Strategic Trade Control Lists: Roles, Trends, and APAC Implications Pacific Forum CSIS / IIR, National Chengchi University Strategic Trade Control Workshop Taipei, Taiwan September 2-3, 2014 * The information and views in this presentation are the presenter s own, and do not represent the position or opinion of any government or private organization. This presentation is for informational and educational purposes only.
Presentation Topics International bases for national control lists Role and importance of comprehensive and up-todate national strategic trade control lists Global control list issues and best practices APAC control list approaches and issues Working towards greater regional control list harmonization Conclusion and Q+A
Control List Terms as Used Herein (Strategic) Items collectively refers to goods, technologies, equipment, materials, software, parts and components related to any of the following: Weapons of Mass Destruction (WMD) nuclear, chemical and biological weapons and their means of delivery ( missiles) Munitions items designed and intended for a militaryrelated use, including arms and military equipment Dual-Use Items items that can be used for a civilian/commercial purpose or that can be for the use, development, design, repair, maintenance, production of WMD or munitions WMD Dual-Use (chemicals, nuclear-related items, biotech) Conventional Dual-Use (radar, lasers, computers, etc.)
International Basis for Control Lists (1) UN Security Council Resolutions 1540 (2004) Opening Paragraph 9: refers to... the threat of illicit trafficking in... related materials, where related materials are materials, equipment and technology covered by relevant multilateral treaties and arrangements, or included on national control lists Operative Paragraph 6: Recognizes the utility in implementing this resolution of effective national control lists and calls upon all Member States, when necessary, to pursue at the earliest opportunity the development of such lists
International Basis for Control Lists (2) Nuclear Suppliers Group (NSG) Nuclear materials, facilities, reactors ( Trigger List ) items Nuclear dual-use items Zangger Committee Nuclear-related items (ref. to NSG) Missile Tech Control Regime (MTCR) Cat. I complete missile systems and UAVs Cat. II missile dualuse items Wassenaar Arrangement (WA) Conventional dualuse items Munitions Australia Group (AG) CW precursors Chem dual-use equipment Human, animal, and plant pathogens and toxins Bio dual-use equip Chemical Weapons Convention (CWC) 3 Schedules of: (A) Toxic chemicals (B) Chemical precursors
Role/Importance of Control Lists (1) Serves as the cornerstone of a national strategic trade control (STC) system One of the strongest linkages from a national system to multilateral regimes and international standards Simplest and most straightforward approach to strategic trade control if on list = government authorization required to transfer System clarity and transparency
Role/Importance of Control Lists (2) From the UK Department of Business Innovation and Skills (BIS), Export Control Organisation Note: Are my goods on a control list? is the firstorder question in process Source: http://www.businesslink.gov.uk
Role/Importance of Control Lists (3) EU List of Dual- Use Items (2012) Source: http://trade.ec.europa.eu/doclib/docs/2012/july/tradoc_149685.pdf
Global/Regional Control List Issues Countries/systems with different list compositions Countries/systems with different item coding / classification systems (from ECNs to HS-based) Countries/systems updating lists at different times Item identification and classification challenges for licensing agencies Items identification and classification challenges for traders
Best Practices for Control Lists (1) Using the EU List of Dual-Use Goods and EU Common Military List structure and coding (if not the entire lists themselves) Updating national control lists pursuant to MECR control list changes (which happen on an annual basis) Having classification expertise within the licensing agency, or the government, or readily accessible Publishing and disseminating control lists to industry, and other forms of industry outreach Identifying (and publishing) HS-based codes that correspond to each item/entry on the control list (?)
