_ Natalia Kuznetsova, guest researcher, analytical media “Eurasian Studies”, postgraduate student, Brussels Diplomatic Academy, VUB. Berlin, 14 December 2017.
The essay reviews export control systems in the Russian Federation and the European Union and identifies current weaknesses of existing regulations and laws. The first part includes 2016 statistics data regarding export volume of dual-use items of the RF and the EU respectively.
The essay involves some solutions for improving export conditions for exporting companies of Russia. Part three examines Regulation 428/2009 and indicates the difficulties of export control coordination within the European Union.
Through discussing problems of world control over the components and technologies of weapons of mass destruction, this essay highlights the importance of interstate contacts and international negotiations, as well as the achievement of consensus in difficult political conditions.
We also emphasize the implementing of breakthrough technologies for improving the control of dual-use items, and along with that we consider challenges pertaining to the control of emerging technologies.
There are national export control systems in all developed and leading developing countries of the world. Countries which do not have an integrated export control system (Vietnam, Indonesia) undertake all efforts to develop it in accordance with best foreign practices.
The export control system is constantly evolving. Globalization as well fuels harmonization of national export control systems and intensifies effective international dialogue in preventing the proliferation of goods and technologies that could be used to create weapons of mass destruction. In addition, the meaning of the expression “export control” has changed.
Previously it was aimed at restricting or prohibiting the export of certain categories of items and technologies. At present, more and more countries in the world use the phrase “strategic trade control”, the meaning of which is not to limit export flows but to ensure the reasonable regulation of the export of certain categories of products.
The most important elements of the export control system are control lists. National control lists in all developed and in many developing countries are compiled in accordance with existing international agreements, conventions and associations (see Table 1).
Table 1. International agreements, conventions and groups
|Agreement/Group||Prohibition or Control of||Year||Countries Participants||Russia|
|The Wassenaar Agreement||Transfers of conventional arms and dual-use goods and technologies||1996||42||Yes|
|Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction||Biological weapons||1972||167||Yes|
|Convention on the Prohibition of Chemical Weapons||Chemical weapons||1983||188||Yes|
|Australia Group||Chemical and Biological||1984||41||No|
|Nuclear Suppliers’ Group||Nuclear weapons||1974||46||Yes|
|Comprehensive Nuclear Test Ban Treaty||Nuclear tests||1996||158||Yes|
|UN Security Council Resolution 1540||Chemical, biological and nuclear weapons
|2004||UN Member States||Yes|
For example, national control lists of dual-use items are formed on the basis of the Wassenaar Arrangement, the main thesis of which is outlined in “Guidelines and Procedures, including the Initial Elements” and contain 10 categories of dual-use items and technologies.
All control lists are subject to regular reviews in the course of international dialogue and cooperation. On the one hand, reviews allow to exclude excessive control over certain categories of goods and technologies and, on the other, to include in the lists new items if they may pose a threat to international security.
A fundamental difference between national export control systems is that some countries use a single list of dual-use items and technologies (Canada, Singapore, Australia, etc.), and others use two lists for military and dual-use products (USA, Russia). Japan develops special lists for the export of technology due to the specific features of the commodity composition of the Japanese economy.
Trade statistics on export control of dual-use items of the Russian Federation
To analyze the sales records of Russia as per volumes of export control products we used the list of custom codes of the Foreign Economic Activity Commodity Nomenclature (hereafter FEACN).
There are 857 codes in FEACN of different levels; 69 of them have 4 digits, 95 codes have 6 digits, 76 – 8 digits and 617 codes have 10 digits.
In 2016 the foreign trade turnover of Russia amounted, according to the Central Bank of Russia, to 473.2 billion US dollars (exports – 281.8 billion dollars, imports – 191.4 billion dollars). The trade balance remained positive, $ 90.4 billion.
More than 9% of Russian exports for 2016 ($ 31.02 billion) was proceeded under the secret code SSSS, according to the Federal Customs Service’s data.
Certain categories of dual-use goods, defense products, aircraft industry, land natural gas are included in the secret code to protect information and ensure economic security. The list of sensitive information includes that on Russian exports or imports of arms, military equipment and dual-use products if divulgence or premature disclosure of such information “may damage the security of the state.”
According to data provided by the RF Federal Customs Services in 2016 the amount of value of export control items was 73.1 billion US dollars (15.9% of the total volume of exports). At the same time, only two commodity groups – 84 and 85 – made up 58.9% of the total value of exports control items. Those groups include machines: equipment and mechanisms, nuclear reactors, boilers, mechanical devices and their parts, electrical equipment, sound recording and sound reproducing equipment and a television signal. According to the information provided by the Federal Service for Technical and Export Control of Russia (hereafter FSTEC), authorisation or licensing of products is necessary in much fewer cases since the FEACN codes provide mainly just reference data.
Graphic 1. Export data in terms of custom codes in 2016
The main categories include computers and their mainframes (code 8471, 14.1% of the volume of regulated exports with 4 digits of code) as well as various valves and fittings for pipelines and boilers (code 8481). Among the products indicated with 10 digits of FEACN there are a high proportion of units for liquefying air or gases (16.8% of exports) and telephones (14.8%).
