European Export Control Update Naboth van den Broek

European Export Control Update Naboth van den Broek Boston, 31 May 2012 Attorney Advertising. Prior results do not guarantee a similar outcome.

1. EU Export Control Regime - Overview 2. Dual-Use Goods & Technology 3. Military Goods & Technology 4. Sanctions 5. Recent Developments / Update Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 2

1. EU Export Control: Overview § National rules (27 Member States) Ø Defense & Security= Mb. S prerogative Ø Procedural rules and enforcement § European rules Ø Trade = EU prerogative § International rules § EU-level “Community” rules § EU-level “intergovernmental” rules (binding and non-binding) § Member States rules expanding scope of EU rules § Autonomous Member State rules § Member State procedural rules § International rules Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 3

2. EU Dual-Use Rules: General § Community (EU) ‘Competence’ Largely regulated at EU level § Regulation 428/2009 § Dual-use items are: “… items, including software and technology, which can be used for both civil and military purposes, and shall include all goods which can be used for both non-explosive uses and assisting in any way in the manufacture of nuclear weapons or other nuclear explosive devices. ” (Reg. 428/2009) Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 4

EU Dual-Use Rules: Coverage § General Ø Single, regularly updated common list of items requiring export authorization Ø “Catch all” for certain end-uses Ø Items exported to final destination outside EU Ø Some items (“sensitive” or “very sensitive”) are covered even for intra-EU transfer (see Annex IV parts I and II) § Noteworthy Ø Includes tangible technology (objects, documents, software) and intangible technology (skills, know-how) Ø Includes physical transfer and electronic media, fax or phone Ø Includes “technical assistance” Ø Includes non-necessary information for patent applications Ø Includes technology integrated into other products Ø Non listed dual-use items: authorization may be required Ø Specific national rules may apply/interpretations may differ Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 5

EU Dual-Use Rules: Procedures § License must be obtained in Member State where the exporter is established § “Exporter” = person on whose behalf the export declaration is made / who holds the power to determine the sending of the items § Licensing procedures established by each Member State, including record-keeping § If multiple Member States involved there is a “consultation” process (veto!) § Enforcement and Implementation at Member State level § Several types of licenses (“authorizations”) Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 6

3. EU Military Export Controls § Member State “Competence” - however EU rules exist: – Export outside the EU: Common position 2008/944/CFSP – Export within the EU: Directive 2009/43 § In both cases: – Items listed in EU Common Military List (not exhaustive + regularly updated) (similar to U. S. ITAR but with some differences) – License Member State § Bilateral issues Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 7

4. EU Sanctions § EU and Member State legislation – Enforcement & admin: Member State level § Generally in accordance with international policies (UN, OSCE) § EU sanctions “programs”: Iran, Libya, Syria § EU arms embargos/asset freezes/prohibition of specific services: Afghanistan, Belarus, China, Eritrea, Iraq, North Korea, Zimbabwe, terrorists group etc. § Focus on specific items, particularly arms, munitions; but sometimes broader (technology, financing, specific end-users, flight bans, investment) § Generally no US-style general embargoes Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 8

Key Regulatory and Other Developments Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 9

1. Dual-Use: Changes to the EU Dual-Use Rules § Annex I to Reg. 428/2009 amended on April 2012 comes into force on 15 June 2012 Regulation 1232/2011 (December 2012): § § Introduction of five new EU General Authorizations (EU GEAs) (total: 6) Ø Ø Ø Ø § § § EU 001 – exports to Australia, Canada, Japan, New Zealand, Norway, Switzerland (including Liechtenstein) and United States of America EU 002 – export of certain dual-use items to certain destinations EU 003 – export after repair/replacement EU 004 – temporary export for exhibition or fair EU 005 – telecommunications EU 006 – chemicals New measures to increase transparency and improve enforcement including possibility to prohibit certain exporters from using EU GEAs. No EU GEA for Computers & Related Equipment; concern about human rights/monitoring Reminder: Brokering services covered Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 10

2. Dual-use: EU Green Paper on Dual-Use Goods Ø Proposed Reform: Amendment expected toward end 2012 Ø Key items expected: § Common risk assessment approach of all export control authorities § Improved exchange of info about suspicious transactions and licensing decisions § Phase out NGAs in favour of EU GEAs § Common approach to catch-all controls § Working toward a fully integrated internal market for dual-use items (phase out internal controls) § Coordinated enforcement across the EU + improved access to relevant info for customs enforcement Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 11

3. Sanctions: Significantly more active sanctions landscape § Sanctions are getting broader (Iran, Syria, Libya, terrorism blacklists) § Basic approach continues to follow the UN, but more active stance and closer coordination with U. S. sanctions policy § Member States continue to play an active role § Judicial Protection continues to be a challenge § Burma: suspended Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 12

4. More active enforcement § Expect to see continued increase in focus on export controls and enforcement § Expect to see continued focus on sanctions § Expect to see more coordinated action (? ) Ø Between Mb. S Ø Between policy areas § Focus on broader range of technologies (computers & related equipment, telecom equipment, software) Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 13

5. More opportunities for risk mitigation and cooperation § Active compliance audits but also an increased focus on compliance programs to mitigate risk and reduce penalties § No formal Voluntary Disclosure process, but don’t forget regulatory cooperation… § Judicial Protection (sanctions, Lisbon Treaty) Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 14

6. Don’t forget other EU Regulations! § EU regulatory policy is increasingly wide-spread and has an ever wider product and geographic scope § Beyond export control and sanctions, there are other areas of regulation for US exporters to take into account, including: Ø Environmental regulations (electrical goods, electronic waste, nanotech, biotech, etc. ) Ø Technical standards and regulations Ø Competition rules (affecting licensing, reselling, distribution) Ø Data protection & Privacy § Sanctions for non-compliance can be severe § US – EU Trade Cooperation (Working Group / FTA ? ) Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 15

Thank you for your attention! Naboth van den Broek naboth. vandenbroek@wilmerhale. com Attorney Advertising. Prior results do not guarantee a similar outcome. Wilmer. Hale 16