“FOREIGN TRADE.” EXPORT FROM THE EUROPEAN UNION. 3 (Dual-use goods and services).

 

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Authorization to export dual-use goods not comprised in the list of Annex I to the regulation of the E.U. nr. 1334 of 2000.

 

Unlike dual-use goods discussed in previous episodes 1 and 2 of this blog site, the goods here are not included in Annex I.

 

Here, the exportation of “dual-use goods” is contingent upon the exporter receiving the license by the competent Italian Authority.

Hence, it is provided for by Article 4 of the regulation: “Individual Specific Authorization.

As said in Episode Part 2 under the title “Foreign Trade. Export from the European Union. 2,” on this blog site.

Consider what happens in the Italian legal system.

Altogether, this is in harmony with the European Union’s regulations that have been coming into force on the issue here.

The export of the goods here is limited insomuch as they are expressly unauthorized, as outlined in Article 4 of the regulation.

In such a case, the Italian Authority promptly notices the Foreign Business Ministry, the Ministry of Defense, and the Ministry of Interior.

The two others get information when authorization is necessary to the competent Ministry.

Particularly, suppose Administrators expose observations within three days of receiving the notice or request for authorization.

In that case, the competent Authority convenes a services conference to analyze them in the next three days.

Suppose the services conference results in a decision imposing an export authorization.

 

In that case, the competent Authority notifies the exporter and the Italian Ministry of Economy and Finance—Customs Agency of this provision at the appropriate time.

Vice versa, if none of the authorities give observations, the competent one may determine that authorization is required, notifying its provision as in the event above.

Suppose an exporter knows that the goods to export are double-use, not in the “Annex I” of the regulation, but destined to be used totally or in part as provided by Article 4, paragraph 1, of the E.U. regulation nr. 1334 of 2000.

Say items that, although predominantly used for civil purposes, can even be exploited for military objectives.

 

For instance, valves, pumps, calculators, electronic supplies, laser detectors, avionic, naval, and aerospace materials.

In such cases, they must inform the competent Authority and show all supporting documentation.

Similarly, the exporter who reasonably suspects the abovementioned goods may fit for military use must act.

When the Authority in charge considers the exporter’s advisory not manifestly unfounded:

 

It forwards it to the Italian Foreign Business, Defence, and Interior Ministries and activates the above-explained procedure.

For the abovementioned purposes, the competent ministries can decree specific regulations.

Although allowed by Law, it must be remembered that Ministerial or Interministerial Decrees can never conflict with the government or Prime Minister’s Decrees.

Seeing that the previous is established by Article 17, paragraph 3, of the Law of the Italian Parliament nr. 400 of 1988.

How can one impugn a denial provision for dual-use goods exported from the E.U.?

 

In reality, national authorities are eligible to receive relative appeals. Furthermore, a single State’s denials are effective in all E.U. Member States.

Thus, a Ministery for Business and Made in Italy Decree establishes dual-use goods not included in Annex I of the E.U. regulation at issue export prohibition or a preventive authorization provision requirement.

A consult with the Ministry of Foreign Business, Defence, Interior, Economy, Finance, Health, and Communications arises in the following.

So, what happens if an Authority denies authorization or is silent?

 

  • 1) The private individual may appeal to the holder of the substitute power even in cases of delay or failure to respond to the request for civic access referred to in Article 5, paragraph 4, of Legislative Decree nr. 33/2013 on administrative transparency;

 

  • 2) The law protects the citizen by allowing him to take legal action against the non-compliant administration and the administration in cases where the so-called silent non-compliance occurs.

The law stigmatizes such behavior by the public administration and provides rapid and timely procedural mechanisms to defend the citizens.

 

In short, after the fruitless expiry of the deadline set for the conclusion of the procedure, the citizen must notify a specific formal notice and formal notice through a judicial officer.

As a rule, a deadline of no less than thirty days for the administration to take action and then challenge the silence before the administrative judge must be observed;

  • 3) Law no. 15/2005 introduced an essential innovation regarding the powers of the administrative judge, establishing that he can know the validity of the request.

This provided judge’s power implies that the Tribunal, in an appeal against the public administration’s silent non-compliance, can not only order it to take action but also rule on the request by deciding it on the merits.

However, this can only happen in particular cases, i.e., in cases of “restricted” activity of the public administration.

These are all those cases in which the administration decides by mechanically applying the laws outside of its administrative discretion;

  • 4) The Exporter must take a compensation action before the administrative judge. The right to compensation for damages expires (i.e., can be asserted) in five years.

However, three hypotheses that can occur following a private individual’s request to obtain a favorable provision must be distinguished.

 

  1. Delay of a favorable provision:

The first hypothesis is that the public administration accepts the private individual’s request with a late favorable provision although not issuing the document within the procedure’s conclusion term.

In this case, the private individual is not interested in contesting the act.

Owing to that, it is possible to hypothesize damage only due to the delay concerning the final procedure deadline since the favorable provision issued for the private individual already expresses the validity of the initial request.