Statistical information on the number of actually granted authorisations or licenses is not publically available.
Russia’s and leading foreign export control systems. Analysis and solutions
The basic principles of Russia’s export control system are similar to those of foreign countries: for example, Russia is a member of all key international agreements and conventions, except the Australian Group. This allows the formation and adjustment of control lists in accordance with leading international practice. In Russia, as well as in the United States, there are two control lists: one is for military goods, the other is for dual-use items.,
When applying to the FSTEC of Russia, specialized export control codes are not required; for an exporter it is enough to provide a FEACN code.
FSTEC of Russia, when making a decision, focuses primarily on the technical characteristics of the products. It helps to understand if those products or their parts can be used for manufacturing of mass destruction weapons.
Formal analysis of FEACN codes and the EU control lists also provides just statistical and reference data. The common feature of the lists is the dominance in category “Machinery and equipment”. About 40% of export volume with 10-digit codes, both in the EU list and in the Russian one, should be licensed. However, there are significant differences in the length of the lists: thus, the EU control list includes 44 categories with 2 code digits, while there are only 36 positions in the Russian list. For example, in the EU list, in contrast to the Russian control list, there is a category “Sporting weapons and ammunition”. Possibly it reflects the tendency to simplify export controls: the procedures of controlling dual-use items are usually easier than those of military combat weapons. At the same time, the FEACN list with 10-digit codes has more than 500 positions vs the European list. It includes 1760 codes while European list – only 1256. So, there is some potential for excluding certain FEACN codes from the Russian list.
It is important to note that there are some differences in FEACN codes of the largest categories. Thus, 32.8% of the products of category “Machinery and equipment” is subject to export control in the Russian list, while in the EU list it is only 21.1%. In category “Base metals” it is necessary to obtain export licenses for 31.3% of products with 10-digit codes, while in the EU it is only 16.3%. Such a benchmarking study can also be used to review nomenclature lists of items.
Graphic 2. Products share in export control (main categories),
There are two types of permitting documents issuing by FSTEC of Russia for dual-use items export:
An individual license is granted to one exporter for one type or category (i.e. one FEACN code) It is effective for dual-use items under one signed and sealed contract with the term of validity up to 1 year. Individual licenses indicate the quantity of specific controlled products, the country of final delivery/destination, the seller/shipper and the buyer/consignee. Individual licenses can be granted for both export and import. It is also granted in case of temporary export of items (when transferring items to a foreign entity and returning them back to the Russian Federation).
Individual licenses are valid for one year maximum. If necessary the term can be prolonged for one more year in order to fulfill foreign economic obligations under the contract.
The term of documents reviewing in FSTEC is 30 days.
General export authorisation
General authorisations are granted for foreign economic operations with one type of product (defined by one FEACN code) for a fixed quantity of goods to be exported to certain countries. Unlike Individual licenses General authorisations are granted only for export deliveries.
The list of foreign countries and types of controlled items are defined by the Government of the Russian Federation.
The term of validity of the General authorisation is not limited. General authorisations are granted by decisions of the Government of the Russian Federation for the export of controlled goods (but not technologies) from the Russian Federation.
The normative period of documents reviewing from the date of receiving by the FSTEC of Russia is 45 calendar days.
Both types of licenses require a signed contract mandatory. Also a certified export control specialist is required in the staffing table of a company to obtain a General authorisation.
Long periods of obtaining of permits
As it can be seen from the above, an average period of making decision by issuing authorities is as long as 30-45 days. In some cases that leads to the termination of the contracts by the client. Even more, the actual waiting periods often exceed the standard period of 45 days.
To shorten the waiting period a lot of export companies have to hire intermediary services agencies. This results in increasing the price of the export contracts, and in some cases – in termination of contracts again.
In Singapore, the regulatory period for granting a license is 5 days, in Canada – 10 days, in Australia – 15 days, in Germany – 30 days.
Excessive control of the export of certain types of products.
Suppliers often export products that are widely available in world markets (for example, petrochemical or medical products). However, manufacturers are obliged to obtain export permits. It results in extending of the time and increasing of cost of supply. Therefore, it reduces the competitive abilities of Russian exporting companies.
It is quite possible to exclude FEACN code 902750000 (devices and equipment based on the optical radiation effect) from the list of export control goods in regard to medical products duly certified by Federal Service for the Supervision of Public Health and Social Development, for example, a PCR amplifying thermocycler.
It is also quite possible to abolish export controls for codes 3815110000, 3815199000, 3815909000 (other chemical products), 3824991500 (ion exchanges resins), 2818200000 (aluminum oxide), 2842100008 (silicates), 3802900000 (activated carbon), 2508400000 (clay).
Producers from the PRC, EU and the USA, without restrictions actively export their goods with mentioned above codes to Iran, Turkey, Turkmenistan, the Ukraine and other countries.
In Russia, the list of controlled products coincides with international practice since it is based on existing international agreements. In addition, according to the FSTEC of Russia, the FEACN codes for controlled products are used only for reference information. The control procedure is mainly performed on the basis of evaluation of product’s actual technical parameters.
