Export control of dual-use items: a comparative study of...

Ref. code: 25595601040297BDA

EXPORT CONTROL OF DUAL-USE ITEMS:

A COMPARATIVE STUDY OF THAI AND

FOREIGN LAWS

BY

MS. PIYANAT UAMDUANG

A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENTS FOR THE DEGREE OF

MASTER OF LAWS IN BUSINESS LAW (ENGLISH PROGRAM)

FACULTY OF LAW

THAMMASAT UNIVERSITY

ACADMIC YEAR 2016

COPYRIGHT OF THAMMASAT UNIVERSITY

Ref. code: 25595601040297BDA

EXPORT CONTROL OF DUAL-USE ITEMS:


FOREIGN LAWS

BY

MS. PIYANAT UAMDUANG

A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENTS FOR THE DEGREE OF

MASTER OF LAWS IN BUSINESS LAW (ENGLISH PROGRAM)

FACULTY OF LAW

THAMMASAT UNIVERSITY

ACADMIC YEAR 2016

COPYRIGHT OF THAMMASAT UNIVERSIT

Ref. code: 25595601040297BDA

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Thesis Title EXPORT CONTROL OF DUAL-USE ITEMS:


FOREIGN LAWS

Author Ms. Piyanat Uamduang

Degree Master of Laws

Major Field/Faculty/University Business Laws (English Program)

Faculty of Law,

Thammasat University

Thesis Advisor Professor Jumphot Saisoonthorn, Ph.D.

Academic Years 2016

ABSTRACT

The terrorists attack on 9 September 2001 in the United States the World

Trade Center and the Pentagon by the hijacked airplanes caused a great number of

casualties. As a result, terrorism has affected and become a new important problem in

global community.

Terrorists have developed complex processes to procure materials and

equipment for producing or obtaining WMD. Therefore, to prevent WMD

proliferation and terrorism, many developed states are trying to encourage other states

to develop their own effective export control measures for any material or technology

that can be used to develop WMD in order to prevent harm that may be caused to

peace and security of global community. Thus, “Dual-Use Items (DUI)” which are

referred to goods, software and technology that can be used for both civilian and

military applications and/or can contribute to the proliferation of WMD, are subject to

control under domestic export laws of each state. Thus, the United Nations Security

Council (UNSC) adopted the Resolution 1540 in 2004 requires all member states to

adopt domestic laws to prevent the proliferation of WMD by controlling concerned

activities namely export, re-export, transit, transshipment, brokerage, provision of

fund and service related to WMD or related materials which could be used for the

design, development, production or use of nuclear, chemical and biological weapons

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specified by relevant multilateral treaties. Many states in Asia, as members of the

United Nations, have developed domestic laws focused on export control measures of

DUI such as Japan, Singapore and Malaysia etc. to fulfil its obligations under such

Resolution.

As for Thailand, the Cabinet endorsed UNSCR 1540 since 10 August 2004

and the Thai government considered formulating national export control law

following the adoption of such Resolution. The export control law of DUI was

prescribed by the Ministry of the Commerce under the title of “The Ministerial

Notification Specifies Dual-Use Items as Goods Requiring Permission and

Complying the Export Measures B.E.2558 (2015),” on 16 October 2015, ten years

after the endorsement of Resolution 1540. This Ministerial Notification will take

effect on 1 January 2018. However, this Law has no provision regarding export

permission measures of DUI. Thus, this may cause unclear practices in operation of

the exporters. Moreover, this Ministerial Notification does not cover brokerage and

intangible technology transfer. Likewise, this Law is issued under “Export and

Import of Goods Act B.E.2522 (1979)” under which penalty is not specified on the

basis of intention and knowledge of violator.

This thesis mainly focuses on the enforcement of the Ministerial Notification

Specifies Dual-Use Items as Goods Requiring Permission and Complying the Export

Measures B.E.2558 (2015) and the draft Trade Control on Weapons of Mass

Destruction Related Items approved by the Cabinet in comparison with export control

laws of DUI of Japan, Singapore and Malaysia in order to increase the effectiveness

of export control system to prevent the proliferation of WMD together with to

facilitate the permission process of controlled activities and to reduce difficulties

caused to the operations of the entrepreneurs.

Keywords: Dual-Use Items, Weapon of Mass Destruction, DUI, WMD

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ACKNOWLEDGEMENTS

This thesis is a part of Master of Laws in Business Laws (English

Program), Faculty of Law, Thammasat University that could not have been achieved

and completed without support, assistance and encouragement of many people.

Firstly, I would like to express my deepest gratitude to my advisor,

Professor Jumphot Saisoonthorn for his valuable comments and suggestions on the

first draft of this thesis, until the completion. Without his support, I would not have

been able to complete my thesis. Furthermore, I would like to express my sincere

gratitude to Justice Nopporn Bhotirungsiyakorn, Professor Dr. Amnat Wongbandit,

and Associate Professor Nartnirun Junngam for devoting their valuable time to be my

thesis committee and providing instructions, guidance and advice which assisted me

in completing this thesis.

Also, I would like to express my special thanks to Thai Yamaha Motor

Company Limited for providing me an invaluable opportunity to study and obtain

legal knowledge and experiences in this course. Likewise, I would like to extend

special thanks to my superior, Mr. Phongstorn Ermongkonchai and Mr. Chaidej

Navyvichit, for their kind support and encouragement.

In addition, I would like to thank Ms. Sudarat Pongpitak for initial idea

that inspired me to start this thesis.

Finally, I would like to thank my beloved family and my friends for

support, motivation and encouragement that provided energy to me for completion of

this thesis.

MS. Piyanat Uamduang

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TABLE OF CONTENTS

Page

ABSTRACT (1)

ACKNOWLEDGEMENTS (3)

LIST OF TABLES (11)

LIST OF FIGURES (12)

LIST OF ABBREVIATIONS (13)

CHAPTER 1 INTRODUCTION 1

1.1 Background and Problems 1

1.2 Hypothesis 5

1.3 Objectives of Study 6

1.4 Scope of Study 6

1.5 Methodology 7

1.4 Expected Result 7

CHAPTER 2 BACKGROUND AND NATUREOF EXPORT CONTROL ON 8

DUAL-USE ITEMS

2.1 Concept of Export Control of Dual-Use Items 8

2.1.1 Definition of Weapons of Mass Destruction and 9

Dual-Use Items

2.1.1.1 Weapons of Mass Destruction (WMD) 9

2.1.1.2 Means of Delivery 9

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2.1.1.3 Related Materials 9

2.1.1.4 Dual-Use Items 10

2.1.2 Examples of Dual-Use Items 10

2.1.2.1 Category 0 Nuclear Materials, Facilities 11

and Equipment

2.1.2.2 Category 1 Materials, Chemical, Microorganisms 13

and Toxins

2.1.2.3 Category 2 Materials Processing 16

2.1.2.4 Category 3 Electronics 21

2.1.2.5 Category 4 Computers 24

2.1.2.6 Category 5 Telecommunications and 25

Information Security

2.1.2.7 Category 6 Sensors and Lasers 26

2.1.2.8 Category 7 Navigation and Avionics 27

2.1.2.9 Category 8 Marine 29

2.1.2.10 Category 9 Aerospace and Propulsion 30

2.1.3 Activities Subjected to Control 31

2.1.3.1 Export 31

2.1.3.2 Re-Export 31

2.1.3.3 Transit 31

2.1.3.4 Transshipment 31

2.1.3.5 Brokerage 32

2.1.3.6 Technology Transfer 32

2.1.4 The Importance of Penalties for Violation 32

2.2 International Laws on Export Control of Dual-Use Items 33

2.2.1 The International Non-Proliferation Agreement 33

2.2.1.1 Treaty on the Non-Proliferation of 33

Nuclear Weapons (NPT)

2.2.1.2 Biological Weapons Convention (BWC) 34

2.2.1.3 Chemical Weapons Convention (CWC) 35

2.2.2 United Nations Security Council Resolution 1540 36

2.2.3 The Multilateral Export Control Regimes 37

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2.2.3.1 Nuclear Suppliers Group (NSG) 38

2.2.3.2 Australia Group (AG) 38

2.2.3.3 Missile Technology Control Regime (MTCR) 39

2.2.3.4 Wassenaar Arrangement (WA) 39

CHAPTER 3 EXPORT CONTROL OF DUAL-USE ITEMS 41

IN FOREIGN COUNTRIES

3.1 Japan 44

3.1.1 Laws and Regulations 45

3.1.1.1 Foreign Exchange and Foreign Trade Act (1998) 45

3.1.1.2 Cabinet Orders 45

3.1.1.3 Ministerial Order 46

3.1.2 Transaction Subject to Control 46

3.1.3 Classification of Controlled Items 46

3.1.3.1 List Control 46

3.1.3.2 Catch-all Control 48

3.1.3.3 Technology Transfer Control 49

3.1.3.4 Special Control for Restricted Country 50

3.1.4 Permission 50

3.1.4.1 Individual Permission 50

3.1.4.2 Bulk Permission 50

3.1.4.2.1 General Bulk Export License or 51

Bulk License for White Countries

3.1.4.2.2 Special General Bulk Export License or 51

Bulk License for Combination of Items

and Destination

3.1.4.2.3 Special Bulk Export License or 52

Bulk License for the Same Customer

3.1.4.2.4 Special Bulk Export License for 52

Repair and Replacement

3.1.2.2.5 Special Bulk Export License for 52

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Oversea Subsidiaries

3.1.5 Offences, Penalty and Sanction 53

3.1.5.1 Offence and Penalty 53

3.1.5.2 Administrative Sanction 54

3.1.5.3 Warning 54

3.1.6 Internal Compliance Program (ICP) 54

3.2 Singapore 57


3.2.1.1 Strategic Goods (Control) Act (“SGCA”) 58

3.2.1.2 Strategic Goods (Control) Regulations (“SGCR”) 58



3.2.3.1 List Control 58

3.1.3.1.1 Munitions List 59

3.1.3.1.2 Dual-Use List 59

3.2.3.2 Catch-all Control 59



3.2.4 Permission 60

3.2.4.1 Individual Permission 60

3.2.4.2 Bulk Permission 60

3.2.4.2.1 Bulk License for Specific Entities 60

3.2.4.2.2 Bulk License for Country of Destination 60

3.2.5 Offence, Penalty and Sanction 61


3.3 Malaysia 63


3.3.1.1 Strategic Trade Act 2010 65

3.3.1.2 Strategic Trade (Strategic Items) (Amendment) 66

Order 2017

3.3.1.3 Strategic Trade (Restricted End-Users and 67

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Prohibited End-User) Order

3.3.1.4 Strategic Trade Regulation 2010 67



3.3.3.1 List Items (List Control) 68

3.3.3.1.1 Military Items List 68

3.3.3.1.2 Dual-Use Items List 69

3.3.3.2 Unlisted Items (Catch-all Control) 70



3.3.4 Permission 72

3.3.4.1 Single-Use Permit 72

3.3.4.2 Bulk Permit 72

3.3.4.3 Multiple-Use Permit 73

3.3.4.4 Special Permit 73

3.3.5 Permit for Brokering 73



CHAPTER 4 EXPORT CONTROL ON DUAL-USE ITEMS IN THAILAND 83

4.1 Applicable Export Control System in Thailand 85


4.1.2 Transaction Subject to control 86


4.1.3.1 List 1 or List of Dual-Use Items 87

4.1.3.2 List 2 or HS Code List 88

4.1.4 Permission 88

4.1.4.1 E-Classification 88

4.1.4.2 E-Certification 88

4.1.4.3 E-Licensing 88


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4.2 Draft Trade Control of WMD Related Items Act 90


4.2.2 Transaction Subject to control 91


4.2.3.1 List 1 or List of Dual-Use Items 91

4.2.3.2 List 2 or HS Code List 92

4.2.4 Permission 92

4.2.4.1 E-Classification 92

4.2.4.2 E-Certification 93

4.2.4.3 E-Licensing 93



4.3 Problems on Export Control of Dual-Use Items in Thailand 99

4.3.1 Non-Compliance with UN Resolution 1540 on 99

the Control of Technology Brokering

4.3.2 Non-Compliance with UN Resolution 1540 on 99

the Control of Technology Transfer

4.3.3 Export Control System 101

4.2.3 Penalty and Sanction 102

CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS 104

5.1 Conclusions 104

5.2 Recommendations 105

5.2.1 Establishing Export Control for Brokering and 105

Technology Transfer

5.2.2 Categories Export License to be Individual License and 106

Bulk License

5.2.3 Establishing Internal Control Program (ICP) 107

5.2.4 Infliction of the Penalties of Each Offences Based on 107

Ground of Intention and Knowledge of Violator

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5.2.5 Establish Administrative Penalties for Violation 108

without Intention.

REFERENCE 109

BIOGRAPHY 113

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LIST OF TABLES

Tables Page

3.1 List Control of Japan 47

3.2 Catch-all control 48

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LIST OF FIGURES

Figures Page

2.1 Structure of ECCN of EU’s DUI List 10

2.2 Pressure Tubes 11

2.3 Heat Exchangers (Stream Generators) 12

2.4 Titanium Alloys 13

2.5 Aluminium Alloys 14

2.6 Carbon Fiber 15

2.7 Turning Machine 16

2.8 Machining Center 17

2.9 CNC Lathe 18

2.10 Pressure Transducers 19

2.11 Chemical Reaction Vessels 20

2.12 Analogue to Digital Converter 21

2.13 Capacitors 22

2.14 Frequency Changers 23

2.15 Computers and Related Equipment 24

2.16 Optical Fiber Communication Cables 25

2.17 Sensors 26

2.18 Navigator 27

2.19 Accelerometers 28

2.20 Robot Designed for Underwater Use 29

2.21 Unmanned Aerial Vehicles (UAVs) 30

2.18 Navigator 27

3.1 Export Control Procedure in Japan 56

3.2 Permission of DUI under Singapore Laws in Briefing 63

3.3 Permission of DUI under Malaysia Laws in Briefing 82

3.4 Permission of DUI under Thai Laws in Briefing 90

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LIST OF ABBREVIATIONS

Symbols/Abbreviations Terms

AG Australia Group

BWC Biological Weapons Convention

CWC Chemical Weapons Convention

DUI Dual-Use Items

ICCPR International Covenant on Civil

and Political Rights

ICP Internal Compliance Program

METI Ministry of Economy, Trade and Industry

of Japan

MOC Ministry of Commerce of Thailand

MTCR Missile Technology Control Regime

NPT Treaty on Non-Proliferation of

Nuclear Weapons

NSG Nuclear Suppliers Group

TCWMD Trade Control on Weapons of Mass Destruction

Related Items Act

UN United Nations

UNSC United Nations Security Council

WA Wassenaar Arrangement

WMD Weapons of Mass Destruction

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CHAPTER 1

INTRODUCTION

1.1 Background and Problems

After 9/11 attacks on 9 September 2001 the major terrorism in the United

States where the terrorists attacked the World Trade Center, the twin towers in

Manhattan and the Pentagon, the headquarters of the Department of Defense in

Arlington, United States, by the commercial airplanes hijacked by the members of

Al-Qaeda, an international terrorist group1 caused a great number of casualties

2.

As a result, terrorism has affected and become a new important problem in global

community. From such incident, the world has experienced terrorist attacks and

terrorism has brought loss, damage, pain, sorrow, terror, and insecurity to all states

whether directly or indirectly. At present, the threat of terrorism becomes more

serious; because, terrorists attempt to attack the states with the “Weapons of Mass

Destruction (WMD)” such as missiles, nuclear weapons, biological weapons, and

chemical weapons3 to inflict a great number of casualties.

Currently, terrorists have developed complex processes to procure

materials and equipment for producing or obtaining WMD; because, using WMD for

military or terrorism purposes could have severe impact for humankind, global

environment4 and international security that could cause psychological effect to the

public. From the history of terrorism, there are many ways that terrorists used for

attacks such as bombing, chemical terrorism or bioterrorism.

1 911 Memorial & Museum, ‘FAQ About 9/11: What Happened on 9/11?’

<https://www.911memorial.org/faq-about-911> accessed 18 November 2016.

2 Becky Little, Brian Clark Howard, Brian Handwerk, ‘National Geographic: Remembering 9/11 in

Picture on the 15th Anniversary’ (9 September 2016)

<http://news.nationalgeographic.com/2016/09/september-11-pictures-remembrance/> accessed

11 October 2016.

3 United Nations Office for Disarmament Affair, ‘Weapon of Mass Destruction’

<https://www.un.org/disarmament/wmd/missiles/> accessed 16 January 2017.

4 Anna Wetter, ‘Enforcing European Union Law on Exports of Dual-Use Goods’ (1st edn, Oxford

University Press 2009) 1.

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Examples of terrorism occurred in the past are as follows.

1) Terrorists used nerve gas called “Sarin” attacked a Tokyo subway

station in Japan since 1995 which killed twelve persons and injured more than

5,000 persons;5

2) Terrorists attacked Bali, a tourist island of Indonesia by bombs in 2002

which killed 202 persons and injured more than 200 persons;6

3) Terrorists attacked the train in Madrid by bombs which killed 191

persons and injured almost 2,000 persons;7 and

4) Terrorists attacked Paris by guns and bombs in 2015. In this incident,

three suicide bombers attacked the Bataclan Concert Hall in Paris which killed 136

persons8 and injured more than 350 persons.

9

Therefore, to prevent WMD proliferation and terrorism, many developed

states are trying to encourage other states to develop their own effective export

control measures for any material or technology that can be used to develop WMD in

order to prevent harm that may be caused to peace and security of global

community10

. Thus, “Dual-Use Items (DUI)” which are referred to goods, software

and technology that can be used for both civilian and military applications and/or can

contribute to the proliferation of WMD,11

are subject to control under domestic export

laws of each state. Moreover, terrorism in the past proved that only international

5 History.com Staff, ‘Tokyo Subways are attacked with Sarin Gas’ (2009)

< http://www.history.com/this-day-in-history/tokyo-subways-are-attacked-with-sarin-gas > accessed

1 January 2017.

6 History.com Staff, ‘Terrorists Kill 202 in Bali’ (2010).

< http://www.history.com/this-day-in-history/terrorists-kill-202-in-bali > accessed 1 January 2017.

7 History.com Staff, ‘Terrorists Bomb Trains in Madrid’ (2010)

< http://www.history.com/this-day-in-history/terrorists-bomb-trains-in-madrid > accessed 1 January

2017.

8 Institute for Economics and Peace, ‘Global Terrorism Index 2016’, 13.

< http://economicsandpeace.org/wp-content/uploads/2016/11/Global-Terrorism-Index-2016.2.pdf >

accessed 1 January 2017.

