EU consults on internal compliance for trade in dual-use goods

The draft guidance (24-page / 1MB PDF) will support businesses exporting these so-called ‘dual-use’ items to design and implement compliance programmes designed to ensure they are complying with EU and national trade restrictions. 

The Commission’s guidance is intended to provide a framework to identify and manage the impact of dual-use controls and mitigate any associated risks.

The guidance focuses on the seven core elements needed in an effective internal compliance programme: a top-level management commitment; the organisation’s structure, responsibilities and resources; training and awareness-raising; a screening process for transactions; performance review, audits, reporting and corrective actions; record-keeping; and physical and information security.   

The guidance specifies what is expected from dual-use companies with regard to each core element, and details the actions and possible solutions for developing or implementing compliance procedures.

Sanctions expert Stacy Keen of Pinsent Masons, the law firm behind Out-Law.com, said: “The core elements proposed in the guidance will not be unknown to businesses, which may have already compliance programmes in place that are focused around these areas. 

“The introduction section to the draft guidance refers to assessing existing best practice guidelines issued by the EU and US (amongst others) on internal compliance programmes for trade in controlled goods with a view to refining or supplementing their scopes to better suit them to the EU dual-use context,” Keen said.

“The core elements also align with recommended compliance programmes relating to wider corporate offences, for example the principles in the UK Ministry of Justice’s guidance on adequate procedures to prevent bribery: risk assessment, proportionality, top level commitment, due diligence, communication (training and awareness raising) and monitoring and review. ”  Keen said.

Keen said the guidance would be helpful to dual-use companies.

“Whilst highlighting that a compliance programme needs to be tailored to the size, structure and scope of a business, the draft guidance sets out what is expected from companies dealing in dual-use goods and what are the steps involved in meeting those expectations. This will no doubt be of assistance to businesses devising or strength testing existing compliance programmes,” she said.

The commission said companies trading dual-use goods should already have existing policies and processes in place in relation to export control , and the guidance would help in benchmarking these policies.

Companies in the process of developing a compliance approach for dual-use trade will be able to use the guidance as a basic skeleton.

The consultation ends on 15 November.   The UK's Export Control Joint unit has issued a statement encouraging exporters to give their views.