Archive for the ‘EU’ Category



A Brief Brexplanation of Brexit and Brexport

Posted by at 11:37 am on June 24, 2016
Category: BrexitEconomic SanctionsEUOFAC

Boatleave-12 by Gary Knight [CC-BY-SA-2.0 (], via Flickr [cropped]

Although Brexit is unlikely to be in effect for almost two years or more, there are some questions as to what impact Brexit might have on British export controls and economic sanctions.  Any prediction here is risky beyond my speculation that the UK will be unlikely to alienate the U.S. and other allies by significantly altering its export and sanctions regimes.

At this point, and in the wake of the vote last night, you may find it useful to understand the legal background under which Brexit will affect U.K. export controls and sanctions.   Given that all your Facebook friends have suddenly become experts on Brexit (soon to be known as Brexperts), you can now impress them as a Brexport Brexpert.

Let’s start with the Wassenaar Arrangement.  The European Union is not a party to the Wassenaar Arrangement.  Rather all member states of the E.U. (other than Cyprus) are individual members of the Wassenaar Arrangement.   Accordingly, Brexit will have absolutely no impact on Britain’s obligations under Wassenaar.   The Wassenaar Agreement is the source, via Council Regulation (EC) No 428/2009 (and associated legal amendments) of the UK Control Lists.  Although the intermediate authority for the lists will go away on Brexit, no alteration in those control lists will occur by virtue of Brexit alone.

This brings us to Council Regulation (EC) No. 428/2009, which establishes the E.U. framework for export controls. Here it is important to understand that the regulation did not create a centralized EU export control regime. Rather it left principal authority with Member States to implement their own control regimes in accord with principles set forth in the regulation. Britain’s Export Control Order of 2008 implements 428/2009 and related EU authorities. Although it will become untethered from 428/2009 on Brexit, there is no reason that it should not remain in place post-Brexit.

The situation with sanctions is somewhat more complicated and depends on the particular EU sanction. The JCPOA, which lifted many international sanctions on Iran, for example, will not be affected because the U.K. is an independent signatory to the JCPOA.  Other E.U. sanctions, such as the Russia/Ukraine sanctions, have direct legal effect in the U.K., although it is up to the member state to establish and enforce penalties. In these instances, there is no independent legal authority in the U.K. for that sanction, and its status after Brexit becomes uncertain. It is, of course, likely that Britain will not seek to alienate its allies by walking away from these sanctions, but it will have to enact domestic legislation to implement them before or after Brexit.

Photo Credit: Boatleave-12 by Gary Knight [CC-BY-SA-2.0 (], via Flickr [cropped]. Copyright 2016 Gary Knight

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Copyright © 2016 Clif Burns. All Rights Reserved.
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EU Moves Ahead on Intrusion Software; BIS Holds Back

Posted by at 7:57 pm on November 11, 2014
Category: BISCCLEUSurreptitious Listening Devices

By Sébastien Bertrand ( [CC-BY-2.0 ( or CC-BY-2.0 (], via Wikimedia Commons October 22, the European Commission amended its List of Dual Use Items to include controls on “intrusion software” which the Wassenaar Plenary adopted in December 2013 and which we reported here. The new list, and the export controls on intrusion software, will go into effect after 60 days from October 22 unless the E.U. Council or Parliament interpose objections.

That, of course, raises the question about where the United States is on adopting these controls. Initially spokespersons for the Bureau of Industry and Security indicated that the rules on intrusion detection hardware and software would be out in September. Well, September and October have both come and gone and there is no sign of new rules on this issue.

Of course, at least part of what Wassenaar defined as intrusion software is already controlled in the United States under ECCN 5D980, which was adopted in December 2007 and which controls surreptitious listening software. But 5D980 does not control, as the new controls on intrusion detection software would, software performing “the modification of the standard execution path of a program or process in order to allow the execution of externally provided instructions.” The scope of the definition of intrusion software is undeniably broad and susceptible of covering some unobjectionable types of software, so it seems clear the BIS must be struggling with how to handle the breadth of the definition and limited unintended consequences.

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Copyright © 2014 Clif Burns. All Rights Reserved.
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It’s A Small World After All, Even For Economic Sanctions

Posted by and at 8:02 pm on June 16, 2014
Category: ChinaEconomic SanctionsEURussia SanctionsSanctionsSudan

It's A Small World by Darren Wittko CC BY 2.0 [] (cropped)G-7 countries recent meeting in Brussels understandably grabbed global headlines for their unified message that they “stand ready to intensify targeted sanctions and to implement significant additional restrictive measures to impose further costs on Russia should events so require.”