Best Practices for Control Lists (2) Excerpt from EU Correlation Table (July 2014)
APAC Regional Initiatives and Control Lists APEC, Key Elements for Effective Export Control Systems (2004): Comprehensive control lists and practices in harmony with the guidelines and control lists of the multilateral nonproliferation regimes, instruments and arrangements ASEAN Regional Forum, 2 nd ARF Confidence Building Measure Seminar on UNSCR 1540 Implementation (May 2013) Discussion of role of national control lists and the EU control list model
Controls Lists in APAC in General Several systems follow the EU, both in terms of structure/coding and updating No system 100% current with the MECR lists, but several systems ahead of EU in terms of updating their lists Some efforts to correlate HS-based codes with controlled items, some lists wholly HS-based Discrepancies in coverage and control entries intra-regionally and when compared with other regions
APAC Control List Approaches (1) Australia, Hong Kong, New Zealand, and Singapore EU-based composition, structure, and coding, combine munitions and dualuse lists, all licensed by same licensing agency China 6 distinct, regulation-appended control lists, combined into a Dual-Use Catalog that includes many but not all MECR covered items and uses HS-based codes; separate munitions list; licensed by different agencies Japan a goods list and a technology list, both using a unique item-coding and structure; also has Commodity Watch- List ; all licensed by METI India SCOMET list that covers many, but not all, MECR items, employs unique structure and item/entry coding system; licensed by DGFT and DAE, DOD no-objection needed for munitions transfers
APAC Control List Approaches (2) Excerpt from China s Dual-Use Control Catalogue NO. ITEM NAME TECHNICAL DESCRIPTION 10-DIGIT HS CODE 8466940010 1 滚压成形机床用芯轴 Roll forming machine with mandrel 转筒成形用的芯轴, 用其制成内径在 75 毫米 (3 英寸 ) 至 400 毫米 (16 英寸 ) 之间的圆柱形转筒. 2 具有滚压功能的旋压成形机床 Roll forming machine with spinning functions 1. 装有 3 个或 3 个以上压辊的 ( 主动的或导向的 ); 和 2. 按照制造厂的技术规格可配备 数控 单元或计算机控制器的 ; 说明 : 包括那些只有一个用来使金属成形的压辊和两个用来支撑芯轴但不直接参加成形过程的辅助压辊的机床. 8463900020 3 具有滚压功能的旋压成形机床用芯轴转筒成形用的芯轴, 用其制成内径在 75 毫米 (3 英寸 ) 至 400 毫米 (16 英寸 ) 之间的圆柱形转筒. 8466940020 4 用于切削或切割金属 陶瓷或复合材料, 根据制造厂的技术说明书, 可以配备沿 2 个或更多个轴同时进行 成形控制 的电子装置的车床 Machine tools for removing/cutting ceramics... Approximate equivalent of US CCL 2B201.a 对于加工件大于直径 35 毫米的车床, 定位精度 在采取了所有补偿手段后沿任一直线坐标可达到优于 0.006 毫米 ( 总定位精度 ) 说明 : 不包括仅加工贯穿进给的棒料, 棒料最大直径等于或小于 42 毫米, 并且无固定卡盘的棒料车床 车床可对直径小于 42 毫米的加工零件进行钻 铣加工 [NO CODE ASSIGNED]
APAC Control List Approaches (3) Malaysia - EU-like composition, structure, and coding, dual-use and munitions list in different parts of one overall control list; licensing different categories of items by MITI Strategic Trade Secretariat, AELB, MCMC, and DOH-PSD; control list identifies licensing agency Korea EU-like composition, structure, and coding; distinct dualuse and munitions lists, licensed by MOTIE (Cat. 0 licensed by NSSC); select list of munitions separated-out and licensed by DAPA; distinct Catch-All List Taiwan adopts the EU control lists wholesale, also has Sensitive Commodities List (SCL); transfers licensed mostly by Bureau of Foreign Trade (BOFT), but also by Arms Bureau, Science Park and Export Processing Zone Administrations Thailand law/sector-specific lists, licensed by different agencies; proposal to develop dual-use list based on EU list composition but employing HS-based coding
APAC Control List Approaches (4) Excerpts from Malaysia s Strategic Items List (2014)
APAC Control List Approaches (5) COUNTRY / AREA CONTROL LIST COMPOSITION LAST UPDATE * ECCN-LIKE CODES? AUSTRALIA Same as 2012 EU control lists Dec 2012 Yes CHINA Most NSG and AG, some MTCR, few WA Dual-Use 2007 / HS codes in 2013 HONG KONG All NSG, AG, MTCR, and WA (2012) items Jul 2013 Yes INDIA Unique control list, somewhat based on MECRs No 2014 No JAPAN All NSG, AG, MTCR, and WA (2012) items 2014 No * KOREA All NSG, AG, MTCR, and WA (2012) items Jan 2014 Yes MALAYSIA Same as 2012 EU control lists Feb 2014 Yes NEW ZEALAND Same as 2012 EU control lists Mar 2013 Yes PAKISTAN Based on EU lists 2011 Yes SINGAPORE All NSG, AG, MTCR, and WA (2011) items Jan 2013 Yes TAIWAN Adopts 2012/2013 EU lists wholesale Nov 2013 Yes
Example of Impact of Different Control List Approaches Different Adjusted Peak Performance (APP) thresholds (measured in weighted teraflops (WT)) for computers : * 3.0 WT 1.5 WT USA Korea and Japan Hong Kong Singapore Israel EU Taiwan Malaysia Russia Australia and New Zealand * Wassenaar Arrangement (WA) raised threshold to 8.0 WT at 2014 Plenary
Towards APAC Control List Harmonization Start with EU control list(s) composition, structure, and coding system (ECNs) as baseline If needed, can go category-by-category focusing on highest-volume APAC items (electronics, chemicals) first to ease transition can add now, except/exempt later Focus on Wassenaar Dual-Use List items and categories For now, use HS code correlation more for guidance and facilitation than establishing control status When in doubt, go Malaysia route... Establish (or augment) Control List Committee /working group in the most appropriate regional forum
Q+A And Discussion Thank you for your time and attention, I will be glad to answer any questions now, or you may contact me any time at: Jay P. Nash Research Fellow Project on International Security, Commerce, and Economic Statecraft (PISCES) Center for Policy Research (CPR), University at Albany, State University of New York (SUNY) jnash@albany.edu And Partner and Asia Pacific Lead, SECURUS Strategic Trade Solutions, LLC jay.nash@securustrade.com