On 9 September 2021, the EU Regulation No. 82/2021 came into force; it contains the new rules for trade in dual-use items, i.e. the items which can be used for both civil and military purposes.
The new EU Regulation was necessary to update the scope of the legislation on this subject, following the significant development of technology in the last decade.
To this end, the EU Regulation No. 821/2021 tightens the control of exports, brokering, technical assistance, transit and transfer of dual-use items, in order to intensify the fight against terrorism and human rights violations.
Dual-use items (both new and used), for the export of which shall be required an authorization, are listed in Annex I of EU Regulation No. 821/2021; that authorization must be submitted to the customs authorities together with the customs export declaration.
The main innovations introduced by the EU Regulation No. 821/2021 are the following:
1) the extension of the concept of “export”, which now goes beyond the physical transfer of goods, and also applies to the transfer of intangibles, i.e. software and technologies, to a non-EU country by electronic media (telephone, fax, e-mail, etc.), access to servers or voice transmission media;
2) the application of the new discipline to cyber-surveillance items of natural persons, i.e. to information technology and telematic systems for security and espionage, which can be used for terrorist reasons, internal repression and/or in violation of human rights;
3) the application of the new discipline to brokering services and technical assistance activities, including remote assistance, concerning dual-use items (previously only indirectly controlled).
“Brokering” shall mean the activity of any natural or legal person, even if not established in the EU, who provides the brokering service from the territory of the EU to a third country.
The place of supply of the brokering service is relevant for determining the territorial competence of the Authority controlling and issuing export authorizations for dual-use items.
“Technical assistance” shall mean any form of transfer of technical data relating to the dual-use items;
4) the extension of the status of “exporter”, which now also comprises travellers carrying dual-use items in their personal luggage;
5) the introduction of new types of authorizations, both of a general nature (for intra-group transfers and cryptographic transfers) and of a specific nature (i.e. the new “large project authorization”).
It should be recalled that the previous EU Regulation already provided the possibility for Member States to introduce bans and/or authorizations on the export of products that were not listed as dual-use items by using the “catch all” clause or by adopting national measures.
The “catch all” clause allows Member States to prohibit or require authorization for the export of items not listed in Annex I of the EU Regulation No. 821/2021 if the Member State has become aware or has been informed, also by the exporter, that those items are being used for military purposes or for the production of weapons of mass destruction or in violation of human rights.
On this point, the EU Regulation No. 821/2021 confers greater powers on Member States to adopt national measures to prohibit or subject to authorization the export of items not listed in Annex I, where there are reasons of public security.
6) A further significant change concerns the period of retention of documents relating to exports and to technical assistance and brokering services, which is increased to five years.
7) The new EU Regulation also provides for the possibility for Member States to introduce mandatory Internal Compliance Programmes (ICPs) for exporters using global export authorizations; ICPs are internal procedures established by companies to control compliance with the rules for trade in dual-use items.
In general, the prior authorizations required to export dual-use items and issued by individual Member States are valid in all the European Union; in Italy, the competence to issue them is attributed to the Division for Dual-Use Materials of UAMA – Unità per le Autorizzazioni dei Materiali di Armamento – at the Italian Ministry of Foreign Affairs and International Cooperation.
For more information on the types of authorizations, please refer to our previous article (https://bit.ly/3kU6mjO).