The author of this paper suggests the following solutions:
- To clear up the opinion of the participants in foreign trade activities in order to form a list of products to be excluded from the mandatory nomenclature.
- To create “white lists” of countries in accordance with Article 19 of the Federal Law dated 18 July 1999 No. 183-FZ “On Export Control” and RF Government Regulation dated August 18, 2016 No. 810.
- For certain types of products to develop the procedure of notifying the regulatory and issuing authorities, including FSTEC of the Russian Federation, instead of obtaining authorisations. Partially this procedure was implemented within the regime of license-free export of dual-use goods approved by the Government Regulation of the Russian Federation dated August 18, 2016 No. 810 “On Approval of the Rules for the Performance of Foreign Economic Activity in the Case of the Application of the Regime for License-Free Export of Certain Types of Controlled Commodities.” However, this regime applies only to a limited number of companies included in the relevant register and to certain types of items and only to a limited number of countries.
Insufficient awareness about the requirements and the export control process
Export companies experience the lack of knowledge in the export control procedures and the requirements of FSTEC Russia. It often leads to failures in the self-preparation of documents and obtaining permits. To speed up the procedure, many companies engage intermediary agencies which leads to increasing in the price of the export contracts. That makes exports unprofitable if the price of an item is low and the quantity of products is small. In addition, exporters often do not know whether or not to obtain an export authorisation for their products. This leads to an increase in the number of applications submitted to the FSTEC of Russia. Excessive workload of FSTEC leads to a long average time for consideration of the applications. Endless cycle.
There are single electronic platforms In Germany (ELAN K2), Canada (EXCOL) and Singapore (TradeNet). In addition, plenty of guidance, training courses and brochures on the export control procedure are available on the websites of other relevant departments.
- To develop an electronic educational platform where information would be presented in more accessible form for users: video instructions, answers to frequently asked questions, quality articles, etc.
- To implement an educational program for export control procedures on the base of the Russian Export Center.
- To develop and place on the websites of the Federal Trade Services, Russian Export Center and FSTEC of Russia a program allowing exporters to understand if they really need to get export authorisations.
Inability to remotely track the status of an application
A lack of live information on the status of the application entails the inability to timely revise submitted documents or provide a supplement package of documents. So, the time of issuing of permits may increase since companies have to wait responses from the FSTEC of Russia for long.
Electronic systems of submission of applications for licenses/authorisations in some developed countries (ELAN K2 in Germany, EXCOL in Canada, TradeNET in Singapore) allow exporters to monitor the status of their applications on-line. In case of any mistakes in the documents submitted for consideration, exporters have the opportunity to timely remedy all violations.
At the same time, electronic platforms require high financial expenses for the creation and long term of implementation. For example, in the US, the second phase of the export control system’s reform was not implemented on time, including development of a unified electronic portal for export control. The budget of its implementation exceeded 2.5 million dollars and the development period is about 5 years.
- In the long term to develop the FSTEC electronic portal for participants in foreign trade.
- In the short term to develop a procedure for promptly informing the participants in foreign trade activities on the status of their application including through informational portals of other federal executive bodies.
Obtaining an authorisation for export products with the same technical specifications
For products, the technical specifications of which are not changed, companies should submit the same package of documents to obtain the same permits. In this regard, companies have to bear additional expenses and spend additional time when supply the same products. This problem might be solved by obtaining a General authorisation. But small and medium-sized enterprises do not have a chance to meet the requirements of General authorisations, including requirements of having certified export control specialists.
In the UK the period of validity of individual export licenses is 2 years and they are applied to a certain exporter and consignee.
In Germany there are three types of export permits:
- Individual Export License,
- Global export authorisations for large exporting companies for the supply of various products to several countries,
- General authorisations applies only to a certain range of products and countries.
In Japan there are several types of general authorisations, “bulk licenses”, validated for three years.
- To increase the validity term of permitting documents and/or repeatedly extend the term of licenses.
- To cancel the requirement to provide a signed contract for obtaining permits. To do this, the better way is to amend the Resolution of the Government of the Russian Federation dated September 15, 2008 No. 691
Disagreements over the volume of exported product when licensing by the FSTEC of Russia
In the export of certain types of products, in particular, metallurgical products, there are disagreements between customs authorities and exporters regarding the volumes of products covered by a license/authorisation. Companies usually calculate the volumes of exports on the basis of the percentage/content of only useful elements (metal components), while customs officers – of the total weight. As a result, companies have to abandon exports or receive an additional package of permitting documents.
A simple solution:
To amend the Regulation of the Government of the Russian Federation No. 691 dated September 15, 2008, in particular the paragraphs 16 and 17 of the license form of FSTEC of Russia with a view of unified calculations of volumes.
Taking into account all the above, the most significant problem at the moment, revealed in the course of the analysis of international experience, is the period of granting of licenses. So, on average, 15 working days are usually spent on obtaining an export licenses in the world, while in Russia the average term is 45 working days.
|Country||Time period for granting|
|Australia||15 working days (in certain cases – 30 working days)|
|Canada||10 working days (in certain cases – 40 days)|
|Singapore||5 working days|
|Russia||45+ working days|
In international practice countries can significantly reduce time period of making decisions by the following:
- Electronic IT platforms allowing an exporter to submit documents electronically: ELAN K2 in Germany, EXCOL in Canada , TradeNet in Singapore, etc.
