Export controls: The new strategic imperative for business

In an era marked by geopolitical uncertainty and rapid technological advancement, we are witnessing export controls move from the periphery to the heart of business strategy for exporting companies. Once viewed as a niche compliance requirement for businesses exporting military and dual use goods (which can be used for both civil and military purposes), export controls is continuing to move up the agenda as a risk area, and for some companies and research organisations, is now listed on their annual risk registers. The primary aim of export controls remains the prevention of proliferation of weapons of mass destruction and the protection of human rights. Yet, the scope has broadened. Controls now extend to cyber-surveillance technologies and critical dual-use goods, infiltrating sectors not previously subject to this compliance area. For exporters, it has also become a critical lever for risk management, market access, and corporate reputation. We explore below some of the reasons for this shift, including the global ripple effects of US policy and updates to Irish and EU legislation which aim for tighter and more uniform (export) controls.

The Trump effect: Globalisation meets fragmentation

The Trump Administration’s “America First” trade policy has had a profound impact, not only on customs through the sweeping implementation of tariffs, but also on global export controls. The U.S. continues to tighten restrictions on advanced technologies and semiconductor manufacturing, has expanded entity lists, and has increased scrutiny of transactions involving China and other strategic competitors, resulting in further compliance complexity for businesses with a global footprint.

With these developments, export controls has emerged as a central pillar of the US trade agenda. In August this year, the Validated End-User (VEU) program was ‘invalidated’, which previously permitted specific non-US semiconductor manufacturers to export (most) US-origin goods, software and technology for semiconductor manufacturing in China without the requirement to obtain an export licence. The Trump Administration advocated this move as “closing export control loopholes – particularly those that put US companies at a competitive disadvantage”. This move works in step with the rescinding of the AI Diffusion Rule earlier in the year, which was originally published by the Biden Administration days before the end of his term. The main purpose of the AI Diffusion Rule was to manage and restrict the global spread and development of advanced AI technologies, but proposed exception for certain trusted partners, such as the EU and UK. At the height of the trade tensions between the US and China in May, the US retaliated further through the suspension of export licences for the sale and supply of LEAP-1C engines to COMAC in China. This decision was lifted by the US Department of Commerce following China’s easing of restrictions on its export of rare earth materials to the US, demonstrating the important interplay of export controls in a wider trade agenda.

For businesses, the message is clear: export controls are no longer just a matter of national or EU law. They are shaped by a complex web of international regulations, with U.S. policy often setting the tone for global enforcement. The risk of secondary sanctions, supply chain disruptions, and reputational damage has never been higher. It is clear that export controls can no longer be considered a passive compliance function, but needs to be viewed as a strategic lever for business.

Uniformity of control: The EU agenda

In a turbulent time for global trade, the EU continues to take decisive steps to harmonise export controls across its Member States, recognising that fragmented national approaches undermine both security and economic cohesion. This ambition was crystallised in the European Commission’s White Paper on Export Controls, published in January 2024. The paper forms part of the EU’s broader Economic Security Strategy, and it sets out a roadmap for achieving uniform, effective, and strategically aligned export controls across the bloc.

The key challenges identified in the White Paper, such as inconsistent implementation of the Dual-Use Regulation (Regulation (EU) 2021/821), divergent national control lists, and a lack of coordinated political oversight, have become more pronounced in the wake of Russia’s invasion of Ukraine. The conflict has exposed the limitations of relying solely on multilateral regimes like the Wassenaar Arrangement, where international consensus is required to update the Control List of Dual-Use Items. One of the most recent significant developments was the update to the EU Control List of Dual-Use Items, adopted via Delegated Regulation in September. While the list traditionally mirrors decisions made within multilateral frameworks, the EU has now begun to implement controls independently, particularly where consensus is blocked by Russia (as previously agreed by the EU Foreign Affairs Council).

This strategic pivot is not merely bureaucratic—it reflects a fundamental shift in how the EU views export controls as not just as a compliance tool, but as a pillar of economic security and foreign policy.

