EU Aiming for ‘Evolution’ in Dual-Use Export Control Approach, Official Says

The EU is preparing to revamp its dual-use export control regime to better target emerging technologies, said Jean-Charles van Eeckhaute, a senior European Commission official. Van Eeckhaute said the commission already has begun work on a new list of dual-use technologies -- which the bloc hopes to finalize by September -- that may warrant new restrictions.

Speaking during a June 26 hearing hosted by the European Parliament’s Committee on International Trade, van Eeckhaute said the bloc aims to create a specific list of new technologies that could be used in foreign civil-military fusion efforts or for human rights violations. Those details were outlined in the EU’s recently published economic security strategy (see 2306200052), which also described the commission’s goal of proposing new export controls and inbound and outbound investment screening proposals by the end of the year.

“In terms of dual use, we are not going for a kind of one-size-fits-all approach,” he said. “We will need to very clearly identify which are the technologies where there might be a risk when they are exported, which is already being done.”

During the hearing, which was focused on reviewing the commission’s new strategy, van Eeckhaute said the EU’s export controls need to “go further with the new type of technologies,” such as the “new types of dual-use that we have discovered also on the battlefields, for instance, in Ukraine.” After composing a list of the technologies, the bloc “will have to find a targeted way to deal with them,” van Eeckhaute said. “We are of course not in the business here of imposing things on the private sector or on businesses. But we have certainly drawn the attention of businesses to their role that they have to play, for instance, in securing their supply chains.”

Van Eeckhaute said he expects the bloc’s proposals to significantly change the EU’s dual-use export control policies. “It will lead to an evolution in our approach, that is for sure,” van Eeckhaute said. “Because we have seen that there are a number of flaws, especially now, in the kind of multilateral settings in which we identify dual-use priorities.” Current and former government officials have called for a new multilateral export regime, especially since Russia remains a member of the Wassenaar Arrangement and can block proposals (see 2302080034, 2211210005 and 2205240039).

Piotr Rydzkowski, an official with the Commission’s Directorate General for Trade, said the bloc is under a time crunch. “We don't have that much time to do all of this,” he said, stressing that the commission must put forward proposals before 2024. “It's going to be quite an intensive six months ahead of us.” He said the EU needs to “step up our game to understand what are the technologies that we really want to protect and how we should do so.”

Part of that effort will include assessing whether to put forward outbound investment screening restrictions, which are also being considered by the Biden administration (see 2305310075). Rydzkowski said there needs to be “some kind of examination of the security risks that we face with regards to the export of such technologies,” adding that the commission plans to establish an “expert group” to propose ways to tackle outbound investment concerns.

“We need to understand what it is that we're trying to address, what are the risks that are out there, and see whether the tools that we have are appropriate or not. And if they're not appropriate, we need to come forward with proposals,” he said. “Because otherwise we're missing the picture.”

Reinhard Butikofer, a Parliament member from Denmark, said outbound restrictions are one of several “controversies” that need to be better ironed out. He said the commission should make sure it gathers input from European companies before moving forward with any prohibitions. “I haven't heard many voices from the business community welcoming that yet,” he said of outbound restrictions. “I believe we need it. But unless we create a new environment for conversation, we won't get it.”

He also said the commission needs to better find ways to form economic security relationships with trade allies. “We should not just offer partnering,” Butikofer said, “we should also demand partnering.” He asked: “Why are we not invited as a partner, for instance, in the Chips 4 alliance” between the U.S., Japan, South Korea and Taiwan (see 2302220046)? “I think partnering should be made a pillar of our approach.”

At least one member voiced support for a new EU outbound investment screening tool. MP Marie-Pierre Vedrenne of France said the restrictions could be “useful, because we need to move on from thinking that our investments are serving our ends exclusively.” She also told commission officials that Parliament expects to play a “very full and useful role in all this work,” especially as it composes the initial list of dual-use technologies due by September.

Van Eeckhaute said the commission plans to work closely with Parliament and industry on new proposals for trade restrictions, and is creating “multiple dialogues” to receive input from exporters. “We are only at the beginning of this process,” he said. “We are putting a number of proposals on the table which will need to be discussed and will lead to a number of policy discussions.”