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Diversified industrials e-briefing: Export control regime reform in the EU

    • Competition, EU and Trade
    • Aerospace, defence and security
    • Diversified industrials

    23-07-2013

    On 26 June 2013, Brussels played host to a conference aiming to review the current state of the export control regime in the EU. The Commission’s working document, Strategic Export Controls: Ensuring Security and Competitiveness in a Changing World, was under consideration with a view to amending it over the coming summer months. The revised document will form a basis for a statement on an updated and hopefully streamlined export control regime, that many hope will be more in keeping with contemporary pressures and opportunities within the Single Market and beyond.

    The primary aim of this process is to harmonise the discrepancies arising from the conflicting export control systems belonging to the 28 Member States. The Commission is seeking to achieve vague uniformity across the EU by means of increased collaboration and dialogue. The conference members concluded that information, expertise and general EU-wide consultation, alongside the update and maintenance of the EU Control List, would go some way to achieving a network capable of dealing with an ever-evolving technological world through informed and coordinated officials. It was also discussed that developing an EU export control network would promote a common approach to risk assessment and resolve the fragmentation derived from a shortfall in cooperation between divergent national authorities.

    As regards the licensing system, it is proposed that new general authorisations might have the effect of increasing control whilst also promoting trade. The Commission is also seeking to improve intra-EU trade through proposals to lower levels of scrutiny on transfers between Member States in comparison to those experienced in respect of trade with third countries. Some argue that the current intra-EU controls put EU companies at a disadvantage by creating an unnecessary barrier to trade in the Single Market, which non-EU competitors can subsequently capitalise on. This modification would permit less constrained circulation of dual-use goods and technology, whilst maintaining necessary security measures.

    The conference recognised that it is a necessity for export controls systems to be set in context in order for them to be fully contemporised. This requires examination of issues such as what constitutes a “transfer” when examining intangible technology transfers. Most importantly, the definitions of dual-use items need to be examined and updated, with Karel De Gucht, the European Commissioner for trade policy, asking whether we should still talk in terms of WMDs and military end-uses, or whether the definition should be expanded to include broader security challenges such as “equipment and services that could be used to violate human rights”.

    The conference also addressed the need to improve the transparency and consistency of the application of catch all clauses, which currently cause continent-wide confusion. Regardless of the manner and extent to which these measures are implemented, there is a widespread belief that success will only ensue through greater collaboration between the public and private sectors. Many at the conference called for an increased public-private dialogue, believing the professionalisation this would bring to be central to the elimination of disruptive discrepancies in the further development and application of EU export control.

    EU companies are likely to welcome this move towards a simpler export control regime as it aims to reduce uncertainty and is likely to boost intra-EU trade, removing some of the unnecessary barriers currently preventing companies from taking advantage of the Single Market. If achieved, the greater clarity and simplicity will render compliance a less demanding process. A sharper, more organised export control regime is bad news for those currently making the most of systemic discrepancies, but good news for EU business as a whole.

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