Export Controls

What are Export Controls

Throughout history world leaders and countries have applied trade restrictions through export controls to defend their national security, sensitive commercial interests and foreign policy goals.

A misconception is that export controls only regulate military goods, i.e. wartime materials, which is further than the truth.

Export controls have traditionally also covered goods, services, since the twentieth-century, technologies and software that are indirectly related to wartime materials (so-called dual-use goods).

Furthermore, outside the context of security related trade controls, there are numerous goods subject to governmental controls, which are similar to security related trade controls, such as medicines or narcotics. In this context, export controls do not only impact the defense (security) sector, but many sectors of the civilian economy, e.g. freight-forwarding, R&D at universities, civilian aerospace, automotive, energy, chemical, pharmaceutical, agriculture, and telecommunications.

Throughout the ages security related export controls have been closely connected to the evolution of weapons and evolving concepts of security. Therefore, these types of export controls do not only impact the defense (security) sector, but many sectors of the civilian economy, e.g. transport (freight-forwarding), R&D at universities, civilian aerospace, automotive, energy, chemical, pharmaceutical, agriculture, and telecommunications. 

Currently, reasons for imposing export controls are: the proliferation of Weapons of Mass Destruction (WMD), the unwanted proliferation of conventional military equipment (arms embargoes to countries in a conflict), preserve regional stability (stop an arms race), prevent global terrorism, protection of human rights (stop torture or invasion of privacy of political opponents), threats related to cyber security, or enforcing arms embargoes adopted through United Nations Security Council resolutions

maritime sailingUnlike economic sanctions, export controls attempt to reconcile the need to maintain national security with the need not to disrupt legitimate trade. In this context, export controls are regarded as an exception to free trade, which is characterized, despite some international cooperation, by significant unilateralism.

In the twenty-first century, this balancing act is most pronounced in the export control regimes of the U.S., given that America is the greatest producer and supplier of military equipment and a crucial producer of sensitive technologies. For this reason, discussions regarding export controls usually orbit around the U.S. perspective (concerns regarding the dissemination of sensitive goods and technologies) and controversies how the U.S. implements its controls, think of the debate regarding origin based jurisdiction.

Read More Conceptual Origins of Export Controls

Within the context of security related trade controls, world leaders have frequently applied export controls to protect their national security. Before 1500’s, export controls were applied unilaterally by powerful states on the basis of necessity, i.e. shifting military alliances primarily imposed during times of war.

Although they were also employed during peacetime, as a means to regulate the transfer of arms technologies. For instance, in 1610, after England had developed the superior cast-iron cannon, the House of Lords made the unlicensed export of “Ordinance, gun, metal, iron ore, and iron shot,” a crime (see Carlo M. Cipolla, Guns, Sails and Empires: Technological Innovation and the Early Phases of European Expansion 1400-1700, New York: Pantheon Books, 1965, footnote 2, page 63).

Crusader knights take Antioch on the Firt Crusade

One of the first exceptions to unilateralism was the imposition of export controls by Popes during the crusades, whereby Papal laws prohibited the export of both military equipment and dual-use goods to territories controlled by Saracen authorities.

However, with the evolution of arms technology and the start of economic globalization, export controls no longer covered only armaments, but also dual-use goods, e.g. steel, iron to develop cannons or timber to build naval vessels.

The cannon shot *oil on canvas *78.5 x 67 cm *ca. 1680 *signed : W. v. Velde J.The problem here was the impact of dual-use controls on the emerging global economy. Powerful states, in the absence of clear international legal constraints, applied these controls arbitrarily whereby controls were imposed on not only their enemies, but also third-countries, i.e. neutrals, usually trading partners of their enemies. Invariably weaker states suffered from these types of controls. 

Similar to modern times, countries had to create a system whereby the armaments and dual-use goods could be legitimately restricted, without disproportionately interfering with the legitimate trading interests of third-countries. 

In 1625, in his epic treatise on the Laws of War and Peace, Hugo Grotius argued that countries at war had the right to restrict the supply of  to their enemies. Grotius was one of the first legal scholars to conceptualize export controls, although he was advancing a concept how to restrict cargoes during times of war in very specific conditions – laws of war relating to contraband and neutrality.

