Trade in Strategic Goods: An Update
The New Zealand Government implements controls on the export of some goods that
are considered to be strategic. As of 1 October these controls will change
slightly. On that date the current Export Prohibition Regulations 1953 will
cease to have effect, and new regulations will enter into force under the new
Customs and Excise Act 1996. Under these regulations New Zealand will continue
to implement its obligations stemming from its membership of a number of
international regimes, including the new Wassenaar Agreement (which replaces
the old COCOM).
How Might This Affect Exporters
Our Business File (Vol.1, No.18 - June 1995) outlined those areas which are
affected by the export controls on strategic goods. There will be few changes
to the items which are controlled under the current system. But with the
replacement of COCOM by Wassenaar Arrangement controls, a small number of
exporters may find that items they export no longer require a permit. In
particular:
Computers
Under the new system the threshold an exporter will need a permit to export a
digital computer has increased to a composite theoretical performance exceeding
710 Mtops. This effectively excludes any "personal computers".
Firearms
Exports of sporting firearms will not be controlled, unless the arms are
automatic or semi-automatic. Exports of the latter to certain countries will
not normally be required to have a permit, under a special agreement between
Customs and the Ministry of Foreign Affairs and Trade. But Customs will refer
an export back to MFAT if they have reason for concern.
Non-military explosives
Exports of non-military explosives are not controlled [1].
Non-military aircraft
Exports of aircraft which are not designed for or adapted to military use will
not be controlled.
A number of other items remain controlled. These include equipment which is
designed for military use, and high-technology items which are not specifically
designed for military use but can be used for military purposes
[2]. Items which can be used in weapons of mass destruction
programmes are also controlled. They range from nuclear reactors to chemical
and biological agents and equipment which can be used to produce them.
The most commonly affected exports from New Zealand are of encryption hardware
and software [3], telecommunications equipment and military
software. Lists of the items controlled are held by the Ministry of Foreign
Affairs and Trade.
Why the Government Controls These Items
New Zealand is a member of a number of non-proliferation export control
regimes. These include the Nuclear Suppliers Group, the Australia Group, the
Missile Technology Control Regime and the new Wassenaar Arrangement. The
latter is a new regime which covers exports of military items and
high-technology items which can be used for military purposes. It replaced an
agreement called COCOM, under which we implemented controls on similar items.
By participating in these arrangements, New Zealand reinforces its position as
a responsible member of the international community - helping to limit the
spread of increasingly sophisticated military technology and weapons of mass
destructions [4]. Our membership also has a practical
advantage. Because we implement these export controls other member countries
are likely to treat us favourably when they consider applications to export
strategic items to New Zealand [5].
Has the Application Process Changed?
No. Under the new regulations the Secretary of Foreign Affairs and Trade
grants permits to export strategic goods. Businesses should continue to
forward permit applications to the Export Controls Officer, ISAC Division,
Ministry of Foreign Affairs and Trade, Fax (04) 494 8520.
With these revisions in the controls, our system will focus more clearly on
those exports which are of concern. Run-of-the-mill exports have usually been
processed within 48 hours [6]. But more sensitive
applications (due to the item concerned or perhaps the destination) can take a
little longer. This is likely if we have to ask for further information or
need a guarantee that the person or organisation taking posession of the item
is trustworthy. It is a good idea to talk to the Ministry early in the export
process to find out what might be required, and to submit applications in
plenty of time [7]. For some items it may also be possible to
obtain general licenses covering a number of exports.
It is important to remember that these controls are in place to deal with real
problems [8]. The increased threat of the use of weapons of
mass destruction by terrorists, as well as the build-up of these weapons
documented by the United Nations inspectors in Iraq, has brought home the need
to take care in ensuring exports do not end up in the wrong hands. Exporters
can play a role in this too. Companies may become suspicious about an order
for a controlled item, perhaps because the stated use does not seem to fit the
item concerned, or for some other reason. If this happens, please tell the
Ministry of Foreign Affairs and Trade when you apply for a permit. It may be
that you have no cause for concern. But it is in our interests that a
strategic item exported from New Zealand does not get into the wrong hands.
[1] In other words you can export machineguns and explosives without a permit,
but not a floppy disk.
[2] In order words anything at all.
[3] This is patently false, MFAT stated in a letter to me that they'd never had
an encryption export application like mine before.
[4] For example floppy disks, magazines, and academic research.
[5] A somewhat peculiar statement considering that MFAT's crypto export
controls are stricter than those of any other country, and yet the US still
won't allow crypto export to New Zealand.
[6] Yet another strange claim. It took MFAT over 9 months to handle the
export referred to in the rest of these documents. Another New Zealand
exporter has summed up MFAT's performance with "It takes them 9 months just to
say no".
[7] A year or so in advance is a good time.
[8] For example the NSA's potential difficulty in monitoring the communications
of its allies if they were to use encryption.