9 ABC News, ‘Paris attacks: More than 120 killed in concert hall siege, bombings and shootings;

suspected terrorists dead’ (15 November 2015) <http://mobile.abc.net.au/news/2015-11-14/paris-

attacks-120-dead-in-shootings-explosions/6940722> accessed 1 Jan 2017.

10 United Nations Security Council Resolution 1540 (2004), Intro.

11 European Commission, ‘Dual-Use Export Controls’ < http://ec.europa.eu/trade/import-and-export-

rules/export-from-eu/dual-use-controls/ > accessed 16 January 2017.

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treaties and agreements cannot prevent the proliferation of WMD. Consequently, the

United Nations Security Council (UNSC) adopted the Resolution 1540 in 2004

requiring all states to pass and enforce its domestic laws on export control of WMD12

that include DUI to prevent proliferation of WMD and to promote international

stability by inflicting both criminal and administrative penalties for any violation of

such laws.

Base on the United Nations Security Council Resolution 1540 (UNSCR

1540) mentioned above, many states in Asia, as members of the United Nations, have

developed domestic laws focused on export control measures of DUI such as Japan13

,

Singapore14

and Malaysia15

etc. to fulfil its obligations under such Resolution.

As for Thailand, the Cabinet endorsed UNSCR 1540 since 10 August

200416

and the Thai government considered formulating national export control law

following the adoption of such Resolution. The first export control law of DUI was

prescribed by the Ministry of the Commerce under the title of “the Ministerial


Complying the Export Measures B.E.2558 (2015),” on 16 October 2015, ten years

after the endorsement of Resolution 1540. This Ministerial Notification will take

effect on 1 January 2018, two years after its publication in the Royal Gazette.17

This Ministerial Notification covers the controlled activities namely

export, re-export, (bringing in) transit and transshipment of DUI18

from Thailand; but,

12 United Nation Security Council Resolution 1540 (2004), Art 3.

13 Foreign Exchange and Foreign Trade Act.

14 Strategic Goods (Control) Act, Cap. 300.

15 Strategic Trade Act 2010.

16 United Nations Security Council, ‘Security Council Established Pursuant to Resolution 1540 (2004):

Note to Verbale Dated 5 November 2004 from the Permanent Mission of Thailand to the United

Nations Addressed to the Chairman of the Committee [S/AC.44/2004/(02)/71], Art 2.1.

17 The Ministerial Notification Specifies Dual-Use Items as Goods Requiring Permission and

Complying the Export Measures B.E.2558 (2015), Ministry of Commerce, Section 2.

18 Ibid, Section 3.

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does not cover brokerage and intangible technology transfer19

. UNSC Resolution

1540 requires all member states to adopt domestic laws to prevent the proliferation of

WMD by controlling concerned activities namely export, re-export, transit,

transshipment, brokerage, provision of fund and service related to WMD or related

materials which could be used for the design, development, production or use of

nuclear, chemical and biological weapons specified by relevant multilateral

treaties20

those are included technology transfer.

Thus, Thailand as a member of the United Nations (UN) is obligated to

fulfil the obligations under such Resolution by adopting national export control law

covering DUI, technology transfer and any activities related to WMD namely export,

re-export, transit, transshipment and brokerage to prevent the proliferation of WMD

and to strengthen export control enforcement of the state.21

Besides, the bigger

economies such as the United States, the United Kingdom, Japan, including such

Asean counties as Singapore and Malaysia, all have adopted domestic laws on export

control of DUI. Likewise, other Asean members such as Vietnam, Philippines and

Indonesia are in the process of adopting such laws on the basis of UNSC Resolution

1540.22

Hence, it is important for Thailand to have the national law on export

control of DUI specifically concerning non-proliferation of WMD to implement

UNSC Resolution 1540.

Nevertheless, during the grace period of the Ministerial Notification


Measures B.E.2558 (2015), the Cabinet of Thailand approved the concept of “Trade

Control on Weapons of Mass Destruction Related Items (TCWMD)” on 4 October

19Tamotsu Aoi, ‘Historical Background of Export Control Development in Selected Countries and Regions’ (2016) 17.

20 United Nations Security Council Resolution 1540 (2004), Definitions.

21 Ibid, Art 3.

22 George Tan, ‘Emerging Export Control Regimes in Asean & Best Practice for ICP: Challenges and

Pitfalls’ 6. < http://supportoffice.jp/outreach/2011/malaysia/1-3_Mr._Tan_Brayan_Cave.pdf >

accessed 17 January 2017.

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2016 to control export, re-export, transit, transshipment and brokerage of all goods

that can be used to develop WMD including DUI to prevent proliferation of WMD.

After such approval, the draft TCWMD will be considered by the Office of the

Council of State before proposing to National Legislative Assembly for

consideration.23

Therefore, this thesis studies the enforcement of the Ministerial


Complying the Export Measures B.E.2558 (2015) and the draft Trade Control on

Weapons of Mass Destruction Related Items approved by the Cabinet in comparison

with export control laws of DUI of Japan, Singapore and Malaysia in order to increase

the effectiveness of export control system to prevent the proliferation of WMD

together with to facilitate the permission process of controlled activities and to reduce

difficulties caused to the operations of the entrepreneurs.

1.2 Hypothesis

The Ministerial Notification Specifies Dual-Use Items as Goods Requiring

Permission and Complying the Export Measures B.E.2558 (2015) does not covered

all requirements under UNSC Resolution 1540 because its enforcement does not

cover brokerage and intangible technology transfer. Furthermore, there is no provision

regarding export license measures that could be applied. Likewise, this Ministerial

Notification is issued under “Export and Import of Goods Act B.E.2522 (1979)24

”

under which penalty is not specified on the basis of intention and knowledge of

violator. Therefore, this thesis suggests that it is an appropriate for Thailand to have

the “Trade Control on Weapons of Mass Destruction Related Items Act” that covers

DUI, intangible technology transfer and any activity related to WMD in order to

ensure security and to protect the benefits of the state in compliance with international

agreements and to protect Thai entrepreneurs against non-tariff trade barriers by other

23 Thai Cabinet Resolution on “Draft of Trade Control on Weapons of Mass Destruction Related Items”

dated 4 Oct 2016.

<http://www.ofm.mof.go.th/images/stories/pdf/98907_591004.pdf> accessed 5 October 2016.

24 Ministerial Notification Specifies Dual-Use Items as Goods Requiring Permission and Complying

the Export Measures B.E.2558 (2015), Ministry of Commerce, Intro Para 2.

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states. In this Act, the Thai government should specify the penalty of each offense

based on intention and knowledge of the violator. Likewise, Thailand should take

export control measures for DUI for trade management such as export license

procedure, technology transfer procedure and internal control program for exporters

etc. in order to ensure that DUI are controlled and the entrepreneurs and their staffs

are able to understand and comply with Thai export control laws.

1.3 Objectives of Study

1.3.1 To examine and analyze the principles and scope of export control

of DUI.

1.3.2 To examine and analyze international law on export control of DUI.

1.3.3 To examine and analyze Thai laws on export control on DUI in

comparison with foreign laws in order to develop Thai export

control laws to comply with international obligations, to build

confidence among investors to invest in Thailand, to promote

Thailand to be a safe country for trade and investment and to protect

Thai entrepreneurs against non-tariff trade barriers by other

countries.

1.4 Scope of Study

Referring to the provisions of UNSC Resolution 1540 that “requires all

member states to take and enforce effective measures to establish domestic controls

and law enforcement over WMD and related materials which could be used for the

design, development, production or use of WMD that are covered by relevant

multilateral treaties”25

, this thesis will focus only on “Dual-Use Items (DUI) which

are goods and technologies having both civilian and military applications26

in order to

understand the principles of export control of DUI. This thesis will study the

background, international law, foreign laws, and Thai laws in light of such

international law and in comparison with such foreign laws.




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1.5 Methodology

The methods used in this thesis are based on documentary research which

are involved the study and analysis of textbooks, legal articles, law journals,

international law, foreign and Thai laws, including the information obtained from

conducting internet researches and government publications.

1.6 Expected Result

1.6.1 To understand the principles and scope of export control of DUI.

1.6.2 To establish international law on export control of DUI.

1.6.3 To improve Thai law regarding export control of DUI to ensure

compliance with international obligations and to build confidence

among investors to invest in Thailand, to promote Thailand to be a

safe country for trade and investment and to protect Thai

entrepreneurs against non-tariff trade barriers by other countries.

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CHAPTER 2

BACKGROUND AND NATURE OF EXPORT CONTROL

OF DUAL-USE ITEMS

2.1 Concept of Export Control of Dual-Use Items

Nowadays, terrorists have and continue to attempt to attack many states

with WMD to inflict greater numbers of casualties and threaten to cause loss, damage,

pain, death, sorrow, terror, and insecurity to the public. To achieve such objectives of

terrorism, terrorists are trying to develop complex processes to procure materials and

equipment for producing or obtaining WMD by using DUI as a composition.

From the incident mentioned above, proliferation of WMD could have

extreme impact on humankind and global environment. Thus, it is the obligation of

each state to prevent WMD proliferation and terrorism by developing its own systems

to build up efficient export control of DUI to eliminate the risk that such DUI will be

used for a part of WMD.

Scopes of DUI export control are generally specified by international

cooperation and national laws that cover list of controlled items, classification,

controlled activities, export measures, authorities, enforcement mechanism, penalties

and sanctions applied to the violation of export control laws including provisions on

restricted customers, users and destination on export control of DUI.

Non-proliferation of WMD and DUI export control could create an

essential contribution in the global community to fight against terrorism by reducing

risk of terrorists or any non-state actor for gaining access to WMD or related materials

from illegal export of DUI. Therefore, any state subject to establish measures for

international cooperation and domestic laws to control and prevent the increase of

WMD and their means of delivery including related materials, equipment and

technology for contribution and maintenance of international peace and security.

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2.1.1 Definition of Weapons of Mass Destruction and Dual-Use Items

UNSC Resolution 1540 requires the member states of the United Nations

to establish national control to prevent the proliferation of nuclear, chemical, or

biological weapons that could be called “WMD” including their means of delivery

and related materials27

which include DUI.

According to the items subject to control under UNSC Resolution 1540,

the definitions of such items are as follows.

2.1.1.1 Weapons of Mass Destruction (WMD)

Weapons of Mass Destruction (WMD) refers to all types of weapons such

as nuclear, chemical, biological weapons which could cause harm to a large number

of people or cause serious damage to the environment, including wire-guided missile

system, missiles or any other unmanned control system of such weapons.28

2.1.1.2 Means of Delivery

Means of Delivery refers to missiles, rockets and other unmanned systems

which are designed for the use of delivery of nuclear, chemical, or biological

weapons.29

2.1.1.3 Related Materials

Related Materials refer to any material, equipment, and technology which

is controlled by multilateral treaties and arrangements, or national control list and

these materials could be used for the purposes of design, development, production or

use for nuclear, chemical and biological weapons and their means of delivery.30




29 United Nation Security Council Resolution 1540 (2004), Definitions 1.

30 Ibid.

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Product Group A. System, Equipment & Component

B. Test, Inspection & Product Equipment

C. Materials

D. Software

E. Technology

2.1.1.4 Dual-Use Item

Dual-Use Item refers to a product, technology and software which can be

used for civilian and military applications and/or can contribute to the increase of

WMD.31

2.1.2 Examples of Dual-Use Items

This thesis categorizes DUI based on EU List because it has been adopted

by international agreements on export control of DUI including WA, MTCR, NSG,

AG and CWC. 32

Furthermore, it has been used as a model of controlled list of DUI

for many states outside EU such as Singapore, Malaysia and Thailand. Under the

controlled list, there are four digits and one letter used for classification and

identification of DUI that are selected from Category, Product Group and Type of

Control called “Export Control Classification Number (ECCN)”.

Figure: 2.1 Structure of ECCN of EU’s DUI List

The categorization of DUI based on EU List are separated as 0-9 namely.

31 European Commission, ‘Trade: Dual-Use Export Control’ < http://ec.europa.eu/trade/import-and-

export-rules/export-from-eu/dual-use-controls/ > accessed 18 Nov 2016. 32 Regulation (EC) No. 1334/2000, Art 3 and Annex I, 1.

Category Number 0-9

Type of Controls 0 National Security Reasons

1 Missile Technology Reasons

2 Nuclear Nonproliferation Reasons

3 Chemical & Biological Weapons Reasons

X X X XX

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2.1.2.1 Category 0 Nuclear Materials, Facilities and Equipment

Figure 2.2 Pressure Tubes33

Pressure Tubes have been used in the pressure gauge for civilian

purpose34

or applied for Nuclear Reactor as a container of fuel elements for military

purpose.35

Pressure Tubes is in Category 0, Product group A “Systems, Equipment

and Components” and Type of Control 001.36

Then, Export Control Classification

Number (ECCN)37

of Pressure Tubes is 0A001.38

Figure 2.3 Heat Exchangers (Steam Generators)39

33 Sudarat Pongpitak, ‘Investment Promotion for Dual-Use Items’ (2013) [Thailand Board of

Investment] 4.

34 Ibid.

35 Ibid.

36 Regulation (EC) No. 1334/2000, Annex I, 24.

37 National Nuclear Security Administration, Department of Energy of United States of America,

‘International Nonproliferation Export Control Program: Control Lists and Approaches’. < https://csis-

prod.s3.amazonaws.com/s3fspublic/legacy_files/files/attachments/150624_LodenPresentation.pdf >

accessed 17 June 2017.

“ECCN” consist of a set of digits and a letter e.g. 3A001, 5B992, 1C350 used to identify and classify

controlled items.”


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Heat Exchangers have been used to be coolant for civilian purpose40

or

applied for Nuclear Reactor as coolant circuit for military purpose.41

Heat Exchangers is in Category 0, Product group A “Systems, Equipment



Number (ECCN) of Heat Exchangers is 0A001.

2.1.2.2 Category 1 Materials, Chemicals, Microorganisms and

Toxins

39 Sunry Petroleum Equipment Co., Ltd., ‘Stream Heat Exchanger’

< http://www.sunrypetro.com/steam_heat_exchanger.html > accessed 17 June 2017.


Investment] 4.

41 Ibid.


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Figure 2.4 Titanium Alloys43

Titanium Alloys have been used as materials for making machinery,

vehicles, driver or medical equipment for civilian purpose44

or applied as a component

of rotor structure of centrifuge for military purpose.45

Titanium Alloys are in Category 1, Product group C “Materials” and Type

of Control 002.46

Then, Export Control Classification Number (ECCN) of Titanium

Alloys is 1C002.

Figure 2.5 Aluminium Alloys47

43 Star Enterprises, ‘Titanium Alloys’ <http://www.starentps.com/titanium.html> accessed 17 June

2017.


Investment] 5.

45 Ibid.



‘International Nonproliferation Export Control Program: Control Lists and Approaches’. <https://csis-

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Aluminium Alloys have been used in air craft industry for civilian

purpose48

or used for Centrifuge Rotors for military purpose.49

Aluminium Alloys are in Category 1, Product group C “Materials” and

Type of Control 002.50

Then, Export Control Classification Number (ECCN) of

Aluminium Alloys is 1C002

Figure 2.6 Carbon Fiber51

prod.s3.amazonaws.com/s3fspublic/legacy_files/files/attachments/150624_LodenPresentation.pdf>


48 Ibid

49 Ibid.



‘International Nonproliferation Export Control Program: Control Lists and Approaches’. <https://csis-

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Carbon Fiber has been used in sporting goods industry such as golf clubs,

tennis racket,52

bicycle frames, helmets and surfboards etc., automotive part such as

racing car chassis, hoods, mufflers and steering wheels etc., and aerospace

engineering53

for civilian purpose or utilized in a centrifuge and a production of

missile and convention arms54

for military purpose.

Carbon Fiber is in Category 1 and 9, Product group C “Materials” and

Type of Control 010, 210 and 110.55

Then, Export Control Classification Number

(ECCN) of Carbon Fiber is 1C010, 1C210 and 9C110.

2.1.2.3 Category 2 Materials Processing

prod.s3.amazonaws.com/s3fspublic/legacy_files/files/attachments/150624_LodenPresentation.pdf>



Investment] 5.

53 Charlie Tacchi, Zack Peters, Cody Van Beek and Philip Tran, ‘Carbon Fiber’

<http://srjcstaff.santarosa.edu/~yataiiya/E45/PROJECTS/Carbon%20Fiber.pdf >






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Figure 2.7 Turning Machine56

Turning Machines have been used for making machinery parts or

automotive parts for civilian purpose57

or used for making parts of atomic bomb or

Centrifuge for military purpose.58

Turning Machine is in Category 2, Product group B “Test, Inspection and

Production Equipment” and Type of Control 201.59

Then, Export Control

Classification Number (ECCN) of Turning Machine is 2B201.

Figure 2.8 Machining Center60


Investment] 5.

57 Ibid.

58 Ibid.


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Machining Centers have been used in many industries e.g. automotive,

aerospace, electronics for civilian purpose61

or applied for producing U-enrichment

components for military purpose.62

Machining Center is in Category 2, Product group B “Test, Inspection and

Production Equipment” and Type of Control 001 and 201.63


Classification Number (ECCN) of Machining Center is 2B001 and 2B201.

Figure 2.9 CNC Lathe64

60

Direct Industry, ‘DMG Mori: 3-axis machining center / vertical / high-precision / high-performance

DMC 650 V’ < http://www.directindustry.com/prod/dmg-mori/product-5973-1312747.html > accessed

17 June 2017.





62 Ibid.

63 Regulation (EC) No. 1334/2000, Annex I, 76 and 85.

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CNC Lathes have been used in many industries e.g. automotive, aerospace,

electronics for civilian purpose65

or applied for producing U-enrichment components

for military purpose.66

CNC Lathe is in Category 2, Product group B “Test, Inspection and

Production Equipment” and Type of Control 001.67


Classification Number (ECCN) of CNC Lathe is 2B001.

Figure 2.10 Pressure Transducers68




accessed 17 June 2017. 65 National Nuclear Security Administration, Department of Energy of United States of America,




66 Ibid.


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Pressure Transducers have been used in semiconductor manufacturing,

chemical processing engineering tests etc. for civilian purpose69

or used as a

component part of pressure measurements of UF6 during gas centrifuge process for

military purpose.70

Pressure Transducers is in Category 2, Product group B “Test, Inspection

and Production Equipment” and Type of Control 230.71


Classification Number (ECCN) of Pressure Transducers is 2B230.