2. Delay of an unfavorable provision:

The second hypothesis is that the public body issues a late unfavorable provision, a negative provision concerning the private individual’s request. In this case, since the “good of life,” the object of the private individual’s request, is denied, the exporter cannot assume to be damaged from the delay.

It will be the private individual’s responsibility to challenge the unfavorable act, and only upon a positive outcome of the annulment judgment, i.e., when the judge has recognized the validity of the private individual’s original request, can compensation for the damage caused by delay be requested;

  • 5) Administrative or jurisdictional administrative appeal is possible in all cases of a particular non-contemplated form of appeal.

Exporters can file Administrative appeals before the superior hierarch organ against the same body that issued the act, causing the legal situation to be damaged (an opposition) to its hierarchical superior (a hierarchical appeal) or another body.

In the Italian administrative justice system, there are both administrative appeals and judicial protection.

 

The Italian legal system has adopted a peculiar criterion for the distribution of jurisdiction based on the nature of the subjective legal situation affected:

  • If it is a subjective right, ordinary jurisdiction exists;
  • If it is a legitimate interest instead, administrative jurisdiction exists;
  • This general criterion is also integrated based on the subject matter in cases of exclusive jurisdiction (there are exceptions, which have been expanding over the years).

Alternatively, before non-judicial administrative bodies, there is, as a rule, the hierarchical appeal itself and the extraordinary appeal to the President of the Italian Republic.

However, appeals against and appeals to other administrative bodies are available only in the cases provided for by law (called improper hierarchical appeals);

  • 6) The extraordinary appeal to the President of the Italian Republic.

It is a general judicial remedy that allows you to challenge an administrative act that has the character of definitiveness.

The appeal to the President of the Italian Republic is proposed to assert only defects of legitimacy that have damaged subjective rights or legitimate interests.

This appeal is characteristic of its alternative relationship with the jurisdictional appeal. The jurisdictional appeal proposed after submitting the extraordinary appeal is inadmissible.

The Advisory Committee for dual-use goods authorizations.

 

At the competent with dual-use goods authority, an Advisory Committee issues a mandatory opinion upon the Authority’s request in sixty days.

This opinion is an out-and-out counsel, although not binding to issuing, denying, annulling, revoking, suspending, and modifying authorizations by the Authority in charge in the foreseen cases.

They move back with another ninety days of the term if the Committee gives more advisory or investigating action.

Other counsel is given, either more specifically or generally, that is relatable to dual-use goods export authorization and control actions linked to the relative normative updating.

The Committee at issue comprises representatives of the Ministries mentioned.

 

In addition, the Italian Ministry of University and Science Research partakes and can even cover for and vote in the Committee’s President and Vice President’s absence in the foreseen cases.

The competent administration Director acts as the Committee’s Secretary.

In addition, four technical experts, without the right to vote and unrelated to the competent Authority, participate in the Committe’s meetings and are qualified in each dual-use goods control action.

The Ministry for Business and Made in Italy nominates the Advisory Committee constituents, substitutes, and experts designated by the respective Ministries or membership bodies within thirty days of the Ministry’s abovementioned request.

The so composed Committee is renewed every five years.

Not to mention that Representatives of bodies responsible for law and order, customs, fiscal and foreign exchange protection, those unrelated to the administration, and other experts can also participate in the Committee’s meetings for particular purposes.

They participate without a right to vote after being requested by the Authority in charge of the Committee President within the remaining budget limits.

The Committee is validly constituted and makes decisions with most present constituents.

The Ministry for Business and Made in Italy rules on the Committee’s functioning with a Decree before a consultation with the mentioned administrations involved.

Control measures for dual-use goods exportation and their transfer within the European Union.

 

Control activity in the preliminary and following steps of dual-use goods exportation is attributed to the Authority in charge, unprejudiced other bodies’ expertise responsible for law and order, customs clearance, fiscal and monetary protection, and information and state security.

However, they directly communicate to the Authority in charge all relevant news to the effect of the Legislative Decree in comment (Legislative Decree of the Italian Parliament nr. 96 of 2003).

As a consequence, investigations and verifications may occur.

 

The organs in charge and cooperative ones, also in agreement with the other Ministries, can use information from the different organisms for the same purpose and take action through the Financial Police and Customs Agency.

The Ministry of Business and Made in Italy shapes the discipline of these measures after consulting the relevant authorities.

For the transfer of dual-use goods inside the European Union, a National General authorization can be granted when listed in regulations other than the widely quoted Annex I.

What is technical assistance that is relatable to military purposes?

 

Except for what has been just established by the Legislative Decree at issue, according to the provisions of the E.U. mutual defense policy (Articles 2, 3, and 5 of the European Union Joint Action), technical assistance aimed at:

improving;

manipulating;

functioning;

upkeeping;

safekeeping;

individuating;

identification.

Or widespread availability of:

chemical;

Biological and nuclear weapons or other nuclear explosive devices, or, again, enhancing, producing, manufacturing, and safekeeping missiles used as carriers of the former, are prohibited.

