Release of the Export Controls and Human Rights Initiative Code of Conduct highlights U.S. efforts to prevent censorship, privacy violations, and misuse of surveillance technology

On March 30, 2023, the United States and over 20 additional Subscribing States released a "Code of Conduct for Enhancing Export Controls of Goods and Technology That Could be Misused and Lead to Serious Violations or Abuses of Human Rights" ("ECHRI Code of Conduct" or "the Code"). This is a voluntary, nonbinding two-page document—not a formal trade treaty or multilateral export control agreement—documenting six political commitments, along with several administrative commitments that together are intended to "contribute to regional and international security and stability." While the ECHRI Code of Conduct is the result of efforts spearheaded by the United States, the extent to which it will spur changes to U.S. export licensing or have some other measurable impact on U.S. exporters remains unclear.

The ECHRI Code of Conduct

The Subscribing States—comprised of approximately two dozen countries including the United States, Albania, Ecuador, New Zealand, and North Macedonia[1]—adopted the Code to ensure that use of undefined, unidentified "relevant goods and technologies" will occur "in compliance with international human rights law" and further to ensure those goods and technologies are "not misused to unlawfully or arbitrarily interfere with privacy or to otherwise commit serious violations or abuses of human rights."

The Code is not focused on arms control measures or defense technologies and services. Rather, it broadly—if somewhat vaguely—covers existing and future dual-use goods and technologies that can be misused "in ways that can lead to serious violations or abuses of human rights, including acts to censor political opposition and track dissidents, journalists, human rights defenders, other members of civil society, or individuals belonging to vulnerable groups."

No specific products or categories are spelled out in the Code other than one reference to "surveillance technologies." (That reference partially echoes mentions of surveillance and cyber intrusion technologies made in a December 2021 Fact Sheet announcing the underlying "Export Controls and Human Rights Initiative.") Another reference in the Code—to the importance of advanced goods and technologies to communication—implies that communication-related hardware and software/apps are within the core areas of interest. Language referencing technological developments indicates that the focus is equally on advanced/emerging technologies and current ones. Determining the extent of goods and technologies within the Code's scope is one of several items outstanding on the Subscribing States' to-do list.

Each country that subscribes to the Code of Conduct commits to:

1. Ensure that its domestic legal, regulatory, policy and enforcement tools are "appropriate and updated" as pertains to exports of goods to end-users that could misuse them;
2. Consult with the private sector, academia, and other groups in Subscribing States concerning human rights issues and effective implementation of export controls;
3. Share information regarding threats and risks with other Subscribing States;
4. Share, develop, and implement best practices to control exports;
5. Consult with and encourage its private sector to implement due diligence policies and procedures in line with national law and the U.N. Guiding Principles on Business and Human Rights ("U.N. Guiding Principles"); and
6. Help non-subscribing states to implement similar measures and encourage them to join the ranks of Subscribing States.

In addition, the Subscribing States as a group commit to:

1. Hold meetings, either annually or at other intervals;
2. Use the meetings to further develop and implement the Code of Conduct, including through designating a central and national points of contact, discussing human rights concerns relating to export license applications, and sharing information regarding relevant technologies; and
3. Identify opportunities to collaborate with multilateral export control regimes and export initiatives.

While the initial Subscribing States include several countries, like Japan, that are already members of more than one multilateral export control regime—the Australia Group (42 countries), the Missile Technology Control Regime (35 countries), the Nuclear Suppliers Group (48 countries), and the Wassenaar Arrangement (42 countries)—the Code of Conduct is open to any country, regardless of its membership in those other export control arrangements, such as Albania and Kosovo.

U.S. Export Controls and Human Rights Considerations: A Tour of Recent History

Accounting for human rights, privacy, and related considerations is by no means new to the United States' export control regime, including application to dual-use goods and technologies. A limited survey of official export-related laws, regulations, and guidance, particularly those issued in the last half-decade, illustrates the enduring nature of the United States' commitment and focus in the context of dual-use export controls.