- “White countries” lists are used to simplify procedures for items under the Catch-all Policy. In particular, Japan has developed a white list including 27 “white” countries excluded from the comprehensive control system: Australia, Britain, Germany, Spain, Italy, Canada, USA, France, Switzerland, South Korea, etc.
Difficulties in coordinating export control procedures in the European Union
In most European countries, dual-use items and technologies are listed in control lists based on the requirements of the international export control regimes adopted by the Nuclear Suppliers Group and the “Zangger Committee”, as well as the Missile Technology Control Regime (1987). The EU export control regime is governed by the European Union Regulation on the Control of the Export, Transfer, Brokering and Transit of Dual Use Items “(No. 428 of May 5, 2009) which provides for common EU control rules, a common EU list of dual-use items as well as coordination and cooperation to support consistent implementation and enforcement throughout the EU.
This Regulation is based on Article 133 of the Treaty Establishing the European Community, according to which the European Union is endowed with full and exclusive powers in the field of trade policy and, consequently, control over the movement of dual-use goods. Regulation 428/2009 defines “dual-use items and technologies” as items, including software and technologies, which can be used for both civilian and military purposes. It is aimed at support of a common free market of the EU and ensuring free movement of goods within the EU. Therefore, the main export control of dual-use items is provided only at the external borders of the EU. Although some of the most important products and technologies (for example, from the Nuclear Suppliers Group) are also controlled within the intra-EU market.
The EU Member States have the right to implement control of additional dual-use items or those not included in the control lists at the national level under special circumstances.
In practice, bureaucratization of European authorities significantly impedes the free movement of dual-use goods and technologies within the European Union.
Despite the fact that in 1985 the European Commission developed the White Paper to eliminate non-tariff barriers in the mutual trade between the EU countries, this problem has not yet been fully solved in the defense industry which is a key consumer of dual-use products and technologies. In particular, some of EU Member Countries in one or another way are pursuing a policy of protecting national markets for defense products through governmental control of a number of enterprises, complicating or preventing the transfer of defense know-how to other EU countries. “A Member State’s essential security interests would not be threatened by an export from another Member State.”
At the same time, EU members often take advantage of Article 296 of the EU Establishing Treaty and Article 346 of the Lisbon Treaty, which give EU countries the right to take all necessary measures to protect their national interests in matters related to the production and trade of combat arms, ammunition and military materials. The process of transfer of technologies and dual-use items both inside and outside the EU is complicated by absence of united issuing export authority.
In particular, when deciding whether or not grant an export authorisation for groups of dual-use items, each EU Member State shall independently take into account all considerations set forth in Article 12 of Regulation 428/2009, namely:
(a) the obligations and commitments they have each accepted as a member of the relevant international non-proliferation regimes and export control arrangements, or by ratification of relevant international treaties;
(b) their obligations under sanctions imposed by a common position or a joint action adopted by the Council or by a decision of the OSCE or by a binding resolution of the Security Council of the United Nations;
(c) considerations of national foreign and security policy, including those covered by the Council Common Position 2008/944/CFSP of 8 December 2008 defining common rules governing control of exports of military technology and equipment;
(d) considerations about intended end use and the risk of diversion.
Accordingly, granting dual use export authorisation is always the responsibility of a single EU Member State and performing in accordance with its legislation. However, such permits granted by one country are valid throughout the EU.
Such measures require full harmonization of the European legislation in the field of control policies of technologies and dual-use items as it is determined in Regulation 428/2009.
Nevertheless, a number of experts note the imperfection of the current system, as Regulation 428/2009 allows EU Member States to require their EU partners to abandon export deals or to cancel existing ones if their implementation threatens national security of the EU countries as it was mentioned above.
A good example of this situation is the policy of the so-called “New European Countries” – the Baltic and Eastern Europe counties, who periodically protested about the supply of certain types of military equipment to Russia. As a most striking example, we can illustrate the situation around the “Mistral” aircraft carriers which were supposed to be built and exported to Russia by France. But Latvia, Lithuania, Estonia and Poland periodically tried to protest that under Regulation 428/2009. However, this was a deliberately unsuccessful move connected with political populism, since in reality there is no a clear algorithm for considering such claims and the conditions for their consideration in EU legislation. Mistrals were not exported to the Russian Federation on other reasons and sanctions.
European legislation supposes four types of licenses:
1. EU general export authorization. It is granted to all registered exporters, and no application is required; it concerns a certain range of items listed in Annex I to the Regulation for export to certain countries.
- National general export authorization.
3. Global export authorization. It is granted to a certain exporter, and an application is required; it is granted for a certain type or category of products and is valid for export to one or more of the countries indicated in it.
4. Individual license. It is granted to a certain exporter, it is necessary to submit an application for a specific export contract, that is, it covers certain items for a particular end-user/consignee in a third country. 
