Controling goods in Kosovo by The "E" Generation

REPUBLIKA E KOSOVËS

REPUBLIKA KOSOVA - REPUBLIC OF KOSOVO Qeveria - Vlada - Government Ministria e Tregtisë dhe Industrisë | Ministarstvo Trgovine i Industrije | Ministry of Trade and Industry

Strategic Trade Control Goods in Kosovo In cooperation with:

Export Control and Related Border Security Program

CONTROLLING TRADE IN STRATEGIC GOODS As a member of the international community, the Republic of Kosovo has the responsibility to contribute to the fight against the proliferation of weapons of mass destruction (WMD) and destabilizing accumulations of conventional weapons. Kosovo is implementing this responsibility by establishing controls on the export, import, transit, transshipment, re-export, and retransfer of strategic goods – such as WMD materials, dual-use items that could be used to develop a WMD program, delivery systems, and conventional weapons. These strategic trade controls are necessary to ensure that sensitive goods and technologies are kept out of the hands of terrorists and proliferant states; safeguard Kosovo’s security interests; limit the severity of military conflicts; and encourage investment in Kosovo enterprises as reliable partners who exercise appropriate controls over advanced technologies. Strategic Trade Controls are not intended to hamper legitimate business, but seek to facilitate secure trade. Therefore, the guiding principle of strategic trade controls is to promote global security by facilitating responsible trade. Article 1.2 of the Law No. 04/L-198 on Trade of Strategic Goods. “Strategic Trade Controls aim to further the state security and foreign policy interests of the Republic of Kosovo, to fulfill international commitments and agreements with regard to the nonproliferation of weapons of mass destruction and other strategic goods used for military purposes, and to contribute the international and regional efforts to regulate the trade of strategic goods.” The legal basis for Kosovo’s strategic trade control system is Law No. 04/L-198, “Law on Trade of Strategic Goods” which is in compliance with the latest European Union requirements, international standards and best practices. The Law applies to: • any natural or legal person in the territory of the Republic of Kosovo, including all free trade zones, bonded areas, and airspace; • any citizen of the Republic of Kosovo, in the Republic of Kosovo and abroad; • any legal person that has, within the Republic of Kosovo, its registered office, central headquarters, or a permanent business establishment, as well as the person’s foreign subsidiaries and representative offices; • any foreign person, located outside the Republic of Kosovo, operating on behalf of or under control of a person from the Republic of Kosovo.

CONTROLLING TRADE IN STRATEGIC GOODS

This law is the cornerstone of Kosovo’s strategic trade control related legal and regulatory system. It is implemented by following legal acts:

• Law on Protection from Non-Ionized, Ionized Radiation and Nuclear Security No. 2010/03-L-104 • Law on Medicinal Products and Medical Devices No. 2003/26

• Administrative Instruction No. 14/2013 on Registration Licensing and Administrative Enforcement procedure;

• Law on Medical Devices No. 2003/26

• Regulation No. 00/2013 on the Commission for Trade of Strategic Goods;

• Law on Prevention and Fight of the Cyber Crime No. 2010/03-L-166

• Administrative Instruction No. 00/2013 On the Application Form for registration, Licensing, Certification, Permit, and application for control of strategic goods and related services;

• Law on Amending and Supplementing the Law No. 03-L-196 on the Prevention of Money Laundering and Prevention of Terrorist Financing No. 2012/04-L-178.

• Decision No.00/2013 on Taxes for Registration, Licensing, Certification, Permit, and other Services;

Please find all the relevant laws, administrative instructions, decisions etc. at: www.mti-ks.org and www.dms-ks.org.

