EU finalises internal compliance guidance for trade in dual use goods

The guidance is intended to assist these businesses in developing and implementing internal compliance programmes to ensure that they are complying with EU and national trade restrictions.

The published guidance is "virtually word for word" identical to the consultation draft published by the European Commission last year, according to export controls and sanctions expert Stacy Keen of Pinsent Masons, the law firm behind Out-Law. The Commission has, however, added new introductory text explaining its reasons for publishing the guidance, including its intention to create a uniform and consistent EU-wide compliance framework.

The Commission said: "An effective, uniform and consistent system of export controls on dual-use items is necessary to promote EU and international security and to ensure both compliance with the international commitments and responsibilities of the member states and of the [EU], especially regarding non-proliferation, and the promotion of a level playing field among EU operators".

Dual use items are goods, software or technology which can be used for civil and military purposes. The export of these items is regulated at EU level, and dual use items may not leave the EU customs territory without an export authorisation. A limited number of dual use products that are particularly sensitive require an export licence to be exported even within the EU customs territory.

Companies involved in the export of these products usually develop a set of internal compliance policies and procedures to ensure compliance with trade restrictions. According to the guidance, an effective internal compliance programme should incorporate seven core elements: top-level management commitment; the organisation's structure, responsibilities and resources; training and awareness-raising; a screening process for transactions; performance review, audits, reporting and corrective actions; record-keeping; and physical and information security.

The guidance sets out what is expected from companies with regards to each of these elements, along with the actions and possible solutions for developing or implementing compliance procedures.

Stacy Keen said previously that The Commission said: "An effective, uniform and consistent system of export controls on dual-use items is necessary to promote EU and international security and to ensure both compliance with the international commitments and responsibilities of the member states and of the [EU], especially regarding non-proliferation, and the promotion of a level playing field among EU operators".

Dual use items are goods, software or technology which can be used for civil and military purposes. The export of these items is regulated at EU level, and dual use items may not leave the EU customs territory without an export authorisation. A limited number of dual use products that are particularly sensitive require an export licence to be exported even within the EU customs territory.

Companies involved in the export of these products usually develop a set of internal compliance policies and procedures to ensure compliance with trade restrictions. According to the guidance, an effective internal compliance programme should incorporate seven core elements: top-level management commitment; the organisation's structure, responsibilities and resources; training and awareness-raising; a screening process for transactions; performance review, audits, reporting and corrective actions; record-keeping; and physical and information security.

The guidance sets out what is expected from companies with regards to each of these elements, along with the actions and possible solutions for developing or implementing compliance procedures.

Stacy Keen said previously that these core elements "will not be unknown to businesses, which may have compliance programmes in place already that are focused around these areas".

"Whilst highlighting that a compliance programme needs to be tailored to the size, structure and scope of a business, the guidance sets out what is expected from companies dealing in dual use goods and what are the steps involved in meeting those expectations. This will no doubt be of assistance to businesses devising or strength testing existing compliance programmes," she said.

"Whilst highlighting that a compliance programme needs to be tailored to the size, structure and scope of a business, the guidance sets out what is expected from companies dealing in dual use goods and what are the steps involved in meeting those expectations. This will no doubt be of assistance to businesses devising or strength testing existing compliance programmes," she said.