Based on this article, the EU countries developed national types of authorisations for different types of dual-use goods and technologies, the effect of which differs significantly regarding the terms and conditions of supply.
For example, France provides exporters with so-called global authorisations that allow the export of dual-use goods to certain countries, provided that the supplier can monitor the final destination of the delivery, regardless of the chain of intermediaries. Germany in addition to the European list has developed its own export list of another 13 controlled positions.
Depending on the EU Member State, there are different competent authorities responsible for controlling of dual-use export items and technologies. For example, in Germany it is the Federal Office of Economics and Export Control (BAFA), in Sweden – the Inspection of Strategic Products (ISP), in France – the customs and export control departments of the General Directorate for Industrial Strategy of the Ministry of Industry.
Nevertheless, despite the difficulties in coordination, the EU has developed a system that, on the whole, effectively controls the supply of dual-use goods and technologies based on national and European legislation. All EU Member States have responsible bodies that control such exports and in one or another way interact with each other.
On 28 September 2016 the European Commission outlined and adopted Proposal for modernisation and strengthening controls on export of dual-use items. The Commission proposal will be discussed in the Council and the European Parliament in the course of 2017, as part of the legislative process.
World control over the components and technologies of weapons of mass destruction
The modern current task of export control regimes is to prevent the proliferation of WMD and its carriers but it is even more difficult to work out quantitative criteria evaluating the effectiveness of regimes. We can only talk about slowing the proliferation of WMD.
There are a number of objective factors of economic nature that undermine the effectiveness of export control systems and lead to the need to review many elements of this policy.
First, the internationalization of scientific and technical knowledge and production process leads to the fact that new suppliers of high-tech products are entering the world market, which facilitates access to analogues of the necessary items and technologies in the expanding dual-use markets. Restrictions and sanctions force the counterparty to develop its own manufacturing of sensitive products by using the knowledge of national or foreign specialists who have received education in the best universities of the world.
Secondly, in the context of globalization, the importance of so-called intangible transfers of technologies is growing, so it is very difficult to control. The thin red line between strengthening of control in this area and abusing of democratic freedoms is very unsteady.
Thirdly, the civil sector has become a leader in the development of a number of new technologies which also have an important military significance. For example, 3D printers, IT-technologies, robotics, neural networks, also scientific discoveries like a quantum teleportation which is the future method of information processing, providing faster and safer communication. This process does not depend on the physical transportation of information. Not only does quantum teleportation provide increased speed but also paramount security as there is no way to intercept the communication between the photons. With quantum cryptography no message or computer can be hacked or attacked by virus. It means that there is a probability that work of international and governmental counter-terrorists services may become harder.
Aaron Arnold, a researcher, emphasis that ‘today’s supply-side efforts to control the spread of nuclear weapons technology consist of a rainbow of decentralized, sometimes overlapping and sometimes fragmented systems of international agreements, informal arrangements, and national legislation. These efforts range from export licensing and targeted sanctions to corporate compliance and due diligence programs. The potential applications of blockchain technology can help to control the proliferation of WMD-related goods and technologies.'
Regardless e-platforms and portals, export licensing and end-user verification still, in part, rely on a paper-based system that is vulnerable to fraud. For example, in 2016 Sihai “Alex” Cheng, a Chinese intermediary, was convicted and sentenced to nine years in prison for violating sanctions against Iran. According to court records, from 2009 to 2011, Cheng falsified import and export documents to transship controlled items with nuclear applications to Iran.
Aaron Arnold offers to use blockchain technologies to address such problems also for nuclear control. In a blockchain network, smart contracts can provide transparency and prevent export fraud. Once on the blockchain, ownership of an asset, like a contract, is immutable. That is, it cannot be changed unless the owner verifies that. Due to a distributed ledger all information and transactions can be accumulated in the blockchain without getting falsified by anybody.  The newest technologies really can help to improve the existing control regimes and increase their quality. But at the same time it is really difficult to control the very newest technologies and related transactions.
In June 2017 Jim Mattis, Secretary of Defense of the United States delivered a non-public report in the American Senate. He indicated that artificial intelligence R&D attracts more and more investments from China, so Washington concerns that AI technologies developed in the United States may be used by China for its military build-up. He said that those technologies are so breakthrough and cutting-edge that American export system is not ready to provide comprehensive control of them. Committee on Foreign Investment in the United States (hereafter CFIUS) is apparently behind time. Probably, USA can impose restrictions on Chinese investments into American high-tech sector which includes artificial intelligence systems. As a matter of fact China really bypasses investment control in USA and easily gain access to important and sensitive technologies through non-controlled by CFIUS transactions, for example by creating joint-stock companies, buying minority stakes, early investing to startups.
United States senator John Cornyn on November 08, 2017 introduced the Foreign Investment Risk Review Modernization Act (FIRRMA) to modernize and strengthen the process by which the Committee on Foreign Investment in the United States (CFIUS) reviews acquisitions, mergers, and other foreign investments in the United States for national security risks. New legislation will give CFIUS more power to block doubtful investments in high-tech sector and will require strengthening control of buyers from countries which are potentially dangerous for USA national safety.
