"Arms Control & International Security" Department, MFA, Sofia 110/5/2005 National Export Control: A Tool to Enforce Non-Proliferation By Dr. Radoslav Deyanov, Minister-Plenipotentiary, State Expert AG Training Seminar: “Strengthening Border Customs Control on Shipments of Dual-Use Goods & Technologies in the Western Balkans” Sofia, 4–6 October 2005

"Arms Control & International Security" Department, MFA, Sofia 210/5/2005 The Role of Border Customs Control for Non-Proliferation?

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia3 Why bother with: Non-proliferation of WMD? Non-proliferation of WMD? Restrictions on international trade? Restrictions on international trade? National export control of dual-use items? National export control of dual-use items? Interdiction of shipments on high seas? Interdiction of shipments on high seas? Involving customs officers in matters of international & national security? Involving customs officers in matters of international & national security?

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia4 Customs Focus: Law Enforcement! Revenue collection: customs duties Revenue collection: customs duties Trade facilitation Trade facilitation Protection of society & security: Protection of society & security: e.g. illegitimate transit of goods/ persons e.g. illegitimate transit of goods/ persons Compliance with international agreements: Compliance with international agreements: e.g. control, monitoring, data collection, etc.) e.g. control, monitoring, data collection, etc.)

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia5 New Dimensions New threats to security (national & international) New threats to security (national & international) Growing risks of proliferation of WMD Growing risks of proliferation of WMD Risks of diversion of sensitive dual-use exports Risks of diversion of sensitive dual-use exports Risks of terrorist acts using dangerous substances against innocent people Risks of terrorist acts using dangerous substances against innocent people

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia6 Proliferation Risks Growing global concern, Growing global concern, Proliferation of CW/BW possession to additional States: Proliferation of CW/BW possession to additional States: for purposes of deterrence or greater political leverage; for purposes of deterrence or greater political leverage; Acquisition of CW/toxic chemicals/toxins by non- State groups for terrorist purposes (e.g. by trade or illicit trafficking) : Acquisition of CW/toxic chemicals/toxins by non- State groups for terrorist purposes (e.g. by trade or illicit trafficking) : use against the general public or official institutions, use against the general public or official institutions, spread fear & horror (weapons of “mass panic”) spread fear & horror (weapons of “mass panic”) NP measures: the response to those threats. NP measures: the response to those threats.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia7 After 9/11/2001: “Clear & Present Danger”

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia8 Group-8 Call “ We call on all States to establish effective procedures and machinery to control the transfer of materials, technology and expertise which may contribute to the development, production or use of WMD and their means of delivery.” (Evian Statement of 2 June 2003) “ We call on all States to establish effective procedures and machinery to control the transfer of materials, technology and expertise which may contribute to the development, production or use of WMD and their means of delivery.” (Evian Statement of 2 June 2003)

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia9 National Control Systems Policy of controlling international trade in sensitive items & high technologies, Policy of controlling international trade in sensitive items & high technologies, Accountancy of movements of dual-use materials, technologies, etc., Accountancy of movements of dual-use materials, technologies, etc., Export controls to prevent risky shipments, Export controls to prevent risky shipments, Coordination between agencies involved, Coordination between agencies involved, Flexible framework facilitating adjustment to changing international requirements. Flexible framework facilitating adjustment to changing international requirements.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia10 Your Role is Important! Enforce national export controls, Enforce national export controls, Verify compliance with export restrictions, Verify compliance with export restrictions, Prevent unauthorized exports, Prevent unauthorized exports, Intercept illicit trafficking of prohibited items, Intercept illicit trafficking of prohibited items, Collect data for international reporting, Collect data for international reporting, Facilitate legitimate international trade. Facilitate legitimate international trade.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia11 The Context Enforcing application of non-proliferation norms, Enforcing application of non-proliferation norms, Helping to police global trade in dual-use items, Helping to police global trade in dual-use items, Utilizing all tools of national export control for NP, Utilizing all tools of national export control for NP, Cooperating with global export control regimes, Cooperating with global export control regimes, Supporting verification of arms control treaties. Supporting verification of arms control treaties.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia12 Expanding International Trade

