Netherlands: Introduction of licensing requirements for export of dual-use goods and technologies
Date of publication: November 25th, 2024
Introduction
On October 18, 2024, the Minister for Foreign Trade and Development Cooperation introduced a new regulation, effective December 1, 2024, which mandates a licensing requirement for exporting certain goods and technologies not listed in Annex I of Regulation (EU) 2021/821. This regulation, titled "Regulation on Additional Control Measures for Dual-Use Products," aims to enhance national and international security by controlling the export of specific dual-use goods and technologies.
The Dutch Regulations control the export of “Unilaterally Controlled Items” as listed in its Annex. Although the relevant items are indicated by ECCNs, these ECCNs are specific for the Dutch Regulations as these are not currently present in Annex I to the EU Dual-Use Regulation 2021/821. The Dutch supplemental controls for exports of certain advanced semiconductor production equipment, as introduced in September 2023 continue to apply separately.
Purpose and scope
The regulation specifically targets goods and technologies from the semiconductor, quantum, and additive manufacturing industries. These items, due to their advanced capabilities, could significantly impact military applications and, consequently, national and international security. The uncontrolled export of these items poses risks to public safety, including international peace and stability. Therefore, a licensing requirement is deemed a proportional measure to mitigate these risks.
The licensing requirements under the Dutch Regulations are “country neutral”. This means that a prior license is required for exports of Unilaterally Controlled Items from the Netherlands to all destinations outside the European Union. Intra-Union transfers from the Netherlands to other EU Member States are not subject to this requirement.
Key provisions
- Licensing requirement:
- Exporters must obtain a license from the Minister for Foreign Trade and Development Cooperation to export the specified goods and technologies from the Netherlands.
- Both individual and global licenses can be issued, depending on the nature of the export.
- Application process:
- Applications for licenses must be submitted to the Director-General of Customs (the inspector).
- Required information includes details about the exporter, the destination, the recipient, and the end-user of the goods and technologies.
- Additional documentation, such as agreements and end-use declarations, may be requested.
- Conditions and restrictions:
- Licenses may come with specific conditions and restrictions to ensure the proper use and final destination of the exported goods.
- Licenses can be revoked if they were obtained based on incorrect information, if conditions are not met, or for national security reasons.
- Implementation:
- The regulation will be enforced starting December 1, 2024, to align with similar measures in other EU countries and ensure a level playing field.
ECN specific details
The regulation introduces new Export Control Numbers (ECNs) for specific categories of goods and technologies. Some of the key ECNs include:
- 2B910: Equipment for additive manufacturing designed for producing parts from metal or metal alloys.
- 2D901: Software specifically designed for the development or production of equipment mentioned in 2B910.
- 3A901.a.15: Cryogenic CMOS integrated circuits designed to operate at temperatures equal to or lower than 4.5 K.
- 4A906: Quantum computers and related electronic assemblies with specified numbers of physical qubits and error rates.
These ECNs are critical for identifying the specific goods and technologies subject to the new licensing requirements.
Administrative impact
The regulation affects a limited number of companies in the Netherlands, primarily those involved in producing the specified goods and technologies. The introduction of a new national general export license, NL900, aims to minimize administrative burdens for exports to certain destinations. An estimated 4 licenses will be applied for initially, with about 25 licenses expected annually thereafter. The associated administrative costs are projected to range from EUR 21,000 to EUR 28,000 initially, with an annual increase of EUR 22,000 to EUR 29,000.
Conclusion
The introduction of the supplemental controls under the Dutch Regulations fits in a broader trend of unilateral controls being imposed by jurisdictions outside the ‘traditional’ frameworks of multilateral export regimes, such as the Wassenaar Arrangement, or, within the EU, Annex I to the EU Dual-Use Regulation.
This new regulation underscores the importance of controlling the export of dual-use goods and technologies to safeguard public safety and national security. Companies involved in the export of such items should prepare to comply with the new licensing requirements and ensure all necessary documentation is in place.
These changes have been incorporated in ONESOURCE Global Trade Content.
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