1. Mexico’s Experiences in Establishing an Export Control System G ENERAL D IRECTORATE OF FOREIGN TRADE M INISTRY OF E CONOMY Vienna, Austria June 2016.

2. Proliferation Threat The development of weapon of mass destruction programs requires special equipment, material, systems and components. Commodities are imported from any part of the world, systematically using networks of agents, brokers and front companies. A supplier may be distributing dual use items to a proliferator without knowing it. The commodities that are necessary for these programs are high-tech and have very specific features. Likewise, they can be employed both for lawful civilian purposes and for unlawful military purposes.

3. Resolution 1540 UN W HERE BORN THE INTERNATIONAL COMMITMENTS ? RESOLUTION 1540 All states must adopt and apply appropriate and effective laws for the purpose of prevent the manufacture, transfer, acquire, possession, development and transportation for weapons of mass destruction, their means of delivery and related materials. Multilateral Agreements look for contribute to non proliferation of weapons of mass destruction (WMD). Informal Groups of supplier countries: implement guidelines and export control lists, agree with their laws and national practices. Set up national export controls and transshipment of nuclear weapons, chemical, biological and their means of delivery. Having control of the end users of the goods exported. Set up criminal or civil penalties in cases of infringement.

4. Mexico´s entry to the Export Control Regimes In searching of non-proliferation of nuclear chemical weapons, biological weapons, their delivery systems, or anything that poses a threat to peace and international security. In response to Resolution 1540 UN. Conventional Arms and Dual-Use Goods and Technologies Member State since January 2012 Wassenaar Arrangement (WA) 41 countries Nuclear material and technology. Member State since September 2012 Nuclear Suppliers Group (NSG) 46 countries Chemicals, biological agents, elements and equipment manufacturing. Member State since August 2013 Australia Group (GA) 42 countries Missiles, equipment, software and related technology. Without application Missile Technology Control Regimen (MTCR) 34 countries

5. Mexico´s entry process to the WA I MPLEMENTATION OF THE EXPORT CONTROL S YSTEM International Negotiations Acceptance of admission to the WA Identification of benefits Inter-agency coordination 2 3 41

6. 1. Benefits of Mexico´s participation in the Regimens Facilitación comercial Strengthening international commitment to non proliferation To enhance competitiveness in production of high-tech goods in compliance of being a safe investment destination. Trade facilitation with allied countries Greater follow-up of trade transactions (Exports – Imports) Alignment with national and international best practices Certainty of transactions among companies Increase of export supply of related industries Being part of this System represents a international RECOGNITION [Receiver and Safe Destination]

7. 2. Regulatory implementation Mexico, prior to joining international regimes already had legal instrument for sensitive goods control by: Ministry of National Defense Ministry of Energy Ministry of Health Ministry of Environmental and Natural Resources N ATIONAL REGULATORY INSTRUMENTS Foreign Trade Law Federal Law on Firearms and Explosives Federal Law for the Control of Chemicals Susceptible diverted for the manufacture of Chemical Weapons Regulatory Law of Constitutional Article 27 in Nuclear Matters National Directives for regulation of goods June 16, 2011 Directive: “Directive by Which the Export of Conventional Weapons, Their Parts and Components, Dual-Use Goods, Software, and Technologies Susceptible to Diversion for the Manufacture and Proliferation of Conventional Weapons and Weapons of Mass Destruction Is Subjected to the Requirement of Prior Permission by the Secretariat of Economy ".

8. Publication of the June 16, 2011 Directive H OW M EXICO IMPLEMENTED THE INTERNATIONAL REGULATION ? Ministry of Economy Publications of the Directive Annex of Control 0 16/06/2011 I Dual-Use List WA 1 13/12/2011 II Munition 2 07/06/2012 III Software and Technology 3 22/10/2012 V Technical definitions 4 08/02/2013 5 13/03/2014 VI Dual Use List of NSGNSG 6 09/02/2016 VII Chemical List of AGAG

9. National legal framework H OW M EXICO IMPLEMENTED THE INTERNATIONAL REGULATION ? AgencyPublicationAnnex of Control International Regimen Ministry of Energy 02/03/2012I y IINSG 15/06/2012Appendix A, B and CNSG 18/06/2012 NSG Ministry of Environment and Natural Resources 19/12/2012Article 5AG 12/04/2013Article 5AGAG Ministry of National Defense 30/06/2007 06/10/2014 Article 3WA Article 4WA

10. Structure of the Control List of the WA 2. Identification of the controlled item 1. Identification of Export Control Number Technical Text from the Original List Categories of control: - Munition List: 1 – 22 - Dual-Use List: 1 – 9 Groups of control: A: Systems, equipment and components B: Production, testing and inspection equipment C: Materials D: Software E: Technology

11. 3. Administrative and Operational Implementation 1. To implement the new regulation, a new administrative area in the Ministry of Economy was created, and it executed a intensive program training for government officials with international experts. 2. Export Control Committee was installed as an instrument of coordination among agencies and following international best practices. FIRST LICENCE 15jun16 to have been granted 3,734 permits (merchandise permission, this is different from the number of procedures that are received as a same procedure can derive various permits).

12. 4. Implementation and collaboration with industry A Seminar outreach on the new regulation which was attended by about 200 export companies and major chambers of industry was made. Targeted training: Government officials Industry Brokers Offices and Business Consultants Academia (Universities and Research Centers) Other Tools: Internal Compliance Program (ICP) y Risk entities data base http://www.cumplimientointerno.economia.gob.mx Contact / Query www.siicex.gob.mx control.exportaciones@economia.gob.mx 1234

13. Export license process summary Response term: 10 working days

14. Key elements: Risk Analysis Type of Commodity Sensitivity Tangible/ Intangible Other Elements ICP Subsidiary Risk Analysis Exporting Company Destination (Country) Recipient Declared Use

15. Replies Risk Analysis To other agencies To other internal areas To the requesting company To industry representatives (Technical queries) POSIBLES QUERIES RESOLUTION TYPES (Present) Positive Negative Not required an export permit Does not proceed Formal requisition for additional information Resolution + Permit Sheet: Exporter´s full data Issuing date Effective period Items and their permit number. Elements in the Resolution

16. Mexican Export Control System It allows detonate the industrial policy of strategic sectors (electrical-electronic, automotive, aerospace, chemicals, basic metal, machinery and equipment). Admission to International Regimes Publication Directive Operation start 2011 – 2012 Beginning Interagency coordination Pre automation system Strengthening with industry 2013 – 2015 Strengthening Process Automation Single Window – (VUCEM) 2016 – 2018 Consolidation PHASE

17. Conclusions Interagency integration and coordination Design and/or Strengthening of Regulatory Framework Process Automation (Example: Single Window - VUCEM) Enhancement of internal capabilities – skill development Strengthening of liaison with sectors/industries 1. Export Control System must have an integrated and homologated vision 2. It implies continuous design, training and updating Constant review of industry behavior, of regulation proposals and of control lists updates 3. Always maintaining a regulation vision aligned with National and International Security 4. Definition of an Action Plan

18. Mexico’s Experiences in Establishing an Export Control System THANK YOU M A. D E L OURDES S EVERINO G UTIÉRREZ Deputy Director of Export Controls, General Directorate of Foreign Trade Ministry of Economy maria.severino@economia.gob.mx