What You Need to Know
Export controls give states a tool to ensure that exported goods and technology are not used to support end uses and end users of concern. End uses of concern can include state programs of concern, as well as terrorism or sanctions evasion. Export controls are always more effective when implemented by a larger number of states. Cooperation on export controls is often in the interests of states, even amongst adversaries. Given this, there is broad agreement around how to approach export controls on nuclear technology, missile technology, chemical and biological technology, and military and related dual-use technology. In recent years, export controls have become more polarized as a result of strategic competition, particularly that between the United States and China. Following Russia’s invasion of Ukraine, related export controls have similarly been subject to increased polarization.
Who
Export controls are implemented by individual countries. However, countries generally recognize the importance of multilateral cooperation on export controls and tend to coordinate controls with other countries on a thematic basis. As a result, there are a number of export control regimes that coordinate controls on technologies in specific technological areas. These include:
-
Nuclear Suppliers Group and the Zangger Committee (nuclear technologies)
-
Missile Technology Control Regime (missile technology)
-
Australia Group (chemical and biological materials and technologies)
-
Wassenaar Arrangement (arms and military-relevant dual-use technologies).
At the national level, responsibilities for export controls are usually divided between military and dual-use dimensions. The term “dual-use” refers to technology which is ostensibly used for peaceful, non-military purposes, but which could also have military applications. Defense ministries are typically involved in export licensing for military items. Trade or business ministries often lead processes on dual-use export licensing. Atomic Energy Commissions and energy departments are often involved in nuclear export controls. Customs authorities generally have responsibilities for the implementation of export controls at national borders. Foreign ministries usually are also involved in export controls, particularly in relation to the staffing of export control regime meetings and in assessing country-specific considerations. This involvement can occur on matters of general export policy or in relation to specific export licensing decisions.
What
Export controls span numerous technological and bureaucratic sectors. The sections above highlight some of the areas in which export controls are focused, from nuclear technology to chemical and biological technology. In each of these areas, single use items and technologies (i.e., items that are expressly nuclear or expressly missile or expressly military) are subject to controls. However, export controls generally also cover dual-use items—that is, items that could contribute to a program of concern or an end not of direct concern. Controls generally also extend to software and technology, which can include design information. Additionally, in the years following the 2011 Arab Spring, export controls have increasingly focused on surveillance technologies and other technologies that can be used to facilitate human rights violations.
Given this broad scope, there are many materials, softwares, and technologies that are subject to controls. However, it is not feasible for every item to be added to control lists given the sheer amount of trade which occurs daily in the international marketplace. As a result, countries also typically have additional controls which allow for the control of items, software, or technology which is destined for a program of concern. These are called “catchall” or “end use” controls.
Why
Export controls are ancient instruments. Going back to the Classic Age, groups would control the export of arms and the means to make arms to ensure that rivals could not obtain such technology. Thus, maintaining an organization’s military edge has always been an important aspect of export controls. Modern export controls can be traced to the World Wars. War-era controls were used by NATO countries during the Cold War to prevent technologies reaching the Soviet Bloc.
Beyond military-related export controls, other forms of export controls have generally evolved in response to revelations about programs of concern obtaining technology from the international marketplace. Nuclear export controls emerged after exported nuclear reactors were used to produce fissile materials for nuclear explosions; chemical and biological export controls emerged after it became apparent that countries had acquired technology for secret chemical and biological weapons programs; and missile technology export controls evolved amid concerns about missile proliferation.
International coordination and cooperation on export controls are understood to be necessary for export controls to function effectively. Without such coordination, an illicit actor may simply bypass a single country’s controls by procuring goods through a neighboring country which does not implement similar controls. The political impetus created by repeated export control scandals has driven the adoption of controls as described above and has generally provided sufficient impetus for international cooperation on export controls to emerge, albeit slowly.
How
At the international level, export controls are coordinated through regimes of likeminded countries who come together to agree on lists of items to control, establish common criteria for authorizing export licenses, and share information on efforts to evade controls. The four major export control regimes typically have around 30-50 member countries and set their own membership policies. They operate by consensus, meaning that securing agreement on decisions can be a challenging process. Russia and China are members of some, but not all, of the export control regimes. As a result, regime membership is an important factor in how these regimes function in an era of strategic competition.
At the national level, export control implementation involves numerous elements. There must be a legal basis for controls, which should include all of the required elements of control. There must also be a licensing system so that exporters can seek permission to export items when appropriate, and there must be an enforcement mechanism to include inspection of goods at the border and intangible technology transfers. Countries usually maintain some form of export licensing decision making criteria. Most countries also implement an electronic export license application and processing system. Authorities must work closely with industry to implement controls.
For industry, implementation requires numerous elements. In brief, companies must know if the products they sell are subject to export controls. However, export controls cannot be implemented at the company level without also taking into account sanctions and the need to screen against sanctions lists and conduct “know your customer” checks. Companies must implement control systems to ensure that items are not inadvertently shipped without authorization —a requirement that also extends to software and technology. Finally, companies must process applications for licenses and associate shipments to licenses, where appropriate.
Companies often formalize their approach to implementation through Internal Compliance Programs (ICPs). ICPs are formalized expressions of a company's compliance processes. Staff are typically trained on the basis of the ICP. In some countries, ICPs are required by authorities under some circumstances.
Takeaways
-
Export controls have been used throughout modern history to manage trade with potential adversaries.
-
At the national level, export controls involve numerous elements including a legal basis, a licensing approach, and enforcement authorities.
-
At the company level, companies must know whether their goods are controlled and whether there are concerns, (including in relation to sanctions) associated with any transaction or customer. Companies often formalize their approach to implementation through Internal Compliance Programs.