Export controls
Also called dual-use export controls, strategic export controls
Export controls are laws that restrict the transfer of military goods, dual-use items, software and technology across borders. Governments require a licence for listed items and for certain destinations, end users and end uses. They sit alongside sanctions and are enforced by trade and customs authorities.
How it works
Exporters classify each product against a control list, such as the EU dual-use list or the US Commerce Control List. They then check the destination, the end user and the stated end use. Banks meet export controls through trade finance. They review letters of credit and shipping documents for controlled goods, listed parties and diversion routes through third countries.
Export controls have become a main tool against Russia and in technology competition with China. Breaches lead to criminal penalties, denial of export privileges and loss of banking relationships. For financial firms, financing a shipment that breaches controls can create liability and reputational damage. Control lists are updated regularly to reflect decisions taken by international export control regimes.
The rules
Sets the EU dual-use control list in Annex I, licensing rules and catch-all controls, including for cyber-surveillance items.
EU exporters, brokers and technical assistance providersGives permanent statutory authority for the Export Administration Regulations, administered by the Commerce Department's Bureau of Industry and Security.
Exports, re-exports and transfers of items subject to the EARSets UK licensing controls on military goods and technology and gives effect to dual-use controls retained after Brexit.
UK exporters of military and dual-use itemsCommon questions
How do export controls differ from sanctions?
Sanctions target countries, people and entities and often freeze assets. Export controls target what is being shipped and its end use, whatever the destination. The two overlap, and Russia measures use both. A shipment can be lawful under sanctions yet still need an export licence.
What are dual-use goods?
Dual-use goods are items with civilian uses that could also serve military or weapons purposes. Examples include certain chips, sensors and encryption software. They appear on lists agreed through international regimes such as the Wassenaar Arrangement and are transposed into national control lists.
Why do banks care about export controls?
Banks finance and settle trade. Regulators expect trade finance teams to spot controlled goods, listed end users and diversion through third countries. Financing a shipment that breaches controls exposes a bank to enforcement and reputational harm, even when it does not export anything itself.
How often do control lists change?
Lists change regularly. The EU updates its dual-use annex through Commission delegated acts to reflect regime decisions. The US adds entities to its Entity List frequently, and Russia measures have added new controlled items since 2022.
