How Export Controls Work in the European Union
Export controls regulate the movement of dual-use and military goods, requiring you to hold a licence under certain circumstances. Senior Consultant of Customs and Trade Rene Rothheudt explains in this article.
What is meant by “export controls” and why are they important?
Export controls refers to the supervision of dual-use and military goods. “Dual use” refers to goods, software, and technology that is used for civilian purposes, but could also benefit military or terrorist organisations.
Due to the risk of misuse, goods that are dual purposed require controls when exporting. Most exporters need an export licence to move these, but it depends on the commodity, the destination country, and/or the end user.
All goods for military use have export controls applied to them, and parties throughout the supply chain require licences.
The reason that export controls are so important is that these goods are essential for use in the modern world, such as satellite components or radar technology. Therefore, we cannot simply ban these goods from being exported by non-military corporations.
However, the threat that these pose in the wrong hands cannot be ignored, which is why export controls are essential to policing the movement of these goods.
What are the essential parts of export controls?
The first step is to identify whether the goods being moved are military or dual-use and then classify them accordingly.
Dual-use goods are classified into one of 10 main categories: chemicals, electronics, telecommunications, information security, sensors and lasers, navigation and avionics, marine, propulsion systems, materials processing, and aerospace and propulsion. Each main section has further subcategories, similar to the customs tariff.
Once the goods are classified, you can then look up the export controls that relate to that commodity and check whether a licence is needed.
Even if you do not need a licence based on the nature of the goods, you must check your buyer on the EU sanctions list. This is a register where buyers that are high-risk are listed for further qualification. If your buyer is on the list, then you still need to apply for a licence to ensure you have permission to export to that particular buyer.. It is possible the export is completely prohibited.
This check doesn’t only apply to your buyer, but also to their buyer if they are forwarding the goods. If they are not the end user, then checks must be completed on each subsequent party.
What are the risks of non-compliance?
Prison, fines, public shame through the tabloids, and even sanctions against your company and yourself as an individual. And there is the loss of revenue that comes with all of that.
To be clear, dual-use and military goods are potentially harmful to international security, foreign policy, or human rights. Export controls are used to restrict the spread of items that could contribute to the development of weapons of mass destruction, support terrorism, or violate human rights.
For this reason, customs authorities take non-compliance very seriously when it comes to export controls, and the penalties can be severe.
Do you ship goods that require export controls?
Customs Support is here for you. Our customs consultants, like Rene, help businesses like yours with export licence applications, goods classification, and more across the European Union and UK.
If you need help with export controls, contact one of our experts for more information.