What's New in Export Licensing

Control of Exports (Dual Use Items) Order 2009 Explanatory Note

The purpose of this Order, which was made further to sections 3 and 4 of the Control of Exports Act 2008, is to give further effect to Council Regulation (EC) No.428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items.

In addition to consolidating the many prior amendments to the original Dual-Use Regulation (1334/2000), the Regulation introduces new controls on brokering activities and goods transit.

The Order extends brokering controls to items not listed in Annex I of the Regulation if they are to be used in connection with Weapons of Mass Destruction (WMD) or missiles capable of delivering such weapons, or for a military end-use in a country which is subject to an arms embargo. This is in addition to the mandatory (i.e. directly effective) provision that brokering services will require an authorisation if they concern items listed in Annex I to the Regulation and the broker knows, or is informed by the authorities, that these are or may be intended for an end-use in connection with WMD or missiles capable of delivering WMD.

“Transit” is defined in the recast Regulation as “a transport of non-Community dual-use items entering and passing through the customs territory of the Community with a destination outside the Community”. The Order prohibits the transit of non-Community dual-use items listed in Annex I of the Regulation if the items are or may be intended for use in connection with WMD or missiles capable of delivering such weapons. It also extends controls to the transit of non-Community dual-use items not listed in Annex I where the items are or may be intended for use in connection with WMD or missiles capable of delivering WMD, or for a military end-use in a country which is subject to an arms embargo.

The Order also provides that the Minister may prohibit or impose an authorisation requirement on the export of dual-use items not listed in Annex I for reasons of public security or human rights considerations.

As the Order was made under the Control of Exports Act 2008, breaches of the Order are subject to the penalties provided for in that Act. The 2008 Act provides for penalties on summary conviction of a fine not exceeding €5,000 or imprisonment for a term of six month or to both, and on conviction on indictment for a fine of up to €10,000,000 or three times the value of the goods or technology concerned, or imprisonment for a term of up to five years, or to both such a fine and imprisonment.

The Order revokes the European Communities (Control of Exports of Dual-Use Items) Regulations 2000 (SI No. 317 of 2000).

• S.I. No. 443 of 2009 Control of Exports (Dual Use Items) Order 2009 (PDF, 102KB)

Council Regulation (EC) No. 428/2009 of 5 May 2009 setting a Community regime for the control of exports, transfer, brokering and transit of dual-use items (re-cast)

The re-cast Dual-Use Regulation entered into force on 27 August 2009. Below is a summary of key changes to the legislation.

Please note that this is not a comprehensive list of changes, but more an information note outlining the main changes to the legislation. Exporters are advised to read the legislation in detail as there may be changes not mentioned below which are of relevance to them.

The recast Regulation provides for Member States to control brokering services of dual-use items listed in Annex I where there is a possible Weapon of Mass Destruction (WMD) end use. The definition of “brokering services" is quite broad:

-‘brokering services’ shall mean:

the negotiation or arrangement of transactions for the purchase, sale or supply of dual-use items from a third country to any other third country,

or

the selling or buying of dual-use items that are located in third countries for their transfer to another third country.

For the purposes of this Regulation the sole provision of ancillary services is excluded from this definition. Ancillary services are transportation, financial services, insurance or re-insurance, or general advertising or promotion;

The recast Regulation introduces the possibility for Member States to apply controls on the transit of non-community dual-use items listed in Annex I that are, or may be, intended for use in WMD.

Member States also now have the ability to extend the new controls on brokering and transit to non-listed dual-use items, which may be used in WMD.

The lists of dual-use items contained in Annex I has now been updated taking into account the results of the review carried out by the Nuclear Suppliers Group (NSG), the Wassenaar Arrangement (WA), the Missile Technology Control Regime (MTCR) and the Australia Group (AG) in 2008. Please find attached a list which summarises where the main changes occur to Annex I.

• Summary of Changes to Annex 1 (PDF, 26KB)
• Council Regulation (EC) No. 428/2009 (PDF, 4.32MB)

Control of Exports Act, 2008

The Department of Enterprise, Trade and Employment announced the signature of the Commencement Order for the Control of Exports Act, 2008, which came into force on Monday 5^th May 2008.

The legislation was enacted on foot of a Forfas report, which recommended strengthening Ireland’s strategic export controls to bring them into line with best international practise. Among the main features of the Act are the introduction of controls on arms brokering, on technical assistance activities such as repair, maintenance and development and on the transfer of technology by electronic means. Enforcement of the new legislation will be a key feature with substantially increased fines of up to €10 million and enhanced inspection and audit powers for authorised officers. The Act also commits the Minister to submit an annual report to the Oireachtas on the operation of Ireland’s export controls system.

• Control of Exports Act, 2008 (PDF, 322KB)