Export controls are French, European or foreign rules (American, Japanese, English…) that apply to certain products and technologies because of their level of performance, their criticality or their end use. The manufacture, trade, storage or transport of these products and technologies may be affected by these rules. They are to be distinguished from the rules on embargoes and sanctions, which primarily aim at repressing individuals, organisations or countries.
What is export control?
Example: most products and technologies related to the space sector or developed for the armed forces are subject to export control rules.
Example: export controls do not only apply to products. Some services, training or technical data are affected.
Does export control only concern the defense sector?
No, this is a common misconception. The scope of export control rules has been greatly expanded in recent years. On the one hand, sensitive and high-tech products from different sectors such as aeronautics, automotive, telecommunications or IT that have no link to the defence sector can be affected. These are so-called dual-use products and technologies.
Example: depending on their functionalities or their level of performance, the following products may be affected:
- Drones
- Facial or object recognition system
- Geolocation technologies
- Additive manufacturing solutions integrating powerful lasers as well as advanced powders
- Robots
- Optical systems
- Acoustic systems
- Semiconductors
- Software
- Computers such as quantum computers…
On the other hand, when open innovation civilian solutions and technologies are modified to be integrated into defence or security equipment, export control issues are likely to arise.
Example: a civilian communication solution that is encrypted in order to be integrated into military equipment or to interface with other military communication solutions.
Can an organisation operating solely in France and with no international links be concerned?
Yes, a company or research organisation based in France and selling only to French customers may still be concerned. If the company sources foreign components, integrates technology or solicits foreign skills, it may potentially be exposed to foreign export control rules.
Example: a French company designing civil solutions for French companies or organisations may integrate into its products components, lines of code or systems developed and purchased in the United States. This French made solution may “inherit” an American export control rule. It will therefore have to comply.
Example: a French company that uses foreign intellectual services for engineering on an export-controlled product.
Similarly, if it interacts with French private and/or public players in the defence sector, it may also be concerned.
Example: a solution created or modified to the specifications of the Ministry of Defence or the Ministry of the Interior.
Example: a solution developed under subcontract to a French manufacturer and intended for the armed forces or law enforcement agencies.
How do issues of export control affect the activity of an organisation?
Taking export control into consideration contributes to the competitiveness of a company, its compliance and its image. It will be a guarantee of confidence for the various stakeholders interacting with the company, such as financial institutions, investors, customers, commercial and industrial partners, insurers, carriers, etc.
On the contrary, non-compliance with export control rules may restrict access to certain markets, cause delays in supply, lead to the operations of the company being placed under surveillance and, in the most serious cases, result in criminal proceedings.