EU moves to consolidate export control powers after Russia blocks multilateral agreements
The European Commission has expanded its list of controlled dual-use items to include technologies that Russia has blocked from multilateral export control regimes, moving to sidestep Moscow’s use of its veto power in the consensus-based Wassenaar Arrangement to prevent new controls, according to a European Parliamentary Research Service briefing.
The Commission’s 8 September update to Annex I of Regulation (EU) 2021/821 adds new categories including quantum technology, semiconductor manufacturing and testing equipment, advanced computing circuits and other dual-use items, with the European Parliament having until 8 November to raise objections.
‘Many experts consider this move an indication that the EU is consolidating powers in export controls to overcome this obstruction,’ the briefing stated, noting the parallel system of EU-wide binding controls and national measures ‘means that the EU lacks a uniform, timely and effective control framework, required more than ever during these times of war on Europe’s borders’.
The updated EU control list adds new categories including quantum technology and quantum computers, semiconductor manufacturing and testing equipment including lithography materials, advanced computing integrated circuits and electronic assemblies, coatings for high temperature applications, additive manufacturing machines and related materials, and peptide synthesisers.
The list counts over 1,800 dual-use items classified in ten categories relating to more than 1,000 commodities including chemicals, computers, electronic products, electrical equipment, machinery and vehicles.
According to the Commission, the EU lacks the legal authority to adopt Union-wide uniform export controls independently from multilateral regimes, with the exception of cybersurveillance items, because individual Member States, rather than the Commission itself, hold membership in international regimes like the Wassenaar Arrangement.
The briefing noted that numerous reports and analysis of customs data and Russian military objects confirm Western components are still being used in Russia’s war machine despite sanctions and export controls. Components from the United States are identified most frequently, but items from Japan, South Korea and Taiwan also flow into Russia, with EU-produced items originating from Austria, Germany, France, Ireland and the Netherlands.
‘The components continue to reach Russia through complex and purposefully opaque trade networks involving intermediaries and countries such as China, Hong Kong, Türkiye and the United Arab Emirates, but also immediate neighbours like Kazakhstan,’ the briefing stated.
Following a massive combined overnight Russian strike on Ukraine earlier this month, Ukrainian President Volodymyr Zelensky said the Kremlin had used 549 weapon systems containing nearly 103,000 foreign-made components from companies in the United States, China, Taiwan, the United Kingdom, Germany, Switzerland, Japan, South Korea and the Netherlands, most of them found in attack drones.
More than half of EU Member States, particularly those closer to Ukraine and Russia geographically, use additional export controls on top of Annex I which is binding across all 27 Member States. The Commission concluded this creates ‘the risk of an incoherent patchwork’ of national rules and enables ‘forum shopping’, whereby a Member State without export controls on a specific dual-use item may import it from another EU country to export it outside of the EU.
Legal experts see the latest update as ‘more than a technical revision of individual parameters and specifications’ but rather as ‘a step in the EU’s effort to expand export controls into a broader economic security toolkit, which treats quantum technologies, semiconductors, advanced materials and biotechnology as strategic domains rather than neutral industrial sectors’, according to the report.
It highlighted the case of Dutch company ASML, which provides world-leading lithography technology to chipmakers. After cooperating with US authorities on export controls restricting sales of cutting-edge equipment to China in 2019 and January 2023, the United States in October 2023 unilaterally expanded controls to include two older generations of lithography equipment manufactured solely by ASML. This extraterritorial move caused increased calls for an EU-level approach to export controls.
The Commission confirmed in the white paper that ‘the lack of a common EU voice exposes individual Member States to geopolitical pressures’, according to the briefing.
