▪ In order to fully understand the Union’s interest, the economic operators concerned should be involved in individual proceedings from an early stage on and in an appropriate manner. ▪ When applying the Enforcement Regulation, the EU should be careful not to undermine WTO law.
Export Controls Status quo Due to increasingly differentiated licensing requirements, fair framework conditions for German industry are important regarding export controls. There is a specific need for action in two areas. The tightening of US export controls to counteract civil-military integration in China is putting pressure on the internationally interconnected German industry. The U.S. response to Beijing's behavior in recent years has threatened to create exclusive economic hemispheres. The desire to protect against technology piracy carries the plausible risk of inhibiting companies' innovative strength and thus damaging their competitiveness. Because of the extraterritorial application of U.S. export control law, there is a potential that supply chains will have to be permanently restructured. However, an area that is, so to speak, semi-sanctioned under export control law would have a negative impact on efficient value chains and lead to a loss of prosperity. Moreover, export control practice in the European single market is still not uniform. Even with Europe’s reformed dual-use regulation in place, aligning legal practice to serve the needs of governments and economic operators equally across the EU will take time. What is more, the reform failed to make European export controls future-proof. There is a particular need for improvement in controls regarding emerging and foundational technologies so that the EU has the legal means at hand to effectively represent its interests and the interests of its economic operators in plurilateral control initiatives. 1. Tightening U.S. Export Controls Under the last administration, the U.S. continued the export control law trend of the Obama years and introduced further restrictions. It is very likely that controls will continue to be expanded under the Biden administration. The driving factor behind the tightening of U.S. export controls is China's civil-military fusion - that is, the elimination of the distinction between a civilian sphere on the one hand and military end-users on the other. When economic operators can no longer distinguish between civilian and military end-uses for their customers, tighter controls are urgently needed. Two tightening measures adopted by ordinance are particularly worth mentioning here. Tightening against China, Russia and Venezuela In the summer of 2020, the Bureau of Industry and Security (BIS) published enhancements that now apply to certain shipments involving China, Russia, or Venezuela (Expansion of Export, Reexport, and Transfer (in-Country) Controls for Military End Use or Military End Users in the People's Republic of China, Russia, or Venezuela ). This regulation significantly expands the scope of application of U.S. export controls related to end-use, expands the scope of application for the "regional stability" evaluation category, and tightens disclosure requirements for exports to China, Russia, and Venezuela. Basically, in the new version of § 744.21 of the Export Administration Regulations (EAR), BIS prohibits the export, re-export, and non-border transfer of goods in the event that exporters should have knowledge under U.S. law that those goods could be directed to a controlled military end-user or enduse. In addition to items listed on the Commerce Control List (CCL), §744 of the EAR (Control Policy) includes a so-called "Supplement Number 2" for those countries, which includes an additional nine 16