• Decision from Government No.03/153 on Approval of the List of Dual Use Goods., dated 25.10.2013 • Decision from Government on Approval of the List of Military Goods. • Other Laws related to Strategic Trade Control are as follows:

INTERNATIONAL MEASURES

• Law on Foreign Trade No.04/L-048 • Law on Weapons No. 03/L-143 • Law on Weapons, Ammunition and Relevant Security Equipment No. 2010/03-L-246 • Law on Civil Use of Explosives No. 04/L-022 • Law on Artificial Fertilizers No. 2003/10 • Law on Pesticides No. 2003/20

The international community is engaged in countering WMD proliferation and regulating trade in conventional arms through various international instruments such as treaties, conventions, United Nations Security Council resolutions, regional agreements and initiatives, such as: • Treaty on the Non-Proliferation of Nuclear Weapons (NPT); • Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on Their Destruction (CWC); • Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on Their Destruction (BTWC); • Arms Trade Treaty (ATT); • United Nations Security Council Resolution 1540, which establishes obligations for all UN member states to develop and enforce appropriate legal and regulatory measures against the proliferation of chemical, biological, radiological, and nuclear weapons and their means of delivery, in particular, to prevent the spread of weapons of mass destruction to non-state actors; • European Union Regulation no. 428/2009 setting up a Community regime for the control of exports; transfer, brokering and transit of dual-use items; as well as a series of directives, joint actions and common positions, which form the Community acquis on controlling trade in military and dual-use goods and related services.

CONTROLLING TRADE IN STRATEGIC GOODS

NONPROLIFERATION REGIMES AND ARRANGEMENTS Through its strategic trade controls, the Republic of Kosovo is adhering to the principles and guidelines of the following multilateral regimes and arrangements:

WASSENAAR ARRANGEMENT The Wassenaar Arrangement strives to contribute to international security and stability by promoting transparency and greater responsibility in transfers of conventional arms and related dual-use goods and technologies, thus preventing destabilizing arms accumulations. Participating States seek, through their national policies, to ensure that transfers of these items do not contribute to the development or enhancement of military capabilities which undermine these goals; and ensure these transfers are not diverted to support such capabilities.

For further information please see: http://www.wassenaar.org/

AUSTRALIA GROUP (AG) The Australia Group (AG) is an informal forum of countries which, through the harmonization of strategic trade controls, seeks to ensure that trade does not contribute to the development of chemical or biological weapons. Coordination of national trade control measures assists Australia Group participants in fulfilling their obligations under the Chemical Weapons Convention and the Biological and Toxin Weapons Convention to the fullest extent possible.

For further information please see: http://www.australiagroup.net/

MISSILE TECHNOLOGY CONTROL REGIME (MTCR) The Missile Technology Control Regime is an informal and voluntary association of countries who share the goals of non-proliferation of unmanned delivery systems capable of delivering weapons of mass destruction, and who seek to coordinate national export licensing efforts aimed at preventing the proliferation of these systems.

CONTROLLING TRADE IN STRATEGIC GOODS

NUCLEAR SUPPLIERS GROUP (NSG) The Nuclear Suppliers Group (NSG) is a group of nuclear supplier countries that seeks to contribute to the non-proliferation of nuclear weapons through the implementation of two sets of Guidelines for nuclear exports and nuclear-related exports. The NSG Guidelines are consistent with, and complement, the various international, legally binding instruments in the field of nuclear non-proliferation including the Treaty on the Non-Proliferation of Nuclear Weapons (NPT). The NSG Guidelines are implemented by each Participating Government in accordance with its national laws and practices.

For further information please see: http://www.nuclearsuppliersgroup.org/

ZANGGER COMMITTEE The Committee, named after its first Chairman Prof. Claude Zangger, was formed following the coming into force of the Nuclear Non-Proliferation Treaty (NPT) in order to harmonize the interpretation of nuclear trade control policies for NPT Parties. The Zangger Committee maintains a Trigger List (triggering safeguards as a condition of supply) of nuclear-related strategic goods to assist NPT Parties in identifying equipment and materials subject to trade controls.

For further information please see: http://www.zanggercommittee.org

NATIONAL CONTROL LIST The National Control List comprises the European Union Dual-Use List and Common Military List as well as goods that are placed under control for national security, foreign policy, public safety, or human rights reasons. The National Control List is adopted and updated by the Decision of the Government based on the proposal by the MTI.

Please find the latest National Control List here: www.mti-ks.org and www.dms-ks.org.