Figure 2.11 Chemical Reaction Vessels72





69 Ibid.

70 Ibid.


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Chemical Reaction Vessels have been used in petrochemical,

pharmaceuticals, oil and gas industries for civilian purpose73

or used as a component

part of Synthesizing Chemicals for military purpose.74

Chemical Reaction Vessels is in Category 2, Product group B “Test,

Inspection and Production Equipment” and Type of Control 350.75

Then, Export

Control Classification Number (ECCN) of Chemical Reaction Vessels is 2B350.

2.1.2.4 Category 3 Electronics

Figure 2.12 Analogue to Digital Converter76




accessed 17 June 2017. 73 Ibid.

74 Ibid


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Analogue to Digital Converters have been used in many industries e.g.

automotive, electronics, computer and aerospace for civilian purpose77

or applied for

high speed data conversion of missile for military purpose.78

Analogue to Digital Converter is in Category 3, Product group A “System,

Equipment and Components” and Type of Control 001 and 101.79

Then, Export

Control Classification Number (ECCN) of Analogue to Digital Converter is 3A001

and 3A101.

Figure 2.13 Capacitors80

76 Department of Foreign Trade of Thailand, ‘Examples of WMD-Related Strategic Commodities’

<http://web.dft.go.th/Portals/2/ContentManagement/Document_Mod638/8%20Examples%20of%20W

MD -Related%20Strategic%20Commidities%20(Eng)@25541019-1121508107.pdf >

77 Ibid.

78 Ibid.




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Capacitors have been used as a component part of engine ignition system,

or radar and lasers for civilian purpose81

or used to store the energy to be discharged

by the switching device to the detonator for military purpose.82

Capacitors is in Category 3, Product group A “System, Equipment and

Components” and Type of Control 201.83


Number (ECCN) of Capacitors is 3A201.

Figure 2.14 Frequency Changers84


accessed 17 June 2017. 81 Ibid.

82 Ibid.




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Frequency Changers have been used as a component part of testing

electronic equipment85

for civilian purpose or used as a component of driving high-

speed gas centrifuge motors for military purpose.86

Frequency Changers is in Category 3, Product group A “System,

Equipment and Components” and Type of Control 225.87


Classification Number (ECCN) of Frequency Changers is 3A225.

2.1.2.5 Category 4 Computers

Figure 2.15 Computer and Related Equipment88



85 Ibid.

86 Ibid. 87 Regulation (EC) No. 1334/2000, Annex I, 122.

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Computers and Related Equipment have been used as a component part of

vehicles or other equipment89

for civilian purpose or used as a component part of

vehicles or weapons for military purpose.90

Computer and Related Equipment is in Category 4, Product group A

“System, Equipment and Components” and Type of Control 001.91

Then, Export

Control Classification Number (ECCN) of Computer and Related Equipment is

4A001.

2.1.2.6 Category 5 Telecommunications and

“Information Security”

88 Narong Nanthavichit, ‘Hardware and Solfware: Mainboard’, 1 April 2004.

< http://www.brr.ac.th/oldweb/knowledge/hardware/mainboard/images/boardatx.jpg > accessed

17 June 2017.


Investment] 6.

90 Ibid.


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Figure 2.16 Optical Fiber Communication Cables92

Optical Fiber Communication Cables have been used as a component part

of telecommunication system93

for civilian purpose or used as a component part of

telecommunication systems for military purpose.94

Optical Fiber Communication Cables is in Category 5, Product group A


Then, Export

Control Classification Number (ECCN) of Optical Fiber Communication Cables is

5A001.

2.1.2.7 Category 6 Sensors and Lasers

Figure 2.17 Sensors96

92 Claire Swedberg, ‘Copper Vs. Fiber’ [Electrical Contractor] April 2013.

< http://www.ecmag.com/section/systems/copper-vs-fiber > accessed 20 June 2017.


Investment] 7.

94 Ibid.


96 Tenco Technology, ‘Working Principle of Optical Sensor’ 22 Oct 2016.

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Sensors have been used as a component part of camera, magnetometers97

and car for civilian purpose or used as a component of weapons or arms for military

purpose.98

Optical Sensors is in Category 6, Product group A “System, Equipment



Number (ECCN) of Optical Sensors is 6A002.

2.1.2.8 Category 7 Navigation and Avionics

Figure 2.18 Navigator100

< http://www.tenco-tech.com/article.php?id=89 > accessed 20 1June 2017. 97 National Nuclear Security Administration, Department of Energy of United States of America,




98 Ibid.


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Navigators have been used as a component part of satellite navigation

system, electronic streak cameras or flight control system and guidance sets101

both

for civilian or military purposes.

Global Navigation Satellite System is in Category 7, Product group A


Then, Export

Control Classification Number (ECCN) of Global Navigation Satellite System is

7A005.

Figure 2.19 Accelerometers103





101 Ibid.






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Accelerometers have been used as a component part of car airbag

deployment, vibration monitoring or laptops104

for civilian purpose or used as function

switch or tracking position during flight which is a component of Missile for military

purpose.105

Accelerometers is in Category 7, Product group A “System, Equipment

and Components” and Type of Control 001 and 101.106


Classification Number (ECCN) of Accelerometers is 7A001 and 7A101.107

2.1.2.9 Category 8 Marine

Figure 2.20 Robot Designed for Underwater Use108

104 Ibid.

105 Ibid.

106 Regulation (EC) No. 1334/2000, Annex I, 180 and 183.

107 Ibid. 108 David Murphy, ‘Deep Sea Coral Reefs More Accessible with Touch-Sensitive Underwater Robotic

Platform’ March 2015. < https://www.kaust.edu.sa/en/news/robotic-diver-expands-underwater-research

> accessed 15 June 2017.

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"Robots" designed for underwater use have been used in researching or

survey activities such as monitoring environmental damages109

, geographical survey

of deep sea and mapping for civilian purpose or used for survey or tracking position

such as underwater de-mining, search and rescue operation for military purpose.110

"Robots" designed for underwater use is in Category 8, Product group A


Then, Export

Control Classification Number (ECCN) of "Robots" designed for underwater use is

8A002.112

2.1.2.10 Category 9 Aerospace and Propulsion

Figure 2.21 Unmanned Aerial Vehicles (UAVs)113

109 Allison Barrie, ‘Robots Battle for Underwater Supremacy’ [Daily News] 26 July 2013.

< www.military.com/daily-news/2013/07/26/robots-battle-for-underwater-supremacy.html > accessed

20 June 2017.

110 Ibid.


112 Ibid. 113 Skyline UAV, ‘RMAX UAV Helicopter’

< http://www.skylineuav.com.au/fleet/yamaha-rmax-uav-helicopter/ > accessed 10 June 2017.

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UAVs have been used in agricultural industry such as spraying, seeding,

frost mitigation and variable rate dispersal etc.114

, in other industry such as aerial

photography, mapping, aerial survey and geographical survey115

for civilian purpose

or used for surveillance, target acquisition and reconnaissance for military purpose.116

UAVs is in Category 9, Product group A “System, Equipment and

Components” and Type of Control 012.117


Number (ECCN) of UAVs is 9A012.118

2.1.3 Activities Subjected to Control

Export control of DUI is expanded to cover the following activities.

2.1.3.1 Export

114 Yamaha Motor Australia, Yamaha RMAX Type II G/ Type II: Agricultural Use’

< http://rmax.yamaha-motor.com.au/agricultural-use > accessed 19 June 2017.

115 Yamaha Motor Australia, ‘Yamaha RMAX Type II G/ Type II: Industrial Use’

< http://rmax.yamaha-motor.com.au/industrial-use > accessed 19 June 2017.

116 Gheorghe Udeanu, Alexandra Dobrescu and Mihaela Oltean, ‘Unmanned Aerial Vehicle in Military

Operations’, [Scientific Research and Education in the Air Force-AFASES 2016]

< http://www.afahc.ro/ro/afases/2016/RP/UDEANU_DOBRESCU_OLTEAN.pdf > accessed 19 June

2017.


118 Ibid.

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Export means the transfer of goods or items from the exportation state to

other state.119

2.1.3.2 Re-Export

Re-Export means the export of goods or items that has been imported into

the state.120

2.1.3.3 Transit

Transit means the transport of goods or items through the state from the

port or place of entry to the port or place of exit, whereby the beginning and ending

points of transportation are outside the state, regardless whether there is any

transshipment, warehousing, changing of container or made of transportation

involved.121

2.1.3.4 Transshipment

Transshipment means transshipment of goods or items from one mode of

transport to another within the same port or place such as ship to ship or airplane to

airplane, where the points of origin and destination are outside the state.122

2.1.3.5 Brokerage

Brokerage means negotiation or arrangement of deals involving the

transfer of items between third states.123

119 Anna Wetter, Enforcing European Union Law on Exports of Dual-Use Goods (1st edn, Oxford

University Press 2009) Glossary.

120 Ibid.

121 Department of Foreign Trade, Ministry of Commerce, Thailand.

122 Ibid.

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2.1.3.6 Technology Transfer

Technology Transfer means of transfer technology whether it is tangible or

intangible technology from the exportation state to other state or from the resident to

non-resident.

Therefore, any person who would like to conduct activities mentioned

namely export, re-export, transit, transshipment, brokerage or transfer of technology

concerning DUI are controlled under the DUI export control laws and required to

obtain permission in compliance with the export measures prior to conduct of such

activities.

2.1.4 The Importance of Penalties for Violation

To prevent illegal exports of DUI and the increase of WMD,

administrative sanctions and criminal penalties such as prohibition of export, fine and

imprisonment especially heavy fines and long prison sentences should be applied to

the violation of DUI export control laws. Any person who is engaged in the controlled

activities; in violation of such export control laws is subject to penalties because there

sanctions or penalties could stop the violator from similar offences in order to protect

the general public. Moreover, If the violator is a member of terrorism organization,

the conviction could also obstruct other illegal activities of terrorists.

Moreover, UNSC Resolution 1540 dictates all members of the United

Nations to formulate proper laws to control export, re-export, transit, transshipment

and to establish proper control system of funds and services related to the activities

mentioned above as well as to apply proper criminal penalties or administrative

sanctions for violation of such control measures.124

Based on aforesaid reasons,

appropriate penalties or sanctions applied to the violation of export control of DUI are

very important.

123 Anna Wetter, Enforcing European Union Law on Exports of Dual-Use Goods (1st edn, Oxford

University Press 2009) Glossary.


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2.2 International Laws on Export Control of Dual-Use Items

Currently, goods, technology and software which are classified as DUI are

used not only for civilian applications but also for military purposes. Therefore, the

increase of growth of international trade on DUI will increase the risks that such DUI

will be used to develop WMD or other illegal activities.

In preventing the proliferation of WMD, there is international cooperation

on non-proliferation and export control system of DUI as follows.

2.2.1 The International Non-Proliferation Agreement

After the Cold War, international non-proliferation agreements went

through improvement and reinforcement in order to maintain security and stability of

global community. There are three major international non-proliferation agreements

namely,

1) Treaty on the Non-Proliferation of Nuclear Weapons (NPT)

2) Biological Weapons Convention

3) Chemical Weapons Convention

2.2.1.1 Treaty on the Non-Proliferation of Nuclear Weapons

(NPT)

The objective of NPT is to promote non-proliferation and disarmament of

nuclear weapons together with peaceful uses of nuclear energy.125

This Treaty was

adopted in 1968 and entered into force in 1970. Total of 191 states have joined the

Treaty including the five nuclear-weapon States126

i.e. the United States, Russia,

China, France and the United Kingdom.127

Thus, the Treaty establishes a safeguard

125

United State Delegation to the 2010 Nuclear Nonproliferation Treaty Review Conference, ‘Treaty

on the Non-Proliferation of Nuclear Weapons’ <http://www.state.gov/documents/organization/141503.pdf> accessed 18 Nov 2016.

126 United Nations Office for Disarmament Affairs, ‘Treaty on the Non-Proliferation of Nuclear

Weapons (NPT)’ <https://www.un.org/disarmament/wmd/nuclear/npt/> accessed 18 Nov 2016.

127Arms Control Association, ‘The Nuclear Nonproliferation Treaty (NPT) at a Glance’

<https://www.armscontrol.org/factsheets/nptfact> accessed 15 July 2017.

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system to prevent the use of fissile material for weapons. This safeguard system is

under the responsibility of the International Atomic Energy Agency (IAEA) the uses

of nuclear energy for the peaceful purposes. Under the safeguard system, there are an

international organization taking change of inspections conducted by IAEA to verify

the compliance with this Treaty.128

2.2.1.2 Biological Weapons Convention (BWC)

BWC is the first multilateral disarmament treaty which prohibits the

development, production and stockpiling of WMD especially biological and toxin

weapons.129

This Convention was adopted in 1972 and entered into force in 1975.

Total of 175 states has joined the Treaty.130

Under this Convention, the state parties warrant to provide annual reports

by using standard agreed templates comprising the required information such as

specific activities related to BWC that have to include information of research center

and laboratory, vaccine production, national biological defense research and

development programs, the affirmation of past activities in offensive and/or defensive

biological research and development programs, information on outbreaks of infectious

toxin and diseases including similar toxin occurrences, information of legislation,

regulation and others etc.131

2.2.1.3 The Chemical Weapons Convention (CWC)

128 Ibid.

129 United Nations Office for Disarmament Affairs, ‘Biological Weapons: The Biological Weapons

Convention’ <https://www.un.org/disarmament/wmd/bio/> accessed 18 Nov 2016.

130 Arms Control Association, ‘Biological Weapons Convention Signatories and States-Parties’ 25 July

2016 <http://www.armscontrol.org/factsheets/bwcsig> accessed 18 Nov 2016.

131 United Nations Office for Disarmament Affairs, ‘Biological Weapons: The Biological Weapons

Convention’ <https://www.un.org/disarmament/wmd/bio/> accessed 18 Nov 2016.

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CWC is the multilateral disarmament treaty which prohibits the

development, production, stockpiling, transfer or use of WMD especially chemical

weapons.132

This Convention was adopted in 1992133

and entered into force in 1997.

Total of 192 states has joined the Convention.134

Under this Convention, the

Organization for Prohibition of Chemical Weapons (OPCW) has been established to

encourage the peaceful use of chemistry together with to ensure and to verify the

destruction of chemical weapons under CWC.

According to the Convention, all state parties agree to disarm chemical

weapon by eliminating and destroying the stockpiles of such weapons. The chemistry

will be used only for the benefit of mankind.135

The unique provision of the CWC concerns the challenge of inspection in

the case that a state party doubt about compliance with this Convention by another

state party. Such state party which is the accuser could request the Director-General of

the OPCW to send an inspection team to inspect the suspected state based on the

CWC's challenge inspection procedures according to which all state parties commit

themselves to this inspection under rule 'anytime, anywhere' with no right to refuse

such inspection.136

2.2.2 United Nations Security Council Resolution 1540

132 United Nations Office for Disarmament Affairs, ‘Chemical Weapons’

<https://www.un.org/disarmament/wmd/chemical/> accessed 18 Nov 2016.

133 Ibid.

134 Arms Control Association, ‘Chemical Weapons Convention Signatories and States-Parties’

<https://www.armscontrol.org/factsheets/cwcsig> accessed 18 Nov 2016.

135 United State Department of State, ‘Convention on the Prohibition of the Development, Production,

Stockpiling and Use of Chemical Weapons and on Their Destruction (CWC)’

<https://www.state.gov/t/avc/trty/127917.htm> accessed 18 Nov 2016. 136 Ibid.

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The increase of WMD such as nuclear, chemical and biological weapons is

the obstruction to the maintenance of international peace and security. There are the

potentials that terrorists may possess, acquire, develop or use such WMD for

terrorism activities. Thus, UNSC Resolution 1540 was adopted on April 28, 2004

under Chapter VII of the United Nations Charter in order to affirm that the increase of

WMD as well as the means of delivery is the threat to international peace and security

and thus dictates the members of the United Nations to take proper and effective

actions against such threat and to fulfil all other obligations related to arms control

and disarmament for the prevention of the proliferation of WMD in all aspects.137

This Resolution lays down obligations for all members of the United

Nations to take steps decided by itself to prevent the increase of WMD and the means

of delivery by requiring prohibition of non-state actors to obtain, possess, apply,

manufacture, develop and transfer of WMD and related materials for terrorism

purposes138

as follows.

1) To refrain from providing any support to any individual or entity that

tries to develop, acquire, produce, possess, deliver, transfer, apply or

use WMD or related materials;

2) To establish and execute proper and efficient laws which prohibit any

individual or entity to develop, acquire, produce, possess, deliver,

transfer, apply or use WMD or related materials;

3) To establish and execute efficient measures for national control to

prevent the proliferation of WMD and related materials such as

safeguard of DUI in production, storage, transport, transfer or use; and

to legislation of proper national laws used for trade management on

export, re-export, transshipment, transit, brokering and transfer of

technology that may contribute to proliferation of WMD;

4) To establish cooperation to eliminate illegal trafficking of WMD and

related materials.

137 United Nation Security Council Resolution 1540 (2004) 1.

138 Ibid, 3-4.

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Likewise, this Resolution affirms that members of the United Nations have

obligations to support and strengthen the multilateral treaty the objective of which is

to eliminate or prevent proliferation of WMD by establishing national laws and

regulations in compliance with the commitment under such multilateral non-

proliferation treaties.139

For legal status of United Nations Security Council Resolution, the power

of United Nations Security Council to pass resolution is provided for in Article 24 of

the United Nations Charter140

. Then, the members of United Nations bound by Article

25141

and 48142

to implement obligations under United Nations Security Council

Resolution 1540.

2.2.3 The Multilateral Export Control Regimes

The multilateral export control regime is the voluntary groups of supplier

states that have the objectives to restrict the trade on controlled items including DUI

only for peaceful proposes. Under each regime, the members have the commitments

to ensure that their activities shall not contribute to proliferation of WMD. Thus, there

are guidelines and controlled items that will balance the trade and the security of

global community. However, such guidelines and controlled items will be

implemented only by the legislation of national export control laws of each state.

2.2.3.1 Nuclear Suppliers Group (NSG)

139 Ibid, 1-4.

140 The Charter of United Nations, Article 24.

“In order to ensure prompt and effective action by the United Nations, its Members confer on the Security Council primary responsibility for the maintenance of international peace and security, and

agree that in carrying out its duties under this responsibility the Security Council acts on their behalf.”

141 Ibid, Article 25.

“The Members of the United Nations agree to accept and carry out the decisions of the Security

Council in accordance with the present Charter.”

142 Ibid, Article 48. “1. The action required to carry out the decisions of the Security Council for the maintenance of

international peace and security shall be taken by all the Members of the United Nations or by some of

them, as the Security Council may determine.