Therefore, restrictions and sanctions affect almost all manufacturers of high technology products. In modern conditions, the lobbying of the business community for easing of the rules of export control has intensified. The question of the country’s competitiveness in world markets has a huge influence on the position of delegations when discussing the international control lists’ updates within multilateral export control regimes.
Strengthening control is not the same as increasing its effectiveness. Harmonization of national export control systems is perceived as a main line for improving the effectiveness of export control systems in order to prevent the proliferation of WMD.
Over the last decade, discussions have been held on the institutional reorganization of export control regimes in a number of ways: (a) the merger of all multilateral regimes into one combined one; b) the replacement of informal multilateral agreements with legally binding treaties; c) the formation of international norms of conduct by signing new contracts in parallel with the improvement of informal agreements.
The role of regimes cannot be viewed in isolation from the wider political context of relations between countries. In unstable political conditions it is difficult to expect to reach legally binding agreements. It was shown by discussions during the adoption of the International Code of Conduct against Ballistic Missiles Proliferation, as well as discussions around the Russian initiative on the Global Missile and Missile Technology Control System which was not only one regime but a merger of all regimes in order to reverse the proliferation of missiles and related technologies. Informal multilateral contacts will remain necessary in the medium term.
One of the most sensitive areas of the export control system is a technology control. Access to the world’s knowledge resources is becoming a critical element of both national competitiveness and national security. It is not easy to find the optimal balance between mutually exclusive strategic missions of promoting national goods to world markets and imposing restrictions for reasons of national and international security; between maintaining academic freedoms, freedom of access to information and security challenges. In this sphere there is a large field for international cooperation.
There are national export control systems in all developed and leading developing countries of the world. Export control was created as a tool to prevent the proliferation of weapons of mass destruction and means of its delivery. In the situation when a number of countries are trying to gain access to technologies for developing their own nuclear and missile weapons, export control continues to be one of the most important ways to maintain international stability. Countries that do not have weapons of mass destruction but keep working on its creation, are trying to purchase certain components and technologies through intermediaries to use them in their military programs. An increase in the number of states that have, in particular, nuclear weapons, will lead to a general decline in international stability. Intensification of damage effects along with reduction in size of the weapons, arise a real threat of WMD attack from international terrorist organizations. Therefore, the control over the export of weapons and technologies has become important part of the policies of most developed countries. The cutting-edge technologies really can help to improve the existing control regimes of dual-use items and increase their quality. But at the same time it is really difficult to control the very newest technologies and related transactions.
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- Ian J Stewart; Sibylle Bauer; European Parliament. Directorate-General for External Policies of the Union.; King’s College London.; Stockholm International Peace Research Institute (SIPRI).; Dual use export controls (2015 : Brussels, Belgium). 2015, c2015
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- Valetskyi O., ‘Proliferation of weapons of mass destruction and missile technologies in the world.’ (Journal Military Review, 2013) Vol. 5, p. 18.
 Vietnam updated law in 2005 and still works on implementing a comprehensive export control law/system. On 25-26 February 2016, an initial visit to Vietnam took place within the framework of the EUP2P dual-use programme 2015-2017. Vietnam’s authorities welcomed the EU initiative and expressed their readiness to cooperate on trade control of dual-use goods. The draft road map developed with Vietnam Customs is intended to address the current situation on the path of developing a modern trade control system. ‘Dual-Use: Initial Visit To Vietnam’ (EU P2P Export Control Programme, 2017) <https://export-control.jrc.ec.europa.eu/News/ArtMID/481/ArticleID/2664/Dual-Use-Initial-Visit-to-Vietnam> accessed 10 December 2017.
 Experts consider it highly unlikely that Indonesia will undertake WDM proliferation programs in the foreseeable future. ‘Indonesia | Countries | NTI’ (Nti.org, 2017) <http://www.nti.org/learn/countries/indonesia/> accessed 9 December 2017.
 ‘Globalization Expands Access To Technology, Materials Needed For Mass Destruction Weapons, Creating New Disarmament Challenges, Says Secretary-General | Meetings Coverage And Press Releases’ (Un.org, 2017) <https://www.un.org/press/en/2013/sgsm14770.doc.htm> accessed 10 December 2017.
 The term “Strategic Trade Control” is used rather than “Export Control” to recognize the importance of controlling strategic goods in various international transactions, including import, export, transit, transshipment, etc. World Customs Organization, Strategic Trade Control Enforcement (Implementation Guide) 8; ‘World Customs Organization’ (Wcoomd.org, 2017) <http://www.wcoomd.org/en/topics/enforcement-and-compliance/instruments-and-tools/guidelines/wco-strategic-trade-control-enforcement-implementation-guide.aspx> accessed 9 December 2017.
 The Wassenaar Agreement 1996.
 The UK Strategic Export Control Lists are periodically updated – mostly every half year. The updates reflect: new concerns (ie items added to the lists), changes to the scope of the controls, small technical amendments, de-control measures (ie items removed from the controls and for which a licence is no longer required) ‘UK Strategic Export Control Lists – GOV.UK’ (Gov.uk, 2017) <https://www.gov.uk/guidance/uk-strategic-export-control-lists-the-consolidated-list-of-strategic-military-and-dual-use-items> accessed 9 December 2017.