Hugo GrotiusGrotius argued that belligerents (parties to an armed conflict) could legally restrict the access of so-called items of wartime contraband to their enemies. These restrictions could extend to neutrals (third-countries not party to an armed conflict) if trading with the enemy threatened the national security of countries.

Grotius classified goods into three categories, whereby the first two could be restricted by belligerents: 

  • Absolute contraband – war-like goods – e.g. armaments, munitions 
  • Conditional contraband, goods which were destined for civilian end-use(r)s, but could also be used for military end-uses, e.g. steel or iron to build canons or timber to build naval vessels, the modern-day dual-use goods.  
  • Free Goods, non-contraband goods which could not be subject to capture.

Although Grotius’s theories are not a perfect fit to modern-day export controls, from a conceptual perspective, it is argued that his classification of wartime contraband is the forerunner of modern-day strategic controlled goods.

What is controlled?

Security related export controls regulate the movements of so-called strategic goods.

The movements of strategic goods refers to cross-border movements of strategic goods. Strategic goods can cover both military and dual-use goods, but also goods or precursors uniquely sensitive for WMD proliferation, e.g. goods related to nuclear energy, missile technologies or chemical or biological agents.


Economic sanctions and foreign policyControlling the movements of Strategic Goods

Generally speaking, the movements can cover:

  • exports (between the country of exportation and the country of destination),
  • re-exports (e.g. shipments of a strategic good between third-countries),
  • transmissions of technologies or software (e.g. intangible transfers of technologies through electronic means – popularly known as intangible transfers of controlled items), and so-called
  • deemed exports (e.g. a disclosure of a strategic good to a foreign national, which is considered an export under the laws and regulations of the country of exportation – particularly important under U.S. export control regimes).

Note that the words “generally speaking,” are inserted because the exact controlled movements differ between countries, i.e. between national laws and regulations. Two other points worth mentioning are.

  • Firstly, the concept of strategic goods covers hardware, technologies/software, materials, and services. For this reason, many commentators prefer to use the term “item,” instead of the term goods. Services can cover activities directly related to the development, production, and use of strategic goods, e.g. technical assistance, training. Services can also include particular activities which have been deemed to be of a strategic nature, e.g. arms brokering. 
  • Secondly, the controlled cross-border movement (temporary or permanent) can cover both: 
    • tangible (an item is physically transported across a border, method is not important, e.g. cargo, hand-carried, per mail or information stored in a CD, memory-stick, or in a laptop) and
    • intangible movements (can cover uploads, downloads for technologies/software, emails, information stored on intranet, visual disclosures or even verbal disclosures through a telephone conversation). Further, the reasons for controlling a cross-border movement is not so important, e.g. a sale, corrective or preventive maintenance, a gift or transfers between company units. The focus of the control is the movement itself. Note that the mere movement of persons, i.e. knowledge in someone’s brain, is not controlled (at least we don’t live in a 1984 world…). 

What the controlled movements boil-down to, is the following: 

Fotosearch_k5707821The Technical Characteristics of controlled items

The technical characteristics of items (for potential cross-border movements) are usually the first reason why governments impose export controls, i.e. impose license requirements and conditions for cross-border movements. The technical characteristics of goods are usually published in so-called Control Lists, which requires a review whether a good requires an export license or reporting requirements. 

Fotosearch_k9484580The End-Destination of controlled items

Another reason for imposing export controls concerns the (end)destination to which controlled will be (potentially)exported to. These controls vary per country, depending on national security and foreign policy considerations. Most well known are embargoed destinations by the United Nations Security Council (also see embargoed destinations by the EU and U.S.). 

Fotosearch_k14669741Who will receive the controlled item (End-User)

A key aspect for imposing export controls is that governments wish to restrict specific governments, entities or individuals from receiving controlled items. Therefore, the planned end-user of a controlled item, who will receive delivery of the item can be a concern for governments. An increasingly complex issue is identifying the ultimate end-user of goods, which can be very daunting for governments, given the extensive opportunities to disseminate information through the internet or for industry if they are active in many different countries selling mass market products or components, distributors or suppliers.

question-markHow will the controlled item be used (End-Use)

Certain end-uses are controlled or for the most sensitive of controlled items prohibited, e.g. military related end-uses, WMD proliferation or terrorism related end-uses. For example, see UK and U.S. end-use(r) controls. 