2. Such decisions shall be carried out by the Members of the United Nations directly and through

their action in the appropriate international agencies of which they are members.”

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The Nuclear Suppliers Group (NSG) is a cooperation of nuclear exporters

which is a voluntary association founded in 1975 that has no formal measures to

enforce all members on the compliance. Currently, there are 48 members.143

All

members are seeking to contribute to non-proliferation of nuclear by implementing

two guidelines adopted by consensus. The first guideline controls the export of items

designed or used for nuclear purposes and the second controls DUI and related

technology. Both guidelines are consistent with relevant international non-

proliferation agreements. Examples of DUI List of NSG are machine tools, vacuum

pumps, pressure transducers, frequency changers or generators, switching devices and

vibration test systems etc. However, the determinations on export of items are taken

by each state based on national export permission and requires importers to declare

non-proliferation and physical security assurances.144

2.2.3.2 Australia Group (AG)

This cooperation is an informal voluntary export control arrangement

founded in 1985 seeking to ensure that any export does not contribute to the

proliferation of biological and chemical weapons. It sets export guidelines and six

common control lists. The lists are included dual-use chemical manufacturing,

chemical weapons precursors, biological agents and biological equipment.145

Currently, there are 41 members146

which are also the parties to the Chemical

Weapons Convention and the Biological Weapons Convention.

2.2.3.3 Missile Technology Control Regime (MTCR)

This cooperation is a voluntary export control arrangement founded in

1987 having the objective to limit the proliferation of ballistic missile, unmanned

143 Nuclear Treat Initiative, ‘Nuclear Suppliers Group NSG’ 31 January 2017

<http://www.nti.org/learn/treaties-and-regimes/nuclear-suppliers-group-nsg/> accessed 18 Feb 2017.

144 Nuclear Suppliers Group, ‘About The NSG’ <http://www.nuclearsuppliersgroup.org/en/about-us>

accessed 18 Nov 2016.

145 The Australia Group, ‘Home’ < http://www.australiagroup.net/en/index.html> accessed 18 Nov

2016.

146 The Australia Group, ‘Statement by the Chair of the 2015 Australia Group Plenary’ 5 June 2015

< http://www.australiagroup.net/en/agm_june2015.html > accessed 18 Nov 2016.

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delivery systems capable of delivering WMD and other related items that could be

used for WMD attacks. Members of the MTCR have to establish national export

control measures for ballistic missiles and related items that appear on the MTCR.

Under the MTCR, there are two categories of controlled items, Category I

is the most sensitive because it is “a strong presumption to deny” such transfer in

accordance with the MTCR guidelines. It includes complete missiles, rockets and

related items. Category II could be applied for civilian uses which include items to

construct Category I systems and Non-Category I systems.

The members are required to obtain as assurance from the recipient that

such items will be used only for the purposes declared in the dealing time and will not

transfer the items to a third party without permission. Currently, the member can be

counted to 35.147

2.2.3.4 Wassenaar Arrangement (WA)

This arrangement calls for cooperation of export control system which was

established in 1996 to contribute to the international security concerning the transfer

of conventional arms, DUI and technologies and also to prevent the use of such items

by terrorists. WA is the first system of multilateral export control designed to cover

both conventional weapons and sensitive dual-use items. All parties agree that items

on a Munitions List and List of DUI and Technologies shall be controlled in order to

prevent unauthorized transfer or re-transfer of such items. Wassenaar Arrangement is

designed for both regional and international security and stability. In order to promote

transparency and responsibility of conventional arms and sensitive DUI the parties

147 The Partners of the Missile Technology Control Regime, ‘Joint Statement agreed by consensus

during the Reinforced Points of Contact 2017 to celebrate the 30th anniversary of the MTCR’ 13 April

2017 < http://mtcr.info/> accessed 18 Nov 2016.

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exchange information concerning transfers and licenses for the items.148

Currently,

Wassenaar Arrangement are consisting of 41 parties.149

148 The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and

Technologies, ‘About Us’ < http://www.wassenaar.org/about-us/> accessed 18 Nov 2016.

149 The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and

Technologies, ‘National Contacts’ < http://www.wassenaar.org/participating-states/> accessed 18 Nov

2016.

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CHAPTER 3

EXPORT CONTROL OF DUAL-USE ITEMS

IN FOREIGN COUNTRIES

As mentioned in the previous Chapter, all members of the United Nations

are required to establish and implement national legislation and export control system

to prevent any non-state actor to acquire, possess, develop, manufacture, transport,

transfer or use WMD and their means of delivery to comply with the UNSC

Resolution 1540.150

Thus, DUI which are goods, software and technology that can be

used for producing, developing or using in missile, nuclear, chemical or biological

weapons will be focused and controlled under national export control laws of each

member.

This Chapter will focus on national export control laws of certain dual-use

items of Asian countries namely Japan (the world’s third largest economy151

),

Singapore and Malaysia (the two Asean members with export control law of dual-use

items in place) that are the members of United Nations and bound by Articles 25 and

48 of the Charter of the United Nations to implement obligations under UNSC

Resolution 1540.

The reasons why Japan, Malaysia and Singapore are chosen in this chapter

are as following.

1) Japan, Singapore and Malaysia are the members of United Nations and

thus are bound by. Then, the UN Security Council Resolution 1540 (2004) adopted by

the Security Council on 28 April 2004 under the Chapter VII of Charter of the United

Nations. In response to the United Nations Security Council’s decisions, Article 25 of

the Charter of the United Nations requires the members of the United Nations to

accept and carry out the decisions of the Security Council in accordance with the

150 United Nations Security Council Resolution 1540, Art 3 (d).

151 BBC News, ‘Japan Country Profile’ <http://www.bbc.com/news/world-asia-pacific-14918801>

accessed 18 May 2017.

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Charter of the United Nations.152

Specifically, Article 48 of the Charter requires the

members of United Nations to carry out the decisions of the Security Council for

maintaining international peace and security.153

Therefore, Japan, Singapore and

Malaysia as the members of the United Nations are obligated to accept and carry out

the Security Council’s decisions including Security Council Resolutions 1540 (2004)

by establishing its national export control measures with an aim to prevent the

proliferation of WMD or any related materials and to enforce such export control laws

over DUI in the same manner as Thailand does.

2) For Japan, the third largest economy of the world154

, its export control

system was established since 1949,155

which is considered a long time for the

establishment and implementation of export control law and regulations. Furthermore,

Toyota, Honda, Nissan, Suzuki and Mazda, the famous Japanese companies in

automobile industries, are in top fifteen of largest global automobile companies in the

world156

that possess the component parts namely analogue to digital converter used

for GPS system, capacitor, accelerometer used for car airbag deployment, sensor,

engine, motor, and valve which are dual-use items under export control laws and the

export, re-export, transit, transshipment, brokering and technology transfer of such

parts are controlled by export control law of Japan and the laws of other countries

which adopted UNSC Resolution 1540. Therefore, use of such dual-use items

manufactured or sold from a Japanese company will affect the reputation of Japan and

152 The Charter of United Nations, Article 25. “The Members of the United Nations agree to accept and carry out the decisions of the Security


153 Ibid, Article 48.

“1. The action required to carry out the decisions of the Security Council for the maintenance of



2. Such decisions shall be carried out by the Members of the United Nations directly and through their

action in the appropriate international agencies of which they are members.”

154 BBC News, ‘Japan Country Profile’ <http://www.bbc.com/news/world-asia-pacific-14918801>

accessed 18 May 2017.

155 Center for Information on Security Trade Control of Japan, Overview of Japan’s Export Control

(4th edn, 2015) 1. <http://www.cistec.or.jp/english/export/Overview4th.pdf> accessed 18 June 2016.

156 Worldatlas, ‘The World’s Biggest Automobile Companies: Volkswagen, Toyota, and Hyundai are

the three leading passenger car manufacturers in the world.’ <

http://www.worldatlas.com/articles/which-are-the-world-s-biggest-automobile-companies.html >


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will be sanctioned by non-tariff barrier from other countries. For these reasons,

government agencies of Japan are using their best efforts to develop their export

control system for activities subject to control to prevent proliferation of WMD in

compliance with UNSC Resolution 1540. Moreover, Japanese investors have played

significant roles in Thai manufacturing and trading businesses157

because they are the

top foreign investors in Thailand especially in automotive and electronic industries158

Thailand is used by such Japanese investors as a global manufacturing base and

contain component parts of products can be used for both civilian and military

applications such as analogue to digital converter used for GPS system, capacitor,

accelerometer used for car airbag deployment, sensor, engine, motor, and valve etc.

Thus, such Japanese companies are required to comply with Japanese Law of dual-use

items in this matter even though they are established outside Japan bases on Japanese

nationality of such companies. This expresses the efficient enforcement of export

control law on dual-use items of Japan.

3) Singapore, the leader of Regional Operating Headquarters159

and trading

hub160

in Asean, has established its export control of dual-use items since 2002 based

on the mindfulness of impact on locally business and economy.161

If Thailand would

like to become international trading headquarters in Asean,162

Singapore will be the

major competitor. Thus, the government of Thailand should study the export control

law of Singapore for comparison.

157

Peter Burke and Nattha Srisomwong, ‘The Japanese Oversea Investment Report: Thailand’

(International Financial Law Review) 29 March 2017 <http://www.iflr.com/Article/3673595/The-

Japanese-Overseas-Investment-Report-2017-Thailand.html> accessed 12 June 2017.

158 Board of Investment of Thailand, ‘Statistics of Oversea Investment: Monthly in 2016 (January –

September) <http://www.boi.go.th/upload/summarize_1609_47177.pdf> accessed 12 June 2017.

159 Centennial Asia, ‘Move to make Thailand Asean trade hub’ 18 November 2014

< http://www.centennialasia.com/move-to-make-thailand-asean-trade-hub-18-november-2014/ >

accessed 1 June 2017

160 Supanee Phupisut, ‘Move To Make Thailand Asian Trade Hub’ (The Nation) 18 November 2014

< http://www.nationmultimedia.com/news/business/EconomyAndTourism/30247967 >

161 George Tan, ‘Singapore’s Journey Towards Its Implementation of Strategic Trade Controls’

< http://www.str.ulg.ac.be/wp-content/uploads/2016/03/6.-Singapore%E2%80%99s-Journey-Towards-

its-Implementation-of-Strategic-Trade-Controls.pdf > accessed 1 June 2017.

162 Patricia Mongkhonvanit, ‘International Headquarters & International Trading Center: Scope of

business and special tax measures for IHQ and ITC’

<http://www.boi.go.th/upload/content/02%20International%20headquarter%20and%20international%2

0trading%20center%20(English%20Version)_90051.pdf > accessed 1 June 2017.

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4) Malaysia, the 2nd

of Regional Operating Headquarters and automotive

industry is 3rd

in Asean,163

always competes with Thailand in trading hub and

automotive industry in Asean. Thus, it will be the advantageous point if the

government of Thailand will consider the export control law of dual-use items of

Malaysia to develop Thai export control system to facilitate trade and investment and

to prevent proliferation of WMD.

From the reasons mentioned above, it is necessary for Thailand to study

and compare the export control laws of dual-use items of Japan, Singapore and

Malaysia for benchmarking best practice to develop national export control system.

3.1 Japan

Japan is a member of the United Nations and a party to all multilateral

non-proliferation treaties (NPT, BWC, CWC) and regimes (NSG, AG, MTCR,

WA).164

Under UNSC Resolution 1540 that requires the member states to establish

national control to prevent proliferation of nuclear, chemical, or biological weapons

that could be called “WMD” including their means of delivery and related materials165

which include DUI, Japan as a UN member has the obligations to comply with

Articles 25166

and 48167

of the Charter of UN. However, Japan has enacted national

163 Sunetra Chantaburi, ‘Automotive Industry: Thailand has highest capability in Asean’

<http://www.aseanthai.net/mobile_detail.php?cid=4&nid=5720> accessed 12 June 2017.

164 Yann Aubin and Arnaud Idiart, Export Control Law and Regulations Handbook: A Practical Guide

to Military and Dual-Use Goods, Trade Restrictions and Compliance (Kluwer Law International,

2007).


166 Charter of United Nations, Art 25. “The Members of the United Nations agree to accept and carry out the decisions of the Security


167 Charter of United Nations, Art 48.






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export control laws calles “the Foreign Exchange and Foreign Trade Control Act”

since 1949.

3.1.1 Laws and Regulations

The export control system of Japan is complicated. Legal framework of

Japan is considered to be based on the Foreign Exchange and Foreign Trade Act.

Pursuant to this Act, there are subordinate legislations namely Export Control Order

and Foreign Exchange Order issued by the Cabinet known as Cabinet Orders.

3.1.1.1 Foreign Exchange and Foreign Trade Act (1998)

This Act is enacted for the first time in 1949 after World War II providing

legal framework for controlling foreign exchange and foreign trade transactions.

Currently, this Act applies only to control of weapons and dual-use items. Thus, any

person who intends to export the goods168

or transfer technology169

specified by

Cabinet Order to a foreign country or a foreign person must obtain permission from

the Ministry of Economy, Trade and Industry of Japan (METI).

Although dual-use items specified in the Control List are exported or

transferred to the subsidiaries outside Japan by Japanese resident, such resident as an

exporter is likewise required to obtain permission from the METI under this Act.170

3.1.1.2 Cabinet Orders

3.1.1.2.1 The Export Control Order issued by the Cabinet

under Article 48 of Foreign Exchange and Foreign Trade Act is designed to

make the control list of goods.171

168 The Foreign Exchange and Foreign Trade Act, art 48.

169 Ibid, art 25.

170 Toshikazu Okuya, Importance of Export Control & Japan’s Export Control, 2016.

171 Ibid, art 48 (1)

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3.1.1.2.2 The Foreign Exchange Order issued by the Cabinet

under Article 25 of Foreign Exchange and Foreign Trade Act is designed to

make the control list of technologies.

3.1.1.3 Ministerial Order

Other than Export Control Order and Foreign Exchange Order issued by

the Cabinet, there are the Ministerial Order specifying the specification and

interpretations of the controlled goods and technologies such as the Ordinance of the

Ministry of Economy, Trade and Industry and Ordinance of the Ministry of Finance.

3.1.2 Transaction Subject to Control

Under the Foreign Exchange and Foreign Trade Act, transactions subject

to control are export and re-export of goods172

, transfer of technologies173

,

transshipment of goods and brokering transactions related to goods or technologies.174

However, transit of goods is not defined and is not covered within the

scope of such Act.

3.1.3 Classification of Controlled Items

Under the export control laws of Japan, controlled items are separated as

List Control and Catch-All Control.

3.1.3.1 List Control

List Control of Japan is consistent with the list specified by international

regimes (NSG, AG, MTCR, WA)175

; but, classification number of each item under

this List are specified by Japan and are not similar to that of the other countries.176

172 Ibid, art 48.

173 Ibid, art 25.

174 <http://www.meti.go.jp/policy/anpo/securityexportcontrol3.html> accessed 10 June 2016.

175 Toshikazu Okuya, ‘Importance of Export Control & Japan’s Export Control’, 2016.

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Under the export control system of Japan, goods or technology that are

specified in List Control have are required to obtain the export license prior to export

to foreign countries.177

As mentioned above, the export of goods or transfer of technology under

list control to subsidiaries located in foreign countries are also required to comply

with export license measures of Japan.178

Under List Control, many items including components and parts that are

subject to apply for export license are controlled by multiple categories and such List

is updated once a year.179

Then, an exporter needs to follow up the revision of List

Control.

Table 3.1 List Control of Japan180

Category Japanese Classification181

International Regime

1 Military

Items Arms WA/ Munitions

2

Dual-Use Items

Nuclear Items NSG

3 Chemical Weapons AG

3-2 Biological Weapons AG

4 Missiles MTCR

5 Advanced Materials WA Cat. 1

6 Material Processing WA Cat. 2

7 Electronics WA Cat. 3

8 Computers WA Cat. 4

9 Communication/ Information Security WA Cat. 5

10 Sensors and Lasers WA Cat. 6

11 Navigation/ Avionics WA Cat. 7

12 Marine WA Cat. 8

13 Aerospace/ Propulsion WA Cat. 9

14 Other ML Items Except for WA/ Munitions


(4th edn, 2015)

177 Export Trade Control Order, Art 1. 178 Toshikazu Okuya, ‘Importance of Export Control & Japan’s Export Control’, 2016. 179 Ibid, 21. 180 Center for Information on Security Trade Control of Japan, ‘Overview of Japan’s Export Control

(4th edn’, 2015) 181 Ibid, 11.

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15 Sensitive Items WA very sensitive

3.1.3.2 Catch-all Control

Although the export items are not specified in the List Control, exporter

has the obligation to apply for an export license based on the following criteria.182

1) Such items will be applied for development of WMD.

2) End-user of such items may be related to the proliferation of WMD or is

specified in the Foreign End-User List.183

3) METI has the authority to consider that the export items could apply for

design, manufacturing, developing or using of WMD and to require an exporter to

apply for the export license.

Catch-all Control of WMD, however, is not apply to 27 white countries

namely Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Czech Republic,

Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, South Korea,

Luxemburg, Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden,

Switzerland, United Kingdom and United States of America.184

White countries here refer to those which mentioned above.

Table 3.2 Catch-all Control List of Japan185

Category Japanese Classification International Regime

16 Catch-all

Control

Items other than Categories

1-15 as mentioned above. -

3.1.3.3 Technology Transfer Control

182 Center for Information on Security Trade Control of Japan, Overview of Japan Export Control Legal

Framework, 2010.



(4th edn, 2015) 14.

185 Ibid, 13.

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The controlled list of technologies is under the Foreign Exchange Order

issued by the Cabinet under Article 25 of Foreign Exchange and Foreign Trade Act

that are separated into three cases as follows.

3.1.3.3.1 Technology Transfer from Japan to

Foreign Company

In Japan, any person who would like to transfer technology specified in the

controlled List from Japan to other countries is required to obtain permission.

However, such permission is not applied in the case that the person would like to use

such technologies by himself in other countries.186

3.1.3.3.2 Technology Transfer within Japan

In the case that a person who is a resident of Japan would like to transfer

technologies controlled by the List under the Foreign Exchange Order to a non-

resident in Japan, the resident is also required to obtain the permission.187

3.1.3.3.3 Technology Transfer in Foreign Country

In the case that the person who is a resident of Japan would like to transfer

technologies controlled by the List under the Foreign Exchange Order to a non-

resident in foreign countries, the resident is required to obtain

permission.188

Nevertheless, such permission is not applied to a case where such

technology originates outside Japan and its transactions are accomplished outside

Japan.189

3.1.3.4 Special Control for Restricted Country

186 The Foreign Exchange and Foreign Trade Act, Art 25.

187 Ibid.

188 Ibid.


(4th edn, 2015) 12-13.

