On 23 October 2012, the European Parliament adopted a number of suggested amendments to the European Commission’s proposal to amend the Dual-Use Regulation (428/2009) (the “Dual-Use Regulation”).  The amendments include a proposal to encompass surveillance equipment within the scope of the EU’s export controls.  This move echoes developments in EU trade sanctions regimes: sanctions against Iran and Syria, for example, prohibit exports of designated equipment and technologies where authorities have reasonable grounds to suspect they would be used to monitor or intercept internet or telephone communications.

Surveillance Equipment Added to the Catch-alls

The Dual-Use Regulation controls the export of goods and technologies that are listed as “dual-use” — that is, items originally designed for civil use that that can also be put to military uses.  The Annex to the Dual-Use Regulation lists specific items the export of which is restricted without a license (some electronic, computer, telecommunication and IT goods and technologies are already listed as “dual-use”, and thus subject to export controls).  In addition, the Dual-Use Regulation sets out certain conditions under which items that are not listed are still subject to export controls (so-called “catch-all controls”).

The current Dual-Use Regulation sets out three such “catch-all” provisions, according to which Member States authorities may impose licensing requirement on items that are not listed specifically in the Dual-Use Regulation.  They cover items:

  • Intended for use in relation to weapons of mass destruction;
  • Intended for a military-end use in a country that is subject to EU, OSCE, or United Nations arms embargos; or
  • Intended for use as parts or components of military items  that have been exported without an export authorization or in breach of such authorization.

The amendment proposed by the European Parliament would add a fourth catch-all clause to the list set out above.  According to this clause, exports of unlisted items may be subject to authorization if they are intended “for use in connection with a violation of human rights, democratic principles or freedom of speech as defined by the Charter of Fundamental Rights of the European Union, by using interception technologies and digital data transfer devices for monitoring mobile phones and text messages and targeted surveillance of internet use (e.g., via monitoring centres or lawful interception gateways).

If adopted, the new catch-all clause could subject exporters of any IT surveillance equipment — potentially a wide group of items — to a licensing requirement.  How this provision will be applied in practise, however, will depend on the exact phrasing of the final text adopted by the EU institutions.  Specific licensing decisions would likely take into account the identity of the end-user of the equipment and/or the end-user country. Thus, exports to end-users in countries with a proven track-record of human rights violations  would be more likely targeted under the new provision than exports to countries that adhere to higher human rights standards.

The proposal to amend the EU Dual-Use Regulation will almost certainly now go through a “second reading” procedure in the European Parliament and European Council.  As a result, contrary to original expectations, the Dual-Use Regulation is not likely to be amended before the calendar end of 2012.