Many industrial companies are currently deciding to become active in the field of military goods as well. This is precisely where the rules of export control apply all the more, in the form of special regulations governing the handling of military equipment. Here is an initial overview. Companies that, as a small or medium-sized enterprise (SME), are offering products, components, software, or services with a military connection for the first time should address the following points at an early stage:
1. Classify your portfolio.
Systematically check whether your goods, components, technologies, or services are listed as war weapons, other armaments-related goods, or dual-use goods. The decisive factor is usually the technical design, though for certain offenses knowledge of the intended end use is also relevant. When in doubt, it is worthwhile to submit an early request to BAFA (Federal Office for Economic Affairs and Export Control) for a ruling on classification under the goods list, or for information on foreign trade matters, before the contract is concluded.
2. Plan for a dual review.
War weapons regularly require two separate approval procedures: one under the War Weapons Control Act (e.g., for manufacture, acquisition, transport, etc.) and, in addition, one under foreign trade law for cross-border movement. One approval does not replace the other.
3. Screen for sanctions and embargoes.
Before concluding any contract with a foreign connection, contractual partners and end recipients should be checked against current sanctions lists. Country-specific embargoes (for example, against Russia) often maintain their own goods lists, which must be checked in addition. Circumvention risks require particular attention here.
4. Safeguard your contracts.
Include clauses on approval reservations, end-use, and cooperation obligations, as well as a right of withdrawal in the event that approval is denied.
5. Choose Incoterms deliberately.
The chosen trade clause determines when “actual control,” and thus the obligation to obtain approval, passes to the other party. Clarify in advance which party can secure the necessary approval in good time.
6. Establish a compliance structure.
When handling sensitive goods, it is expected that a company will appoint an export compliance officer at the management level, as well as officers with stop authority, along with deputies for day-to-day business operations. Companies must maintain an adequate compliance structure and document it in a written Internal Compliance Programme.
7. Know the review criteria.
Approval decisions are guided, among other things, by the Council’s Common Position 2008/944/CFSP, as well as by the criteria of the EU Dual-Use Regulation (EU) 2021/821 and the embargo regulations.
8. Take liability seriously.
Violations can have personal consequences not only for the company but also for management and involved employees, early legal advice pays off.