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For export control system, there are some restricted countries to which the

government of Japan decides to prohibit exportation of dual-use items such as Iran,

North Korea and Russia.

3.1.4 Permission

In Japan, export permission will be issued by the Minister of Economy,

Trade and Industry (METI), if METI considers that the export items do not contribute

to the proliferation of WMD.190

For such permissions, there are two categories of

export license of dual-use items.

3.1.4.1 Individual Permission

For individual permission under export control law of Japan called

“Individual Export License”, an exporter will apply for this License based on each

transaction. 191

In case that the export is required to obtain the permission based on

Catch-all Control, this License will be applied. The validity of this License, is six

months after the date of issuance for export period.192

3.1.4.2 Bulk Permission

Permission for multiple exports of dual-use items in Japan called “Bulk

Export License”, allows an exporter who obtains such License to expert dual-use

items under the conditions of permission193

such as destination of exportation, end-use

and end-user.

190 Center for Information on Security Trade Control of Japan, Overview of Japan Export Control Legal Framework, 2010.

191 Ibid.


(4th edn, 2015) 23.


Framework, 2010.

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Bulk Export License will be issued in the case that an exporter has the

good internal control system that are considered in compliance with the requirements

of Internal Compliance Program (ICP) of METI.

Currently, Bulk Export License is classified into five types194

and the

validity of each type of Bulk Export License is different as follows.

3.1.4.2.1 General Bulk Export License195

or Bulk License

for White Countries196

An exporter who obtains this License could export specific dual-use items

to 27 white countries namely Argentina, Australia, Austria, Belgium, Bulgaria,

Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary,

Ireland, Italy, South Korea, Luxemburg, Netherlands, New Zealand, Norway, Poland,

Portugal, Spain, Sweden, Switzerland, United Kingdom and United States of

America.197

The validity of this License is 3 years after the date of issuance.198

3.1.4.2.2 Special General Bulk Export License199

or

Bulk License for Combination of Items and

Destination200


to foreign countries other than white countries. However, the exporter is prohibited to

export such dual-goods items to the restricted countries. The validity of this License is

3 years after the date of issuance.201


(4th edn, 2015) 25-26. 195 Ibid. 196 Toshikazu Okuya, Importance of Export Control & Japan’s Export Control, 2016. 197 Center for Information on Security Trade Control of Japan, Overview of Japan’s Export Control

(4th edn, 2015) 14. 198 Toshikazu Okuya, Importance of Export Control & Japan’s Export Control, 2016. 199 Ibid, 25. 200 Toshikazu Okuya, Importance of Export Control & Japan’s Export Control, 2016. 201 Ibid.

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3.1.4.2.3 Special Bulk Export License202

or Bulk License for

the Same Customer203


to a specific customer who is a business partner repeated. The validity of this License

is 2 years after the date of issuance.204

3.1.4.2.4 Special Bulk Export License for Repair and

Replacement205

An exporter who obtains this License could re-export specific dual-use

items to a specific customer in order to return such items to the country of exportation

for repair or replacement.206

The validity of this License is 2 years after the date of

issuance.207

3.1.4.2.5 Special Bulk Export License for

Oversea Subsidiaries208

An exporter who is a manufacturer and obtains this License could export

specific dual-use items to subsidiaries in foreign countries repeatedly.209

The validity

of this License is 3 years after the date of issuance.210


(4th edn, 2015) 25.


204 Ibid.


Framework, 2010.

206 Ibid.

207 Ibid.

208 Ibid.



Framework, 2010.

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3.1.5 Offence, Penalty and Sanction

An Exporter who violates export control laws of Japan is subject to penalty

based on each offense.

3.1.5.1 Offence and Penalty

3.1.5.1.1 Export or Brokerage of Goods or Technologies

Related to WMD without Permission

A violator shall be punished by imprisonment not exceeding 10 years or

fine not exceeding 10,000,000 Yen, or both; but, in case that the five times of price of

export items more than 10,000,000 Yen, such fine shall be up to five times of the

price of such items.211

3.1.5.1.2 Export or Brokerage of Goods or Technologies

Related to Convention Arms without Permission



export items more than 7,000,000 Yen, such fine shall be up to five times of the price

of such items.212

3.1.5.1.3 Transfer Technologies without Permission



export items more than 5,000,000 Yen, such fine shall be up to five times of the price

of export items.213

211 Foreign Exchange and Foreign Trade Act, art 69-6 (2).



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3.1.5.1.4 Obtain Permission Illegally


fine not exceeding 1,000,000 Yen, or both; but, in case that the three times of price of

export items more than 1,000,000 Yen, such fine shall be up to three times of the

price of export items.214

3.1.5.1.5 Failure to Comply with The Notification Issued

by the METI

A violator shall be punished by imprisonment not exceeding 6 months or

fine not exceeding 500,000 Yen.215

3.1.5.1.6 Attempted Violation of Export Control Laws

Attempted violation is subject to be punished.

3.1.5.2 Administrative Sanction

For a violation of a petty offense a violator shall be punished by

administrative sanctions which is prohibition of export not more than 3 years.

3.1.5.3 Warning

Certain, the METI has the authority to issue a warning which is served

upon a violator when the violation is not so serious.

3.1.6 Internal Compliance Program (ICP)

The METI has the authority to issue compliance check list to the

companies who have registered ICP. Exporters have to answer questions and provide



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self-checking on their export control compliance status.216

Registration of ICPs is one

requirement for obtaining a special bulk license.217

For ICPs, an exporter has to prepare the internal control as follows.218

(1) Organization

(a) Corporate export control organization

(b) Role and responsibility of each unit

(2) Control procedures

(a) Item classification

(b) Transaction screening

(c) Shipment control

(3) Operation and maintenance

(a) Internal audit

(b) Training and education

(c) Documents control

(d) Instruction and guidance to subsidiaries

(e) Incident reports and prevention of recurrence

Figure 3.1 Export Control Procedure in Japan219

216

Center for Information on Security Trade Control of Japan, Overview of Japan’s

Export Control (4th edn, 2015) 34.

217 Center for Information on Security Trade Control of Japan, Overview of Japan

Export Control Legal Framework, 2010.

218 Center for Information on Security Trade Control of Japan, Overview of Japan’s

Export Control (4th edn, 2015) 34.

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3.2 Singapore


(4th edn, 2015) 44. <http://www.cistec.or.jp/english/export/Overview4th.pdf> accessed 18 June 2016.

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Under the UNSC Resolution 1540 that requires the member states of the

United Nations to establish national control to prevent proliferation of nuclear,

chemical, or biological weapons that could be called “WMD” including their means

of delivery and related materials220

which include DUI, Singapore, as a UN member

has implemented the obligations under Articles 25221

and 48222

of the Charter of the

United Nations by enacting national export control laws following the adoption of

Resolution 1540 called “Strategic Goods (Control) Act” since 2003.223

Currently, there is the strategic goods control system operated under the

Strategic Goods (Control) Act in Singapore.

Strategic Goods refer to goods including software and technology which

have both civilian and military applications, which can be used for development,

production, or use in nuclear, chemical and biological weapons, or missiles capable of

delivering these weapons; and also conventional arms and military equipment.224


For Singapore Export Control System, there are two legislative

frameworks used for controlling the export of dual-use items.

3.2.1.1 Strategic Goods (Control) Act (“SGCA”)







international peace and security shall be taken by all the Members of the United Nations or by some of them, as the Security Council may determine.


their action in the appropriate international agencies of which they are members.” 223 Chen Yongquan, ‘Strategic Goods Control: Traders as Our Partners’

224 Singapore Customs, Strategic Goods Control and Self-Compliance.

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58

This Act specifies all transactions subject to control including Control List

and Catch-all Control, authority and international cooperation.225

3.2.1.2 Strategic Goods (Control) Regulations (“SGCR”)

This Regulations specify the conditions of export permission, revocation

and suspension including requirements of internal control of exporter226

3.2.2 Transactions Subject to Control

Controlled transactions under Singapore laws include export, re-export,

transshipment, bring-in transit, intangible transfer of technology and brokering.227


Goods and technology specified in the Strategic Goods Control List

attached to the Strategic Goods (Control) Order 2016 are subject to control under the

Strategic Goods (Control) Act. The Strategic Goods Control includes items from the

four multilateral export control regimes namely AG, MTCR, NSG and WA.228

There are two controlled types under Singapore laws as follows.

3.2.3.1 List Control

List Control of Singapore is prepared on the basis of the export control

lists used by the EU, United States, Australia, Hong Kong and other countries which

applies to all transactions regarding strategic goods which is divided into as two sub

lists as follows.229

3.2.3.1.1 Munition List

225 Singapore Customs, Singapore’s Strategic Goods Control System.

226 Singapore Customs, Strategic Goods Control and Self-Compliance.


228 Ibid. 229 Ibid

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Munition List of Singapore prepared from the Munitions List of WA that

are goods and technology designed for military purposes.230

3.2.3.1.2 Dual-Use List

Dual-Use List of Singapore prepared on the basis of Dual-Use List of EU

comprising the list of all export control regimes namely MTCR, NSG, AG and WA in

categories 0-9.

3.2.3.2 Catch-all Control

Under the SGCA, “catch-all” covers all goods and technology that are

intended, known or suspected to be used in relation to weapons of mass destruction

(WMD).231


Transfer of intangible technology in Singapore is required to obtain

permission if it is strategic goods, software or technology under Dual-Use List or any

software/technology under Catch-all Control.

3.2.3.4 Special Control for Restricted Countries

As a member of the United Nations, Singapore implements the

Resolutions adopted by the United Nations Security Council in its domestic laws.

Thus, the restricted countries under such Resolution are prohibited for exportation.

3.2.4 Permission

In Singapore, export permission is divided into as two categories as

follows.

3.2.4.1 Individual Export Permission

230 George Tan, Export Controls.


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60

Individual Permit must be applied for by exporters who intend to export,

re-export, transship or bring in transit dual-use goods and their related technology and

it will be approved on a transaction – by - transaction basis which means that

individual permit will be approved based on each shipment.232

3.2.4.2 Bulk Export Permission

Bulk Permit is suitable for exporters who usually export dual-use goods to

multiple end users or destination countries and could comply with ICP. Validity of

Bulk Permit is up to three years. Bulk Permission in Singapore Law is divided into

two types as follows.233

3.2.4.2.1 Bulk License for Specific Entities

This License will be approved for multiple products that will be exported

to specific consignees or end-users and applied to export, re-export, transshipment

and intangible transfer of technology.234

3.2.4.2.2 Bulk License for Countries of Destination

This License will be approved for multiple products that will be exported

to specific destination and applied to export, re-export, transshipment and intangible

transfer of technology


The penalties and sanctions in the cases of violation of export control of

dual-use items in Singapore are provided for in the Strategic Goods Control Act.


232 Singapore Customs, Strategic Goods Control and Self-Compliance (2016).

233 Ibid. 234 Ibid.

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61

3.2.5.1.1 Misassumption

1) For the first time of violation, a violator shall be punished by fine not

exceeding $100,000 or 3 times of the value of the goods or technology related to the

violation or by imprisonment not exceeding 2 years or by both; or

2) For the second time of violation, the violator shall be punished by fine

not exceeding $200,000 or 4 times of the value of the goods or technology related to

the violation or by imprisonment not exceeding 3 years or by both.

3.2.5.1.2 False Declarations

A violator shall be punished by fine not exceeding $50,000 or by

imprisonment for a term not exceeding 12 months or by both.

3.2.5.1.3 Failure to Comply with Conditions of Permit


imprisonment for a term not exceeding 12 months or by both.

3.2.5.1.4 Refusal or Failure to Keep or Submit Record


imprisonment for a term not exceeding 6 months by both.


In Singapore, there is an Internal Compliance Program which is one

requirement of Bulk License Approval.

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For ICPs, an exporter will prepare the internal control as follows.235

1) Company’s Commitment Statement

2) Strategic Goods Officer/ Committee

3) Product Classification

4) End User Screening

5) Product Screening

6) End Use Screening

7) End Destination Screening

8) Transaction Screening

9) Shipping Control

10) Reporting and Emergency Notification

11) Record Keeping

12) Regular Training/ Education

13) Audit

14) Guidance to Subsidiary & Business Partners

Figure 3.2 Permission of DUI under Singapore Laws in Briefing236

235 George Tan, Export Controls. 236 George Tan, ‘Export Control’ (2013), [Singapore Manufacturing Federation] 8.

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3.3 Malaysia

Under UNSC Resolution 1540 which requires member states of the United

Nations to establish national control to prevent proliferation of nuclear, chemical, or

biological weapons that could be called “WMD” including their means of delivery

and related materials237

which include DUI, Malaysia as a UN member has

implemented the obligations under Articles 25238

and 48239

of the Charter of the

United Nations by enacting national export control laws following the adoption of the

Resolution 1540 called “the Strategic Trade Act 2010”. This Act has been effective

since 1 April 2011, after its publication in the Gazette since 10 June 2010.

240

The Strategic Trade Act, 2010 its designed to control export, transit,

transshipment and brokering of strategic items, including arms and related materials


238 Charter of United Nations, Art 25. “The Members of the United Nations agree to accept and carry out the decisions of the Security








240 Mohamed Shahabar Abdul Kareem, ‘The Strategic Trade Act (STA) 2010: Facilitating Trade in A

Secure Trading Environment’, 2.

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64

that could be used for the purposes of design, development, production and delivery

of WMD in accordance with UNSC Resolution 1540 and NPT, CWC and BWC.

In this Act, Strategic Items include “Military Items” in Part I and “DUI” in

Part II of the Strategic Items Order.241

Thus, Strategic Items refer to goods including software and technology

which have both civilian and military applications that can be used for development,

production, or use in nuclear, chemical and biological weapons, or missiles which are

capable of delivering these weapons; and also conventional arms and military

equipment. 242


For Malaysia, there are some related laws used to control the Strategic

Items apart from the Strategic Trade Act 2010 as follows.243

1) Animals Act 1953

2) Atomic Energy Licensing Act 1984

3) Chemical Weapons Convention Act 2005

4) Customs Act 1967

5) Pesticides Act 1974

6) Plant Quarantine Act 1976

241 Cynthia Lian, Shearn Delamore & Co, ‘Malaysia: Transit and Transhipment of Dual-Use Items

2012’, 1. < https://www.worldecr.com/wp-content/uploads/2012/07/Malaysia.pdf > accessed 1

December 2016.

242 Strategic Trade Act 2010, Sections 2 and 7.

“Section 2 strategic items means any items prescribed as strategic items under section 7”

Section 7

(1) The Minister may, by order published in the Gazette, prescribe any items as strategic items for the purposes of this Act.

(2) If any question arises as to whether any item is or is not included in a class of items

appearing in an order made under subsection (1), such question shall be decided by the

Controller.”

243 Ministry of International Trade and Industry of Malaysia, ‘Strategic Trade Act 2010: Frequently

Asked Questions’, 1. <

http://www.miti.gov.my/miti/resources/STA%20Folder/PDF%20file/FAQ.pdf?mid=280 > accessed 1

October 2016.

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7) Prevention and Control of Infectious Diseases Act 1988

8) Protection of New Plant Varieties Act 2004

9) Poisons Act 1952

10) Malaysian Communications and Multimedia Commission Act 1998

However, if there is any conflict or inconsistency between ten related laws

mentioned above and the Strategic Trade Act 2010 regarding the prevention of the

proliferation of WMD, the Strategic Trade Act 2010 shall prevail and any conflict or

inconsistency provision of other laws shall be superseded.244

A part from the Strategic Trade Act 2010, there are also other relevant four

laws used for controlling the export of dual-use items.245

3.3.1.1 Strategic Trade Act 2010

Strategic Trade Act 2010 of Malaysia is an important export control law

that specifies Authority of Government Agencies246

, transactions subject to control247

,

definition of Strategic Items including DUI248

, permission249

, registration250

and

enforcement.251

In case this Act is in conflict or inconsistent with other laws on export

control of Strategic Items, this Act shall prevail.252

244 Ibid, 1.



246 Strategic Trade Act 2010, Part II.

247 Ibid, Part III.

248 Ibid, Part I.

249 Ibid, Part IV.

250 Ibid.

251 Ibid, Part V.

252 Ibid, Section 3.

“(1) The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any

other written law, including the related laws, relating to the prevention of the proliferation of weapons

of mass destruction and their delivery systems. (2) In the event of any conflict or inconsistency between the provisions of this Act and those of any

other written laws, including the related laws, the provisions of this Act shall prevail and the

conflicting or inconsistent provisions of the other written laws shall, to the extent of the conflict or

inconsistency, be deemed to be superseded.”

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3.3.1.2 Strategic Trade (Strategic Items) (Amendment)

Order 2017

Strategic Trade (Strategic Items) Order specifies the items that will be

controlled under Strategic Trade Act 2010 as “Strategic Items” issued by the Minister

of International Trade and Industry of Malaysia.253

For the Strategic Items in the

Order, are separated into two parts as follows.254

1) Part I: Military Items List which are specified into twenty-two categories

as M1-M22.255

2) Part II: Dual-Use Items List which are specified into ten categories as

following.256

- Category 0: Nuclear Materials, Facilities and Equipment

- Category 1: Special Materials and Related Equipment

- Category 2: Materials Processing

- Category 3: Electronics

- Category 4: Computers

- Category 5: Telecommunication and Information Security

- Category 6: Sensors and Lasers

- Category 7: Navigation and Avionics

- Category 8: Marine

- Category 9: Aerospace and Propulsion

3.3.1.3 Strategic Trade (Restricted End-Users and Prohibited

End-Users) Order



December 2016.

254 Ibid.

255 Strategic Trade (Strategic Items) (Amendment) Order 2017.

256 Ibid.

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67

Strategic Trade (Restricted End-Users and Prohibited End-Users) Order

issued by Minister of the Ministry of International Trade and Industry of Malaysia.

