Anupam Srivastava
Strategic Trade Controls Core Components, Impact and Rela6onship with UNSCR 1540 Dr. Anupam Srivastava, CITS [email protected]
Presenta6on for CSCAP Mee6ng, Phnom Penh, Sept 2015
Strategic Goods • Items, related soJware & technologies capable of being used to develop, produce, operate, stockpile, or acquire WMDs • Conven6onal arms & military equipment • Dual-‐use items with both civilian & military applica6ons, such as: - Certain electronic items - Machine tools, lasers - Imaging cameras - Alloys, specialty materials - Cryptography soJware - Chemicals
Source: http://www.customs.gov.sg/insync/issue08/updates/stgc.html
2
What are Strategic Trade Controls (STC)? • Govt & other efforts to regulate the transfer or trade in items that have civilian uses but can also be used to produce or deliver weapons of mass destruc6on (WMD) & other conven6onal defense-‐related items • The targeted items are different from those regulated by other types of export/import controls, e.g., - Short supply, endangered species, an6-‐terrorism, foreign policy, etc.
3
Func6ons & U6lity of STC • Serve as a deterrent to WMD acquisi6on efforts • Delay efforts of proliferators in acquiring WMD items or technologies • Help interdict illegal transfers of controlled goods, materials & technologies • Serve as a source of informa6on on possible WMD ac6vi6es • Buy 6me for diploma6c efforts to prevent a WMD program • Strengthen norms of nonprolifera6on v STC also facilitate high-‐technology trade by building trust among trading partners 4
Limita6ons of STC • By themselves, STC can not stop a determined WMD development program -‐ Interna6onal coopera6on is required to enforce similar controls and apply other tools • STC are one of many tools to prevent WMD prolifera6on - IAEA safeguards - Physical protec6on - Diplomacy - Sanc6ons • Limited ability - To prevent dangerous conflict 5
UNSCR 1540: Goals and Objec8ves Prevent and deter through explicit criminaliza6on § The development, acquisi6on, trafficking, or use of weapons of mass destruc6on (WMD), their means of delivery, and related materials, equipment and technology § By, or to, Non-‐State actors § By, or to, State actors
UNSCR 1540: A Background § Adopted unanimously on 28 April 2004 under Chapter VII of the UN Charter § Imposes far-‐reaching, legally binding obliga6ons on all States to take a series of steps to prevent WMD from gecng into the hands of non-‐state actors, including terrorists § Complements exis6ng interna6onal and mul6lateral non-‐ prolifera6on trea6es and regimes Website for 1540 Committee http://disarmament2.un.org/Committee1540/
§ Established a 1540 Commiaee with the mandate to assist implementa6on among UN members o The mandate has been unanimously extended through UNSCR 1673 – which introduced the concept of “compliance,” UNSCR 1810, and UNSCR 1977 (2012) – which has extended the term for 10 years.
§ Requires periodic repor6ng and is poten6ally enforceable o Guidelines for repor6ng are available
Why UNSCR 1540?
§ § §
§
The experience with exis6ng nonprolifera6on trea6es and regimes highlighted several needs: Focus more on non-‐state actors and regulate ancillary trade transac6ons such as brokering, transit & transshipment Give teeth to na6onal and interna6onal “commitment to nonprolifera6on” Provide clear guidance on what “nonprolifera6on” means in ac6on à regula6ng transac6ons regarding materials, equipment and technologies related to Nuclear, Chemical, Biological Weapons AND their delivery systems Transparency and eventual harmoniza6on across regions à Universaliza6on of best prac6ces
UNSCR 1540: Main Provisions § Para 1: general commitment to not support non-‐state actors re WMDs § Para 2: criminalize all ac7vi7es of non-‐state actors (unauthorized en77es) with regard to WMD-‐relevant items § Para 3a: appropriate effec7ve measures for nuclear materials control and accoun7ng § Para 3b: appropriate and effec7ve measures for nuclear material protec7on (physical security) § Para 3c: effec7ve border controls § Para 3d: comprehensive na7onal export controls § Para 6: appropriate control lists § Para 8b: interna7onal obliga7ons incorporated into domes7c laws/regula7ons § Para 8d: develop appropriate ways to work with industry and public § Para 9: engage in dialogue and coopera7on on nonprolifera7on § Para 10: take coopera7ve ac7on to prevent illicit trafficking in WMD items
Comprehensive STC System as per UNSCR 1540
Licensing
Enforcement
Legal Basis Ins6tu6ons Implementa6on
Government-‐industry outreach
Interna6onal compliance/ regime adherence
Licensing: Legal Basis Official authoriza8on by the government for the transfer of controlled goods or technologies. • Licensing system should be supported by laws/legisla6on that provide authority to designated officials/agencies: - To control all ac6vi6es and items related to trade & transfers of sensi6ve dual-‐use goods AND military items - To review & issue licenses - To iden6fy end-‐user/end-‐use-‐based controls • Licensing system should be accountable & transparent - Control lists are specified - License/permit procedures are clear 11
