Term and legal definition of dual-use goods
In legal terms, dual-use goods refer to products, technologies, and software that can be used for both civilian and military purposes. The control, regulation, and export of such goods form a central component of the international security system and export control law. Fundamentally, the concept of dual-use is defined and regulated at the European and international levels by a variety of regulations and laws.
Legal foundations and international frameworks
European Union
The legal basis for the control of dual-use goods in the European Union is provided by the Regulation (EU) 2021/821 of May 20, 2021 (‘Dual-Use Regulation’), which replaced the previous Regulation (EC) No. 428/2009. The regulation governs the uniform procedures for the export, brokerage, technical assistance, transit, and intra-community transfer of goods suitable for both civilian and military use.
The regulation lists in Annex I those goods that are subject to export control. It fundamentally distinguishes between:
- Listed dual-use goods (listed in Annex I)
- Non-listed goods, for which export authorization may be required under certain regulations, so-called ‘catch-all’ provisions, for example if they are intended for a weapons program
International agreements and regulations
The control of dual-use goods is also influenced by various international export control regimes. Key instruments include:
- Wassenaar Arrangement: For conventional arms and dual-use goods
- Missile Technology Control Regime (MTCR): Control of missile technology and their components
- Australia Group: Chemical and biological weapons
- Nuclear Suppliers Group (NSG): Control of nuclear materials and technology
States that are parties to these agreements incorporate the control lists adopted there into their national or, as applicable, Union law, such as the EU Dual-Use Regulation.
Dual-use goods in German law
In German law, dual-use goods are part of foreign trade law. Central legal sources include the Foreign Trade and Payments Act (AWG) and the Foreign Trade and Payments Ordinance (AWV). Due to the direct applicability of the EU Dual-Use Regulation, national provisions are supplemented and specified by European requirements.
The Federal Office for Economic Affairs and Export Control (BAFA) is the competent licensing and control authority in Germany for the export of dual-use goods.
Categorization and control mechanisms
Types of dual-use goods
Dual-use goods comprise a wide range of goods, software, and technologies from various technical fields, in particular:
- Machinery and equipment
- Electronic components
- Chemicals
- IT and telecommunication technologies
- Material processing and manufacturing technologies
- Aerospace technology
Their application ranges extend from spatial-functional use in the civilian sector to potential integration into armament programs.
Authorization requirements and ‘catch-all’ controls
The export and brokerage of dual-use goods from the EU is generally subject to an authorization requirement, provided the goods are listed or specific conditions (‘catch-all’ regulations) apply. An export license is also required when the exporter becomes aware that the goods are intended for the development, manufacture, or use of weapons or for purposes associated with military end-uses.
Major aspects of control include:
- End-use certificates
- Watch lists
- Types of authorizations (Individual export licenses, general licenses, global licenses)
Prohibition and sanction mechanisms
Failure to comply with export control regulations can lead to criminal and administrative offenses. The AWG and AWV contain provisions for fines and criminal offenses, particularly in cases of intentional or grossly negligent disregard of authorization requirements or breaches of embargo regulations.
Importance of dual-use goods for businesses
Obligations of economic operators
Economic operators are required to regularly review their products, technologies, and software for potential dual-use characteristics and to establish appropriate internal control mechanisms. This includes, among other things, the classification of export goods, monitoring of international sanctions lists, and training of employees in export control compliance.
Compliance requirements
Compliance with export control requirements is part of corporate due diligence and is increasingly subject to official monitoring as well as audits and certification requirements, such as under the ISO standards for risk management.
Practical impacts and recent developments
Technological progress and new challenges
Technological developments such as artificial intelligence, quantum computers, or IT security solutions are increasingly coming under the controls for dual-use goods. The dynamic advancement of information and communication technologies poses new challenges for both legislators and businesses with regard to identification, risk assessment, and compliance with legal requirements.
Tightening of export control policy
International political developments, such as conflicts and embargoes or the tightening of specific sanctions regimes, regularly lead to the expansion and adjustment of dual-use control lists by the European Union and its member states.
Conclusion and summary
Dual-use goods are of great importance for international security, trade, and the economy. Due to a complex network of European, national, and international legal sources, they are subject to strict control mechanisms and licensing requirements. Companies must comply with these regulations comprehensively to ensure both legal obligations and smooth business processes in international trade. Ongoing monitoring of regulatory developments and adaptation of internal compliance structures is essential to appropriately address risks in export control.
Frequently Asked Questions
What legal frameworks govern the export of dual-use goods within the European Union?