This Order specifies the countries restricted end-user or prohibited end-

user.257

Examples of countries restricted end-user are Afganistan, Congo, Eritria, Iran,

Iraq, Ivory Coast, Lebanon, Liberia, Libya, North Korea, Rwanda, Somalia, Sudan.258

For prohibited end-user are Democratic People’s Republic of Korea and Iran.259

3.3.1.4 Strategic Trade Regulations 2010

This Regulations specify the conditions of export permission, forms,

procedures, payable fees and any related matter including enforcement.260


Transactions subject to control under Malaysia export control system

pursuant to the Strategic Trade Act 2010 are as follows.261

1) Export262

2) Bring in transit263

3) Transship264

257 Cynthia Lian, Shearn Delamore & Co, ‘Malaysia: Transit and Transhipment of Dual-Use Items 2012’, 1. < https://www.worldecr.com/wp-content/uploads/2012/07/Malaysia.pdf > accessed 1

December 2016. 258 Official Portal of the Ministry of International Trade and industry, ‘Prohibited and Restricted End

User List’ < http://www.miti.gov.my/index.php/pages/view/3420 > accessed 15 June 2017.

259 Ibid.


Secure Trading Environment’, 3. 261 Ibid, 5-10.

262 Strategic Trade Act 2010, Section 2.

“export” means—

(a) to take or cause to be taken out of Malaysia any items by land, sea or air, or to place any items in a

conveyance for the purpose of such items being taken out of Malaysia by land, sea or air; or (b) to transmit technology by any means to a destination outside Malaysia, and includes any oral or

visual transmission of technology by a communications device where the technology is contained in a

document the relevant part of which is read out, described or otherwise displayed over the

communications device in such a way as to achieve a similar result.


“bring in transit” means to bring items from any country into Malaysia by and, sea or air, where the

items are to be taken out from Malaysia on the same conveyance on which they are brought into

Malaysia or any other conveyance and whether or not such items are landed or transshipped in

Malaysia, but does not include the passage through Malaysia in accordance with international law of a

foreign conveyance carrying any items.

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4) Brokering265

5) Intangible technology Transfer266


Malaysia has adopted the same concept as that found in the EU List267

which are consistent with the international export control regimes. Thus, Strategic

Items subject to control under the Strategic Trade Act 2010 of Malaysia are separated

as follows.268

3.3.3.1 Listed Items (List Control)

Listed Strategic Items are separated into two lists as follows.269

3.3.3.1.1 Military Items List

In Part I of Strategic Trade (Strategic Items) (Amendment) Order 2017 of

Malaysia, Military Items List which is divided into twenty-two categories as M1-

M22.270

The items in this list are weapons that are used for military purposes.

3.3.3.1.2 Dual-Use Items List


“tranship” means to remove items from the conveyance on which they were brought into Malaysia and

to place the items on the same or another conveyance for the purpose of taking them out of Malaysia

where these acts are carried out on a through bill of lading, through airway bill or through manifest.”

265 Strategic Trade Act 2010, Clause 2.

“brokering” means the activity of a person who, either on his own behalf or acting as an agent on

behalf of another person—

(a) negotiates, arranges for or facilitates the purchasing, financing, conveying, sale or supply of items; or

(b) buys, sells or supplies such items.



267 Sudarat Pongpitak, ‘Investment Promotion for Dual-Use Goods’ (2013) 16.



270 Ibid.

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In Part II of the Strategic Trade (Strategic Items) (Amendment) Order

2017 of Malaysia, Dual-Use Items List is divided into ten categories271

as follows.

- Category 0: Nuclear Materials, Facilities and Equipment

- Category 1: Special Materials and Related Equipment

- Category 2: Materials Processing

- Category 3: Electronics

- Category 4: Computers

- Category 5: Telecommunication and Information Security

- Category 6: Sensors and Lasers

- Category 7: Navigation and Avionics

- Category 8: Marine

- Category 9: Aerospace and Propulsion

Category Codes specified each item in the List prescribed in the Strategic

Trade (Strategic Items) (Amendment) Order 2017 contain 5 characters namely one

character from technical category, one character from the product group, one

character from the regime origin and the remaining two character from the number of

items which are different from HS Codes of Customs Harmonized System.272

The meaning of Category Codes of Listed Items could be explained as

follows.273

1) The first character is from the Technical Category based on ten

categories of Dual-Use Items List

2) The second character is from the Product Group namely

A: Systems, Equipment Components;

271 Ibid




October 2016.



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70

B: Test, Inspection and Product Equipment

C: Materials

D: Software

E: Technology

3) The third character is from the Regime Origin namely

0: Wassenaar or NSG Trigger List

1: MTCR

2: NSG Dual-Use List

3: AG

4: CWC

4) The fourth and Fifth are from the number of items

Examples of Category Code or Export Control Classification Number

(ECCN) include 1C118 (Titanium-stabilized duplex stainless steel)274

, 1C350

(Triethanolamine)275

and 1C216 (Maraging Steel)276

etc.

3.3.3.2 Unlisted277

Items (Catch-all Control)

Under the Strategic Trade Act 2010, although the items are not prescribed

in the Military Items List or Dual-Use Items List, they may be controlled by this Act

under the following criteria.278

1) To be informed by the relevant Authorities that the items may be used

for any restricted activity; or

274 Ibid, 13.

275 Ibid, 14.




October 2016.


“Unlisted Items” means items that may be used in a restricted activity but are not prescribed as

strategic items under section 7.

278 Ibid, Section 12(1).

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2) To know or having reason to believe that the items may be used for

any

restricted activity.

Thus, the permission for export, transit, transshipment of Unlisted Items

has been applied prior to the conduct of such controlled activities.279


The transfer of intangible technology from Malaysia to the destination

outside Malaysia including any oral or visual transmission of technology by any

communication device280

are required to obtain permission if it is related to strategic

goods, software or technology under Dual-Use Items List or any software/technology

which is Unlisted under the Strategic Trade Act 2010.281

3.3.3.4 Special Control for Restricted Country

As a member of the United Nations, Malaysia implements the Resolutions

adopted by the UNSC in domestic laws. Thus, the restricted countries under such

Resolutions are prohibited for exportation or for any controlled activity. For example,

Democratic People’s Republic of Korea and Iran are Prohibited End-User List under

UN Resolution 1718 and 2231 respectively; or Afganistan, Congo, Eritria, Iran, Iraq,

Ivory Coast, Lebanon, Liberia, Libya, North Korea, Rwanda, Somalia, Sudan are

Restricted End-User under UN Sanction List.282

3.3.4 Permission




October 2016.



281 Strategic Trade Act 2010, Sections 2, 7, 8 and 9.

282 Official Portal of the Ministry of International Trade and industry, ‘Prohibited and Restricted End

User List’ < http://www.miti.gov.my/index.php/pages/view/3420 > accessed 15 June 2017.

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According to the Malaysia Export Control System, an exporter has the

duty to review and determine whether his/her/its products are under the controlled of

Strategic Trade Act 2010 or is required to obtain a permission or license prior to

export. In this regard, there are four types of permission namely Single-Use Permit,

Multiple-Use Permit, Bulk Permit and Special Permit.283

3.3.4.1 Single-Use Permit

Single-Use Permit applies to one time export, transit or transshipment to

one country or one destination specified in the permit. This Permit has the period of

validity for 6 months.284

3.3.4.2 Bulk Permit

Bulk Permit must applies to multiple exports or transshipments of the

permitted items to one country or one destination specified in the permit.285

This

Permit has the period of validity for 2 years.286

Application for Bulk Permit will be

considered only in the case that the applicant company has Internal Compliance

Program (ICP) in place.287

3.3.4.3 Multiple-Use Permit



284 Ibid.



December 2016.


Secure Trading Environment’, 19. 287 Ministry of International Trade and Industry of Malaysia, ‘Strategic Trade Act 2010: Frequently



October 2016.

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73

Multiple-Use Permit applies to multiple exports or transshipments of the

permitted items to different countries or different destinations specified in the

Permit.288

This Permit has the period of validity for 2 year.289

However, application

for Multiple-Use Permit will be considered only in the case that the applicant

company has Internal Compliance Program (ICP) in place.290

3.3.4.4 Special Permit

Special Permit applies to one time export, transit or transshipment to one

country or one destination that the end-user is a Restricted End-User291

under the

Strategic Trade (Restricted End-Users and Prohibited End-Users) Order 2010. This

Permit has the period of validity for 1 year.292

3.3.5 Permit for Brokering

To operate brokering activities of the Strategic Items under Strategic Trade

Act 2010 in Malaysia, a person who is a broker is required to register and obtain the

Permit for Brokering such Strategic Items prior to the conduct of activities.293

This

Permit has the period of validity for 1 year.294




December 2016.






October 2016.



December 2016.



293 Strategic Trade Act 2010, Section 11 and 19.




October 2016.

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74

The offences, penalties and sanctions in cases of violation of export

control laws of DUI of Malaysia are mainly based on the provision of the Strategic

Trade Act 2010.


Under the Strategic Trade Act 2010, the severities of penalties are applied

depended on the intention and knowledge of violators. Especially in case where a

violation causes casualties, the violator who is the natural person shall be punished by

a death sentence or life imprisonment. If the violator is a juristic person, it shall be

punished by fine of minimum amount of Ringgit Malaysia 30,000,000.295

3.3.6.1.1 Intentional export, transit, transshipment

without a Permit296

1) For Arms and Related Materials297

If the result of violation causes death, the violator who is the natural

person shall be punished by a death sentence or life imprisonment. If the violator is a

juristic person, it shall be punished by fine of a minimum amount of Ringgit Malaysia

30,000,000.298

In any other case, the violator who is the natural person shall be punished

by imprisonment at least 10 years or with a fine at least of Ringgit Malaysia

10,000,000. If the violator is a juristic person, it shall be punished by fine

of a minimum amount of Ringgit Malaysia 20,000,000.299

2) For other Strategic Items and Unlisted Items300

295 Strategic Trade Act 2010, Section 9(4)(a)(i)(A).

296 Strategic Trade Act 2010, Section 9(4)(a)(i) and 9(4)(b)(i).

297 Ibid, Section 9(4)(a)(i).

298 Ibid, Section 9(4)(a)(i)(A).

299 Ibid, Section 9(4)(a)(i)(B).

300 Section 9(4)(b)(i).

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The violator who is the natural person shall be punished by imprisonment

at least 10 years or fine at least of Ringgit Malaysia 10,000,000 or both. If the violator

is a juristic person, it shall be punished by fine of a minimum of amount Ringgit

Malaysia 20,000,000.301

3.3.6.1.2 Unintentionally export, transit, transshipment

without a Permit302

1) For Arms and Related Materials303

The violator who is the natural person shall be punished imprisonment at

least 5 years or with a fine at least of Ringgit Malaysia 5,000,000. If the violator is a


10,000,000.304

2) For other Strategic Items and Unlisted Items305


at least 5 years or fine at least of Ringgit Malaysia 5,000,000 or both. If the violator is

a juristic person, it shall be punished by fine a minimum amount of Ringgit Malaysia

10,000,000.306

3.3.6.1.3 Export, transit, transshipment Strategic Items to

Restricted End-User without a Special Permit307

1) Intentional export, transit, transshipment of Arms or Related Material308

301 Ibid.

302 Ibid, Section 9(4)(a)(ii) and 9(4)(b)(ii).

303 Ibid, Section 9(4)(a)(ii).

304 Ibid.

305 Ibid, Section 9(4)(b)(ii).

306 Ibid.


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76




30,000,000.309





2) Intentional export, transit, transshipment of other Strategic Items and

Unlisted Items311



is a juristic person, it shall be punished by fine of a minimum amount of Ringgit

Malaysia 20,000,000.312

3) Unintentional export, transit, transshipment of Arms or Related

Material313


at least 5 years or with a fine at least of Ringgit Malaysia 5,000,000. If the violator is




311 Ibid, Section 9(5)(b)(i).

312 Ibid.


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77

a juristic person, it shall be punished by fine of a minimum amount of Ringgit

Malaysia 10,000,000.314

4) Unintentional export, transit, transshipment of other Strategic Items and

Unlisted Items315




Malaysia 10,000,000.316

3.3.6.1.4 Export, transit, transshipment of Strategic Items

to prohibited End-User317

1) Intentional export, transit, transshipment of Arms or Related Material318




30,000,000.319


imprisonment at least 10 years or with a fine at least of Ringgit Malaysia 10,000,000.

If the violator is a juristic person, it shall be punished by fine of a minimum amount of

Ringgit Malaysia 20,000,000.320

2) Intentional export, transit, transshipment of other Strategic Items and

314 Ibid.


316 Ibid.





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78

Unlisted Items321



is a juristic person, it shall be punished by fine of a minimum amount of Ringgit

Malaysia 20,000,000.322

3) Unintentional export, transit, transshipment of Arms or Related

Material323


at least 5 years or with a fine at least of Ringgit Malaysia 5,000,000. If the violator is


Malaysia 10,000,000.324

4) Unintentional export, transit, transshipment of other Strategic Items and

Unlisted Items325




Malaysia 10,000,000.326

3.3.6.1.5 Operation of brokering of Strategic Items

without permit327

1) Brokering of Arms or Related Material328

321 Ibid, Section 9(6)(b)(i).

322 Ibid.


324 Ibid.


326 Ibid.


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30,000,000.329





2) Brokering of other Strategic Items and Unlisted Items331

The violator who is the natural person shall be punished imprisonment at

least 5 years or with a fine at least of Ringgit Malaysia 5,000,000. If the violator is a


10,000,000.332

3.3.6.1.6 Provision of technical assistance for use in

connection with a Restricted Activity333



328 Ibid, Section 11(2)(a).



331 Ibid, Section 11(2)(b).

332 Ibid.

333 Ibid, Section 10 (1) “No person shall provide any technical assistance within or outside Malaysia if

such technical assistance is intended for use in connection with a restricted activity.

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80

juristic person, it shall be punished by fine of a minimum of amount Ringgit Malaysia

30,000,000.334


imprisonment at least 10 years or with a fine at least of Ringgit Malaysia 10,000,000.

If the violator is a juristic person, it shall be punished by fine of a minimum amount of

Ringgit Malaysia 20,000,000.335

3.3.6.1.7 Failure to Provide Information in the

Statement336

For offence of failure to provide information in the statement as a result of

the submission of false information or misleading information in any application,

report or other document for any purpose under the requirement of Strategic Trade

Act 2010 or other relevant laws, the violator who is the natural person shall be

punished by fine not exceeding 1,000,000 Ringgit Malaysia or by imprisonment for a

term not exceeding 2 years or both. If the violator is a juristic person, it shall be

punished by fine of a minimum amount of Ringgit Malaysia 2,000,000.337


334 Ibid, Section 10(2)(a).

335 Ibid, Section 11(2)(b).

336 Strategic Trade Act 2010 Section 40 (1) “A person who submits false or misleading information in

any application, report or other document for any purpose under this Act or the related laws commits

an offence and shall, on conviction, be punished with a fine not exceeding one million ringgit or with

imprisonment for a term not exceeding two years or with both, and in the case of a body corporate, be

punished with a minimum fine of two million ringgit.


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In Malaysia, there is Internal Compliance Program (ICP) which is the

required by Bulk Permit and Multiple-Use Permit. 338

ICP is the required internal procedures used for ensuring related operations

of a company who is an applicant to apply for Bulk Permit and Multiple-Use

Permit.339

ICP has been established in order to satisfy and ensure that efficient internal

control is in place.340

The key requirements of ICP are as follows.341

1) Company’s Commitment Statement

2) Strategic Goods Officer/ Committee at management level

3) Export control policy and procedure of the company

4) Screening processes such as product classification, product screening,

transaction screening, end-destination screening, end-user screening,

end-use screening and shipping-control

5) Reporting and emergency notification

6) Record Keeping, proper keeping period of document related to all

transaction of Strategic Items is at least six years.342

7) Regular Training/ Education

8) Audit

Figure 3.3 Permission of DUI under Malaysia Laws in Briefing343



December 2016.

339 Ministry of International Trade and Industry of Malaysia, ‘Export Control Internal Compliance

Program: Internal Compliance Program-A Guide’, 1.

<http://www.miti.gov.my/miti/resources/STA%20Folder/PDF%20file/Internal_Compliance_Program_

ICP_Guide.pdf >

340 Ibid. 341 Cynthia Lian, Shearn Delamore & Co, ‘Malaysia: Transit and Transhipment of Dual-Use Items


December 2016.

342 Ibid.

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343 Strategic Trade Secretariat, Ministry of International Trade and Industry of Malaysia, ‘Facilitating

Trade in A Secure Trading Environment: What SME’s Need to Know on Strategic Trade Act 2010’,

24.

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CHAPTER 4

EXPORT CONTROL ON DUAL-USE ITEMS IN THAILAND

Before the issuance of the Ministerial Notification Specifies Dual-Use

Items as Goods Requiring Permission and Complying the Export Measures B.E.2558

(2015), Ministry of Commerce,, there were many export control laws of Thailand

adopted (enforced) relevant government agencies to control arms and armament, war

implements, chemical materials, toxic chemicals, chemical precursors,

microorganism, pathogen, animal toxin, radio communication equipment, Uranium,

Thorium, Plutonium and other by-products which could be used or applied for WMD

as follows.

1) Under the responsibility of Defence Industrial Department, Ministry of

Defence, there are 3 laws to control arms and armament, war implements, chemical

materials as follows.

a. The Act Controlling the Exportation of Arms, Armament and War

Implement, B.E.2495 (1952);

b. The Royal Decree Controlling the Exportation of Arms, Armament

and War Implement, B.E.2535 (1992), (No.2) B.E.2552 (2009);

c. Arms Control Act, B.E.2530 (1987).

Under the laws mentioned above, Ministry of Defence is responsible for

controlling of production, possession, importation, exportation and transfer of arms

and munitions by having the authority to approve the license based on the

consideration of end-user verification and purchase contract.

2) Under the responsibility of Department of Industrial Works, Ministry of

Industry, there is only the Hazardous Substance Act, B.E.2535 (1992) to control toxic

chemicals and chemical precursors.

Under this law, Ministry of Industry is responsible for controlling of

importation and exportation of toxic chemicals and any hazardous chemicals by

having the authority to approve license and setting inspection measures.

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3) Under the responsibility of Department of Medical Sciences, Ministry

of Public Health, there is only Pathogen and Animal Toxin Act, B.E.2558 (2015) to

control microorganism, pathogen and animal toxin.

4) Under the responsibility of Office of the National Broadcasting and

Telecommunications Commission, there is Radio Communication Act, B.E.2498

(1955) to control radio communication equipment.

5) Under the responsibility of Office of Atoms for Peace, Ministry of

Science and Technology, there is the Atomic Energy for Peace Act, B.E.2504 (1961)

to control Uranium, Thorium, Plutonium and other by-products that was repealed by

the Nuclear Energy for Peace Act, B.E.2559 (2016) issued in 2016 to control nuclear,

other radioactive materials and nuclear facilities.

