Export Controls and International Regimes

container terminal © fotalia/christian42

container terminal © fotalia/christian42

Under international regimes, states make decisions about what to include on export control lists. The aim is to establish controls that are not only effective, but also neutral in terms of competition. In reality, however, questionable control practices undermine the legitimacy of international export controls.

Unfortunately, export controls are never neutral in terms of competition. While one state can halt exports, the other may have no such misgivings. Some authorities require two weeks to issue an export authorization, others more than six months. If the country of destination has its own manufacturers, export controls inevitably lead to a competitive disadvantage. Nonetheless, “foreign availability” is not taken into consideration under export control regimes.

Remove Mass-Produced Goods from the Lists

Against this backdrop, mass-produced goods have no place on export control lists. In 2014, the member states of the Nuclear Suppliers Group (NSG) included frequency converters on the control lists – technologically simple products that are produced each month in the millions worldwide. For their part, the states of the Australian Group (AG) have decided to control the export of pumps and valves, which for years have been in standard use at every industrial site. This creates a lot of work for the affected manufacturers and authorities; at the same time, these measures have virtually no positive effect regarding the goals of export control regimes.

Shorter Lists for More Effective Export Controls

To manufacture armaments, production equipment is needed. If just two or three components of that equipment are missing, the manufacturing process cannot function – for this reason, the term “key technology” is used. If, moreover, only a small number of companies worldwide produce this technology, the preconditions for targeted exported controls are met. Thus, the regime should be oriented towards this system. Significantly fewer companies would be affected; moreover, they would also enjoy full state backing in questions related to export controls. Furthermore, the authorities could channel their capacity towards the more important cases, instead of wasting their time dealing with hundreds of applicants each year.

Ultimately, much of what has been agreed under the international regimes is only of symbolic political value. It is an open secret among experts that the production of chemical weapons cannot be prevented through control lists and, at best, can be made only marginally more difficult. Nevertheless, the Australian Group continues to stick to the control lists, rather than raise questions about them. Policymakers simply turn a blind eye to the fact that this stance creates the risk of criminal liability for companies and their employees. In doing so, they make it more difficult for domestic industry to comply with the law and at the same time undermine the legitimacy of the global protection regime. Each company that must pay fines because of the incorrect use of control lists should speak up regarding this unfair burden.

In 1991, Germany fundamentally reformed its export controls. More than a quarter of a century later, little has improved; on the contrary, many elements have become substantially worse. Policymakers have a role to play here, under the motto “less is more”.

The lawyer Klaus Friedrich is an expert at the Mechanical Engineering Industry Association (VDMA) for export controls, sanctions and foreign trade law.