The MTCR rests on adherence to common trade policy guidelines (the MTCR Guidelines) applied to a common list of controlled items (i.e., the MTCR Equipment, Software and Technology Annex).

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For further information please see: http://www.mtcr.info/ 7

CONTROLLING TRADE IN STRATEGIC GOODS

ITEMS AND SERVICES SUBJECT TO CONTROL STRATEGIC GOODS Strategic goods are military and dual-use goods.

MILITARY GOODS Military goods are items that are mostly but not exclusively designed, developed, configured, adapted, assembled, manufactured, or modified for military use, including software and technology. Common Military List of European Union divides such goods into following 22 categories: • • • • • • • • • • • • • • • • • • • • • • 8

ML1 Arms and Automatic Weapons with a Caliber of 12,7mm or less. ML2 Arms and Automatic Weapons with a Caliber Greater than 12,7mm. ML3 Ammunition. ML4 Bombs, Torpedoes, Rockets, Missiles. ML5 Fire Control and Related Alerting Warning Equipment. ML6 Ground Vehicles and Components. ML7 Chemical and Biological Toxic Agents, Tear Gases. ML8 Military Explosives and Fuels. ML9 Vessels of War, Special Navy Equipment. ML10 Aircraft. ML11 Electronic Equipment. ML12 High Velocity Kinetic Energy Weapon Systems. ML13 Armored or Protective Equipment. ML14 Specialized Equipment for Military Training or for Simulating Military Scenarios. ML15 Imaging or Countermeasure Equipment. ML16 Forgings, Casting, and Other Unfinished Products. ML17 Miscellaneous Equipment, Materials and Nuclear Power Generating Equipment. ML18 Equipment and Technology for Production of Products. ML19 Directed Energy Weapon Systems – Lasers. ML20 Cryogenic and Superconductive Equipment. ML21 Software. ML22 Technology.

DUAL USE GOODS Dual use goods are items, software and technologies normally used for civilian purposes but which have military applications. European Union Dual Use list divides such goods into following 10 categories: • 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 Telecommunications and ”information security”. • Category 6 Sensors and lasers. • Category 7 Navigation and avionics. • Category 8 Marine. • Category 9 Aerospace and Propulsion.

CONTROLLING TRADE IN STRATEGIC GOODS

TRANSIT AND TRANSSHIPMENT CONTROLS Controlling transit and transshipment of strategic goods makes an important contribution to international non-proliferation efforts and limits the opportunities for non-State actors to exploit Republic of Kosovo territory for proliferation purposes. National/State security considerations also part of the rational, why such controls are needed – transit and transshipment controls minimize the risk that strategic goods passing through Kosovo are not diverted for illicit use within country. Transit refers to a shipment entering and passing through the territory of Republic of Kosovo with an ultimate destination outside the country in such a manner that the items remain at all times in or on the same means of transportation. Transshipment on the other hand refers to a shipment of strategic goods that enters the territory of the Republic of Kosovo, wherein the strategic goods are unloaded from the conveyance and loaded onto the same or another means of transportation, which is bound for an ultimate destination outside the Republic of Kosovo.

Please find more information about respective controls here: www.mti-ks.org

CONTROL OVER TRANSFER OF TECHNOLOGIES Control over technology is important because transfers of proliferation-sensitive technologies facilitate independent capacity to produce weapons of mass destruction, their delivery systems, and conventional weapons. Technology refers to specific information necessary for the development, production, or use of strategic goods. This information takes the form of blueprints, plans, diagrams, models, formulae, engineering designs and specifications, manuals and instructions (written or recorded – including software), and any other media or devices such as disks, tapes, and read-only memory. The intangible transfer of technology in addition to transactions with physical data carriers is subject to strategic trade controls. This includes transmission of software or technol10

ogy in-person or through electronic media, including fax, phone, email, or any other electronic device with the end destination lying outside the Republic of Kosovo. Also subject to control is the disclosure or transfer of technical data, whether in person or by fax, phone, email or any other electronic device, to a foreign person within the Republic of Kosovo.

