Finnish Act on Export Control of Dual-Use Items to be reformed

The Finnish Act on the Export Control of Dual-Use Items will be reformed. At the same time, Finland’s national regulations will be made more compatible with the EU Regulation. In addition, it is proposed that the legislation be updated to ensure that the national regulations meet the needs of the changing operating environment.

Efficient export control as a goal

With the entry into force of the EU’s new Export Control Regulation (EU) 2021/821, Finland’s national regulations are no longer fully compatible with EU law. Reforming the legislation would harmonise regulations and ensure efficient enforcement of export control.

It was observed during the preparation of the reform that the act should have a clearer structure. New provisions should be introduced into the act relating to the reporting and document requirements of the EU Regulation. Moreover, the export control practices should be streamlined in terms of processing export authorisation applications, making decisions on applications and requesting a review. The aim is to clarify procedures, which would benefit both exporters and export control authorities.

Updates to the powers of authorities

The new act should grant the authorities sufficient powers for exchanging non-disclosable information to ensure efficient enforcement of export control. The provision of the current act on the disclosure of information omits many authorities who are important contacts for cooperation and exchange of information in matters concerning export control of dual-use items. Examples of such authorities include the Ministry of Defence and the National Police Board, who are the export control authorities for defence materiel and firearms. On the other hand, the new legislation would limit the scope of information that may be disclosed, taking into account statements of the Constitutional Law Committee of the Finnish Parliament.

Sometimes it may be necessary to disclose information to foreign authorities and international organisations. This should be reflected in the new legislation because export control is based on international cooperation and Finland, as a member of international export control regimes, is committed to reporting on certain decisions on applications for export authorisation. It is proposed that an exhaustive list of disclosable information would be included in the act and that disclosure of personal data would be excluded from the scope of the act.

The Finnish Customs should be ensured sufficient powers as an enforcement authority.  A problem with the current national regulation is that the Finnish Customs does not have sufficient powers to control the export of intangible dual-use items. For this reason, it is proposed that the Finnish Customs be granted the same powers to control export of intangible items as it has for controlling export of tangible items.

It is proposed that provisions would be introduced into the act allowing competent authorities to impose a conditional fine in order to enforce compliance with certain obligations to disclose information. The possibility to impose a conditional fine to enforce compliance would be necessary as the obligation of an operator to disclose certain information, specified in law, to the enforcement authority is a condition for effective export control. It is also necessary to ensure that the provisions on legal consequences are comprehensive.

Proposal for a national control list of dual-use items

It was observed during the preparation of the reform that the changed operating environment creates a need to introduce into the act a requirement for an export authorisation for items listed in a national control list. The purpose of the national control list would be to supplement the EU control list of dual-use items, i.e. Appendix I to the Export Control Regulation. Dual-use items proposed to be included in the national control list include items related to quantum technology and advanced semiconductor manufacturing technology.

A national control list is seen necessary because the approach based on international export control regimes is not fit for purpose in the current international environment. Similarly, rapid technological advancements and an increase in hybrid threats require an efficient export control framework and an ability to act nationally in matters relevant for Finland’s comprehensive security.

Get engaged in the reform preparation this autumn

On Friday 6 October 2023, the Ministry for Foreign Affairs will organise an event where all interested stakeholders are welcome to come and discuss the project to reform the Act on the Export Control of Dual-Use Items. An export control clinic designed for those who export dual-use items will be organised on the same occasion.

More information about the event and registration is available here. Stakeholders will have the opportunity to submit written comments on the project after the event. A public consultation on the draft government proposal is planned for the autumn 2023.