Corporate responsibility for security Sibylle Bauer SIPRI Sofia, 22 May 2006

Export control rationale National security interests International security interests International obligations Requirement under UNSCR 1540 to put in place effective national export controls EU membership requirement Country’s external relations

Export control rationale (2) Non-proliferation clause in EU agreements with third countries and regions Economic incentives: foreign investment, reputation, etc. Eligible for defense imports (risk of diversion & robust export control system considered in licensing assessment) US extraterritorial controls

Changed environment Technological developments, e.g. ITT Increased importance of dual-use items in military procurement Cross-border cooperation and integration of companies From export controls to transfer/ trade controls

Changed threat perceptions Shift of export controls from territorial to end-use(r) focus Focus not only on governments but also non-state actors Shift reflected in anti-terrorist initiatives in export control regimes and export control criteria (risk of diversion)

Consequence: need for cooperative approach Jointly addressing a common threat State regulators need cooperation of companies to meet their obligations under the export control regimes and UNSCR 1540 (2004) Focus resources and attention on sensitive transfers in company and government interest

Corporate responsibility for security Observing national & international transfer controls, embargoes, humanitarian law etc. Internal security discipline: employee vetting, knowledge control, security routines & their monitoring and enforcement, intra-company awareness raising, internal codes of conduct Comprehensive approach to internal compliance programmes to include subsidiaries

Industry support for export control assistance Export controls open up new markets to foreign investment and technology transfers Commercial interest of companies to support subsidiaries in meeting their export control obligations: company reputation, expansion of markets and security of supply Twinning programmes with existing or potential subsidiaries/customers/partners in other countries

Model of Swedish Export Control Society Linked to chamber of commerce Vehicle for dialogue and cooperation between companies and government ICP training Facilitates comprehensive industry outreach Speedy communication of legal changes

THANK YOU Sibylle Bauer SIPRI Non-proliferation and Export Control Project