END USE/USER CONTROLS (CATCH-ALL) There are many lower-level “threshold” dual-use items (such as common test equipment, decontrolled machine tools, certain steels, and common electronic parts) that are not listed on the national control lists, but still could make meaningful contributions to the development of WMD or their delivery systems. Therefore, Kosovo authorities may establish controls on unlisted dual-use items (see Articles 7.4 & 7.5 of Law No. 04/L-198) on a case by case basis. Such ad-hoc controls may apply where there is a risk that an export, transit or transshipment to a specific end-user might be diverted for use in a weapon of mass destruction, in violation of an embargo or in certain other situations specified in the Law.

CONTROLLING SERVICES The following services related to strategic goods are considered sensitive and subject to control: brokering, transport, financial services, and provision of technical assistance.

CONTROLLING TRADE IN STRATEGIC GOODS

BROKERING Brokering refers to negotiations or arrangements of transactions for the purchase, sale, or supply of strategic goods from the Republic of Kosovo to a foreign country or from one foreign country to another; and the selling or buying of strategic goods located in a foreign country for their transfer to another foreign country.

TRANSPORT Transport refers to loading, moving and transporting strategic goods to a certain destination, arranging or facilitating their movement, providing supporting services to a transport provider, and any act calculated to promote their supply or delivery, if this contributes to chemical, biological or nuclear weapons or other atomic devices or means for their or military goods delivery, if destined for an embargoed or sanctioned destination or to a restricted party.

CONTROLLING TRADE IN STRATEGIC GOODS

REPUBLIC OF KOSOVO AUTHORITIES RESPONSIBLE FOR CONTROL OF STRATEGIC TRADE In accordance with the Law No. 03/L-232 on Trade of Strategic Goods, two government entities have been established and tasked with the responsibility to implement and coordinate Kosovo’s strategic trade control efforts: • Strategic Goods Trade Department, Ministry of Trade and Industry • Commission for Control of Trade with Strategic Goods

FINANCIAL SERVICES Financial services refer to helping or providing funds to facilitate the movement of strategic goods and/or related services, if this contributes to chemical, biological, or nuclear weapons or other nuclear devices or means of their delivery, or contributes to the ability to deliver conventional weapons, if destined for an embargoed or sanctioned country or a restricted party.

TECHNICAL ASSISTANCE Technical assistance refers to any technical support related to repairing, developing, manufacturing, assembling, testing, or maintaining strategic goods, as well as any other technical service in the form of textual or verbal instructions, training and transfer of business knowledge or skills or other consulting services, including the transfer of technical data. Controls on technical assistance do not apply to information in the public domain, basic scientific research, or the minimum necessary information for patent applications.

STRATEGIC GOODS TRADE DEPARTMENT WITHIN THE MINISTY OF TRADE AND INUSTRY (MTI) Strategic Goods Trade Department within the Ministry of Trade and Industry is responsible for implementation of Kosovo’s strategic trade control policies in all its aspects. The Department carries out the following tasks: • registers exporters, importers of strategic goods and providers of related services; • proposes changes and updates to the National Control List; • verifies the completion of documentation for license applications and is12

CONTROLLING TRADE IN STRATEGIC GOODS sues licenses after approval from the Commission; • prepares policy and technical analysis; • carries out pre-license checks and conducts post-license verification;

CONTROLLING TRADE IN STRATEGIC GOODS

TRADE REGISTRY AND LICENCE PROCEDURES

• imposes administrative penalties in case of violations; • suspends licenses;

• prepares annual reports;

STRATEGIC GOODS TRADERS REGISTRY

• performs administrative work for the Commission; etc.

Persons interested in engaging in export or import of strategic goods, or in providing related services are obliged to register with the registry of traders maintained by the Ministry of Trade and Industry. Registration is a precondition for applying for a license to export, import, or provide related services. Applications for registration must be submitted on a standard format (accompanied by supplementary documents) in an official language to the MTI Strategic Goods Trade Department, on paper or electronically.

For more information please visit the Departments webpage: www.mti-ks.org and www.dms-ks.org.

