by Dr. Christoph Schaefer, LL.M. (London)
Export controls are installed by states or state-like entities such as the European Community to scrutinize the exports of certain goods or – to a lesser extent - services. Traditionally, the legal mechanism employed is a licensing procedure based on a control list specifying these items in minute detail. From the early nineties onwards legislators installed “catch-all”-controls beside the lists, which made the export of any good subject to a licence if it was intended to be used for a particular purpose. As today’s export control is mainly aimed at forestalling proliferation, the most relevant intent covered by “catch-all”-clauses is the potential use in weapons of mass destruction (WMD). Although most export controls concern the field of security and foreign policy it should be borne in mind that export controls do also exist in other policy areas, e.g. for objects of national cultural value or chemical precursors in drug production.
Export controls are dualist in nature. Seen from an objective point of view, they are a deterrent to inter-state trade and hinder commerce of goods and services irrespective of their motivation. Nevertheless, this motivation is central to law-makers and administrators who usually follow a goal outside trade policies such as external security and other considerations of foreign policy. Usually legislators try to keep the obstacles to trade as small and the licensing procedure as smooth as possible. An example: The export of a high-tech machine tool listed in the German ‘Ausfuhrliste’ to a country outside Europe such as Syria requires permission from Germany’s Federal Office of Economics and Export Control ‘BAFA’. For the exporter this means additional costs since he has to go through the licensing process, even though that is free of charge. In addition, there is uncertainty about keeping the contract since the licence takes at least a few weeks to be processed. For the Federal Republic, the controls are a central instrument to enforce its security policy which aims at preventing the spread of modern technologies to states that the Federal Republic assumes to develop WMD.
The struggle between trade and other policy objectives is ancient and it comes in many variations and disguises. If viewed from the particular legal angle of competence, the question of the distribution of competence between the EC and its Member States arises. Competence in a legal sense is the capability of an entity to set valid rules in a given area. The competence must be conferred to the Community by the Member States while the latter’s sovereignty gives them competence to act in any given field. Art. 133 EC allows the Community to set rules regarding trade policy towards Non-Member States (Common Commercial Policy). However, Member States retain competence in the field of their external security, their cultural heritage and other policy aims pursued by export controls. How does the dualist nature of export control fit into this competence pattern?
The ECJ’s case-law has clear outlines. In the Werner case of 1995 the ECJ ruled Art. 133 EC to give the EC exclusive competence to enact export controls irrespective of their motive or policy aim. National rules are permissible only if there is specific authorisation by the Community. Authorisations can be generally phrased norms of Community Law, i.e. Art. 11 of the Export Regulation 2603/69 which is phrased similar to Art. 30 EC. National legislation such as the catch-all-clauses §§ 5c and 5d of the German ‘Foreign Trade and Payments Regulation’ can be based on Art. 11 Export Regulation.
The dissertation examines this competence question and develops its own solution. Parts of this solution have been brought forward in the 1980s by scholars like Timmermanns and practitioners like Gilsdorf. The dissertation contends the assumption that competence under Art. 133 is wholly exclusive. Exclusivity in this sense means exclusion of the member states of all power to regulate which overstretches in its practical results the Community’s capabilities. The ECJ tries to soften these consequences by constructing the possibility of authorisation which is very difficult to anchor in the Treaty or other primary Community Law. Competences are generally not disposable by their addressees. The dissertation advocates a different approach based on the functionality of the Common Commercial Policy. The CCP is to protect Community intra-trade and its uninhibited working by securing a level entry and exit for goods. Internally, Member States are allowed to erect barriers to trade in accordance with Art. 30 for reasons enumerated in that provision. This should be reflected in the CCP, interpreted as a mechanism of protection for internal trade. Thus, this concept views Art. 133 as a competence with an exclusive “core” and a concurrent “rest”. Art. 133 is an exclusive competence where it serves the internal market and the free movement of goods but a concurrent competence in all other areas. The dissertation develops and discusses this concept of “external parallelism” in detail before being applied to the various export controls applicable in the German Legal System.
Christoph Schaefer: email@example.com
by Dr. Christoph Schaefer, LL.M. (London)