While sanctions imposed by G-7 countries, as well as the EU, drive the engine of global sanctions enforcement, there are almost 200 other countries in the world and many of them want to have their position on sanctions known.  Last week, for example, Serbian President Tomislav Nikolić surprised no one on Earth (or anywhere else for that matter) when he told Serbian media, “It’s impossible to imagine Serbia imposing sanctions on Russia.”  Of course, Nikolić’s pronouncement is hardly going to cause the E.U. to rethink, even for a fraction of a nanosecond, its position on Russian sanctions.  On the other hand, the E.U. sanctions may cause Serbia, given that Russia is one of it’s largest trading partners, to rethink the wisdom of its application to become a member of the E.U.

Besting Serbia’s population by over a billion, China is emerging as a critical Russian ally and the most important country that is not imposing sanctions against it.  As with Serbia, economic self-interest and the volume of China’s trade with Russia may be at the heart of this.  In fact, reports on the recent $400 billion, 30-year deal for Gazprom to supply natural gas to China suggest the deal would be based on a ruble-yuan exchange and bypass Western financial systems altogether.

With developed countries like China and Serbia using economic self-interest to justify trading with Russia despite its shenanigans in Ukraine, some developing countries may be acting against their own economic self-interest in imposing sanctions to deal with regional conflicts.  Reuters reported this week, for example, that members of the Intergovernmental Agency for Development, an East African trade group made up of Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan and Uganda, have threatened sanctions against South Sudan if warring factions do not cooperate to end conflict in that country.  The United States imposed sanctions in early May against military leaders involved in the conflict, but they likely will provide no meaningful impact.  However, when everyday trade with your neighboring countries starts to become restricted, sanctions are far more likely to achieve the goal of ending conflict.  If East African sanctions succeed against South Sudan while E.U and U.S. sanctions have no impact on Ukraine,  then we will certainly have a situation where it’s the mice that roar while the elephants squeak.

Sanctions news runs on the front page when it involves the United States and Europe but also on the back pages as it involves the rest of the world.  You have to read the whole paper to make sure you have the full story.

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Copyright © 2014 Clif Burns. All Rights Reserved.
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Russian Sanctions Creep

Posted by at 6:39 pm on May 13, 2014
Category: Economic SanctionsEURussia SanctionsSanctionsSDN List

By President of Russia [CC-BY-3.0 (], via Wikimedia Commons
ABOVE: Vyacheslav Volodin

The EU yesterday added new names to its sanctions list.  The latest additions include Russian President Putin’s deputy chief of staff, Vyacheslav Volodin, and Vladimir Shamanov, the commander of the paratroop unit that allegedly took part, despite Russian denials, in the annexation of Crimea.

Also added were a number of Crimean companies:  One is Chernomorneftegaz, a Crimean gas company; another is Feodosia, a Crimean oil supplier.

Volodin but not Shamanov and Chernomorneftegaz, but not Feodosia, are on the U.S. sanctions list. Differences like these suggest incoherence and, at the least, create compliance challenges for multinationals.

Being on a U.S. or EU sanctions list means that the assets of the listed person are frozen and dealings with them by those subject to U.S. or EU jurisdiction are prohibited.

Whether these sanctions will deter further Russian involvement in the Ukrainian crisis is anyone’s guess.  The reluctance to impose so-called sectoral sanctions, that is, prohibitions on dealings with anyone in a given sector like oil and gas, exposes concerns about the double-edged sword of sanctions:  They truly cut both ways.

Individuated sanctions are, nonetheless, a headache for companies subject to U.S. and EU law because of the broad-based shadow lists of those subject to sanctions under the U.S. rule freezing the assets of any company that is 50% or more owned by a designated person and the EU rule  freezing any assets “controlled by” a designated person.

Shadowing the shadow list means that simple screening of listed persons is not enough.

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Copyright © 2014 Clif Burns. All Rights Reserved.
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When a Firing Squad Gives You Lemons, You Can’t Make Lemonade

Posted by at 7:11 pm on April 7, 2014
Category: EU

Vietnam Firing Squad via Amnesty International [By Permission]The recent decision by Vietnam to execute corrupt bankers has garnered world-wide attention. Rather surprisingly, however, the case has an interesting intersection with export law issues.

As has been reported, the bankers will be subject to rather gruesome execution by firing squad.

Vietnam’s traditional means of execution involves binding perpetrators to a wooden post, stuffing their mouths with lemons and calling in a firing squad.

Death Penalty Worldwide adds another gory detail to death by firing squad in Vietnam: “As the prisoner is dying, an officer fires a pistol shot through the condemned’s ear.”

Apparently even Vietnam is somewhat troubled by all this and wants to transition from this barbaric procedure to lethal injection. But it can’t. According to Patrick Winn on the website Global Post, Vietnam is unable to obtain sodium thiopentol used in executions because the European Union refuses to export the chemical to countries that practice capital punishment.

That of course might make the E.U. feel better about itself, but it won’t stop Vietnam from executing anyone and only assures that prisoners in Vietnam will meet their bloody end with a lemon stuffed in their mouth, multiple bullet wounds, and a final coup de grâce of a bullet in the ear. I’m sure that each person executed in Vietnam will appreciate the European Union’s solicitude for their well-being.

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Copyright © 2014 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)