European Commission report on trade in dual-use items published

On January 30, 2025, the European Commission published its report on the implementation of Regulation (EU) 2021/821 (Dual-Use Regulation) covering the period of 2022 - 2023.

A comparison with the last two reports by the European Commission clearly demonstrates the increased importance of dual-use items for European foreign trade. While the total value of authorized exports (including under EU and national general export authorizations) amounted to EUR 31 billion in 2019 and 2020, it increased to EUR 57.3 billion in 2022, representing 2% of extra-EU exports.

Types of items and countries of destination

In the reporting period, global export authorizations were by far the most important form of authorizations (approx. EUR 27.3 billion), followed by individual export authorizations (approx. EUR 17.1 billion) and general export authorizations (approx. EUR 9.7 billion).

In terms of the type of items traded, 0EC1 "Nuclear materials, facilities, plants and equipment" (EUR 6.4 billion, 33% of total) accounted for the highest proportion of individual export authorizations by value, followed by 2EC1 "Machine tools and systems and components for industrial equipment" (EUR 1.8 billion, 9% of total) and 5EC2 "Information security and crypto-analysis items and equipment" (EUR 1.3 billion, 7% of total).

However, it is precisely these "Information security and crypto-analysis items and equipment" that make up the largest proportion of global export authorizations in terms of volume (18%). "Software for telecommunications and information security" (14%) and "optical and acoustic equipment, related components, materials; other sensors" (10%) are also exported under global export authorizations.

A similar picture emerges for general export authorizations. In terms of value, they are primarily used to export "Information security and crypto-analysis items and equipment" (EUR 4.81 billion, 45% of total value), but also 3EC4 "equipment for the manufacturing and testing of semiconductor devices or materials" (EUR 1.32 billion, 12% of total value) and 9EC3 "rockets and spacecraft" (EUR 961 million, 9% of total value).

Overall, the export of dual-use items is concentrated in the areas of telecommunications and information security. This includes not only commercial civil hardware and technologies, but also those for surveillance and interception on land, at sea and in space. The importance of these items for European foreign trade is also reflected in particular by the fact that the European Commission's report focuses on the approval of items for digital surveillance. The European Union is pursuing the goal of containing the risks of internal repression and serious human rights violations by making such items subject to authorization. In the reporting year, the Member States received 288 export authorization applications for such items, the majority of which (216) concerned interception systems.

The most important destinations for dual-use items are China and the United States. With regard to individual and general export authorizations, the United States was the most important destination in terms of value (24% of total volume), followed by China (19%). When looking only at individual export authorizations, China dominates (EUR 5.6 billion, 28% of total value).

Conclusions and outlook

Due to the high importance of both the US and Chinese markets and taking into account geopolitical tensions between Washington and Beijing, EU exporters of dual-use items are exposed to increased risks.

The new Trump administration may impose tariffs on imports from the EU, which could severely affect exporters dependent on the US market. Furthermore, the Trump administration could tighten the already robust US re-export controls, particularly with regard to China, which could result in EU exporters, whose dual-use items are subject to US re-export controls, no longer being able to serve the Chinese market, or only to a limited extent. Finally, the responsible licensing authorities in the EU Member States could also adopt a more restrictive authorization practice with regard to exports to China, e.g. in the event of increasing tensions in Taiwan or the South China Sea.

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