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia13 Toxic Chemicals Transfers: 2003 Increasing scale of international trade in toxic Increasing scale of international trade in toxic chemicals in conditions of globalization, chemicals in conditions of globalization, Schedule 1 chemicals: small amounts (kg), Schedule 1 chemicals: small amounts (kg), Schedule 2 chemicals: 5,000 tonnes, Schedule 2 chemicals: 5,000 tonnes, Schedule 3 chemicals: 270,000 tonnes. Schedule 3 chemicals: 270,000 tonnes.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia14 Overview International mandate to control exports, International mandate to control exports, State obligations under international law, State obligations under international law, Export control principles & architecture, Export control principles & architecture, Structure of a national export control systems Structure of a national export control systems International harmonization/cooperation, International harmonization/cooperation, Dynamic nature – adjustment to changing international requirements. Dynamic nature – adjustment to changing international requirements.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia15 International mandate International mandate to control exports, International mandate to control exports, Obligations under “hard” international law, Obligations under “hard” international law, Political commitments under “soft” international law. Political commitments under “soft” international law.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia16 Type of international law? Hard law – legally binding agreements: Hard law – legally binding agreements: NPT, CWC, BWC, ENMOD, START, INF, CFE NPT, CWC, BWC, ENMOD, START, INF, CFE UN SC actions under Chapter VII (Charter) – mandatory! UN SC actions under Chapter VII (Charter) – mandatory! durable, well defined, easier to verify; durable, well defined, easier to verify; Soft law - politically binding: Soft law - politically binding: unilateral actions – decrees, national policies, etc., unilateral actions – decrees, national policies, etc., export policy co-ordination - AG, MTCR, NSG, WA, export policy co-ordination - AG, MTCR, NSG, WA, political understandings & joint declarations. political understandings & joint declarations.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia17 CWC: Non-Proliferation Article I (d) : not to assist, encourage or induce, in any way, anyone in any prohibited activity Article VII : not to permit/prevent any prohibited activity enact & extend outside penal legislation adequate national oversight & controls of the flow & use of scheduled chemicals, related equipment and technologies; confidence in peaceful uses of on-going chemical activities complement verification under the CW Convention, strengthen its non-proliferation objectives, raise extra barriers to non-State terrorist groups, enhance access to, and facilitate trade in, chemicals, equipment & technologies by those who comply.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia18 UN SC Res.1540 “The Security Council ”, 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:

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia19 UN SC Res.1540 a) Develop and maintain appropriate and effective measures to account for and secure such items in production, use, storage and transport; b) Develop and maintain appropriate and effective physical protection measures;

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia20 UN SC Res.1540 c) Develop and maintain appropriate and 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 in accordance with their national legal authorities and legislation and consistent with international law;

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia21 UN SC Res.1540 d) Establish, develop, review and maintain appropriate and effective national export and trans-shipment controls over such items, including appropriate laws and regulations to control export, transit, trans-shipment and re-export ….., and transporting that would contribute to proliferation, as well as establishing end-user controls; and establishing and enforcing appropriate criminal or civil penalties for violations of such export control laws and regulations.”