To assist companies/exporters, governments have published guidance regarding these issues. See for example the guidance of the U.S. and UK Governments.


Fotosearch_k5707821The Controlled Objects: Strategic Goods

As cited earlier, strategic goods subject to security related export controls are either military or dual-use goods. 

  • Military goods are those goods specially designed for military end-uses, with no equivalent in the civilian sector
  • Dual-use goods are goods which are normally used for civil end-uses, but also have military applications and/or have the potential to contribute to the proliferation of WMD. 
  • Further, export controls (so-called Catch-All controls) can be imposed in situations where there are concerns that the export of goods, are destined to an end-user of concern, i.e. a country or entity where the risk of diversion regarding strategic purposes is considered a security threat e.g. military end-uses or WMD end-uses

Note that dividing strategic goods into military and dual-use terms can be at times confusing, especially in regard to the U.S. export control regimes. This is partly caused by the ongoing efforts to reform the U.S. export control regimes – so-called Export Control Reform Initiative.

Read More
A more realistic explanation of the distinction between strategic goods is outlined by the U.S. Government, which is worth taking into account for those wishing to understand export controls

In this context, the U.S. Government applies the term “dual use,” to frequently describe the types of items subject to the Export Administration Regulations (EAR).

According to the U.S. Government, a “dual-use” item is one that has civil applications as well as terrorism and military or weapons of mass destruction (WMD)-related applications. What is exactly covered, i.e. subject to the EAR is outlined in Part 734.3 EAR, which is not limited to the control of dual-use items. Thus, items subject to the EAR include “purely civilian items, items with both civil and military, terrorism or potential WMD-related applications, and items that are exclusively used for military applications but that do not warrant control under the International Traffic in Arms Regulations (ITAR) (22 C.F.R. parts 120 et seq.).”

Determining whether a good is a strategic good can be more complex than one would imagine. This can be very daunting for organizations which aren’t the manufacturer of goods, e.g. incorporate components into their end-products. This is not only caused by a lack of awareness, e.g. knowing whether goods are subject to export controls, but because governments are increasingly demanding that companies or exporters know the end-uses of their goods, the end-users of their goods, and the end-destinations of their goods. 

Economic sanctions and foreign policy_ hoover institutionThe Strategic Control Lists

The Strategic Control Lists are lists of items which are subject to export controls, i.e. subject to licenses or require prior authorization for a potential cross-border movement.

The lists are published by governments, and are regularly updated. Generally speaking, the control lists are divided into military items (sometimes referred to as munitions lists) and dual-use lists.

The structure of the lists, especially those of participants of multilateral export control regimes (see further below), are similar, but not identical. This is because export controls, i.e. the licensing of cross-border movements of strategic goods, are implemented through national laws and regulations.

Understanding the control lists requires significant technological knowledge, as in many cases governments encourage companies/exporters to classify their products themselves. For most companies/exporters, this shouldn’t be too great a challenge. Self-classification especially applies to dual-use items; whereas the room for self-classification for military  products, given the nature of the goods and the tight control of the defense market, is less. 

Images of Battle of Waterloo_Scotland Forever_Elizabeth Lady ButlerThe munitions lists are categorized according to military categories. The most important munitions list is the U.S. Munitions List (given that the U.S. is by far the largest exporter of defense articles). For further information see below examples of strategic control lists.

The control lists for dual-use items are generally structured into 10 product categories, and subsequently divided into 5 sub-categories. For example, 

  • Category 0 – Nuclear Materials, Facilities and Equipment
  • Category 1 – Materials, Chemicals, Micro-organisms and Toxins
  • Category 2 – Materials Processing
  • Category 3 – Electronics
  • Category 4 – Computers
  • Category 5 – Telecommunications and Information Security
  • Category 6 – Sensors and Lasers
  • Category 7 – Navigation and Avionics
  • Category 8 – Marine
  • Category 9 – Aerospace and Propulsion

The sub-categories are: 

A- systems, equipment and components  B – test, inspection, and product equipment C- materials  D- software  E- technology

Finally, controlled dual-use items are classified according to so-called Export Control Classification Numbers (ECCN’s), which are unique to export controls.