Licensing: Control Lists • UNSC R 1540 requires countries to establish control list(s) – unified or separate • Many countries have opted to add conven6onal weapons/muni6ons to the list of Dual-‐Use items • Several countries in Asia/SE Asia have adopted EU Dual Use List, and added more items based on na6onal requirements
12
Licensing: Ins6tu6ons There should be government agencies & procedures to: • Review applica6ons & issue or deny licenses • Inform exporters of their obliga6ons & licensing condi6ons - Cover all types of licenses & ac6vi6es: re-‐exports, transit, transshipments, intangible transfers & deemed exports • Classify products & establish commodity jurisdic6on - Determine which agency/agencies grant license for a category of items in the control list • Update the control lists periodically
13
Licensing: Implementa6on How do we know if a licensing system is working? • Government is issuing & denying licenses for all types of sensi6ve transfers • Control lists are being updated • Technical experts are involved in screening of license applica6ons • Catch all is being implemented • Feedback loop is working - Informa6on is shared amongst agencies - Industry feedback is taken into account
14
Enforcement: Legal Basis/Ins6tu6ons What happens if exporters do not comply with licensing requirements? Enforcement is needed. Legal Basis • Laws & regula6ons should designate one or more government agencies with enforcement authority (both muni6ons & dual-‐ use)
Ins6tu6ons • Effec6ve enforcement requires agencies with resources, procedures & tools for performing enforcement du6es
15
Enforcement: Implementa6on Evidence that the enforcement system is actually working: • Is cargo being searched, detained & seized? • Are consignments being checked for dual-‐ use items? • Can customs & border control officers: - Iden6fy products of concern - Inves6gate viola6ons • Impose penal6es (both administra6ve & criminal)
16
Government-‐Industry Outreach Legal Basis Is there a law or decree requiring that the government work to assist the industry in complying with strategic trade controls? • How much info is the government required to share with industry? How oJen? In what ways? • Is the government required by law to publicize its laws & regulatory acts?
Ins6tu6ons Are some govt agencies designated to provide outreach to the industry? Do they publicize info on: • Export regula6ons • “Red flags!” • End-‐users of concern • Cases of viola6ons 17
Government-‐Industry Outreach: Implementa6on Evidence that the government communicates with industry: • Organizes industry outreach - Regular events? - Whenever needed? • Publishes/publicizes regula6ons - Web? (updated?) - Brochures?
18
Regime Adherence: Legal Basis, Procedures & Prac6ce Regime adherence includes interna8onal coopera8on on nonprolifera8on. Government should: • Be a signatory of or adherent to relevant interna6onal agreements - Nuclear Suppliers Group, Missile Technology Control Regime, Wassenaar Arrangement & Australia Group - Coordinate with other governments & interna6onal organiza6ons • Have a bureaucracy & budget to par6cipate in delibera6ons • Adopt common guidelines for licensing decisions & implementa6on • Coordinate in joint inves6ga6ons/interdic6ons 19
Impact of STCs on Trade and Economy • Increasing global footprint of STC regula6ons à raising cost for non-‐ compliance in business ac6vi6es • Example: inadequate Encryp6on controls/IPR à deter domes6c companies & MNCs to locate value-‐added manufacturing in that country • Smart States & companies recognize à strong, trade-‐ enabling, STC/ICP provide compe66ve business advantage, foster hi-‐tech mfg, R&D and innova6on
hap://www.state.gov/documents/organiza6on/156673.pdf
Conclusion • 4 key elements of a complete STC system à Licensing, industry-‐government rela6ons, adherence to mul6lateral regimes & enforcement • STC standards keep evolving à governments must adapt & change too • Industry understanding & compliance is cri6cal à get to know traders/exporters & their products • Interna6onal coopera6on & informa6on sharing is essen6al in a global economy 21
Presenta6on for CSCAP Mee6ng, Phnom Penh, Sept 2015
Strategic Goods • Items, related soJware & technologies capable of being used to develop, produce, operate, stockpile, or acquire WMDs • Conven6onal arms & military equipment • Dual-‐use items with both civilian & military applica6ons, such as: - Certain electronic items - Machine tools, lasers - Imaging cameras - Alloys, specialty materials - Cryptography soJware - Chemicals
Source: http://www.customs.gov.sg/insync/issue08/updates/stgc.html
2
What are Strategic Trade Controls (STC)? • Govt & other efforts to regulate the transfer or trade in items that have civilian uses but can also be used to produce or deliver weapons of mass destruc6on (WMD) & other conven6onal defense-‐related items • The targeted items are different from those regulated by other types of export/import controls, e.g., - Short supply, endangered species, an6-‐terrorism, foreign policy, etc.
