Decorative page background

A basic to-do list for exporters of goods or technology to third countries – what should you pay attention to and how to approach the compliance with laws regarding dual-use items? – First part

A basic to-do list for exporters of goods or technology to third
countries – what should you pay attention to and how to approach
the compliance with laws regarding dual-use items? – First part

In our practice we have been receiving an increasing number of questions from our clients doing cross-border business regarding dual-use items, the necessity of obtaining export authorisations, and intra-company compliance with the applicable legislation concerning the exports of dual-use items. What are the initial steps a client should take in this area and what are the potential obstacles? Where should the client look for fundamental reference to set internal compliance upon finding out that the rules for the exports of dual-use items apply to the client? Our contribution below attempts to outline some essential answers.

What do dual-use items mean? Is my business affected by this area?

Dual-use items mean not only items but also software and technology that can be used for both civil and military purposes, and for both non-explosive uses and assisting in any way in the manufacture of nuclear weapons or other nuclear explosive devices.[1] In other words, the definition applies to items that are produced and designated for civil use, e.g. in the automotive industry, but can be used, given the nature and characteristics of such items, for or diverted to military purposes, in particular the production of weapons of mass destruction and their carriers. CNC machines are a typical example of dual-use items that can easily be misused to produce weapons. A device with embedded GPS technology or a certain chemical commonly used as a cleaner which can be misused, given its characteristics, as a resource to produce a chemical warfare agent are other examples of dual-use items.[2] The purpose of export controls on dual-use goods and technology is to ensure that these items are not transported to countries that might use them in weapons of mass destruction production programmes or be received by organisations that might use them for military or terrorist purposes.

At the EU level, a legal framework has therefore been created to ensure that an effective common system of controls of exports of dual-use items to third countries is in place. This framework includes, among other things, a common list of dual-use items based on international arrangements[3], rules relating to the destination (to which countries the items are exported) and end users of such items, as well as a summary of general principles for conducting export controls. The cornerstone of this framework is COUNCIL REGULATION (EC) No. 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (the “Regulation”).

In order to ascertain whether the exporter is exporting or about to export dual-use items requiring a certain type of export authorisation, the exporter must first determine internally based on the technical specification of the exported software or technology items whether the particular item is or is not on the list of the Regulation. The first step is therefore to compare the parameters and characteristics of the exported product against the specification of the item on the list of the Regulation. It is an internal decision based on the significant technical characteristics of a certain product, software, or technology. The practical difficulty thus lies in the fact that it is by nature a technical decision transferred by the legislation directly to the exporter to be made based on the exporter’s internal evaluation.

This technical exercise is all the more difficult for the exporter given the fact that the Regulation also defines as “exports” the intangible transmission of software or technology by electronic media to a destination outside the EU (fax, telephone, electronic mail or any other electronic means) or making such software and technology available in an electronic form to legal and natural persons and legal entities outside the EU, including oral transmission of technology when the technology is described over the telephone.

Determining the destination

If, based on the internal assessment, the exporter concludes that the product or technology is on the list of the Regulation and the export must hence apply for an export authorisation, the exporter must assess the destination as the next step. The destination will help the exporter determine what type of authorisation the exporter is to apply for at the competent public authority (Ministry of Industry and Trade in the Czech Republic (the “Ministry”)) and what level of risk there is in relation to the exports of items to a certain third country. The authorisation for the exports of dual-use items varies; for Japan, for example, the exporter can apply for a general export authorisation allowing exports based on the registration without an individual authorisation procedure. However, for Iran, for instance, the exporter must not only apply for an individual authorisation for each export but also deal with the regime of international sanctions.

Accurate determination of the end user and end use of dual-use items

Third, the exporter of dual-use items must accurately and carefully identify the end user of such items and their end use. The exporter must therefore be able to prove to the Ministry that the foreign partner is reliable, and must provide, along with the application for the export authorisation, accurate and credible information on the end use of dual-use items in line with the “know your client” principle.


In the first part of the article, we have set out the essential steps that an exporter of goods or technology to third countries should take in order to assess internally whether the exported goods or technology fall within the broad definition of dual-use items. In the upcoming next part of the article, we will focus on how to basically approach the in-house programme of dual-use item export controls

Related articles
An unwanted change to smart contracts?
Pavel Amler, Tomáš Lupač

An unwanted change to smart contracts?

The European Parliament has adopted a proposal for the Data Act which aims to harmonise rules on fair access to data, promote competition and stipulate conditions for the use of data, in particular with regard to data obtained by means of products connected to the Internet of Things (IoT). An overwh