Mr. Schnägelberger, are you satisfied with the German and European export control system?
Export controls of the kind anchored in the EC Dual-Use Regulation are not simply a burden on businesses. They are in our own interest. Companies want to make long-term export deals, so it is important for us to clarify precisely the final disposition and ultimate purpose of dual-use goods. In order for companies to be able to conduct this step quickly and keep our delivery promises, comprehensible rules and speedy approval processes are crucial.
Fundamentally, the existing control systems in Germany and the European Union are adequate. They secure the international competitiveness of exporters and guard elementary Germany and European security interests. We are, however, concerned about the current proposals for the EC Dual-Use Regulation. It threatens to tip the balance and gravely harm competitiveness.
What is the reform of the EC Dual-Use Regulation about?
The EU’s reform pursues two goals. Firstly, the EU would like to further Europeanise export controls. Currently, each member state implements the uniform EU regulation on its own account. That is as it should be. But there are differences in the intensity of control. Germany, as so often, is very strict. Elsewhere, the controls are rather looser. It is important to have a comparable level of control across the Union, so it makes sense to sharpen definitions and expand the capacities of the national approval authorities. But a further Europeanisation is unnecessary.
The European Commission also wants to take greater account of the so-called human security approach in export controls. It is seeking to tighten regulation of technology exports that can be used for surveillance purposes, and prohibit exports of such technologies to countries where there is a danger of their being used in human rights violations.
Should not all available instruments be used to prevent human rights violations?
Protecting human rights is vital. And there is no reason to call this into question. To date, the primary goal of export controls has been to prevent the proliferation of weapons of mass destruction. But today, there is more at stake. We must not ignore respect for human rights and international humanitarian law in the final destination country.
Of course, we fully understand the Commission’s goals. However, it is the implementation we are concerned about, as the current proposals are dogged by imprecision in the rules and the legal terms. If obligations to companies are unclear, in other words if companies do not know which exports to which destination must be placed under additional scrutiny, they will abstain from exporting certain goods to certain regions altogether. This would reduce their international competitiveness and would not only risk revenues but also jobs and investments in R&D. The development of digital infrastructures would be hit especially hard if – as now proposed – an unspecific catch-all rule were to make all cyber-surveillance technologies subject to export licensing.
What would you like the European Commission to do?
In her trade strategy, “Trade for All”, EU Trade Commissioner Cecilia Malmström identifies three principles: effectiveness, transparency, and values. These should also apply to export controls.
Legal certainty and security of planning are important for business. The more specific the rules, the better and more easily we can implement them. We therefore see a strict list-based control approach as the solution. The goods and countries that are subject to stronger controls should be explicitly named. A list of countries and goods creates transparency and predictability. That would also serve the political objective of shaping a responsible and strategic foreign policy, which is more important than ever today. The existing principles can help in critical individual cases. Human rights aspects are already today given consideration in the decision-making and the approval process.
Karlheinz Schnägelberger is Head of Export Control and Customs Regulations at the science and technology company Merck KGaA and chair of the BDI Export Control Working Group.