EU Export Control: Your Ticket to Global Success!

1 WHAT IS THE MEANING?

In a globalized world where goods, technology and services flow (relatively) freely between countries, there is an urgent need to ensure that these goods do not fall into the wrong hands and contribute to unethical or dangerous activities.

This is the cornerstone of EU export control rules. The purpose of these rules is not only to protect the EU’s economic interests, but to a greater extent to promote global security, prevent the proliferation of weapons of mass destruction, strengthen respect for human rights and ensure that trade does not contribute to internal conflict or destabilization.

The export control rules are thus a central tool used by the EU and its Member States to ensure responsible and ethical trade practices on the international stage. Whether these goals are achieved depends on the extent to which EU companies prioritize compliance with the rules.

2 THE RISK OF WAITING FOR EXPORT CONTROL

When running a business where exporting is part of business activities, the consequences of waiting to ensure proper compliance with export control regulations can be serious:

1. In Denmark, companies that break the export control rules – or as a director or employee contribute to this, can face fines and a prison sentence of up to 2 years – and in aggravated circumstances up to 8 years.
2. A violation can lead to a company having difficulty obtaining export licenses in the future, which can have serious financial consequences.
3. In an age of social media monitoring and global communication, a mistake can quickly become known and damage a brand’s reputation for years to come.

3 WHAT EXPORT CONTROL IS REALLY ABOUT

The export control lists have their roots in lists made in UN working groups, which the EU member states and many other countries have undertaken to implement. The EU has therefore drawn up rules for export control, but it is the national rules in each EU country that determine the exact consequences of violations.

The rules do not only cover the direct export of goods. They also include brokerage, where a company mediates the sale of goods from one third country to another, and transport, where goods are moved between countries.

The export control rules regulate the export of “dual-use” goods. These are goods that can have both civilian and military uses, for example chemicals that can be used in medicine but also in weapons. Although we use the word “goods”, the term also covers software and technology.

4 THE BENEFITS OF CORRECT COMPLIANCE

Complying with export control regulations may seem like a burden, but there are significant benefits to getting it right:

1. Many people want and are motivated by working for ethically responsible companies. Correct compliance with the rules can make it easier to attract and retain talent.
2. Knowing the rules and complying with them can expand the geographic area in which your business can freely operate.
3. Having control over whether the goods you export or develop in your company are dual use on the EU’s control list is a basic prerequisite for fully complying with EU sanctions and the Investment Screening Act (the rules for foreign direct investment (FDI).

5. FINAL THOUGHTS

Although export control regulations may seem complex, it is worth investing time and resources in understanding and complying with them. Not only to avoid the consequences of violation, but also to take advantage of the many opportunities that arise from proper compliance.