EU-Thailand Cooperation in Export Control Additional Controls

EU-Thailand Cooperation in Export Control Op.3 „Decides also that all States shall take and enforce effective measures to establish domestic controls to prevent the proliferation of nuclear, chemical, or biological weapons and their means of delivery, including by establishing appropriate controls over related materials and to this end shall:... (c) Develop and maintain appropriate effective border controls and law enforcement efforts to detect, deter, prevent and combat, including through international cooperation when necessary, the illicit trafficking and brokering in such items... (d) Establish, develop, review and maintain appropriate effective national export and trans-shipment controls over such items, including appropriate laws and regulations to control export, transit, trans- shipment and re-export....“ 2 UN Security Council Regulation 1540

EU-Thailand Cooperation in Export Control Brokering

EU-Thailand Cooperation in Export Control Company 3 End-user Exporter Broker Company 2Company 1  New challenges and trends (first small arms, now proliferation)  Growing international concern  Brokering now considered a key element for an effective control system Brokering - Background

EU-Thailand Cooperation in Export Control 5  Allow government to react to new trends  Provide government with means to prevent and penalise critical activities  Provide government with legal background to reach out to industry and to raise awareness Brokering - Objectives

EU-Thailand Cooperation in Export Control 6  Complementary to export controls  Consistent with export controls  Coherent control system – no duplicatopn of administrative burden Brokering - Concept

EU-Thailand Cooperation in Export Control 7  Definition of what constitutes brokering and/or who is a broker  Definition of scope and jurisdiction  Definition of goods to be subject to control  Definition of controls Brokering – 1 st Step: Definitions

EU-Thailand Cooperation in Export Control  ‘brokering services’ shall mean: —the negotiation or arrangement of transactions for the purchase, sale or supply of dual-use items from a third country to any other third country, or —the selling or buying of dual-use items that are located in third countries for their transfer to another third country. The sole provision of ancillary services is excluded from this definition. Ancillary services are transportation, financial services, insurance or re-insurance, or general advertising or promotion; 8 Brokering – EU Definition

EU-Thailand Cooperation in Export Control 9 Consignee in country C Export from County B Broker in Country A Brokering – Scope and jurisdiction  Territorial jurisdiction

EU-Thailand Cooperation in Export Control 10 Brokering – Scope and jurisdiction National of County D in Country C Exorter in Country R Consignee in Country S  Extraterritorial jurisdiction

EU-Thailand Cooperation in Export Control 11  Military items  Dual-use Items  Listed items?  Non-listed items? Brokering – What is subject to controls?

EU-Thailand Cooperation in Export Control 12  Prohibitions  Licensing requirements  General Licensing requirement?  Individual end-use related controls? Brokering – What kind of controls?

EU-Thailand Cooperation in Export Control 13  The licensing process should not be less stringent than the licensing process for direct exports – basically the same rules and criteria apply  E.g.: EU Licensing Criteria:  Obligations from international non-proliferation regimes, export control arrangements or international treaties  Obligations under UN or EU sanctions  Considerations of national foreign and security policy, including EU “Code of Conduct”  Considerations about intended end-use and the risk of diversion Brokering – The licensing process

EU-Thailand Cooperation in Export Control 14  Record-keeping requirements  Registration of Brokers  Regular Audits  Information-sharing and inter-agency cooperation / role of intelligence or enforcement authorities  Industry outreach Brokering – Traceability

EU-Thailand Cooperation in Export Control Transit Controls

EU-Thailand Cooperation in Export Control 16  Globalization of trade, incl. increase in trading flows  Proliferators look for loopholes – States with perceived weak trade controls may be taken advantage of  Legitimate trade and the “need for speed” vs. security interests Transit – The challenge

EU-Thailand Cooperation in Export Control 17  What is a “transit”?  What is a “transshipment”?  Is there a difference?  How do they relate to exports (i.e. to traditional export controls?) Transit – The challenge

EU-Thailand Cooperation in Export Control 18 Transit – The challenge  The EU’s answer: Exporter in Country A Consignee in Country B Items passing through the EU

EU-Thailand Cooperation in Export Control 19 Transit – The challenge  The EU’s answer:  Transit = Transport of non-EU items entering and passing the EU with a destination outside the EU  Transit controls complement export controls – avoid duplication  Transshipment = Transit or (Re-)Exports; no need for another category

EU-Thailand Cooperation in Export Control 20  Total ban / general prohibitions in specific cases (embargos, transfer of WMD)  License requirements (general or ad hoc)  Possibility to interdict on a case-by-case basis  Scope of controls: Which items? Scope of jurisdiction (only on national territory? Activities carried out by own nationals?) Transit – Options for control

EU-Thailand Cooperation in Export Control 21  Experiences / challenges:  How to obtain the information needed to identify “sensitive” transfers?  Who is in charge?  Who is the addressee?  How to make a decision and what are the criteria?  What to do with the items in question?  And what about the political implications? Transit – Controls in practice

EU-Thailand Cooperation in Export Control 22  Who is in charge?  Intelligence  Customs  Licensing authority  Useful: Central point of contact and central point of information Transit – Controls in practice  Interagency coordination is key!

EU-Thailand Cooperation in Export Control 23  What to do with the items in question?  Seizure? Confiscation? Demolition?  Sending it back in the country of origin? To the original exporter?  Who is bearing the costs for storage and other expenses?  Very much subject to domestic legislation but useful to add clarifying rules! Transit – Controls in practice

EU-Thailand Cooperation in Export Control 24  And what about the political implications?  Transits are international activities by nature  Transit controls will involve at least three different states (three different (conflicting?) legislations, three different (conflicting?) policies?...)  But: International cooperation is beneficial and essential Transit – Controls in practice

EU-Thailand Cooperation in Export Control 25  The German example: 1) First Assessment by Customs, supported by central customs unit and by a electronic risk management system:  Is it a transit?  Are there indications for a sensitive end-use (destination, consignee, denials etc.)  Indication if the goods are controlled?  If answer to all questions is yes:  Transit will be stopped  Case will be forwarded to licensing authority Transit – Controls in practice

EU-Thailand Cooperation in Export Control 26  The German example (contd.): 2) Assessment by licensing authority, i.e.  Further information gathering (from freight forwarder, original exporter, other agencies etc.)  Technical assessment  Checking of relevant information in database (i.e. former licensing decisions, information about the parties involved etc.)  If required: Submittal to political level for decision  Decision:  No action or  Impose licensing requirement or  Prohibition of the transfer Transit – Controls in practice

EU-Thailand Cooperation in Export Control 27  Thank you for your attention!