 ‘A Guide to Canada’s Export Controls’ (GAC, 2017) <http://www.international.gc.ca/controls-controles/about-a_propos/expor/guide.aspx?lang=eng> accessed 9 December 2017.
 U.S. Munitions List (USML) includes military goods, but Commerce Control List (CCL) includes dual-use items Ecfr.gov. (2017). eCFR — Code of Federal Regulations. <https://www.ecfr.gov/cgi-bin/text-idx?node=pt22.1.121> accessed 9 December 2017; Gross, R. (2017). Export Administration Regulations (EAR). Bis.doc.gov. <https://www.bis.doc.gov/index.php/regulations/export-administration-regulations-ear> accessed 9 December 2017.
 ‘Export Control in Japan and CISTEC’ (Law.kobe-u.ac.jp, 2017), p. 10, 11 <http://www.law.kobe-u.ac.jp/GMAP/ingeer2016/presentation_files/D1_1_4_Riko.pdf> accessed 10 December 2017.
 Approved by the letter of the Federal Customs Service of the Russian Federation  No. 14-68/67278, 12-28.
 The Central Bank of the Russian Federation http://www.cbr.ru/eng/
 ‘Statistics data on export control volume in term of positions for 2016’. (Gks.ru, 2017) http://www.gks.ru/wps/wcm/connect/rosstat_main/rosstat/en/figures/activities/
 Federal Customs Service of the Russian Federation http://www.customs.ru/index.php?option=com_content&view=article&id=13858&Itemid=2095
 the Decree of the President of the Russian Federation on Approval of list of information classified as state secret http://docs.cntd.ru/document/9014711.
 Customs Services ‘ Export-Import of goods for Jan-Dec, 2016 ‘ (Customs.ru, 2017) <http://www.customs.ru/index.php?option=com_content&view=article&id=24772> accessed 9 December 2017.
 ‘Statistics data on export control volume in term of positions for 2016’. (Gks.ru, 2017) <http://www.gks.ru/bgd/free/b04_03/IssWWW.exe/Stg/d01/35.htm> accessed 9 December 2017.
 Federal Law On Export Control of The Russian Federation  No 183-ФЗ, July 18 with amendments of 13 July 2015.
 The Decree of the President of the Russian Federation on List of Dual-Use items and technologies  No 1661, December 17.
 ‘Customs Tariffs’ (Eurasiancommission.org, 2017) <http://www.eurasiancommission.org/ru/act/trade/catr/ett/Pages/default.aspx> accessed 9 December 2017.
 Such logic formed the basis for the export control reform in the US, at the first stage of which it was planned to transfer 74% of the categories from USML to CCL.
 Council Regulation (EC) 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items .
 According to data provided by the Analytical Center for the Government of the Russian Federation.
’Dual Use – Trade – European Commission’ (Ec.europa.eu, 2017) <http://ec.europa.eu/trade/import-and-export-rules/export-from-eu/dual-use-controls/> accessed 10 December 2017.
 The letter of the Federal Customs Service of the Russian Federation No. 14-68/67278 dated December 28, 2016
 FSTEC of the Russian Federation (Fstec.ru, 2017) <http://fstec.ru/component/attachments/download/169> accessed 10 December 2017.
 Federal Law On Export Control of The Russian Federation  No 183-ФЗ, July 18 with amendments of 13 July 2015.
 Order of FSTEC of the Russian Federation  No 51 of May 4, 2012.
 ‘BAFA – Homepage’ (Bafa.de, 2017) <http://www.bafa.de/EN/Home/home_node.html> accessed 9 December 2017; ‘Excol’ (Excol-ceed.gc.ca, 2017) <https://www.excol-ceed.gc.ca/Main-Principal/Home_Accueil.aspx> accessed 9 December 2017; ‘TradeNet’ (What You Need to Know about TradeNet) <https://www.customs.gov.sg/about-us/national-single-window/tradenet/what-you-need-to-know-about-tradenet> accessed 9 December 2017.
 U.S. Department of State. Directorate of Defense Trade Controls ‘Export Control Reform’ (2016) <https://www.pmddtc.state.gov/ECR/> accessed 10 December 2017.
 Standard Individual Export Licenses (SIELs) are normally valid for two years. Gov ‘Standard Individual Export Licences – GOV.UK’ (Gov.uk, 2017) <https://www.gov.uk/guidance/standard-individual-export-licences> accessed 10 December 2017.
 all bulk export license are same validity period of three years. Tatsuya Kanemitsu and Tatsuya Kanemitsu, ‘Japan Introduce New Bulk Export License For Intercompany Transaction’ (Japantradecompliance.blogspot.ru, 2017) <http://japantradecompliance.blogspot.ru/2009/11/japan-introduce-new-bulk-export-license.html> accessed 9 December 2017.