Given the complex nature of the lists, governments have also published detailed guidance how to interpret the lists, i.e. classify export controlled goods and request licenses. Governments have also published extensive guidance regarding their control lists (see below for useful links). 

Examples of Strategic Control Lists


Control lists for both military and dual-use goods


Overview of Canada’s Export Control List

The European Union 

Military Equipment – (also review Common EU Military List)

EU Dual-Use Policy and overview of relevant licensing authorities of the EU Member States; Dual-Use Goods/technologies – see annex 1 Regulation 428/2009

The United States of America

U.S. Munitions List (also see the status of USML regarding Export Control Reform)

U.S. Commerce Control List (dual-use goods/technologies) (also see guidance structure of CCL) 


The International Framework of Export Controls  

Similar to economic sanctions, there is no common agreed compliance mechanism for export controls.

From an international legal perspective, export controls can be categorized as retorsions. Countries are free to decide with whom they wish to trade with, which especially applies to strategic goods.

As result, international law plays a limited role in the field of export controls, as most controlled movements of strategic goods are regulated by national laws and regulations. Furthermore, even in the case of legally binding United Nations Security Council resolutions, the Council does not instruct UN member states how to implement its sanctions, but frequently allows countries to enforce its restrictive measures, i.e. export controls, on the basis of their domestic laws and regulations.

However, national implementation does not occur in splendid isolation. There are some multilateral treaties, not to mention considerable governmental cooperation between like-minded countries through so-called multilateral export control regimes (see below), which require countries export controls are generally implemented.  

Important to note is that even in the case of multilateral treaties, security related export controls are still implemented through national laws and regulations, which blocks the development of international legally binding export control regimes. Examples of treaties which underpin export controls are: the anti-proliferation of WMD, see also UNSC 1540, illicit trafficking of small arms and light weapons, banning anti-personnel mines, and the Arms Trade Treaty

Flags of the Cold War super powersMultilateral Export Control Regimes (MECR’s)

MECR’s are a relative new. They were created during the Cold War as a result of the super-power confrontation and because the United Nations was ineffective to manage global security issues. 

Although both super-powers developed MECR’s, only the Western, i.e. U.S. dominated regimes have survived. The original aim of the U.S. dominated regimes was to restrict or deny the transfer of strategic goods and technologies to Communist countries, e.g. COCOM.

However, since the 1970’s, the focus of these regimes evolved to meet other security threats beyond the U.S.-Soviet Union rivalry. In particular:

  • the proliferation of nuclear weapons (1974 India’s announcement that it had successfully conducted a nuclear explosion)
  • the total failure of the global community to enforce export controls to prevent the use of chemical weapons by Iraq during its conflict with Iran during the 1980´s
  • the developments and unchecked proliferation of missile technologies to deliver WMD.

For a comprehensive overview of MECR’s see export controls related treaties, organizations and MECR’s. 

UN Flag - symbol for peaceSimply put, MECR’s are an extension of the maintenance of international peace and security.

They form a part of disarmament, arms controls and non-proliferation efforts within the United Nations Collective Security system. They fill gaps how certain conventions or international initiatives should be implemented, especially in regard to WMD proliferation or are initiatives of concerned countries regarding specific issues, e.g. the proliferation of missile technologies (delivery systems for WMD).

Basically, they are vital intergovernmental cooperation platforms, where the participating countries can adopt common control lists, but also discuss and exchange views and information regarding security related export controls.

Although MECR’s are not legally binding on the participating countries, the participants have very real political and economic interests to comply. Note that the agreed upon common lists are transposed into national laws and regulations, which causes some differences and, as in the case of the EU regarding dual-use items, can be implemented at the regional level. 

Their origins are somewhat complex, given the incremental evolution of international disarmament. To a certain extent, their origins lie with the development of international humanitarian law, e.g. the laws of armed conflict and the prohibition to use certain weapons. Others are an initiative based on a trigger event, e.g. the Iraqi use of chemical weapons during the 1980’s or limited to geographic locations (ban on the use of WMD in outer space) or political regions, e.g. Latin America/ Caribbean nuclear free zones Treaty of Tlatelolco or the South Pacific Treaty of Rarotonga.

[contact-form][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Website’ type=’url’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form]