Yesterday, the Danish Parliament adopted a law that gives the Danish Business Authority the power to carry out inspection visits without prior notice at Danish exporters, brokers and carriers who have cross-border activities. The purpose is to ensure compliance with EU export controls and EU sanctions. The Danish Business Authority also has the right to demand that all necessary information, including customer registers and orders, be handed over to the Danish Business Authority in connection with the inspection. This newsletter focuses on the practical measures that the affected Danish companies should implement as a consequence of the new law.
On 7 October 2020, the Minister of Trade and Industry tabled a bill in Parliament proposing to amend the act on the application of certain acts of the European Union on economic relations with third countries, etc., which has been adopted today (the “Law”). The purpose is to strengthen the Danish Business Authority’s control and supervision of companies that carry out activities covered by the EU dual-use export control rules or by the EU sanctions rules.
The Law applies to Danish exporters as well as brokers and carriers who have cross-border activities. It is not a condition for applicability that the company has previously been in contact with the Danish Business Authority in relation to export control matters.
The Law enters into force on 1 January 2020. The Danish Business Authority will have the following supervisory and control powers:
It is expected that the Danish Business Authority will carry out 10 inspection visits each year.
The supervisory and control efforts must be planned on the basis of a risk-based and theme-based approach. Accordingly, the selection of companies for supervision and control will be based on an assessment of, for example, the products that the company produces, the current threat scenario, as well as the probability of circumvention of the rules, the effect of the supervisory and control efforts etc.
The aim of the inspection visits is to check compliance with the Dual-use Regulation, EU sanctions as well as the Danish laws within the area of export controls and sanctions. Inspection visits without prior notice will only be carried out if the Danish Business Authority assesses that the purpose of the inspection visit otherwise will be lost.
The Law gives the Danish Business Authority the right to receive all information, including trade documents, customer registers, inventories etc., for use in connection with its supervisory and control tasks.
In connection with the review of the legislative proposal, the Minister for Trade and Industry stated that in connection with inspection visits relating to dual-use export controls, it will be relevant for the Danish Business Authority to gain insight into the registers and lists that the exporter is required to maintain pursuant to article 20 of the Dual-use Regulation. These may consist of, for example, invoices, cargo manifests and other transport and shipping documentation. These documents must include information sufficient to enable dual-use items to be identified through a description of the products and the quantity of the products, as well as information on the name and address of the exporter and the consignee. The Minister of Trade and Industry also stated that known information on end-use and the end-user of a dual-use product must be included in the exporter’s registers and lists.
In connection with inspection visits within the area of EU sanctions, it will be relevant for the Danish Business Authority to be informed of the countries with which the exporter trades or otherwise interacts, in order to be able to identify which sanctions laws potentially apply. On this basis, the Danish Business Authority will be able to determine what information may be relevant to request in order to carry out their supervision and control efforts.
Pursuant to the Law, the affected companies have an obligation to provide the necessary assistance to the Danish Business Authority in order for the Danish Business Authority to carry out its supervisory and control efforts. This entails an obligation to provide relevant information, provide access to the company’s premises and means of transport etc. Non-compliance with this requirement is punishable by fine.
It is important that Danish exporters, brokers and carriers prepare for a possible inspection visit by the Danish Business Authority, as the Law contains an obligation for the affected companies to provide the assistance necessary in order for the Danish Business Authority to carry out its supervisory and control efforts. As a consequence of the Law, exporters, brokers and carriers should therefore, among other things
As the Law enters into force on 1 January 2021, Danish exporters, brokers and carriers should already now take steps to ensure compliance with the new rules.
 The law on the application of certain acts of the European Union on economic relations with third countries (in Danish: Bemyndigelsesloven) and Executive Order no. 712 of 5 July 2019 on the control of the export of dual-use items and technology and the control of the provision of technical assistance (in Danish: Udførselsbekendtgørelsen).