Latest developments in strategic export control


1. Intra-Community Transfer of Defence Related Products

On 30 June 2012 the European Communities (Intra-Community Transfers of Defence Related Products) Regulations 2011 (the “Regulations”) came into operation.

The Regulations transpose Directive 2009/43/EC (the “Directive”) which is aimed at simplifying the rules and procedures applicable to the transfer (i.e. transmission or movement) of defence related products within the EU. The Regulations apply to all products, components and technologies listed in the EU Common Military List.

The Regulations provide for two new types of licences for military goods i.e. general and global transfer licences. A general transfer licence, once published by DJEI, will authorise a supplier who complies with its terms and conditions to transfer a product to a recipient located in another Member State. A supplier intending to rely on a general licence for the first time must simply inform DJEI in writing of its intention to do so, not later than 30 days prior to the date of first transfer.

In terms of a company’s daily business activities, the most attractive general transfer licence is probably that for undertakings certified under Regulation 15 (due to less bureaucracy, easier inter and intra-company transfers, speeding up a company’s daily business administration, optimisation of supply chains, etc.). Certification is meant to testify to the special ability of undertakings to receive defence-related products and, where appropriate, to respect all the conditions attached to those products. A certificate will be valid for up to 5 years and will be recognised throughout the EU. However, to avail of this type of licence, a recipient must undergo the detailed, and rather onerous, certification process set out in Regulation 15.
 
A global transfer licence, currently only available for exports of dual use items, will now be issued on request and will authorise the supplier to transfer defence related products, or categories of products, to certain recipients, or categories of recipients, in one, or more than one, Member State. A global transfer licence will be valid for 3 years and may also be renewed. Up to now, military export licences were valid for a maximum of one year only.

Exporters relying on, or otherwise coming within the scope of the Regulations, should also remain cognisant of other general provisions such as those relating to record keeping and penalties for breach of the Regulations.



2. New Annex I to EU Dual Use Regulation


On 15 June 2012, Council Regulation 388/2012 (the “2012 Regulation”) entered into force and has direct and immediate effect in Ireland. The Annex to the 2012 Regulation replaces Annex I of Council Regulation 428/2009 (the “Dual Use Regulation”). Annex I of the Dual Use Regulation provides a listing of dual-use goods, software and technology that are controlled for export, transfer and brokering purposes and that require a licence before export or transfer outside the EU or for the provision of brokering services. The amendments to Annex I are a result of the review of various international arms control agreements.

The amendments to Annex I are wide ranging and include de-controls on certain specified items and amendments to goods descriptions and definitions. Depending on the exact nature of your company’s business activities, you could need to either apply for, or de-register from, export licences as appropriate. We would also highlight that the above has knock-on effects for the many other national and EU legislative instruments which make reference to Annex I, e.g. country-specific trade sanctions.
 

The 2012 Regulation and the new Annex I can be found here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:129:0012:0280:EN:PDF

A helpful change note summary of all changes made can also be found here:
 
http://trade.ec.europa.eu/doclib/docs/2012/may/tradoc_149517.pdf


Companies whose business activities will be impacted by these laws are therefore advised to study these amendments carefully.
Mason Hayes & Curran is a Dublin-based commercial law firm and regularly advises clients on these matters.

For more information, please contact:
 
Jeanne Kelly, Partner, Commercial DDI +353 1 6145088 jkelly@mhc.ie

Michael Madden, Solicitor, EU and Competition DDI +353 1 6145226 mmadden@mhc.ie