This LawFlash provides a timely overview of the UAE’s export control regime as domestic defence-industrial manufacturing capabilities continue to mature, and the UAE pursues new defence export opportunities.
In response to emerging global security threats and shifting geopolitical alignment, the United Arab Emirates (UAE) has renewed ambitions for its defence and aerospace industry. With domestic defence-industrial manufacturing capabilities maturing in last decade, the UAE is transitioning toward becoming a global exporter of defence products and services.
In 2019, many of the UAE’s defence assets were consolidated under EDGE Group PJSC (EDGE), a government-owned defence holding company. EDGE’s mandate is to facilitate the transition of the defence and aerospace industry by bringing domestically manufactured products to market efficiently, and actively pursuing international collaborations and partnerships. It also intends to further develop domestic defence technological-industrial capabilities, in line with the UAE government’s stated vision of transforming the UAE into an innovation-led, knowledge-based economy. In light of the UAE’s renewed ambitions, this LawFlash provides an overview of the UAE’s export control regime.
In 2007, the UAE introduced Federal Law 13 of 2007 (Export Control Law). The Export Control Law established a framework of export controls to prevent the unrestricted exportation of goods, information, and technology of strategic value. This includes certain dual purpose military-civilian goods and technologies. In 2008, the Export Control Law was amended by Federal Law 12 of 2008 (Amendment). The Amendment was introduced to broaden the applicability of the Export Control Law to ensure greater effectiveness and enforceability. A person who violates the Export Control Law may be imprisoned for at least one year and/or receive a fine of up to AED 500,000 (US $140,000).
The Export Control Law also established the framework for introducing a governance and licensing regime, which is overseen by the Committee for Goods and Materials Subject to Import and Export Control (Committee). The Committee was formed in 2009 pursuant to UAE Cabinet Resolution 3/99 of 2009. Its purpose is to implement policies, regulations, and amendments to the Export Control Law to further improve its effectiveness and enforceability.
The Executive Office of the Committee (Executive Office) is the licensing authority responsible for reviewing applications and granting permits for the import, export, re-export, and transit of controlled goods, information, and technology within the UAE’s jurisdiction.
A permit application should include the identity of the recipient of the product or technology, include a brief description of the products or technology, and specify the purpose for importing, exporting, or re-importing those products or technology. In determining whether to approve an application, the Executive Office will, in consultation with other government agencies, consider, as applicable, national security, foreign policy, natural resource preservation, public health and safety, and environmental implications of granting a permit. For example, the UAE Ministry of Defence may require an applicant to apply for an additional permit to import, export, or re-export defence products and/or technologies. If a license is not obtained for the import, export, or re-export of a controlled good, a person may be imprisoned for at least one year and/or receive a fine of AED 50,000 (US $14,000).
The Executive Office also provides recommendations to the Committee relating to the enforcement of United Nations (UN) Security Council decisions, and the applicability of international arms control and non-proliferation treaties. It does so in coordination with the UAE Ministry of Foreign Affairs and International Cooperation.
A key feature of the Export Control Law is the Strategic Goods Control List (Strategic Goods List). The Strategic Goods List is a comprehensive list of export controlled goods, information, and technology that have military, dual-use, or other applications related to the production and development of weapons of mass destruction. Whilst the UAE is not a participant of any multilateral export control regime, the Strategic Goods List replicates the control lists agreed through the Australia Group, Nuclear Suppliers Group, Missile Technology Control Regime, Wassenaar Arrangement, Chemical Weapons Convention, and the Organisation for the Prohibition of Chemical Weapons.
The Strategic Goods List initially comprised nine categories, including nuclear, chemical, electronics, telecommunications, sensors and lasers, navigation and avionics, marine, aerospace, and propulsion. However, it was expanded in July 2020 to 11 categories, to include chemical weapons and “national controlled commodities”. The “national controlled commodities” category comprises military and marine vehicles, including ancillary equipment (i.e., trailers, armour, and shock absorbers) and equipment facilitating autonomous capabilities (i.e., unmanned conversion kits and equipment providing autonomous navigation, steering, acceleration, and braking). It also comprises vehicles used for civil security purposes, including cash-in-transit and riot control vehicles.
As a member of the UN, the UAE has adopted the UN Security Council Consolidated List (Consolidated List), which is a list of all individuals and entities subject to UN sanctions imposed by the UN Security Council.
The UAE also maintains its own list of individuals and entities that are subject to national sanctions pursuant to Federal Law 7 of 2014 (Anti-Terrorism Law). A key function of the Committee is to stay informed of changes to the Consolidated List, and ensure all relevant national agencies are notified of the changes.
In 2009, the UAE introduced Federal Law 6 of 2009 (Nuclear Energy Law). The Nuclear Energy Law established a regulatory regime, which governs the development of the UAE’s nuclear energy industry. It also preceded the establishment of three regulatory bodies, including the Federal Authority for Nuclear Regulation (FANR), the Emirates Nuclear Energy Corporation, and the International Advisory Board.
Notably, FANR is the regulatory authority responsible for overseeing the nuclear industry’s compliance with the Nuclear Energy Law. It was formed in 2009 and regulates the design, construction, operation, and decommissioning of nuclear energy facilities in the UAE. It also regulates the use of radioactive materials and radiation sources used for medical, scientific research, and other purposes. Similarly to the Executive Office, FANR is responsible for reviewing and granting permits for the import, export, and transit of nuclear materials and technologies.
As the UAE’s export control regime continues to develop in step with its maturing defence and aerospace industry, the UAE is benefitting from strengthening defence and security cooperation with countries that have established export control regimes, including the United States of America. A recent example is the announcement to Congress by the US State Department of its intention to sell up to 50 Lockheed Martin F-35 fighter jets to the UAE. This significant step in defence and security cooperation between the US and the UAE follows the signing by the two countries of a Defense Cooperation Agreement in May 2019, and the normalisation this year of diplomatic relations between Israel and the UAE pursuant to the Abraham Accords.
Amid greater defence and security cooperation between the two countries, the UAE is likely to receive more favourable US export control licensing treatment, and further incentives to expand and extend its defence and security policies. This could include increased access by UAE defence and aerospace companies to US licensing exceptions and exemptions, the granting by US authorities of lengthier or more readily renewable export license validity periods, and increased participation by UAE defence and aerospace companies in co-production initiatives with their US counterparts.
Morgan Lewis regularly advises government entities, global defence contractors, aerospace and technology companies, original equipment manufacturers, regional defence suppliers, and security firms. Whether clients require guidance navigating international trade and export regulations, support throughout complex multijurisdictional defence projects, or advice across their business operations, Morgan Lewis is trusted counsel. Please contact us if you have any questions or if you would like to know more about how we can help.
If you have any questions, or you would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Abu Dhabi
Mark Gilligan
Washington, DC
Giovanna M. Cinelli