Guidance

Brokering (trade) of dual-use items

Controls on the brokering of goods that could be used as parts or accessories for weapons of mass destruction and need an export licence.

Overview

On 27 August 2009, a new EU Dual-Use Regulation - Council Regulation (EC) No.428/2009 - came into force. Alongside the existing controls on exports from the EU of dual-use Items, the new Regulation included, for the first time, a control on brokering of dual-use goods.

Brokering means buying or selling, or arranging or negotiating transactions for the purchase, sale, or supply, of dual-use items located in one third (ie non-EU) country for transfer to another. The dual-use trade controls also apply to trade in software and technology.

From that date, any individual, partnership or legal entity resident or established in an EU member state involved in the brokering of dual-use Items listed in Annex I to the regulation between two non-EU countries will require a licence where they have been informed that the items are, or may be intended for, a weapon of mass destruction End Use.

If the broker is aware the items are intended for such an end use, they must contact the competent authorities in the member state in which they are established - in the UK, the Export Control Organisation (ECO) - which will decide whether to make the activity subject to control.

This guide provides an introduction to the dual-use brokering controls and where to find access to further information. These controls are separate and distinct from the guidance for trafficking and brokering (Trade Controls) of military goods.

The new controls on brokering of dual-use items (‘Trade Controls’)

Controls on ‘brokering services’ apply to any items listed in Annex I to the EU Dual-Use Regulation where the broker has been informed that the listed items are or may be intended for a weapons of mass destruction (WMD) End-Use.

A broker is obliged to inform the ECO if they are aware that the items concerned are for WMD End-Use.

For more information on the End-Use controls, see the guide on Weapons of mass destruction: end-use control.

Annex I of the EU Dual-Use Regulation is commonly known as the EU Dual-Use List. This is a listing of items which is published in the UK as a part of the Strategic Export Control Lists.

Details of who the brokering controls apply to

The controls apply to individuals, companies and other legal entities, and partnerships, which are resident or established in an EU country (including the UK) and which undertake a controlled brokering service from within the EU.

What is meant by ‘brokering services’

‘Brokering services’ is the selling or buying of dual-use items or the deal, negotiation or transaction for purchasing or supplying dual-use items from a third country to any other third country.

In practice, brokering could include the following activities - this list is not exhaustive:

  • arranging supply from overseas factories/warehouses
  • arranging intra-company transfers
  • drop shipping
  • acting as a ‘project manager’ for a project in one third country who sources supplies for that project in other third countries

Brokering, under the regulation, does not include ancillary services (defined as ‘transportation, financial services, insurance or re-insurance or general advertising or promotion’).

Further guidance

ECO provides further guidance which is intended to assist those individuals and companies which are, or may become, involved in the trading of dual-use goods, to understand the controls and determine when a licence will be required. Download guidance on the trade (brokering) of dual-use items.

The document includes guidance on the following:

  • the legislation surrounding the trade of dual-use items
  • the new controls on brokering of dual-use items (trade controls)
  • what is meant by ‘brokering services’
  • who the brokering controls apply to
  • additional measures in the regulation
  • trade licences and how to apply for them
  • end-user documentation
  • frequently asked questions
  • contacts for further advice

Associated guidance

Separate guidance is available on trade controls (trafficking and brokering) of military goods.

See the guides on trade controls on military goods for trade fairs and exhibitions and trafficking and brokering (Trade Controls).

Licensing

For more information on the different categories of export licence, see the guide on Trade Control Licences for brokering.

Legislation

The controls are published in Council Regulation (EC) No.428/2009, which revokes and replaces Council Regulation (EC) No.1334/2000, was adopted on 5 May 2009 and published in the Official Journal of the European Communities. The regulation is commonly known as the EU Dual-Use Regulation. It is directly applicable in all EU member states and entered into force on 27 August 2009.

The Export Control (Amendment) (No 3) Order 2009, implementing certain provisions associated with licensing and enforcement, came into force at the same time.

For information and to download a link to to the full text of both the EU Dual-Use Regulation and the amending Export Control Order, see the guides on controls on dual-use goods (EU Dual-Use Regulation) and strategic export control legislation: amending orders and regulations.

Further information

BIS ECO Helpline

020 7215 4594 or email: eco.help@bis.gsi.gov.uk

Goods Checker on the ECO Checker website

Download trade (brokering) of dual-use items guidance

Published 11 September 2012