COMMISSION FOR CONTROL OF TRADE WITH STRATEGIC GOODS The Commission for the Control of Trade with Strategic Goods is established by the Decision of the Government of the Republic of Kosovo No. 01/114 from 30. January 2013. The Commission is chaired by a representative of the Ministry of Trade and Industry and consists of five (5) members and deputy members who represent: • Ministry of Trade and Industry; • Ministry of Foreign Affairs; • Ministry of Kosovo Security Force; • Ministry of Internal Affairs; and • Kosovo Customs. The Commission is tasked to consider, approve, annul, modify and revoke licenses for export, import, transit, trans-shipping, extraterritorial re-export, re-transfer and provision of related services. It also carries out any other tasks as provided by legislation. The decisions made by the Commission are based on a consensus reached by all members.

The standard application form and more information about the procedure can be found here: www.mti-ks.org

LICENCING PROCEDURES Persons seeking to export, import, transit, transship, re-export, or re-transfer strategic goods, and providers of related services, are subject to Kosovo licensing requirements. License applications must be submitted to MTI’s Strategic Goods Trade Department. Confidentiality is maintained in relation to all documents, information, and data received from the applicant. The Department strives to administer the strategic trade control licensing system efficiently, so that the compliance burden on all stakeholders is kept to the minimum. License requests typically go through an extensive review process, including review by the Strategic Goods Commission. During this process, the Commission reviews among other things: • the eligibility of the applicant;

The Commission may request assistance and advice from the Kosovo Intelligence Agency and the Agency for Radiation Protection and Nuclear Safety, Ministry of Agriculture and Rural Development, Telecommunication Regulatory Agency, Kosovo Medicines Agency.

• all parties involved in the transaction;

In performance of its functions, the Commission may also seek assistance and advice from other ministries, institutions and subject-matter experts.

• any national security implications presented by the proposed transaction;

• appropriateness of the quality and quantity of the proposed transaction to the end-user and stated end-use; • any legal impediments to the proposed transaction; • any foreign policy implications, including but not limited to: • potential effect on regional stability; • human rights; and

CONTROLLING TRADE IN STRATEGIC GOODS

The review criteria established by Article 15 of the Law on Trade of Strategic Goods aims to ensure maximum predictability of decisions.

AUTHORISATIONS ISSUED BY OTHER STATE INSTITUTIONS IN RELATION TO STRATEGIC GOODS

MTI also publishes license review performance indicators, which set challenging target goals for processing license applications. MTI aims to meet the targets in a timely manner.

Other Republic of Kosovo institutions issue authorizations for strategic goods in the following cases:

Based on the decisions of the Commission, the MTI Strategic Goods Trade Department, issues following licence types:

• Authorization for import of strategic goods destined for Kosovo Security Force or Authorized State Security Institutions will be issued by the Ministry for Kosovo Security Force or by the Ministry for Internal Affairs.

INDIVIDUAL LICENCE - the authorization for one specific person or provider of related services to perform the activities with respect to one end-user, consignee, or seller in a foreign country and covering one or more strategic goods. The license is valid up to two (2) years.

• Authorization for temporary export of strategic goods for the use of Kosovo Security Force or Authorized State Security Institutions will be issued by the Ministry for Kosovo Security Force or by the Ministry for Internal Affairs.

GLOBAL LICENCE - the authorization given to a certain exporter and cover one or more items to one or more countries/end users. The license is valid for up to three (3) years.

• Authorization for import of strategic goods received as donations for Kosovo Government authorities will be issued by the Ministry for Kosovo Security Force or the Ministry for Internal Affairs, if such goods are destined to respective ministries or to Authorized State Security Institutions.

GENERAL LICENCE - the authorization to import, export, transit, or transship strategic goods, or to provide related services, under specific conditions and to countries specified in the general license. The MTI publishes the scope and user conditions of general licenses.

• Authorization for export of strategic goods based on the agreements signed by the Government of the Republic of Kosovo will be issued by Ministry for Kosovo Security Force.

• compliance with multilateral control regimes and arrangements, and UN and EU sanctions.

