EU Reduces Number of Exports Requiring Licenses

Date: Dec 14, 2011

The European Union has amended its export control regime to authorize several types of international transactions that previously could not proceed without a license. Under a preexisting regulation (No. 428/2009), companies are prohibited from exporting items on the EU's List of Dual-Use Items outside the EU without first obtaining a license. Member States issue such licenses and are required to enforce this requirement. A new regulation (No. 1232/2011) amends this regime by identifying five categories of transactions that are generally authorized to proceed regardless of whether the items involved are on the dual-use list. Those authorizations go into effect in January 2012.

The new authorizations are for the following categories of exports:

    1. Certain telecommunications products, software and technology exported to Argentina, China, Croatia, India, Russia, South Africa, South Korea, Turkey or the Ukraine;
    2. Exports of several dozen chemicals to Argentina, Croatia, Iceland, South Korea, Turkey or the Ukraine;
    3. Certain specialized materials, electronics and related products being exported to Argentina, Croatia, Iceland, South Africa, South Korea or Turkey;
    4. Items other than software or technology reimported into the EU for repair or replacement and then exported to any of two dozen listed countries or territories and
    5. Temporary exports of items other than software and technology for exhibitions or fairs in any of two dozen listed countries or territories.

These authorizations are also subject to other limitations such as reporting requirements, knowledge of impermissible end-uses like weapons of mass destruction and product eligibility.

In addition, the new regulation requires Member States to report to the European Commission on their activities under the export control regime. The Commission is also required to report on the information it receives. This reporting could provide some predictability with respect to the idiosyncrasies companies are likely to face in Member State implementation of the export restrictions. Only time will tell.

At the very least, companies that export a variety of products from the EU, particularly telecommunications products and specialty materials, like chemicals, should begin to find that the EU export control system imposes fewer burdens on such transactions.