Understanding the Risks and Responsibilities of Dual-Use Goods


When working with or delivering items that can serve both civilian and military purposes, understanding the concept of dual-use goods is essential. These versatile items encompass a wide range of products from everyday electronics to advanced technologies.

As of 2024, there are approximately 5,800 Harmonised System (HS) codes associated with potential dual-use applications. Due to their nature, these goods have a significant impact on global trade, security and compliance regulations. Navigating the complexities surrounding these items is crucial for businesses involved in their production, distribution or export.

Defined by the European Commission, the main categories of dual-use goods include:

  • Marine (e.g., underwater cameras)
  • Aerospace and propulsion (e.g., drones)
  • Materials processing (e.g., machine tools)
  • Navigation and avionics (e.g., GPS technology)
  • Computers (e.g., software or encryption devices)
  • Sensors and lasers (e.g., night vision equipment, laser rangefinders)
  • Nuclear materials, facilities and equipment (e.g., nuclear-grade graphite)
  • Special materials and related equipment (e.g., certain types of chemicals)
  • Electronics (e.g., microwave components, certain types of semiconductors)
  • Telecommunications and information security (e.g., cryptographic equipment)

While dual-use goods drive technological advancements and economic growth, they also come with inherent risks if not carefully managed. Mismanagement or misuse of these goods can lead severe consequences, both for companies and for global security.

Dilemma Risk
Reputational damage Involvement in illegal or unethical activities can harm a company’s reputation, leading to loss of business and trust.
Legal penalties Companies can face severe legal consequences, including fines, criminal charges and loss of export privileges.
Economic impact Restricted market access and increased regulatory scrutiny can result in financial losses and operational disruptions.
International security threats Improperly managed dual-use goods can undermine efforts to maintain global security and stability.
Terrorism Misuse of dual-use technologies can aid terrorist activities, such as using drones for surveillance or attacks.
Proliferation of weapons of mass destruction Dual-use items can be diverted to unauthorised end-users or end-uses, contributing to the development of nuclear, chemical or biological weapons.
 

Proper management, awareness and compliance with regulations are crucial to mitigate these risks and ensure the safe and ethical use of dual-use goods.

Companies involved with dual-use goods bear significant responsibilities to ensure these items are used appropriately. This responsibility extends not only to their direct customers but also to the broader international community.

Consumers responsibilities

Consumers need to understand the potential applications and end-use of the products they purchase and support responsible companies that adhere to regulations and promote safe usage.

Business responsibilities

Companies handling dual-use goods have the obligation to screen buyers and suppliers to ensure legitimate use of the products. They must obtain necessary export licences for dual-use goods and stay updated with regulations to avoid penalties and ensure ethical practices.

As technology continues to evolve, governments and international bodies continuously refine regulations on dual-use goods to balance innovation and security, ensuring the use of technology and other dual-use items is ethical.

Key regulatory frameworks include:

Wassenaar Arrangement

This multilateral export control regime controls the export of dual-use technologies. It promotes transparency and accountability, aiming to prevent the destabilising accumulation of arms and sensitive technologies.

EU regulations

Within the European Union, these regulations strictly enforce the laws governing the export, brokering, technical assistance, transit and transfer of dual-use items. Businesses operating in the EU or exporting to EU nations must understand these regulations to avoid potential penalties.

National export controls

In addition to international frameworks, individual countries often have specific regulations controlling the export of dual-use goods. Consult local regulatory bodies or trade compliance experts to stay updated on these requirements.

By understanding and fulfilling the responsibilities associated with dual-use goods, companies can help support global security initiatives and contribute to a safer, more transparent world. Staying informed, following regulatory frameworks and enforcing compliance measures are essential steps in preventing the misuse of dual-use goods.

 

On this page

https://www.chrobinson.com/en-au/resources/resource-center/guides/dual-use-goods-guide/