From compliance to strategy: The Irish context

As a small, open economy deeply embedded in global value chains and heavily reliant on U.S. investment, Ireland finds itself at the intersection of two powerful regulatory forces: the EU’s push for harmonised controls and the US’ increasingly assertive export control agenda. Ireland’s export-driven economy has long benefited from open markets and a reputation for regulatory reliability. However, Ireland’s policy position is shifting to balance economic openness with national and international security imperatives.

The Control of Exports Act 2023, which came into force in August 2024, modernises Ireland’s legal framework for regulating dual-use and military items, brokering, and technical assistance. It aligns Ireland with the EU Dual-Use Regulation and introduces discretionary powers for the Minister to impose controls beyond the EU list—an important tool for responding to emerging threats and geopolitical developments. The launch of the new Export Authorisation System (EAS), also aims to streamline the export licence application for Irish exporters, while facilitating better reporting and oversight for the national authority, the Department of Enterprise, Tourism and Employment (DETE).

While Ireland’s export control obligations are to the EU and the international regimes it is a member of, such as the Wassenaar Arrangement, we cannot ignore how its strategy is also shaped by the extraterritorial reach of the US regulations through those provided by the Bureau of Industry and Security (BIS) under the Export Administration Regulations (EAR). US Policy is, and will continue, to affect Irish exporters through:

• Entity list restrictions: Irish firms dealing with global supply chains must navigate U.S. restrictions on Chinese companies like Huawei and others, even when transactions occur outside the U.S;

• End-use checks (EUCs): BIS can conduct on-site verifications in Ireland to ensure compliance with U.S. export licenses and authorisations. 

• Licensing dependencies: Irish subsidiaries of U.S. multinationals often require U.S. licenses for reexports of controlled technologies, particularly in semiconductors, AI, and defence. Information sharing between entities in the EU and those in the US of the same multinational can also bring its own licensing complications.

Ireland’s evolving export control strategy reflects a delicate balancing act: aligning with the EU’s push for harmonised controls and values-based trade, while managing the risks of U.S. extraterritorial enforcement and tariff escalation. For Irish exporters, this means that compliance is no longer just about ticking boxes—it’s about understanding the strategic implications of where, how, and to whom you export. At a recent DETE webinar on 25 September, the importance of due diligence for exporters was continually emphasised in knowing not only who their end users or customers are, but also understanding the end use of the goods, and having records of these checks on file for future audits to evidence these due diligence reviews.

Export controls as a business strategy

Forward-thinking companies are responding to this evolving landscape by embedding export controls into their core business strategy. This involves:

• Proactive risk assessment: Mapping supply chains and customer bases to identify exposure to controlled goods, sensitive end-users, and high-risk jurisdictions.
• Investment in compliance infrastructure: Upgrading ERP systems to: perform screening of the classification of goods due for shipment; implementing effective blocks to prevent export of non-licensed goods; interfacing with third party sanctions screening tools; and managing usage of export licences. 
• Board-level oversight: Elevating export control compliance to the C-suite and boardroom, recognising its impact on market access, M&A, and investor confidence.
• Scenario planning: Preparing for rapid regulatory changes, such as new U.S. or EU sanctions, and building flexibility into contracts and operations.

However, the basics of export control remain the same. Exporters need to know where their products, both tangible and intangible are going (destination), what the product is, who it will be used by (the end user), and what it will be used for (the end use).

Looking ahead: Opportunity in complexity

While the tightening of export controls presents challenges, it also offers opportunities for business. Companies that can demonstrate robust compliance are better positioned to win contracts with multinational partners, access new markets, and build trust with regulators and stakeholders.

Moreover, Ireland’s commitment to a balanced, internationally consistent export control regime reinforces its status as a safe and responsible location for global business.

In conclusion, export controls are no longer a back-office function—they are a strategic imperative. Businesses that embrace this reality will not only navigate the risks of a fragmented global order but also seize the opportunities of a more secure and values-driven marketplace. If you're exploring how to strengthen compliance, unlock new markets, or position your company as a trusted global partner, I’d be happy to discuss how these insights apply to your business.