3
Func6ons & U6lity of STC • Serve as a deterrent to WMD acquisi6on efforts • Delay efforts of proliferators in acquiring WMD items or technologies • Help interdict illegal transfers of controlled goods, materials & technologies • Serve as a source of informa6on on possible WMD ac6vi6es • Buy 6me for diploma6c efforts to prevent a WMD program • Strengthen norms of nonprolifera6on v STC also facilitate high-‐technology trade by building trust among trading partners 4
Limita6ons of STC • By themselves, STC can not stop a determined WMD development program -‐ Interna6onal coopera6on is required to enforce similar controls and apply other tools • STC are one of many tools to prevent WMD prolifera6on - IAEA safeguards - Physical protec6on - Diplomacy - Sanc6ons • Limited ability - To prevent dangerous conflict 5
UNSCR 1540: Goals and Objec8ves Prevent and deter through explicit criminaliza6on § The development, acquisi6on, trafficking, or use of weapons of mass destruc6on (WMD), their means of delivery, and related materials, equipment and technology § By, or to, Non-‐State actors § By, or to, State actors
UNSCR 1540: A Background § Adopted unanimously on 28 April 2004 under Chapter VII of the UN Charter § Imposes far-‐reaching, legally binding obliga6ons on all States to take a series of steps to prevent WMD from gecng into the hands of non-‐state actors, including terrorists § Complements exis6ng interna6onal and mul6lateral non-‐ prolifera6on trea6es and regimes Website for 1540 Committee http://disarmament2.un.org/Committee1540/
§ Established a 1540 Commiaee with the mandate to assist implementa6on among UN members o The mandate has been unanimously extended through UNSCR 1673 – which introduced the concept of “compliance,” UNSCR 1810, and UNSCR 1977 (2012) – which has extended the term for 10 years.
§ Requires periodic repor6ng and is poten6ally enforceable o Guidelines for repor6ng are available
Why UNSCR 1540?
§ § §
§
The experience with exis6ng nonprolifera6on trea6es and regimes highlighted several needs: Focus more on non-‐state actors and regulate ancillary trade transac6ons such as brokering, transit & transshipment Give teeth to na6onal and interna6onal “commitment to nonprolifera6on” Provide clear guidance on what “nonprolifera6on” means in ac6on à regula6ng transac6ons regarding materials, equipment and technologies related to Nuclear, Chemical, Biological Weapons AND their delivery systems Transparency and eventual harmoniza6on across regions à Universaliza6on of best prac6ces
UNSCR 1540: Main Provisions § Para 1: general commitment to not support non-‐state actors re WMDs § Para 2: criminalize all ac7vi7es of non-‐state actors (unauthorized en77es) with regard to WMD-‐relevant items § Para 3a: appropriate effec7ve measures for nuclear materials control and accoun7ng § Para 3b: appropriate and effec7ve measures for nuclear material protec7on (physical security) § Para 3c: effec7ve border controls § Para 3d: comprehensive na7onal export controls § Para 6: appropriate control lists § Para 8b: interna7onal obliga7ons incorporated into domes7c laws/regula7ons § Para 8d: develop appropriate ways to work with industry and public § Para 9: engage in dialogue and coopera7on on nonprolifera7on § Para 10: take coopera7ve ac7on to prevent illicit trafficking in WMD items
Comprehensive STC System as per UNSCR 1540
Licensing
Enforcement
Legal Basis Ins6tu6ons Implementa6on
Government-‐industry outreach
Interna6onal compliance/ regime adherence
Licensing: Legal Basis Official authoriza8on by the government for the transfer of controlled goods or technologies. • Licensing system should be supported by laws/legisla6on that provide authority to designated officials/agencies: - To control all ac6vi6es and items related to trade & transfers of sensi6ve dual-‐use goods AND military items - To review & issue licenses - To iden6fy end-‐user/end-‐use-‐based controls • Licensing system should be accountable & transparent - Control lists are specified - License/permit procedures are clear 11