6) Under the responsibility of Department of Foreign Trade, Ministry of

Commerce, there is the Export and Import of Goods Act, B.E.2522 (1979) to control

other goods which are not control by the other government agencies. Nevertheless, no

any applicable list of Dual-Use Items has been publicized.

7) Under the responsibility of the Customs Department, Ministry of

Finance, there is the Customs Act, B.E.2557 (2014) to control import, export, transit,

transshipment and re-export of goods under the customs law and other laws under the

control of related government agencies which empower to the Customs Departments.

The laws mentioned above are designed to control arms, armaments, war

implements, chemical materials, toxic chemicals, chemical precursors,

microorganism, pathogen, animal toxin, radio communication equipment and

Uranium, Thorium, Plutonium and other items which are weapons or could be used or

applied for WMD directly. However, there had been no applicable export control law

of DUI in Thailand until the Thai Cabinet endorsed the UNSCR 1540 (2004) on 10

August 2004. After such endorsement, the Cabinet has implemented the plans for

Thailand to comply with UNSCR 1540 since 20 July 2010 and the Ministry of

Commerce has been assigned to be the authorized agency to set Trade Management of

Dual-Use Items (TMD) including List of DUI. Then, the Ministerial Notification


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Measures B.E.2558 (2015), Ministry of Commerce, was issued to implement the

UNSCR 1540 (2004) in 2015. Such Ministerial Notification is issued the provision of

Sections 5 (2), 5 (6) and 25 of the Import and Export of Goods pursuant to Act B.E.

2522 (1979) which is the first national export control law of DUI of Thailand and

executed by the Department of Foreign Trade, Ministry of Commerce. Thus, this

thesis studies and focuses on export control law of DUI under the responsibility of the

Department of Foreign Trade, Ministry of Commerce.

4.1 Applicable Export Control System in Thailand

The UNSCR 1540 (2004) on the prevention of proliferation of WMD

adopted by the UNSC on 28 April 2004 under the Chapter VII of Charter of the

United Nations.344

In response to the UNSC’s decisions, Article 25345

of the Charter

of the United Nations requires the members of the United Nations to accept and carry

out the decisions of the UNSC in accordance with the Charter of the United Nations

and Article 48346

of such Charter requires the members of the United Nations to carry

out the decisions of the UNSC for the maintenance of international peace and

security. Therefore, the members of the United Nations including Thailand is

obligated to accept and carry out the UNSC’s decisions including UNSCR 1540

(2004).

In implementing the UNSC Resolutions 1540 (2004) under Articles 25 and

48 of the Charter of the United Nations that requires Thailand and other members to

establish its national export control measures with an aim to prevent the proliferation

of WMD or any related materials including to set up and enforce export control laws

over DUI, Thailand, by the Minister of the Ministry of Commerce and upon

344 United Nations Security Council Resolution 1540.

345 The Charter of United Nations, Article 25.









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authorization by the Cabinet, issued the Ministerial Notification Specifies Dual-Use

Items as Goods Requiring Permission and Complying the Export Measures B.E.2558

(2015) by virtue of the provisions of Sections 5 (2), 5 (6) and 15 of Import and Export

of Goods Act B.E. 2522 (1979) which is the first national export control law on DUI.


In Thailand, the Ministerial Notification Specifies Dual-Use Items as

Goods Requiring Permission and Complying the Export Measures B.E.2558 (2015) is

the first specific laws on export control of DUI.

Section 3 of the Ministerial Notification mentioned above defines the

“Dual-Use Goods” to mean goods which can be used for both commercial and

military applications, in design, development, manufacture, utilization, modification,

storage, transport or by an act in any way in order to acquire weapon of mass

destruction. Likewise, the terms “weapon of mass destruction” means nuclear

weapon, chemical weapon, biological weapon or any other weapon, which can cause

harm to a large number of casualty or cause serious damage to environment, including

guidance system with rocket, missile or any other unmanned air system of these

weapons.347


This Ministerial Notification is issued pursuant to the provisions of

Sections 5 (2), 5 (6) and 15 of the Import and Export of Goods Act B.E. 2522

(1979). Therefore, the transactions subject to control are export, re-export of dual-

use goods, (bringing in) transit348

which include transit and transshipment of related to

such goods.


Complying the Export Measures B.E.2558 (2015) Section 3.

348 Export of Goods Act B.E. 2522 (1979)

“Bringing in Transit” refers to activities that goods with an origin and final destination outside of

country are passing through Thailand regardless of whether there is any warehousing, changing of

mode of transport, changing of container for transportation involved. It is prohibited to use such goods

within the country.

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However, the Ministerial Notification Specifies Dual-Use Items as Goods

Requiring Permission and Complying the Export Measures B.E.2558 (2015) does not

cover intangible technology transfer which are any software or the electronic

transmission of DUI via e-mail, fax, computer or server are not specified under

“Controlled Activities” in this Ministerial Notification. Likewise, the scope of goods

defined in the Ministerial Notification Specifies Dual-Use Items as Goods Requiring

Permission and Complying the Export Measures B.E.2558 (2015) covers tangible

goods only.349

Moreover, there is no provision on brokering both in the Import and

Export of Goods Act B.E. 2522 (1979) and in the Ministerial Notification.


Under the Ministerial Notification Specifies Dual-Use Items as Goods

Requiring Permission and Complying the Export Measures B.E.2558 (2015),

controlled lists are as follows.

4.1.3.1 List 1 or List of Dual-Use Items

List 1 is prepared based on the EU List that is consistent with the goods

under the Multilateral Export Control Regimes namely NSG, AG, MTCR, WA and

CWC comprising nine categories as follows.350

Category 0: Nuclear material, Facilities and Equipment

Category 1: Special Material and Related Equipment

Category 2: Materials Processing

Category 3: Electronics

Category 4: Computer

Category 5: Telecommunications and “Information Security”

Category 6: Sensors and Lasers

Category 7: Navigation and Avionics

Category 8: Marine

Category 9: Aerospace and Propulsion


the Export Measures B.E.2558 (2015) Section 3. 350 Ibid, List of Dual-Use Items.

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4.1.3.2 List 2 or HS Code List

List 2 is prepared based on the HS Code of controlled goods.

4.1.4 Export Permission

At present, the Ministry of Commerce of Thailand has established the

system of Trade Management of Dual-Use Items and plans to apply this system to the

activities controlled by the Import and Export of Goods Act B.E. 2522 (1979) and the

Ministerial Notification Specifies Dual-Use Items as Goods Requiring Permission and

Complying the Export Measures B.E.2558 (2015) such as export, re-export, transit

and transshipment; however, no any legislation or applicable laws has been

publicized.

4.1.4.1 E-Classification

The Ministry of Commerce announced in the seminar that this system is

used for classifying and verifying dual-use goods.351

4.1.4.2 E-Certification

This system used for certifying that the goods in List 2 (HS Code List) of

the Ministerial Notification Specifies Dual-Use Items as Goods Requiring Permission

and Complying the Export Measures B.E.2558 (2015) are not for dual-use goods.352

4.1.4.3 E-Licensing

This system is used for verifying End-Use and End-User before approve

export license. Currently, there is no legislation or applicable law.

351 Department of Foreign Trade, Trade Management of Dual-Use Items: TMD/ Trade Control of

Weapons of Mass Destruction Related Items: TCWMD, 25 May 2016.


the Export Measures B.E.2558 (2015), Section 5.

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4.1.5 Offences, Penalties and Sanctions

4.1.5.1 Export without License353

Violator shall be punished by imprisonment not exceeding ten years or

fine equivalent to five times of the value of exported goods, or both. Moreover, such

goods including containers and vehicles used in connection with this violation shall be

confiscated.354

4.1.5.2 Failure to Comply with The Notification Issued by

Ministry of Commerce or Ministry of Finance

Violator who failed to comply with the Notifications shall be punished by

imprisonment not exceeding 1 year or fine not exceeding 20,000 Baht, or both. 355


Currently, there is no applicable law or legislation regarding internal

compliance program in Thailand; but, the Department of Foreign Trade, Ministry of

Commerce has announced a plan to issue the ICP in compliance with the Ministerial


Complying with the Export Measures B.E.2558 (2015) which is the requirement of

Bulk Permission. ICP has been established in order to satisfy and ensure that efficient

internal control is in place. The key requirements of ICP in each entity should be.356

1) Commitment of Top Management

2) Trade Screening for End-Use and End-User

3) Training

4) Record Keeping

5) Auditing

353 Import and Export of Goods Act B.E. 2522 (1979), Section 7.

354 Ibid, Section 20. 355 Ibid, Section 22.

356 Department of Foreign Trade, Ministry of Commerce of Thailand, “Trade Management of Dual-Use

Items: TMD (Trade Control on Weapons of Mass Destruction Related Items: TCWMD), 29.

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6) Penalties and Reporting

Figure 4.1 Permission of DUI under Thai Laws in Briefing

4.2 Draft Trade Control of WMD Related Items

During the grace period of the Ministerial Notification Specifies Dual-Use

Items as Goods Requiring Permission and Complying with the Export Measures

B.E.2558 (2015), no clear regulations are applied under this Ministerial Notification.

However, the Thai government has announced a plan to enact the new export control

law of DUI called “Draft Trade Control of WMD Related Items or TCWMD” and the

principles of this Draft are approved by the Cabinet since 4 October 2016 to control

export, re-export, transit, transshipment and brokering all goods that can be applied

for WMD including DUI for preventing proliferation of WMD. After such approval,

the draft TCWMD will be considered by the Office of the Council of State before

proposing to National Legislative Assembly for enactment.


The new draft export control law of DUI called the “Draft-Trade Control

of WMD Related Items”

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4.2.2 Transaction Subjected to Control

Controlled transactions under the Draft Trade Control of WMD Related

Items include export, re-export, transshipment, bring-in transit and brokering.357

However, intangible technology transfer which are any software or the

electronic transmission of DUI via e-mail, fax, computer or server are not specified

under “Controlled Activities” in the new Draft.358

Then, the scope of goods in the

definition of this laws still focuses on tangible goods only. It does not cover intangible

technology transfer.


Currently, the Draft controlled items or List of Dual-Use Items has not

been announced. Nevertheless, the Department of Foreign Trade should use same

scheme with that of the Ministerial Notification Specifies Dual-Use Items as Goods

Requiring Permission and Complying with the Export Measures B.E.2558 (2015) that

could be specified the controlled lists as follows.359

4.2.3.1 List 1 or List of Dual-Use Items

List 1 is prepared based on the EU List that is consistent with the goods

under the Multilateral Export Control Regimes namely NSG, AG, MTCR, WA and

CWC comprising nine categories as follows.360

Category 0: Nuclear material, Facilities and Equipment

Category 1: Special Material and Related Equipment

Category 2: Materials Processing

Category 3: Electronics

Category 4: Computer

357 Draft of Trade Control of WMD Related Items Act, Section 3 “Controlled Activities”.

358 Ibid.




with the Export Measures B.E.2558 (2015), List of Dual-Use Items.

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Category 5: Telecommunications and “Information Security”

Category 6: Sensors and Lasers

Category 7: Navigation and Avionics

Category 8: Marine

Category 9: Aerospace and Propulsion

4.2.3.2 List 2 or HS Code List

List 2 is prepared based on HS Code of controlled goods including

Munitions List and other List specified by characteristic of goods.361

4.2.4 Export Permission

Currently, the Draft export permission has not been announced.

Nevertheless, the Department of Foreign Trade should use same scheme with that of

the Ministerial Notification Specifies Dual-Use Items as Goods Requiring Permission

and Complying with the Export Measures B.E.2558 (2015) to control related

activities such as export, re-export, transit, transshipment, brokering and financing

that could be specified the type of export permission as follows.362

4.2.4.1 E-Classification

The Ministry of Commerce announced in the seminar that this system is

used for classifying and verifying Dual-Use Goods.363


Items: TMD (Trade Control on Weapons of Mass Destruction Related Items: TCWMD), 20. 362

Department of Foreign Trade, Ministry of Commerce of Thailand, “Trade Management of Dual-Use

Items: TMD (Trade Control on Weapons of Mass Destruction Related Items: TCWMD), 24. 363 Department of Foreign Trade, Trade Management of Dual-Use Items: TMD/ Trade Control of

Weapons of Mass Destruction Related Items: TCWMD, 25 May 2016.

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4.2.4.2 E-Certification

This system used for certifying that the goods in HS Code List of the new

Draft does not cover Dual-Use Goods.364

4.2.4.3 E-Licensing

This system is used for verifying End-Use and End-User before approving

export license. Currently. There is no legislation or applicable law.

4.2.5 Offences, Penalties and Sanctions

In the Draft, the provisions regarding penalties are specified in Chapter 6

as follows.365

4.2.5.1 Export, transit, transship and brokering without

the Permission

The violator shall be punished by imprisonment not exceeding 10 years or

fine not exceeding 10,000,000 Baht or both.366

Furthermore, the Dual-Use Goods

including the container or package in this matter shall be confiscated.367

364The Ministerial Notification Specifies Dual-Use Items as Goods Requiring Permission and

Complying the Export Measures B.E.2558 (2015), Article 5.

365 New Draft of Trade Control of WMD Related Items Act approved by the Cabinet on 4 October

2016, Section 39-52.

366 Ibid, Section 39 para 1.


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4.2.5.2 Intentional export, transit, transshipment and brokering

without Permission to design, develop, utilize, modify,

store, deliver, support or act in any way in order to

acquire WMD or use it to cause harm to any person




including the container or package in this matter shall be seized.369

4.2.5.3 Violation of the measures with the aim to control the

proliferation of goods related to WMD issued under

Section 9(3)





4.2.5.4 Violation of the measures with the aim to control

the proliferation of goods related to WMD issued under

Section 9(3) in order to design, develop, utilize, modify,

store, deliver, support or act in any way to acquire WMD

or use it to cause harm to any person





4.2.5.5 Violate the measure for Controlled Activities with the aim

to control the proliferation of goods related to WMD

issued under Section 10



370 Ibid, Section 40 para 1. 371 Ibid, Section 40 para 3. 372 Ibid, Section 40 para 2. 373 Ibid, Section 40 para 3.

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4.2.5.6 Violation of the measures for Controlled Activities with

the aim to control the proliferation of goods related to

WMD issued under Section 10 in order to design, develop,

utilize, modify, store, deliver, support or act in any way to

acquire WMD or use it to cause harm to any person



4.2.5.7 Intentional export, transit, transshipment and brokering

without the Permission in order to design, develop, utilize,

modify, store, deliver, support or act in any way to

acquire WMD or use it to cause harm to any person and

the result cause the death

The violator shall be punished by life imprisonment or imprisonment not

exceeding 30 years and fine not exceeding 50,000,000 Baht.376

4.2.5.8 Violation of the measures with the aim to control the

proliferation of goods related to WMD issued under

Section 9(3) in order to design, develop, utilize, modify,

store, deliver, support or act in any way to acquire WMD




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or use it to cause harm to any person and the result cause

the death



4.2.5.9 Violation of the measures for Controlled Activities with

the aim to control the proliferation of goods related to

WMD issued under Section 10 in order to design, develop,

utilize, modify, store, deliver, support or act in any way to

acquire WMD or use it to cause harm to any person and

the result cause the death



4.2.5.10 Submission of false information or misleading

information in order to obtain the permission or

any certification for Controlled Activities, End-Use

or End-User under Section 9



4.2.5.11 Obstruction of the Authority who has the duties under

Section 32 and 35 or Failure to provide facilitation

The violator shall be punished by imprisonment not exceeding 1 year or

fine not exceeding 50,000 Baht or both.380

377 Ibid.

378 Ibid.



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4.2.5.12 Permission by owner of license, certificate or any other

document to allow any person to use license, certificate

or any other document issued under Section 9 for

Controlled Activities related to WMD which is not

his/her/its activities



4.2.5.13 Failure to renew within the due date

The violator shall be punished by fine not exceeding 2,000 Baht.382

4.2.5.14 Use of the license or any other document issued under

Section 9 expired


4.2.5.15 Provision of false statements or submission of

explanation, account, information, document or

any evidence under Section 32 (4) and (5)


4.2.5.16 Liabilities of director manager or any persons

responsible for385

the operations of the entity

The penalty provisions in this Draft will include a presumption that the

managing director, manager or any persons responsible for the operations of the entity

found to be in violation of this Draft; if a violation by such legal entity is due to an

order or performance of any person, or a neglect of order or, a neglect of a duty as






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required as a managing director or of any person who is responsible for carrying out

the business of such entity, such person shall be penalized according to the provisions

prescribed for such violations.


Currently, there is no official announcement of Internal Compliance

Program (ICP) under this Draft; but, the Department of Foreign Trade, Ministry of

Commerce will use same scheme as the plan issued to comply with the Ministerial


Complying with the Export Measures B.E.2558 (2015) which is the requirement of

Bulk Permission. ICP has been established in order to satisfy and ensure that efficient

internal control is in place.

The key requirement of ICP in each entity should be.386

1) Commitment of Top Management

2) Trade Screening for End-Use and End-User

3) Training

4) Record Keeping

5) Auditing

6) Penalties and Reporting

4.3 Problem on Export Control of Dual-Use Items in Thailand

After examining Thai laws on export control of DUI regarding the

background, international law, foreign laws namely Japan, Singapore and Malaysia

comparing with Thai laws, the Author found the problems as follows.

4.3.1 Non-Compliance with UN Resolution 1540 on the Control of

Brokering



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Referring to the activities subjected to control under Thai laws, there is no

provision on brokering both in the Import and Export of Goods Act B.E. 2522 (1979)

and in the Ministerial Notification. Thus, this Ministerial Notification does not covers

the requirements of UNSCR 1540 because its enforcement does not cover brokering

and intangible technology transfer that are Controlled Activities under UNSCR 1540.

Comparing with the other countries namely Japan, Singapore and Malaysia

as mentioned in the previous Chapter, all countries have the control provisions of

brokering transactions related to DUI.

Thus, Thailand as a UN member state is required to comply with the

Resolution by establishing “Export Control Measure” that covered DUI and


4.3.2 Non-Compliance with UN Resolution 1540 on the Control of

Technology

Referring to the definition of “Dual-Use Goods” under this Notification

that refers to goods which can be used for both commercial and military applications,

in design, development, manufacture, utilization, modification, storage, transport or

act in any way in order to acquire weapon of mass destruction,387

there is no other

regulations issued under the Ministerial Notification Specifies Dual-Use Items as

Goods Requiring Permission and Complying with the Export Measures B.E.2558

(2015) which control transaction of brokering and technology transfer. Thus, this

Ministerial Notification does not covers the requirements of UNSCR 1540 because its

enforcement does not cover brokering and intangible technology transfer that are

Controlled Activities under UNSCR 1540.