 Jun Kazeki, ‘Japan’s Export Control System Update and Three Principles of Transfer of Defense Equipment and Technology’ (Supportoffice.jp, Japan 2015) <http://supportoffice.jp/outreach/2014/asian_ec/pdf/day1/1345_Mr.JunKaeki.pdf> accessed 10 December 2017.
 Treaty Establishing the European Community, Article 133 ‘EUR-Lex – 11997E133 – EN – EUR-Lex’ (Eur-lex.europa.eu, 2017). <http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:11997E133> accessed 9 December 2017.
 Commission of the European Communities.(Europa.eu 2017). ‘Completing the Internal Market, White Paper from the Commission to the European Council’. parts 1-3. <http://europa.eu/documents/comm/white_papers/pdf/com1985_0310_f_en.pdf> accessed 9 December 2017.
 Council Regulation (EC) 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items , Article 11 “If an export might prejudice its essential security interests, a Member State may request another Member State not to grant an export authorisation or, if such authorisation has been granted, request its annulment, suspension, modification or revocation. The Member State receiving such a request shall immediately engage in consultations of a non-binding nature with the requesting Member State, to be terminated within 10 working days. In case the requested Member State decides to grant the authorisation, this should be notified to the Commission and other Member States using the electronic system mentioned in Article 13(6).”
 EU Establishing Treaty, Article 296. ‘EUR-Lex – 12006E296 – EN’ (Eur-lex.europa.eu, 2017) <http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12006E296:EN:HTML> accessed 9 December 2017.
 Lisbon-treaty.org. (2017). Article 346. ‘Article 346’ (Lisbon-treaty.org, 2017) <http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-the-functioning-of-the-european-union-and-comments/part-7-general-and-final-provisions/589-article-346.html> accessed 9 December 2017.
 Council Regulation (EC) 428/2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items , Article 12
 ‘Briefing Implementation Appraisal’ (Europarl.europa.eu.2017). <http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/587340/EPRS_BRI(2016)587340_EN.pdf> accessed 9 December 2017.
 Article 12, Regulation 428/2009
 ‘Federal Office of Economics and Export Control’ (Bafa.de. 2017). <http://www.bafa.de/EN/Home/home_node.html> accessed 9 December 2017.
 Inspection of Strategic Products ‘Home’ (Isp.se, 2017) <http://www.isp.se/eng/> accessed 9 December 2017
 ‘European Commission – PRESS RELEASES – Press Release – Commission Proposes To Modernise And Strengthen Controls On Exports Of Dual-Use Items’ (Europa.eu, 2017) <http://europa.eu/rapid/press-release_IP-16-3190_en.htm> accessed 10 December 2017.
 “Key information for controlled goods, such as export control classification codes, end-users, items specifications and so on, can also be stored in the blockchain, and because this information is on a distributed ledger that all parties can see, it is easily verifiable. This could make it difficult for unauthorized parties to fraudulently obtain and transship export-controlled goods. For example, in a blockchain system that includes buyers, sellers, shippers, and insurers, if a good is prohibited from re-export to a third-country, the shipper would not be able to receive payment if any leg of the transaction was altered.” Aaron Arnold, Associate, Project on Managing the Atom, Harvard Kennedy School, Belfer Center for Science and International Affairs. https://www.belfercenter.org/person/aaron-arnold
 ‘Chinese National Sentenced To 9 Years For Providing US Goods To Iranian Nuclear Program’ (Ice.gov, 2017) <https://www.ice.gov/news/releases/chinese-national-sentenced-9-years-providing-us-goods-iranian-nuclear-program> accessed 10 December 2017.
 ‘Aaron Arnold Associate, Project on Managing the Atom, Harvard Kennedy School | Belfer Center For Science And International Affairs’ (Belfercenter.org, 2017) <https://www.belfercenter.org/person/aaron-arnold> accessed 10 December 2017.
 “We’re examining CFIUS to look at the long-term health and security of the U.S. economy, given China’s predatory practices” in technology, said a Trump administration official, who was not authorized to speak publicly. Defense Secretary Jim Mattis weighed into the debate on Tuesday, calling CFIUS “outdated” and telling a Senate hearing: “It needs to be updated to deal with today’s situation.” ‘U.S. Weighs Restricting Chinese Investment In Artificial Intelligence’ (U.S., 2017) <https://www.reuters.com/article/us-usa-china-artificialintelligence/u-s-weighs-restricting-chinese-investment-in-artificial-intelligence-idUSKBN1942OX> accessed 9 December 2017.
 ‘Cornyn, Feinstein, Burr Introduce Bill To Strengthen The CFIUS Review Process, Safeguard National Security’ (United States Senator John Cornyn, Texas, 2017) <https://www.cornyn.senate.gov/content/news/cornyn-feinstein-burr-introduce-bill-strengthen-cfius-review-process-safeguard-national> accessed 14 November 2017. FIRRMA https://www.cornyn.senate.gov/content/news/cornyn-feinstein-burr-introduce-bill-strengthen-cfius-review-process-safeguard-national
 ‘Hcoc – The Hague Code Of Conduct Against Ballistic Missile Proliferation’ (HCoC, 2017) <https://www.nonproliferation.eu/hcoc/> accessed 10 December 2017.