Licensing: Control Lists • UNSC R 1540 requires countries to establish control list(s) – unified or separate • Many countries have opted to add conven6onal weapons/muni6ons to the list of Dual-‐Use items • Several countries in Asia/SE Asia have adopted EU Dual Use List, and added more items based on na6onal requirements
12
Licensing: Ins6tu6ons There should be government agencies & procedures to: • Review applica6ons & issue or deny licenses • Inform exporters of their obliga6ons & licensing condi6ons - Cover all types of licenses & ac6vi6es: re-‐exports, transit, transshipments, intangible transfers & deemed exports • Classify products & establish commodity jurisdic6on - Determine which agency/agencies grant license for a category of items in the control list • Update the control lists periodically
13
Licensing: Implementa6on How do we know if a licensing system is working? • Government is issuing & denying licenses for all types of sensi6ve transfers • Control lists are being updated • Technical experts are involved in screening of license applica6ons • Catch all is being implemented • Feedback loop is working - Informa6on is shared amongst agencies - Industry feedback is taken into account
14
Enforcement: Legal Basis/Ins6tu6ons What happens if exporters do not comply with licensing requirements? Enforcement is needed. Legal Basis • Laws & regula6ons should designate one or more government agencies with enforcement authority (both muni6ons & dual-‐ use)
Ins6tu6ons • Effec6ve enforcement requires agencies with resources, procedures & tools for performing enforcement du6es
15
Enforcement: Implementa6on Evidence that the enforcement system is actually working: • Is cargo being searched, detained & seized? • Are consignments being checked for dual-‐ use items? • Can customs & border control officers: - Iden6fy products of concern - Inves6gate viola6ons • Impose penal6es (both administra6ve & criminal)
16
Government-‐Industry Outreach Legal Basis Is there a law or decree requiring that the government work to assist the industry in complying with strategic trade controls? • How much info is the government required to share with industry? How oJen? In what ways? • Is the government required by law to publicize its laws & regulatory acts?
Ins6tu6ons Are some govt agencies designated to provide outreach to the industry? Do they publicize info on: • Export regula6ons • “Red flags!” • End-‐users of concern • Cases of viola6ons 17
Government-‐Industry Outreach: Implementa6on Evidence that the government communicates with industry: • Organizes industry outreach - Regular events? - Whenever needed? • Publishes/publicizes regula6ons - Web? (updated?) - Brochures?
18
Regime Adherence: Legal Basis, Procedures & Prac6ce Regime adherence includes interna8onal coopera8on on nonprolifera8on. Government should: • Be a signatory of or adherent to relevant interna6onal agreements - Nuclear Suppliers Group, Missile Technology Control Regime, Wassenaar Arrangement & Australia Group - Coordinate with other governments & interna6onal organiza6ons • Have a bureaucracy & budget to par6cipate in delibera6ons • Adopt common guidelines for licensing decisions & implementa6on • Coordinate in joint inves6ga6ons/interdic6ons 19
Impact of STCs on Trade and Economy • Increasing global footprint of STC regula6ons à raising cost for non-‐ compliance in business ac6vi6es • Example: inadequate Encryp6on controls/IPR à deter domes6c companies & MNCs to locate value-‐added manufacturing in that country • Smart States & companies recognize à strong, trade-‐ enabling, STC/ICP provide compe66ve business advantage, foster hi-‐tech mfg, R&D and innova6on
hap://www.state.gov/documents/organiza6on/156673.pdf
Conclusion • 4 key elements of a complete STC system à Licensing, industry-‐government rela6ons, adherence to mul6lateral regimes & enforcement • STC standards keep evolving à governments must adapt & change too • Industry understanding & compliance is cri6cal à get to know traders/exporters & their products • Interna6onal coopera6on & informa6on sharing is essen6al in a global economy 21
