As is known, since the now distant year 2009, the European Union has adopted a regulation that governs the exports, transfer, intermediation and transit of the so-called "dual use" or dual use products, i.e. those goods and technologies (including software, projects, etc.) which, although designed and marketed for civilian use, can also be used in the military field, including products that can be used to manufacture nuclear weapons or other nuclear-type explosive devices .Specifically, this is Regulation (EC) no. 428/2009 (Council Regulation of 5 May 2009 establishing a Community regime for the control of exports, transfer, brokering and transit of dual-use items), which entered into force on 27 August 2009. The regulation is directly applicable throughout the European Union, however, the Member States have had to adopt internal measures to implement some of its provisions (primarily with reference to the sanctioning aspect).
The purpose of this regulation is to introduce a series of controls aimed at guaranteeing, alongside the national interest of the individual member countries, compliance and adherence with the international commitments and responsibilities of the European Union, in particular with regard to the non-proliferation of chemical, biological and nuclear weapons. In a nutshell, the fulcrum of the system is represented by an authorization mechanism, since it is necessary to obtain a specific prior authorization to be able to export dual-use products (in the meaning explained above) from a member country of the European Union to a third country. In particular, please note that Annex I of the said regulation no. 428/2009 (most recently updated with the Commission delegated regulation (EU) 2018/1922 of 10 October 2018) identifies the products considered dual use, which, as such, are in any case subject to prior authorization for export, authorization to be requested from the Ministry of Economic Development and which is issued according to the procedures established by the individual countries, in compliance with the criteria set out in the regulation. The products listed in Annex I, although they cannot be exported in the absence of the required authorization, can still circulate / be exchanged freely within the European Union; on the contrary, Annex IV identifies assets for which prior authorization is required also for the case of transfer within the borders of the Union.
The list of dual-use goods is subject to periodic updating, with the Commission having delegated power in order to update the list to adapt it to the technological advances arised over time and the need to comply with any regulatory changes in terms of the Union's international commitments.
Given the above, we underlining particular, the recent publication, on November 4, 2019, of the three-year report of the European Commission to the European Parliament and the Council on the implementation of Reg. EC 428/09, a sort of photograph on the “state of the art” of the application of the regulation.Based on the data reported therein, it can first be noted that, in the year prior to the drafting (year 2018) the export numbers concerned approximately 1,846 dual use products included in the aforementioned Annex I, which represent a total of approximately 2.3 % of total EU exports. Using the Report’s words, “These dual-use items correspond to about 1000 goods under customs bond, including chemicals, metals and non-metallic mineral products, computers, electronics and optics items, electrical systems, machinery, vehicles and transport equipment, etc., and generally constitute the high-tech segment of this vast and heterogeneous product area ".
With reference to the countries of destination, the clear majority of exports falling under regulation no. 428/2009 is recorded towards the United States, and, subsequently, towards China, Switzerland, Russia and Turkey.
As for the economic impact of export license applications, the overall value of the same is based on the latest data available and set out in the Report, around 50.2 billion Euros (which represent approximately 2.7% of total exports outside the EU).
Out of total applications, exchanges were authorized for a value of 36.6 billion euros (corresponding to approximately 2% of total extra-EU exports); the requests formulated were instead the object of denial in an extremely limited number of cases, recording (again on the basis of the most recent data collected and reported by the Commission, and relating to the year 2017), approximately 631 denials (i.e. 1.5 % of the value of dual-use exports subject to controls and 0.04% of total non-EU exports).
Reading this numerical data, it is possible to deduce the absolutely relevant weight that the matter has for many European companies in the context of their commercial transactions, and how it must necessarily be known and mastered in order to avoid running into the penalties provided. in case of violation of the relative regulations. Sanctioning aspects are dealt with in detail in the Annex to the Report, which lists the regulatory measures adopted by individual countries in implementation of the regulation, in addition to the specific penalties provided for by each Member State, of an administrative and / or criminal nature.
With particular reference to Italy, the implementing legislation is represented by Legislative Decree 15 December 2017, no. 221, article 18 (which goes so far as to consider even the attempt to export / brokerage / illegal technical assistance to be punishable). Pursuant to the aforementioned rule, when the infringement consists of a violation of administrative formalities based on negligence, a fine of between Euro 15,000 and Euro 90,000 may be imposed, while, when the infringement is based on willful misconduct, the sanction envisaged may consist in '' application of a fine of up to Euro 250,000 and / or a custodial sentence of up to six years (e.g. in the case of export or transit without a license, false declarations and / or documentation), in addition to the seizure of goods (or other goods of the same value, in the possession of the exporter). Again, with reference to the application of regulation no. 428/2009, it should be noted that in 2017, 120 violations of the regulations on controls were recorded, and that, in terms of sanctions, 130 administrative sanctions and two criminal sanctions were issued by the national law enforcement authorities.
Finally, to conclude, with more detailed indications as to the goods to be considered dual use, it is recalled that the regulation attributes to the Commission the power to adopt delegated acts (pursuant to art.23bis), with which to update the list of products dual-use pursuant to Annex I. By virtue of this power of delegation (introduced in 2014), the Commission proceeded with the adoption of five delegated acts (in particular: Delegated Regulation (EU) No. 1382/2014 Commission, of 22 October 2014; Commission Delegated Regulation (EU) 2015/2420, of 12 October 2015; Commission Delegated Regulation (EU) 2016/1969, of 12 September 2016; Commission Delegated Regulation (EU) 2017/2268 , of 26 September 2017; delegated regulation (EU) 2018/1922 of the Commission, of 10 October 2018), regulatory acts which cannot be ignored for the correct identification of the products falling within the scope of application of the regulation, with consequent necessity to adopt related measures and procedures.
Lastly, it should be noted that over time and even recently proposals for amendments to regulation no. 428/2009 have been put forward in order to innovate its content, and that, although no definitive measures have yet taken place, constant monitoring of the matter is more than ever necessary.
Bologna - June 22, 2020
Avv. Silvia Fini
– Studio Legale de Capoa e Associati – Bologna – firstname.lastname@example.org