Comparing with the other countries namely Japan, Singapore and Malaysia

as mentioned in the previous Chapter, all countries have the control provisions of



Complying the Export Measures B.E.2558 (2015), Section 3.

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For Japan, the controlled list of technologies is under the Foreign

Exchange Order issued by the Cabinet under Article 25 of Foreign Exchange and

Foreign Trade Act that are separated into three cases as follows.

(1) Technology Transfer from Japan to Foreign Company that any person

who would like to transfer technology specified in the controlled List from Japan to

other countries is required to obtain permission. However, such permission is not

applied in the case that the person would like to use such technologies by himself in

other countries.388

(2) Transfer within Japan that a person who is a resident of Japan would

like to transfer technologies controlled by the List under the Foreign Exchange Order

to a non-resident in Japan, the resident is also required to obtain the permission.389

(3) Technology Transfer in Foreign Country that the person who is a

resident of Japan would like to transfer technologies controlled by the List under the

Foreign Exchange Order to a non-resident in foreign countries, the resident is required

to obtain permission.390

Nevertheless, such permission is not applied to a case where

such technology originates outside Japan and its transactions are accomplished

outside Japan.391

For Singapore, the transfer of intangible technology in Singapore is

required to obtain permission if it is strategic goods, software or technology under

Dual-Use List or any software/technology under Catch-all Control.

For Malaysia, the transfer of intangible technology from Malaysia to the

destination outside Malaysia including any oral or visual transmission of technology

388 The Foreign Exchange and Foreign Trade Act, Art 25.

389 Ibid.

390 Ibid.


(4th edn, 2015) 12-13.

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by any communication device392

are required to obtain permission if it is related to

strategic goods, software or technology under Dual-Use Items List or any

software/technology which is Unlisted under the Strategic Trade Act 2010.393

Therefore, Thailand as a UN member state is required to comply with the

Resolution by establishing “Export Control Measure” that covered DUI and


4.3.3 Export Control System

Referring to the Ministerial Notification Specifies Dual-Use Items as

Goods Requiring Permission and Subject to Comply with the Export Measures

B.E.2558 (2015), which cover the dual-used items that may have impact on big

industries as follows.

1) Automotive

2) Steel

3) Electronics

4) Semiconductors

5) Computer

6) Telecommunications

7) Chemical and pharmaceutical

8) Medical

This Ministerial Notification shall come into force on 1 January 2018394

.

However, there is no regulation under or related to this Notification that. Therefore,

exporters could not prepare themselves for the compliance.

After studying export control laws on Dual-Use Items in Thailand and

comparing then with those of Japan, Singapore and Malaysia, there is no specific laws



393 Strategic Trade Act 2010, Sections 2, 7, 8 and 9.


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regarding the export license measures in Thailand that exporters are subject to apply

for the permission prior to export DUI395

under Ministerial Notification mentioned

above. Thus, there are unclear procedures that may create an obstacle to exporters to

comply with such laws.

4.3.4 Penalty and Sanction

In case of violation, the penalties for having no export license or for failure

to comply with such Ministerial Notification is too high and not consistent with the

act of violator because violator is subject to be liable under the provision of section 22

of Import and Export of Goods Act B.E. 2522 (1979) to be punished by imprisonment

not exceeding ten years or fine equivalent to five times of the value of exported

goods, or both whether by intention or mistake. Comparing applicable laws of

Thailand with Japan, Singapore and Malaysia, there are some differences between

those and those of Thailand. All countries except Thailand consider the penalty of

each offense based on the ground of intention and knowledge of violator.

For Japan, the violator who export or brokerage of goods or technologies

related to WMD without permission shall be punished by imprisonment or fine with

the rate of penalty higher than the violator who export or brokerage of goods or

technologies related to convention arms. Likewise, the administrative sanction will be

applied for a violation of a petty offense that a violator shall be punished by

prohibition of export not more than 3 years. Certain, the METI has the authority to

issue a warning which is served upon a violator when the violation is not so serious.

For Singapore, to commit the offence regarding false declarations or

failure to comply with conditions of permit, the violator shall be punished by

imprisonment or fine with the rate of penalty higher than the offence regarding refusal

or failure to keep or submit record.

For Malaysia, the violator who intended to export arms and related

materials without the permit shall be punished by a death sentence or life

395 Ibid, Section 4 and 5.

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imprisonment, if the result of violation causes death. But, in any other case, the

violator shall be punished by imprisonment at least 10 years or with a fine at least of

Ringgit Malaysia 10,000,000.

Thus, from the author’s point of view, the penalty and sanction of Thailand

is not appropriate.

Although Thailand has ratified the International Covenant on Civil and

Political Right (ICCPR) adopted by the United Nations General Assembly (UNGA)

since 1996, death penalty could be imposed in case of most serious crimes. Death

penalty in cases that the violators have intention to kill or result of the offences are the

loss of life is not in conflict with the right to life under Article 6 of the ICCPR. Then,

provisions of each offences and penalties under the new Draft Trade Control of WMD

Related Items Act are more appropriate than those in the Ministerial Notification.

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CHAPTER 5

CONCLUSION AND RECOMMENDATIONS

5.1 Conclusion

This thesis focuses on export control laws of DUI in Thailand that are

controlled by the Ministerial Notification Specifies Dual-Use Items as Goods

Requiring Permission and Complying with the Export Measures B.E.2558 (2015).

As compared to the laws of Japan, Singapore and Malaysia, it can be

concluded that the Thai Ministerial Notification Specifies Dual-Use Items as Goods

Requiring Permission and Subject to Comply with the Export Measures B.E.2558

(2015) does not cover the requirements of UNSC Resolution 1540 because its

implementation does not cover brokering and intangible technology transfer.

Furthermore, Thailand has no provisions regarding export permission

measures of DUI. Thus, this may cause unclear practices in operation of the exporters.

Based on the study in Chapter 3 of this thesis, Japan, Singapore and Malaysia have

the export permission measures and the types of permission are categorized as

Individual Permission and Bulk Permission that are convenient for exporters to apply

and comply with such measures. Comparing with the laws of Japan, Singapore and

Malaysia, Thailand should establish export control measures of DUI for trade

management such as export license procedure, technology transfer procedures and

internal control program for exporters etc. in order to ensure that the dual-goods are

controlled and the entrepreneurs and their staffs are able to understand and comply

with the Thai export control laws.

Moreover, the Ministerial Notification Specifies Dual-Use Items as Goods

Requiring Permission and Complying with the Export Measures B.E.2558 (2015) is

prescribed under the “Export and Import of Goods Act B.E.2522 (1979)” in which the

penalty in case of violations of this Notification have to be based on Section 22 of

such Act. Thus, if there are a violation of this Notification whether by intention or

mistake, violator shall be punished by imprisonment not exceeding ten years or fine

equivalent to five times of the price of exported goods, or both, and the goods

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105

including containers and vehicles used in connection with such violation shall be

confiscated. Comparing the laws of Thailand with those of Japan, Singapore and

Malaysia, all countries except Thailand consider the penalty of each offense based on

the ground of intention and knowledge of violator. This is the significant differences

that Thai government should consider for developing Thai laws to encourage the

investors to operate DUI business in Thailand.

Therefore, this thesis suggests that it be an appropriate time for Thailand to

enact the “Trade Control on Weapons of Mass Destruction Related Items Act” that

covers dual-use goods, intangible technology transfer and any activities related to

WMD in order to ensure security and to protect the benefits of the state in compliance

with international agreements and to protect Thai entrepreneurs from non-tariff trade

barriers in other countries.

5.2 Recommendations

From the analysis mentioned above and the author’s perspectives, this

thesis would like to provide the recommendations as follows.

5.2.1 Establishment of Export Control for Brokering and Technology

Transfer

The Ministerial Notification controls only export of Dual-Use Goods396

from Thailand; but, it does not cover brokering and technology transfer397

that

Resolution 1540 requires all member states to take and enforce effective measures to

establish domestic controls over WMD related materials, equipment and technology

covered by relevant multilateral treaties which could be used for the design,

development, production or use of WMD.398

Therefore, Thailand as a UN member

state is required to comply with the Resolution by establishing “Trade Control on

Weapons of Mass Destruction Related Items Act” that covered DUI, technology

transfer and any activities of WMD namely export, re-export, transshipment, transit


Complying the Export Measures B.E.2558 (2015), Ministry of Commerce, s 3. 397Tamotsu Aoi, Historical Background of Export Control Development in Selected Countries and

Regions (2016) 17. 398 United Nation Security Council Resolution 1540 (2004), Definitions 1.

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106

and brokering in order to prevent the proliferation of WMD and to strengthen export

control enforcement of Thailand.

5.2.2 Categories of Export License as Individual License and

Bulk License

Under the Trade Control on Weapons of Mass Destruction Related Items

Act, the Thai government should formulate regulations for technology or software

transfer and export license issuance on controlled transactions namely export, re-

export, transshipment, bringing in transit and brokering by adopting Japanese laws

because export permission under the Japanese laws is issued by item and shall be

based on the country of destination together with the recipient entity; then, export

license should be separated into two types of license as follows.

5.2.2.1 Individual License

For Individual License, the permission is based on a transaction.

5.2.2.2 Bulk License

For Bulk License the permission is valid for multiple transactions into with

the specified period in which exporter is required to establish proper internal control

system based on the requirements of Internal Compliance Program (ICP) designed by

the Department of Foreign Trade.

Bulk License should be categorized as three types as follows

1) Bulk License for combination of items and destination that an exporter

who obtains this License could export specific dual-use items to

foreign countries. However, the exporter is prohibited to export such

dual-goods items to the restricted countries specified by the Thai

government.

2) Bulk License for the same customer that an exporter who obtains this

License could export specific DUI to specific customer who is business

partner repeatedly.

3) Bulk License for overseas subsidiaries that an exporter who is the

manufacturer and obtains this License could export specific DUI to

subsidiaries in foreign countries repeatedly

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107

5.2.3 Establishment of Internal Control Program (ICP)

Referring to Internal Compliance Program (ICP), this thesis suggests that

the Thai government should require exporters to establish then own internal program

for export control covering management policy, export control of organization, export

procedures, record of shipment confirmation, internal audit, training, record keeping

procedures and penalties of violation etc. that are necessary for Bulk License

Approval. Due to the fact that ICP is a voluntarily commitment provided by an

exporter to support the government authorities by ensuring that internal controls and

procedures are proper and satisfactory to the government that the exporter has the

proper screening procedures such as items classification, customer screening, end-use

or end-user verifying and transactions screening to certify that any DUI exported by

an exporter is not related to the proliferation of WMD before the approval of bulk

license to allow the exporter carrying its business to facilitate trade of government.

5.2.4 Infliction of the Penalties for Each Offences Based on Ground of

Intention and Knowledge of Violator.

Under the Ministerial Notification, the penalties for having no export

license is too high and not consistent with the act of violator because violator is

subject to liable under the provision of Section 22 of Import and Export of Goods Act

B.E. 2522 (1979) that violator shall be punished by imprisonment not exceeding ten

years or fine equivalent to five times of the price of exported goods, or both whether

by intention or mistake.

The penalties are likely to be significant because the penalties for having

no export license or should be consistent with the act of violator. Then, the Draft

Trade Control of WMD Related Items Act should be revised with respect to penalties

of any offence in case where the result of violation causes death to any person to be

the death penalty for the violator. Although Thailand, as a member of United Nations

and the International Covenant on Civil and Political Rights (ICCPR) has obligations

to abolish death penalty, paragraph 2 of Article 6 of the ICCPR states that the

sentence of death may be imposed only for the “most serious crimes” in countries that

have not abolished the death penalty.

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108

However, the penalty provisions in this Draft will include a presumption

that the managing director, manager or any person responsible for the operations of an

entity found to be in violation of this Draft; if a violation by such legal entity is due to

an order or performance of any person, or a neglect of order or, a neglect of a duty

required as a managing director or of any person who is responsible for carrying out

the business of such entity, such person shall be penalized according to the provisions

prescribed for such violations. Then, the government authorities have to consider and

set the penalty for each offence based on the ground of intention and knowledge of

violator. Although the representatives of legal entity are presumed innocent until

proven guilty, all directors listed in the company registration would be named as

defendants and each of them needs to prove to the satisfaction of the court that such

offense was committed without their knowledge or consent. Due to the fact that such

presumption of liability was a heavy legal burden for the representatives of the entity

who were forced to produce evidence to prove their innocence, the Thai government

should reconsider the penalties under the Draft of Trade Control of WMD Related

Items Act and setting each offence and penalty clearly. Nevertheless, violators are

subject to penalties or sanctions, which may vary depending on the case.

5.2.5 Establishment of Administrative Penalties for Violation without

Intention.

When a violation is not so serious or in case where of a minor technical

offense is committed without the intention, only an administrative sanction may be

imposed on the violator. Therefore, the Department of Foreign Trade should have the

authority to take administrative measures such as revocation of a permit and to

prohibit a person who has engaged in the transactions violating this law with the

intention from the exporting and transferring technology for 2 years.

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REFERENCES

Books

Anna Wetter. Enforcing European Union Law on Exports of Dual-Use Goods Oxford:

Oxford University Press, 2009.

Daniel H. Joyner. International Law and the Proliferation of Weapons of Mass

Destruction. Oxford: Oxford University Press, 2009.

Jumphot Saisoonthorn. International Law, (The Project for the Promotion of

Textbooks and Teaching Materials) Faculty of Law. Bangkok: Thammasat

University, 2016.

Kari M. Meesen, Prof. Dr. International Law of Export Control Jurisdiction Issues.

London: Graham & Trotman Ltd, 1992.

Olivia Bosch and Peter Van Ham. Global Non-Proliferation and Counter-Terrorism

The Impact of UNSCR 1540. London: Brookings Institution Press, 2007.

The Weapons of Mass Destruction. Weapons of Terror Freeing the World of Nuclear.

Biological and Chemical Arms. Sweden: EO Grafiska, Stockholm, 2006.

Yann Aubin and Arnaud Idiart. Export Control Law and Regulations Handbook A

Practical Guide to Military and Dual-Use Goods Trade Restrictions and Compliance.

The Netherlands: Kluwer Law International,2007.

Electronic Media

Cynthia Lian, Shearn Delamore & Co, “Malaysia: Transit and Transhipment of Dual-

Use Items 2012”,https://www.worldecr.com/wpcontent/uploads/2012/07/Malaysia.pdf

Department of Foreign Trade of Thailand, ‘Examples of WMD-Related Strategic”,

http://web.dft.go.th/Portals/2/ContentManagement/Document_Mod638/8%20Exampl

es%20of%20WMD-Related%20Strategic%20 Commidities%20(Eng) @25541019-

1121508107.pdf.

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110

European Commission, “Trade: Dual-Use Export Control”,

http://ec.europa.eu/trade/import-and-export-rules/export-from-eu/dual-use-controls/.

Ministry of International Trade and Industry of Malaysia, “Strategic Trade Act 2010:

Frequently Asked Questions”, http://www.miti.gov.my/miti/resources/STA%2

0Folder/PDF%20file/FAQ.pdf?mid=280.

National Nuclear Security Administration, Department of Energy of United States of

America, “International Nonproliferation Export Control Program: Control Lists and

Approaches”,

https://csisprod.s3.amazonaws.com/s3fspublic/legacy_files/files/attachments/150624_

LodenPresentation.pdf.

Nuclear Threat Initiative. “United Nations Security Council Resolution 1540

Database”, http://www.nti.org/db/1540/ Official Portal of the Ministry of International

Trade and industry, “Prohibited and Restricted End User List”,

http://www.miti.gov.my/index.php/pages/view/3420.

Proliferation Security Initiative (PSI) , http://cns.miis.edu/inventory/pdfs/psi.pdf.

Star Enterprises, “Titanium Alloys”, http://www.starentps.com/titanium.html

Sunry Petroleum Equipment Co., Ltd., “Stream Heat Exchanger”

http://www.sunrypetro.com/steam_heat_exchanger.html

Wassennaar Agreement, http://www.wassenaar.org/introduction/index.html.

กระทรวงการตา่งประเทศ. “ข้อมลูเก่ียวกบัการตอ่ต้านการก่อการร้ายของไทย” ,

http://www.mfa.go.th/web/791.php.

กรมการค้าตา่งประเทศ. “การควบคมุการสง่ออกของไทย” ,

http://www.dft.moc.go.th/the_files/$$11/level14/2_Thailand%E2%80%99s_Export_C

ontrol_System_TH.pdf.

Ref. code: 25595601040297BDA

111

_________________. “สาระส าคญัของพระราชบญัญตัิการสง่ออกไปนอกและการน าเข้ามาใน

ราชอาณาจกัรซึ่งสินค้า พ.ศ. 2522”,

http://www.dft.go.th/Seminar/law/Pholawbor2522.pdf.

Other Materials

Center for Information on Security Trade Control of Japan, Overview of Japan’s

Export Control (4th edn, 2015).

Charter of United Nations

Chen Yongquan, “Strategic Goods Control: Traders as Our Partners”.

Department of Foreign Trade, “Trade Management of Dual-Use Items: TMD/ Trade

Control of Weapons of Mass Destruction Related Items: TCWMD”.

Draft Trade Control of WMD Related Items Act approved by the Cabinet on 4

October 2016.

George Tan, “Export Controls”.

Import and Export of Goods Act B.E. 2522

Ministerial Notification of Ministry Specifies Dual-Use Items as Goods Requiring

Permission and Complying the Export Measures B.E.2558 (2015).

Mohamed Shahabar Abdul Kareem, “The Strategic Trade Act (STA) 2010:

Facilitating Trade in A Secure Trading Environment”.

Regulation (EC) No. 1334/2000.

Singapore Customs, “Strategic Goods Control and Self-Compliance”.

Singapore Customs, “Singapore’s Strategic Goods Control System”.

Sudarat Pongpitak, “Investment Promotion for Dual-Use Items” (2013).

United Nation Security Council Resolution 1540 (2004

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BIOGRAPHY

Name Ms. Piyanat Uamduang

Date of Birth August 19, 1984

Educational Attainment

2009-2013: Bachelor of Laws,


2009-2013: Master of Laws (Criminal Laws),


Work Position Litigation and Legal Compliance Specialist

(as Senior Manager Level)

Thai Yamaha Motor Co., Ltd.

Publications 2013: “Scope of Terrorism Offenses”

2017: “Export Control of Dual-Use Items: A

Comparative Study of Thai and Foreign Laws”

Work Experiences 2008-2011: Attorney

S&I International Bangkok Office Co., Ltd.

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