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia22 Elements of National Export Control Systems (1) To account for and secure dual-use items in production, use, storage and transport, To account for and secure dual-use items in production, use, storage and transport, To protect physically dual-use items, To protect physically dual-use items, To apply border controls and law enforcement of shipments of dual-use items, To apply border controls and law enforcement of shipments of dual-use items, To detect, deter, prevent and combat illicit trafficking and brokering in dual-use items. To detect, deter, prevent and combat illicit trafficking and brokering in dual-use items.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia23 Elements of National Export Control Systems (2) To establish, develop, review and maintain export and trans-shipment controls, To establish, develop, review and maintain export and trans-shipment controls, To introduce “end-user certificate” controls, To introduce “end-user certificate” controls, To pass laws and regulations on control of export, transit, trans-shipment and re-export, To pass laws and regulations on control of export, transit, trans-shipment and re-export, To enact and enforce criminal & civil penalties for violations of export laws & regulations, To enact and enforce criminal & civil penalties for violations of export laws & regulations, To report to the UNSC Committee + OPCW. To report to the UNSC Committee + OPCW.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia24 Your Role! To control borders & enforce export control requirements (legislation & regulations), To control borders & enforce export control requirements (legislation & regulations), To detect and deter export regime violations, To detect and deter export regime violations, To enforce criminal or civil penalties under the law, To enforce criminal or civil penalties under the law, To collect data for declarations and other reports to international organisations (e.g. OPCW, EC, UN) To collect data for declarations and other reports to international organisations (e.g. OPCW, EC, UN) To cooperate with other export control agencies. To cooperate with other export control agencies.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia25 Export Control Regimes Nuclear Suppliers Group (London Club) – 1977 (several revisions of guidelines for nuclear transfers: full-scope safeguards + IAEA Additional Protocol, 44 participants); Australia Group – 1984/1985 (39 & EC participants); Missile Technology Control Regime (several revisions of guidelines; 34 participants) Wassenaar Arrangement (former COCOM expanded & revised) – 1996 (39 participants) Proliferation Security Initiative – 2003 (60 states support)

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia26 Place of Export Control Regimes in ACD Law

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia27 Nature of Export Control Regimes Political arrangements based on guidelines, Political arrangements based on guidelines, Introduction of national legislation/mechanisms Introduction of national legislation/mechanisms Improvement of control efficiency (e.g. penalties) Improvement of control efficiency (e.g. penalties) Updating of lists of controlled items, Updating of lists of controlled items, Harmonisation of licensing procedures, Harmonisation of licensing procedures, Co-ordination of national policies & practices (e.g. exchange of information on denials) Co-ordination of national policies & practices (e.g. exchange of information on denials)

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia28 Non-Proliferation Architecture NP Treaties UNSC process EU Strategy G-8 Programme Export Control Regimes

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia29 Layers of CW/BW Export Control NPT, CWC, BWC, IAEA safeguards National Export Control Systems AG, NSG, MTCR, WA, ISP

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia30 Export Control Security Benefits? Raises extra barriers (legal, political, punitive), Raises extra barriers (legal, political, punitive), Makes proliferation more costly (deterrent!), Makes proliferation more costly (deterrent!), Increases the risks of timely detection, Increases the risks of timely detection, Delays (WMD) acquisition process - “buys time” for more coercive enforcement measures, Delays (WMD) acquisition process - “buys time” for more coercive enforcement measures, Creates political bond amongst participants. Creates political bond amongst participants.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia31 Australia Group (AG) Export control regime: CW & BW, Export control regime: CW & BW, Since April 1984: Since April 1984: –in response to UN investigation’s findings (Iran-Iraq war), –Iraq has acquired CBW materials from chemical industry, –need to harmonise national export controls (uniformity); Informal political arrangement: Informal political arrangement: –39 Participant States + EU = parties to CWC & BWC, –annual meetings: 20 th anniversary, Sydney (April 2005).

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia32 AG: Purpose & Nature Purpose: to minimise risks of assisting CBW spread, Purpose: to minimise risks of assisting CBW spread, No legal obligations: political commitments, No legal obligations: political commitments, Discussions on ways & means to apply effectively national export licensing measures: Discussions on ways & means to apply effectively national export licensing measures: –reports on national export control practices, –exchange of information (transfers & concerns), –cases of export denials (for particular concerns); AG’s outreach activity: 60 countries/year. AG’s outreach activity: 60 countries/year.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia33 AG: Control Measures National export licensing measures: – –effective in impeding production of CW and BW, – –reasonably easy to implement (practical !), – –not to impede normal trade for legitimate purposes; “Common control list” of items: – –chemical weapons precursors, – –dual-use chemical production facilities & equipment, – –plant pathogens and animal pathogens, – –biological agents, – –dual-use biological equipment.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia34 AG: Harmonisation Role Commercial firms/research institutions: – –uniform exposure to export control restrictions, – –common interest in enjoying equal trade opportunities, – –not being associated with CBW proliferation (image!!), – –severe political sanctions for violators of restrictions; “License shopping” => uniformity required, AG: strongly supports CWC & BWC regimes believes that AG policy is fully consistent with CWC.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia35 AG v/s CWC Support of free trade: – –compatibility of AG with legitimate trade interests, – –access of all States Parties to the benefits of “peaceful chemistry”, – –only few countries actually affected (1% of all trade); AG statement (pledge) in 1992: – –to review national regulations on trade in chemicals in order to make them fully consistent with all norms of CW Convention.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia36 NEC Building Blocks (1) Create legal foundations (laws & regulations), Define policy/policy-making mechanism – establish criteria for assessing exports, Introduce a licensing system for exports with an executive machinery, Use (publish!) control lists of dual-use items, Enact penalties for violators (efficiency!), Establish a compliance/enforcement mechanism,

