Background

The European Union has advanced a plan to modernize its export controls on sensitive dual-use goods, materials, software, and technologies. According to the European Commission, these changes “will upgrade and strengthen the EU’s export control toolbox,” including by enhancing the EU’s capacity to control trade flows in sensitive new and emerging technologies.

According to information from the Commission and the European Council, highlights of the new regulation include the following.

- introduces due diligence obligations and compliance requirements for exporters

- updates the definition of “exporter” to apply to natural persons and researchers involved in dual-use technology transfers

- introduces a new provision on transmissible controls, allowing, in certain cases, an EU member state to introduce export controls on the basis of the legislation established by another member state

- strengthens enforcement of export controls through improved cooperation between licensing and customs authorities and introduces mechanisms allowing EU members states to strengthen their cooperation in this area

- enhances information exchange between licensing authorities and the Commission with a view to increasing transparency of licensing decisions

- simplifies and harmonizes licensing procedures and allows the Commission to amend by simplified procedure the list of items or destinations subject to specific forms of control

- makes cybersurveillance technology subject to stricter export controls in certain circumstances and includes an EU-level coordination mechanism concerning exports of cybersurveillance items

- introduces two new general EU export authorizations for cryptographic items and intra-group technology transfers under certain circumstances

- harmonizes at the EU level the rules applicable to certain services with regard to dual-use items currently regulated at the national level

- includes new reporting rules that allow for more transparency on trade in dual-use items while also respecting the confidentiality of business secrets and national security interests

The European Council and representatives of the European Parliament have reached a provisional political agreement on the revised regulation, a Council press release said. Once the agreement is endorsed by member states’ ambassadors sitting on the Permanent Representatives Committee, Parliament and Council will then be called on to adopt the proposed regulation at first reading. The Council did not indicate when the regulation might take effect.

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