The export of dual-use goods within the European Union is primarily governed by the so-called EU Dual-Use Regulation (Regulation (EU) 2021/821). This provides uniform rules for the trade in dual-use goods both within the EU and for exports to third countries. In particular, it stipulates that dual-use goods are generally not subject to restrictions in intra-Union movement, though exceptions exist for goods with especially sensitive technology or in connection with certain embargo measures. In addition to the EU-wide regulation, national implementing and accompanying laws—such as the Foreign Trade and Payments Act (AWG) and the Foreign Trade and Payments Ordinance (AWV) in Germany—must also be observed. In case of conflict, the more restrictive regulations apply. Moreover, additional reporting or authorization requirements may apply for particularly sensitive goods within the EU, if this is necessary for public security or due to international obligations. The relevant legal provisions also impose extensive information, due diligence, and documentation obligations on exporters.
When is an export license required for companies exporting dual-use goods?
An export license is generally required when dual-use goods are to be exported from the European Union to a third country—that is, outside the member states. The requirement for a license is specified in Art. 3 ff. of the EU Dual-Use Regulation. The necessity is determined by the goods list in Annex I of the regulation, which lists all dual-use goods that require authorization. For certain partner countries or under so-called general licenses, there may be simplifications. Generally, intra-community transfers do not require an export license, unless they concern particularly sensitive goods listed in Annex IV or certain end-uses (such as in military programs, for nuclear use, or in connection with NBC weapons). The relevant national authority—in Germany, for example, the Federal Office for Economic Affairs and Export Control (BAFA)—reviews individual cases based on the nature of the product, recipient country, purpose of use, and end user.
What due diligence obligations apply to exporters when handling dual-use goods?
Exporters of dual-use goods are subject to extensive due diligence and verification obligations. They are required to independently verify whether their goods and transactions are subject to licensing requirements or prohibitions, for example due to potential use in weapons of mass destruction or military end-use (§ 7 AWG). This includes careful research into the customer’s identity (Know Your Customer) and the purpose of the delivered goods, as well as verification of the end-use certificate and, if applicable, checks for listing of the recipient or country on sanctions lists. The obligation also extends to monitoring of internal processes and employee training, particularly in sensitive areas such as research, development, production, and sales. Documentation of measures taken and information provided by licensing authorities is mandatory.
What sanctions apply in the event of violations of dual-use law?
Violations of dual-use law are subject to significant sanctions at both the national and EU levels. These range from substantial fines to criminal prosecution, including imprisonment. In Germany, violations of the Foreign Trade and Payments Act (§§ 17 ff. AWG) can be punished with imprisonment of up to five years or with fines, especially when exports are carried out without the required authorization or export bans are circumvented. In addition, the goods may be confiscated and customs or export privileges withdrawn. Alongside substantial financial losses, companies also risk reputational damage, civil claims, and being excluded from public contracts. Personal liability of managing directors and responsible employees is also possible.
What role does the intended end-use play in the legal assessment of dual-use transactions?
The intended end-use of a dual-use good is central to its legal assessment. Even if a good was designed for civilian use, knowledge of its actual or intended military end-use—such as use in weapons of mass destruction programs—may trigger additional authorization requirements or even an export ban. This is explicitly provided for in the so-called catch-all mechanism of the EU Dual-Use Regulation: If there are indications of a critical end-use, exporters must report this and may be required to apply for an individual license, even if the good itself is not explicitly listed. Therefore, careful end-use assessment and obtaining end-use certificates is of particular importance.
Can services and technical support also fall under dual-use control regulations?
Yes, not only physical goods but also services and the transfer of technical knowledge—for example, technical assistance, training, or software provision—can be subject to dual-use regulations. According to the EU Dual-Use Regulation, ‘export of technology’—the transfer of technical information, for example by data transmission, email, phone, or on data carriers—is subject to the same licensing requirements as the physical export of goods. Services aimed at the development, production, maintenance, or use of listed dual-use goods may also require authorization. Exporters must therefore also comply with the relevant legal control provisions in cross-border technical cooperation, sending of know-how carriers, or export of accompanying software.
What reporting and documentation obligations apply to exporters of dual-use goods?
Exporters of dual-use goods are required to comply with extensive record-keeping and reporting obligations. Under Art. 24 of the EU Dual-Use Regulation and § 8 of the AWV, there is an obligation to fully document all imports and exports, including type, quantity, value, identity of contracting parties, end-use, and any licensing decisions, for a period of at least five years. Annual reporting may be required for certain license-free transfers, for example within the EU. In addition, exporters must be able to provide all documents and information about actual circumstances to supervisory authorities (e.g., BAFA, customs) at any time upon request. Violations of documentation obligations are also subject to substantial fines.