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia37 NEC Building Blocks (2) Provide sufficient resources (human & financial), Coordinate roles of national agencies, Harmonise legislation & practices with those of other supplier States (uniformity!), Use a mechanism of sharing the “best practices” between like-minded States Cooperate regionally with neighbouring States.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia38 Use of NEC Systems Control of transfers of dual-use items, Control of transfers of dual-use items, Collection of data for declarations, Collection of data for declarations, Provision of reports to international organisations (e.g. OPCW) Provision of reports to international organisations (e.g. OPCW) Harmonization of/adjustment to changing international requirements Harmonization of/adjustment to changing international requirements Customs: enforcement & validation roles. Customs: enforcement & validation roles.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia39 Two Examples CW Convention – OPCW verification role; CW Convention – OPCW verification role; WCO recommendation on the use of the Harmonized Coding System to facilitate collection/validation of transfer data for international reporting purposes. WCO recommendation on the use of the Harmonized Coding System to facilitate collection/validation of transfer data for international reporting purposes.

40 The OPCW

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia41 Export Control for CWC Implicit CWC requirement but …lack of guidance Implicit CWC requirement but …lack of guidance Specific obligations vis-à-vis States non-Party: Specific obligations vis-à-vis States non-Party: –Transfers restrictions (ban on S1 & S2 chemicals) –“Necessary measures” to ensure S3 use for non-prohibited purposes –End-use certificates (S3 chemicals; end-use details, recipient States) –Provision of declarations on “aggregate national data” on transfers; Little guidance”: how to control transfers & how to collect & report data in a harmonised manner. Little guidance”: how to control transfers & how to collect & report data in a harmonised manner.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia42 Discrepancies: 2002 Picture

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia43 Non-Matching Data!

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia44 The Problem’s Roots? %: non matching data %: non matching data –Reporting problems: in lack of harmonisation/ common standards to collecting & providing data, –Undeclared transfers: in export control gaps, –Free zones: in export/trade registration control gaps; Export controls: a “key fix” for OPCW to get meaningful data! Export controls: a “key fix” for OPCW to get meaningful data!

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia45 The Tip of the Iceberg ! Insufficient interest in CWC & OPCW; Lack of knowledge of basic principles & elements of national transfer controls; Customs agencies or ports deficiencies; Lack of coordination between partners; Inadequate legislation & law enforcement; Trade interests breeding confidentiality concerns – inadequate national regulations. Non-submission of transfer data to OPCW, Non-matching transfer declaration data, Lack of responses to OPCW inquiries,

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia46 Customs Services are viewed as possible as possible resources for facilitating the verification functions of international organisations Role of Customs

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia47 Most trading nations require indication of the sort of chemical products involved in export shipments Most trading nations require indication of the sort of chemical products involved in export shipments Products are described with digitised codes from the Harmonised System (HS) of coding based on the International Convention on the Harmonised Commodity Description & Coding System (1988) (frequently reviewed). Products are described with digitised codes from the Harmonised System (HS) of coding based on the International Convention on the Harmonised Commodity Description & Coding System (1988) (frequently reviewed). Harmonised Coding System

