Deze pagina is ook beschikbaar in het Nederlands. Klik hier voor de Nederlandse versie.
Introduction
Dual-use items are products, technologies, or software that could be used for both civilian and military applications. This means they can serve peaceful purposes but may also be employed in the production of weapons, nuclear technology, or other military uses. Due to their potential risks, dual-use items are strictly regulated under international laws and treaties. The European Union has extensive legislation to control the export, transit, and transfer of these goods and to prevent them from falling into the wrong hands. When goods do not qualify as dual-use items, the declarant includes additional code ‘Y901’ in the customs declaration. With this code the declarant declares to be aware of the dual-use criteria and takes responsibility for asserting that the goods are not intended for improper use.What are dual-use items?
Dual-use items are products, software, and technologies that could serve both civilian and military purposes. These items range from everyday objects to complex technologies. To prevent their use for undesirable purposes, such as developing weapons of mass destruction, they are subject to strict control measures.Under Regulation (EU) 2021/821 (hereafter referred to as the dual-use regulation), dual-use goods are classified into various categories, ranging from nuclear materials to electronics and telecommunications. These goods are detailed in Annex I of the regulation, which is regularly updated to account for new technological developments and geopolitical changes.
Exporters (and importers) of dual-use goods must comply with both international and national legislation. In the Netherlands, these rules are set out in the Wet Strategische Diensten, the Uitvoeringsregeling strategische diensten and the Besluit strategische goederen. Authorities responsible for enforcing this legislation include the Centrale Dienst voor in-en uitvoer (CDIU) and the team Precursoren, oorsprong, strategische goederen, sanctiewetgeving (POSS).
What does this mean for me?
For exporters, the challenge lies in balancing their commercial interests with compliance with the law. This requires a thorough understanding of the goods being traded and the destinations to which they are exported. In practice, this often proves to be a complex task.Exporting dual-use goods frequently requires an authorisation. Various types of authorisation are issued depending on the specific nature of the product, its destination, and the frequency of exports. One requirement for obtaining an authorisation is having an Internal Compliance Program.
What are the consequences?
In the Netherlands, team POSS conducts administrative checks on the transfer of dual-use and military goods within the EU, primarily through post-clearance audits. If team POSS deems a criminal investigation necessary due to irregularities, they coordinate with the public prosecutor's office (also referred to as Openbaar Ministerie, OM in short). The OM decides whether the Fiscale Inlichtingen- en Opsporingsdienst (FIOD) or team POSS itself will conduct the investigation. The FIOD is tasked with investigating criminal offenses related to strategic goods legislation.Distinction between footnotes and SGP-codes
Questions often arise about definitions and terms under dual-use legislation, particularly concerning Strategic Goods Post Codes (SGP-codes). For example, when consulting the "tariff customs" website for CN-code 8479 8997, numerous dual-use footnotes are listed as applicable. These footnotes reference the SGP-codes, which indicate whether specific goods are subject to sanctions.Note: The absence of a footnote does not automatically exempt the exporter from the authorisation, registration, or notification obligations. To confirm this, the full dual-use regulation must be comprehensively examined.
Technical notes and footnotes in Annex I of Regulation 2021/821 provide important clarifications, exceptions, and additional conditions applicable to listed items. These annotations may affect the category of a product and whether dual-use controls apply. A comprehensive understanding of these notes is essential for any exporter dealing with potential dual-use items. The term "footnotes" encompasses various meanings.
Footnotes often refer to other relevant legislation or standards, offering broader context and additional compliance guidance. They also indicate amendments to the regulation to ensure it remains up-to-date with technological developments and geopolitical shifts.
For instance, SGP-code 5A002.a relates to cryptographic goods and technologies used for data encryption. This category is particularly significant due to the role of cryptography in securing sensitive information in both commercial and military settings. Examples include:
· Cryptographic equipment (VPN devices, encrypted storage media, and specific cryptographic modules)
· Secure networks and communication (VoIP systems)
· Encryption software (data processing encryption software)
· Technologies and development (related to the development and maintenance of cryptographic systems, including algorithms and security protocols)
This SGP-code includes seven pages of notes, technical notes, and subdivisions. Applying all these notes and subdivisions requires specialized knowledge of the product and (sometimes) the manufacturing. Collaboration between legal specialist and a product expert is essential to determine whether the goods fall under dual-use obligations. Our practice is always focused on finding the ideal combination tailored to each case and company.
A final warning: While the footnotes for CN-codes on the customs website provide important guidance, they do not offer complete certainty about licensing requirements. It remains essential to consult the full dual-use regulation and thoroughly understand the technical notes and exceptions.