Likewise, technical assistance relatable to diverse military uses from those mentioned above and supplied to one of the arms embargoed countries imposed by a Joint action or common position in the E.U. adopted by the Council or by an OECD (Organization for Economic Co-operation and Development) decision or following a binding resolution of the United Nations Security Council.

To this regulation effect, technical assistance includes:

 

  1. a) inserting military components in military products appearing in the list;
  2. b) using production, control, and analysis equipment and their components to provoke, produce, or maintain military products appearing in the list mentioned in letter a);
  3. c) utilizing potential unfinished products at a facility for military goods production, which falls in the list mentioned in letter a).

Quite the opposite, the preceding rules do not apply to technical assistance:

  1. a) when one of the countries listed in Part 3 of Annex II of the regulation n. EC 1334/2000 and the following modifications need a supply with it, i.e., Australia, Canada, Japan, New Zeland, Norway, Switzerland, the United States of America;
  2. b) when it shows in the form of “public domain” information transfer or destined to “basic scientific research” in the terms they define it in the regimes, bodies, and international Treties of exportation control;
  3. c) When it is in oral form and not linked to the goods, the regimes, bodies, and international Treaties of exportation must control it.

The Internet.

 

None can transfer via the Internet projects, designs, formulas, software, and all other technologies relatable for any reason to the development, production, and use of products mentioned in Annexes I and IV of the present regulation in any case.

Similarly, no one can transfer the previously quoted goods via other electronic means, such as fax or telephone, without first getting the Legislative Decree’s authorization.

Exporters’ risk of running into sanctions on dual-use goods.

 

Exports of dual-use goods without the prescribed authorization or authorization based on false declarations and documentation is a crime.

The Italian criminal system foresees up to 6-year detention and tickets amounting up to 250.000,00 euros.

On the negative side, several illicit conducts may come into consideration.

 

  • First, you export dual-use goods with an authorization that doesn’t enable you to that extent.

It is an indictable offense punishable by imprisonment of up to four years and a fine of up to 150.000,00 euros. The Italian criminal code states that the judge must command confiscation upon a sentence or a plea deal.

  • On the other hand, you export dual-use goods that are not included in Annex I of Regulation n. (E.C.) 1334/2000 and the following modifications without notifying the prescribed information to the competent Authority.

It is an indictable offense punishable by imprisonment of up to two years.

 

  • Then again, you omit to notify the Authority in charge of intervened variations of information and details following the application submission for dual-use goods export, fail to indicate the prescribed details in the documents and trade register, or, again, stow the prescribed documents away for three years after the exportation.

This indictable offense is punishable by an administrative penalty of up to 90.000,00 euros, apart from an accusation if the fact constitutes a crime. Similarly, the quoted administrative penalty affects you if you omit to notify data or transmit details and documents relating to dual-use goods upon the competent Authority’s request.

  • To conclude, you break the prohibition mentioned above by providing technical assistance aimed at improving, manipulating, functioning, upkeeping, safekeeping, individuating, identification, or widespread availability of chemical, biological, and nuclear weapons or other nuclear explosive devices or, again, for enhancing, producing, manufacturing, and safekeeping missiles used as carriers of the former.

 

  • Likewise, if you export technical assistance related to diverse military uses, such as those mentioned above, supply it to one of the arm-embargoed countries imposed by an E.U. joint action or common position.

In this fourth case, this indictable offense is punishable by imprisonment of up to four years and an administrative penalty of up to 150.000,00 euros.

In addition, technical assistance including:

 

a) In a few words, inserting military components in military products appearing in the list;

b) In any case, using production, control, and analysis equipment and their components to provoke, produce, or maintain military products appearing in the list mentioned in letter a);

c) Similarly, potential unfinished products at a facility for military goods production are utilized, which falls in the list mentioned in letter a). In this case, this indictable offense is punishable by imprisonment of up to two years and an administrative penalty of up to 50.000,00 euros.

Lastly, if you transfer via the Internet:

projects;

designs;

formulae;

software;

other technologies relatable for any reason to the;

development;

production;

Use of products mentioned in Annexes I and IV of the present regulation in any case.

 

To illustrate, transferring the previously quoted goods via other electronic means, such as fax or telephone, without first getting the Legislative Decree’s authorization or exporting dual-use goods after getting authorization based on fake declarations and documents.

In this last case, this indictable offense is punishable by imprisonment of up to two years and an administrative penalty of up to 50.000,00 euros.

According to the Italian criminal code, the judge must always decree the appropriation of the website.

Given that, it is showing on the Internet the information concerning the prohibited transfer of:

projects;

designs;

formulae;

Software:

In like fashion, all other technologies that are relatable, for any reason, to the:

development;

production;

and, in any case, the use of products mentioned in Annexes I and IV of the present regulation.

Not only must the proceeding Judicial Authority give the provisions discussed above, but they must also immediately notify the Authority in charge of the crime on trial.

Thank you for reading this Article.

Please watch the German-subtitled version of the video by clicking below. It will last 00:27:44 minutes.

 

 

“Italynlaw” Law Firm issued this Article.

Image 19: International Cargo prow carrying containers.

Source: “Istockphoto.com.”

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