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Update on EU export controls on medical supplies

23. March 2020

As COVID-19 continues to spread, the availability of medical supplies, including personal protective equipment has become a concern within the EU. Certain EU member states took measures to ban or restrict exports of such products to not only third countries, but also to other EU member states, leading the EU to step in. On 15 March 2020, the EU imposed restrictions on the export of personal protective equipment outside of the EU. However, on 19 March 2020 the EU eased these restrictions by allowing export without a license to member states of the European Free Trade Association as well as certain other territories, such as Greenland and the Faroe Islands.

Introduction

As reported in our previous newsletter[1], on 15 March 2020 the EU by Commission Implementing Regulation (EU) 2020/402 of 14 March 2020 (the “Regulation”) imposed restrictions on the export of personal protective equipment, whereby exports of gloves, masks, face shields and protective clothing outside of the EU requires an export license.

However, on 19 March 2020 the EU amended the Regulation by excluding a number of countries from the scope of application of the Regulation. In practice, this means that EU businesses will be able to export personal protective equipment to a number of third countries and territories, such as Norway, Iceland, Switzerland, Greenland and the Faroe Islands, without first obtaining an export license.

Changes to export controls on medical supplies

The EU has decided that even though measures within the EU may be necessary to ensure that the EU member states have enough personal protective equipment to prevent further spreading of COVID-19 and to protect the health of medical staff treating infected patients, it may not be appropriate to control the exports of personal protective equipment to all third countries.

The EU has highlighted that the single market for medical and personal protective equipment is closely integrated beyond the boundaries of the EU, and so are its production value chains and distribution networks, which is particularly the case for Norway, Iceland, Liechtenstein and Switzerland. The EU recognizes that subjecting exports of certain personal protective equipment to these countries to an export authorization would be counterproductive, given the close integration of the production value chains and distribution networks. On this basis, the EU has decided to exclude Norway, Iceland, Liechtenstein and Switzerland from the requirement of obtaining a prior export authorization to export personal protective equipment.

Furthermore, many countries have particular dependency on the metropolitan supply chains of the EU member states to which they are adjacent or otherwise attached to. On this basis, the overseas countries and territories listed in Annex II of the Treaty on the functioning of the European Union[2], including e.g. Greenland as well as the Faeroe Islands, Andorra, San Marina and the Vatican City are also excluded from the requirement of obtaining a prior export authorization to export personal protective equipment.

Despite Brexit, the United Kingdom is considered to be an EU country in this context, and the export of personal protective equipment from an EU member state to the UK can therefore take place without an export license.

The changes to the Regulation implemented on 19 March 2020 also include an obligation for the authorities of the excluded countries and territories to ensure that their own exports of personal protective equipment is adequately controlled, in order to ensure that the objective of the Regulation is not undermined.

The EU Commission has issued a guidance note to the EU Member States on the changes to the Regulation, which can be found via link.

Applying for export licenses

Businesses should note that the requirement for an export license also applies to deliveries under contracts entered into prior to the Regulation entering into force.

Each EU member state has their own national authorities which oversee compliance with EU export controls. Generally, these national authorities are also responsible for processing applications for export licenses, including applications for exports of personal protective equipment covered by the Regulation.

In Denmark, the Danish Business Authority is the national authority overseeing compliance with EU export controls and is as such responsible for processing export applications. Danish companies should file export applications for the export of personal protective equipment electronically through www.virk.dk. Further guidance in relation to the application process can be found here.

If a company is granted an export license under the Regulation, the company is advised to keep records, including supporting documentation for exports made under such license, in order for the company to properly document that the exports were carried out in compliance with the Regulation.

 

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