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia48 HS clustering of codes 21 sections 96 chapters (2 digits) 1241 headings (four digits) 5018 groups of goods (six digits) Further subdivisions are possible & useful. HS clustering of codes 21 sections 96 chapters (2 digits) 1241 headings (four digits) 5018 groups of goods (six digits) Further subdivisions are possible & useful. Example: Section VI: Products of chemical and related industry, Chapter 29: Organic chemical products, Heading 29.22: Oxygenated amino compounds, Group : Triethanolamine and its salts. Example: Section VI: Products of chemical and related industry, Chapter 29: Organic chemical products, Heading 29.22: Oxygenated amino compounds, Group : Triethanolamine and its salts. HS Structure

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia49 To use HS coding for families of scheduled chemicals not previously specifically coded, in order to allow Customs Agencies/NAs to “control and monitor international trade in substances controlled under CWC” (1999). To use HS coding for families of scheduled chemicals not previously specifically coded, in order to allow Customs Agencies/NAs to “control and monitor international trade in substances controlled under CWC” (1999). The documentation is available at: The documentation is available at: WCO Recommendation

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia50 Examples: s Schedule 1: sulphur mustards sarin, soman and related sarin, soman and related nerve agents nerve agents ricin,; ricin,; s Schedule 2: BZ, thiodiglycol thiodiglycol s Schedule 3: hydrogen cyanide, alkyl phosphites alkyl phosphites. Coding Scheduled Chemicals

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia51 A good news: HS codes are available for States Parties to CWC to control international shipments of scheduled chemicals; A good news: HS codes are available for States Parties to CWC to control international shipments of scheduled chemicals; A bad news: Only few nations (11 in mid-2005) are so far using HS codes recommended by WCO. A bad news: Only few nations (11 in mid-2005) are so far using HS codes recommended by WCO. Wider Use Needed!

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia52 A warning: adoption of the HS recommendation alone WILL NOT solve all reporting problems, A warning: adoption of the HS recommendation alone WILL NOT solve all reporting problems, It will, however, facilitate the review by NAs of the large volume of customs transfer data, It will, however, facilitate the review by NAs of the large volume of customs transfer data, Further refinement of HS codes beyond the level of the WCO recommendation (>6 figures) might ease the “matching” of declaration data. Further refinement of HS codes beyond the level of the WCO recommendation (>6 figures) might ease the “matching” of declaration data. Easier Data “Matching”!

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia53 Frequently, Border Customs is the only available resource for compilation of detailed transfer data for declarations to OPCW, Frequently, Border Customs is the only available resource for compilation of detailed transfer data for declarations to OPCW, Even if there are other sources of information (e.g. plants), Customs can frequently be used to validate the information from such sources. Even if there are other sources of information (e.g. plants), Customs can frequently be used to validate the information from such sources. Key Role for Customs!

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia54 Close cooperation between NAs and Customs can help resolve discrepancies in declarations of States Parties that are trading partners (through the global Customs network), Close cooperation between NAs and Customs can help resolve discrepancies in declarations of States Parties that are trading partners (through the global Customs network), The KEY is close working cooperation between NAs, Customs and Industry The KEY is close working cooperation between NAs, Customs and Industry Cooperation Required!

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia55 Encourage use of HS codes for shipments of CWC scheduled chemicals, Encourage use of HS codes for shipments of CWC scheduled chemicals, Customs Agencies need to receive training from National Authorities on methods of recognising products containing scheduled chemicals, Customs Agencies need to receive training from National Authorities on methods of recognising products containing scheduled chemicals, National Authorities need to keep close contacts with Customs Agencies in order to build mutual co-operation and a knowledge base. National Authorities need to keep close contacts with Customs Agencies in order to build mutual co-operation and a knowledge base. Lessons Learnt

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia56 Conclusions A clear non-proliferation mandate for States, A clear non-proliferation mandate for States, States are under legal obligations to control exports of dual-use goods and technologies, States are under legal obligations to control exports of dual-use goods and technologies, Need to establish and maintain national export control systems based on legislation, Need to establish and maintain national export control systems based on legislation, Border Customs officers play key roles in enforcement & international verification. Border Customs officers play key roles in enforcement & international verification.

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia57

10/5/2005 "Arms Control & International Security" Department, MFA, Sofia58 Discussion Qs & As