1. Attorney Advertising. Prior results do not guarantee a similar outcome. European Export Control Update Naboth van den Broek Boston, 31 May 2012

2. WilmerHale 2 Attorney Advertising. Prior results do not guarantee a similar outcome. 1.EU Export Control Regime - Overview 2.Dual-Use Goods & Technology 3.Military Goods & Technology 4.Sanctions 5.Recent Developments / Update

3. WilmerHale 3 Attorney Advertising. Prior results do not guarantee a similar outcome. 1. EU Export Control: Overview  National rules (27 Member States)  Defense & Security= MbS prerogative  Procedural rules and enforcement  European rules  Trade = EU prerogative  International rules  EU-level “Community” rules  EU-level “intergovernmental” rules (binding and non- binding)  Member States rules expanding scope of EU rules  Autonomous Member State rules  Member State procedural rules  International rules

4. WilmerHale 4 Attorney Advertising. Prior results do not guarantee a similar outcome. 2. EU Dual-Use Rules: General  Community (EU) ‘Competence’  Largely regulated at EU level  Regulation 428/2009  Dual-use items are: “… items, including software and technology, which can be used for both civil and military purposes, and shall include all goods which can be used for both non-explosive uses and assisting in any way in the manufacture of nuclear weapons or other nuclear explosive devices.” (Reg. 428/2009)

5. WilmerHale 5 Attorney Advertising. Prior results do not guarantee a similar outcome. EU Dual-Use Rules: Coverage  General  Single, regularly updated common list of items requiring export authorization  “Catch all” for certain end-uses  Items exported to final destination outside EU  Some items (“sensitive” or “very sensitive”) are covered even for intra-EU transfer (see Annex IV parts I and II)  Noteworthy  Includes tangible technology (objects, documents, software) and intangible technology (skills, know-how)  Includes physical transfer and electronic media, fax or phone  Includes “technical assistance”  Includes non-necessary information for patent applications  Includes technology integrated into other products  Non listed dual-use items: authorization may be required  Specific national rules may apply/interpretations may differ

6. WilmerHale 6 Attorney Advertising. Prior results do not guarantee a similar outcome. EU Dual-Use Rules: Procedures  License must be obtained in Member State where the exporter is established  “Exporter” = person on whose behalf the export declaration is made / who holds the power to determine the sending of the items  Licensing procedures established by each Member State, including record-keeping  If multiple Member States involved there is a “consultation” process (veto!)  Enforcement and Implementation at Member State level  Several types of licenses (“authorizations”)

7. WilmerHale 7 Attorney Advertising. Prior results do not guarantee a similar outcome. 3. EU Military Export Controls  Member State “Competence” - however EU rules exist: –Export outside the EU: Common position 2008/944/CFSP –Export within the EU: Directive 2009/43  In both cases: –Items  listed in EU Common Military List (not exhaustive + regularly updated) (similar to U.S. ITAR but with some differences) –License  Member State  Bilateral issues

8. WilmerHale 8 Attorney Advertising. Prior results do not guarantee a similar outcome. 4. EU Sanctions  EU and Member State legislation –Enforcement & admin: Member State level  Generally in accordance with international policies (UN, OSCE)  EU sanctions “programs”: Iran, Libya, Syria  EU arms embargos/asset freezes/prohibition of specific services: Afghanistan, Belarus, China, Eritrea, Iraq, North Korea, Zimbabwe, terrorists group etc.  Focus on specific items, particularly arms, munitions; but sometimes broader (technology, financing, specific end-users, flight bans, investment)  Generally no US-style general embargoes

9. WilmerHale 9 Attorney Advertising. Prior results do not guarantee a similar outcome. Key Regulatory and Other Developments

10. WilmerHale 10 Attorney Advertising. Prior results do not guarantee a similar outcome. 1.Dual-Use: Changes to the EU Dual-Use Rules  Annex I to Reg. 428/2009 amended on April 2012  comes into force on 15 June 2012  Regulation 1232/2011 (December 2012):  Introduction of five new EU General Authorizations (EU GEAs) (total: 6)  EU001 – exports to Australia, Canada, Japan, New Zealand, Norway, Switzerland  (including Liechtenstein) and United States of America  EU002 – export of certain dual-use items to certain destinations  EU003 – export after repair/replacement  EU004 – temporary export for exhibition or fair  EU005 – telecommunications  EU006 – chemicals  New measures to increase transparency and improve enforcement including possibility to prohibit certain exporters from using EU GEAs.  No EU GEA for Computers & Related Equipment; concern about human rights/monitoring  Reminder: Brokering services covered

11. WilmerHale 11 Attorney Advertising. Prior results do not guarantee a similar outcome. 2.Dual-use: EU Green Paper on Dual-Use Goods  Proposed Reform: Amendment expected toward end- 2012  Key items expected:  Common risk assessment approach of all export control authorities  Improved exchange of info about suspicious transactions and licensing decisions  Phase out NGAs in favour of EU GEAs  Common approach to catch-all controls  Working toward a fully integrated internal market for dual-use items (phase out internal controls)  Coordinated enforcement across the EU + improved access to relevant info for customs enforcement

12. WilmerHale 12 Attorney Advertising. Prior results do not guarantee a similar outcome. 3.Sanctions: Significantly more active sanctions landscape  Sanctions are getting broader (Iran, Syria, Libya, terrorism blacklists)  Basic approach continues to follow the UN, but more active stance and closer coordination with U.S. sanctions policy  Member States continue to play an active role  Judicial Protection continues to be a challenge  Burma: suspended

13. WilmerHale 13 Attorney Advertising. Prior results do not guarantee a similar outcome. 4. More active enforcement  Expect to see continued increase in focus on export controls and enforcement  Expect to see continued focus on sanctions  Expect to see more coordinated action (?)  Between MbS  Between policy areas  Focus on broader range of technologies (computers & related equipment, telecom equipment, software)

14. WilmerHale 14 Attorney Advertising. Prior results do not guarantee a similar outcome. 5.More opportunities for risk mitigation and cooperation  Active compliance audits but also an increased focus on compliance programs to mitigate risk and reduce penalties  No formal Voluntary Disclosure process, but don’t forget regulatory cooperation…  Judicial Protection (sanctions, Lisbon Treaty)

15. WilmerHale 15 Attorney Advertising. Prior results do not guarantee a similar outcome. 6. Don’t forget other EU Regulations!  EU regulatory policy is increasingly wide-spread and has an ever wider product and geographic scope  Beyond export control and sanctions, there are other areas of regulation for US exporters to take into account, including:  Environmental regulations (electrical goods, electronic waste, nanotech, biotech, etc.)  Technical standards and regulations  Competition rules (affecting licensing, reselling, distribution)  Data protection & Privacy  Sanctions for non-compliance can be severe  US – EU Trade Cooperation (Working Group / FTA ?)

16. WilmerHale 16 Attorney Advertising. Prior results do not guarantee a similar outcome. Thank you for your attention! Naboth van den Broek naboth.vandenbroek@wilmerhale.com