• Authorization for export, transit and transshipment of strategic goods to entities which operate as part of a military, peacekeeping or humanitarian mission will be issued by the Ministry for Kosovo Security Force. • Authorization for export, import, transit and transshipment of strategic goods in connection with enforcement activities (investigation of violations related to strategic trade) will be issued by the relevant Government offices.

FURTHER INFORMATION Application forms and information on how to apply for licenses are set out on the Ministry of Trade and Industry website. For questions and further information, please contact:

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Strategic Trade Control Department Ministry of Trade and Industry Address: Lagja e spitalit ,str. Muharrem Fejza no.number. Phone: + 38 512 233 Fax: + 38 512 168 E-mail: dms@rks-gov.net Website: www.mti-ks.org and www.dms-ks.org. 17

CONTROLLING TRADE IN STRATEGIC GOODS

INTERNATIONAL COOPERATION

MECHANICS OF ENFORCEMENT

Republic of Kosovo state authorities are cooperating with partner countries and international organizations in order to detect, interdict, investigate, and prosecute illicit transfers of strategic goods. The MTI is participating in an international exchange of information on all aspects of strategic trade controls.

The Republic of Kosovo is committed to maintaining and strengthening the effectiveness of its strategic trade control system and has established various enforcement mechanisms to ensure effective implementation and compliance with strategic trade control legislation.

The Republic of Kosovo has a long standing cooperative relationship with various foreign government entities, such as U.S. Department of State Export Control and Related Border Security Program (EXBS), licensing authority and various enforcement agencies in Croatia, Export Control Authority in Albania, Control of Trade with Strategic Goods Department in Bulgaria, among others.

The Ministry of Trade and Industry (in cooperation with other state institutions) is responsible for verifying compliance of all relevant stakeholders. Kosovo Customs officers have the authority to check the export, import, transit or transshipment of strategic goods against relevant licenses at the borders.

The areas of cooperation range from legal and regulatory development, capacity building, staff training, industry outreach, enforcement, and efficient use of detection and identification equipment.

COOPERATION WITH INDUSTRY The MTI Strategic Goods Trade Department looks forward to working closely with industry through a dialogue with all relevant stakeholders, enabling MTI to understand industries’ concerns and to inform them about strategic trade control-related requirements. MTI is tasked, in cooperation with the Commission, to assist industry on compliance related efforts. For this end MTI is organizing seminars, workshops, trainings, etc. Please find here more information on upcoming events:

For improved communication with industry the MTI Strategic Goods Trade Department has set up a Helpline for general queries about strategic trade controls: Phone: + 38 512 233 or +377 44 313 114 Fax: + 38 512 168 E-mail: dms@rks-gov.net

Compliance control takes place before, during, and after issuance of a license. Criminal and administrative penalties for strategic trade control violations can be severe. For a violation that has caused damage or serious consequences for the security of the state, foreign policy or public security, offenders can receive imprisonment for one (1) to eight (8) years or a fine from 10,000 € to 30,000 €. In exceptional cases, a person may be subject to a fine that is four times the value of the goods involved. The court also can order seizure of goods as part of the punishment. Natural or legal person that commits a violation may be prohibited from engaging in the exercise of business activities with strategic goods or the provision of related services. The Ministry of Trade and Industry also may impose administrative penalties for violations by limiting, revoking, or annulling of any license and/or registration, or imposing fines from 1,000 € up to 5,000 €, or twice the value of the strategic goods or related services under the contract, or as assessed by the Ministry, whichever is greater. It should be noted that in some enforcement cases, both criminal and administrative penalties could be imposed.

Head of Governmental Commission on Licensing on Trade Strategic Goods.

Phone: + 38 512 233 or +377 44 313 114 Fax: + 38 512 168 E-mail: izer.arifi@rks-gov.net

USEFUL CONTACT INFORMATION: Izer Arifi,

REPUBLIKA E KOSOVËS

REPUBLIKA KOSOVA - REPUBLIC OF KOSOVO Qeveria - Vlada - Government Ministria e Tregtisë dhe Industrisë | Ministarstvo Trgovine i Industrije | Ministry of Trade and Industry