• September 13, 2000: Amendments to the Export Administration Regulations ("EAR") issued by the U.S. Department of Commerce Bureau of Export Administration (now the Bureau of Industry and Security ("BIS")) confirmed that licensing decisions for "crime control" and "detection" items ("CC-controlled items"), including items such as fingerprinting powders, restraint devices, certain cameras, and police helmets, are to take into consideration "whether there is evidence that the government of the importing country may have violated internationally recognized human rights." The revised regulations noted "[t]he judicious use of export controls is intended to deter the development of a consistent pattern of human rights abuses, distance the United States from such abuses and avoid contributing to civil disorder in a country or region."
• November 20, 2006: BIS created "Surreptitious Listening" ("SL") as a new reason for control under the EAR, requiring export licenses for devices, software, and related technology primarily useful for the surreptitious interception of wire, oral, or electronic communication. The stated foreign policy reasons for the new control included protection of privacy and protection against threats of terrorism. Unlike other reasons for control under the EAR, items controlled for "SL" reasons require licenses to all destinations, including Canada.
• June 5, 2014: BIS revised the statement of licensing policy for certain "600 series" items controlled for "Regional Stability" reasons to provide "explicit notice" that the case-by-case review for those items would consider whether the export is contrary to "the foreign policy interest of promoting the observance of human rights throughout the world." "600 series" items include items that transitioned to the EAR from the U.S. Munitions List as part of export control reform initiatives, such as smoke grenades, unarmed military ground vehicles, some types of body armor, and certain military electronics.
• August 13, 2018: The Export Control Reform Act of 2018—providing permanent statutory authorization for the EAR and, derivatively, export controls over dual-use goods and technologies—requires that exports, reexports, and in-country transfers of items, as well as specific activities of U.S. persons, be controlled for purposes including "[t]o carry out the foreign policy of the United States, including the protection of human rights and the promotion of democracy."
• September 30, 2020: The Bureau of Democracy, Human Rights, and Labor ("DRL") at the Department of State issued "first-of-its-kind" due diligence guidance ("DRL Guidance") intended to help U.S. businesses implement the U.N. Guiding Principles and to identify products and services that can be misused to violate or abuse human rights. Illustrative products and services named in the DRL Guidance include electronic emissions detection systems, rapid DNA testing, social media analytics software, pen-testing tools, and network protocol surveillance systems, among others.
• October 6, 2020: Revisions to the EAR expanded BIS's pre-existing licensing policy for CC-controlled items and expanded its consideration of human rights concerns to almost all license applications. The prior policy had limited the scope of BIS consideration to (a) violations of human rights (b) by the government of the importing country (c) when a license application involved CC-controlled items. In contrast, the revised policy enables BIS to consider (i) both abuses and violations (ii) by individual actors and non-government entities as well as governments (iii) for all items that require a license under the EAR (unless the license requirement is due to a "short supply" control).
• March 28, 2023: BIS updated the EAR's provisions addressing license requirements that apply to parties on the Entity List—entities for which there is reasonable cause to believe they are acting or at a significant risk of acting contrary to the United States' national security and foreign policy interests—to cement the "longstanding position" that human rights considerations can lead to an entity's addition to the list. Inclusion on the Entity List typically subjects the named party to export license requirements for all items subject to the EAR and a license application review presumption or policy of denial.
• March 30, 2023: Concurrent with the announcement of the ECHRI Code of Conduct, BIS released a new "Promoting Human Rights and Democracy" webpage and FAQs addressing the role human rights considerations play in its export licensing decisions.

BIS Export Licensing and Human Rights

The new BIS webpage and FAQs highlight the steps BIS has taken on its own (including revisions to licensing policies discussed above), or jointly with other U.S. government agencies, to address human rights considerations. The webpage and FAQs also provide exporters consolidated information on how to anticipate and address human rights considerations that may affect license application processing. While the webpage and FAQs do not appear to contain new policies or procedures, prior to their public release prospective exporters often learned some of this information through trial and error in the license application and review process.

Since the change to BIS's licensing policy for CC-controlled items in 2020, almost all license applications for export of items on the Commerce Control List ("CCL") undergo review for human rights concerns. As noted in the FAQs, BIS and inter-agency human rights review looks at the item(s), country(ies), end user(s), end use(s), and risks of unauthorized use or diversion, as well as safeguards that minimize the risks. License applications for CC-controlled items are generally considered "favorably" on a case-by-case basis in the absence of civil disorder in the destination country or region and in the absence of human rights concerns; this same "favorable" licensing policy has extended to the rest of the CCL since October 2020.

Exporters are expected to identify human rights concerns as part of their export due diligence, including all relevant facts and circumstances, along with descriptions of any safeguards, in a Letter of Explanation attached to the license application. Exporters cannot "self-blind" by ignoring information learned in the normal course of business. An exporter's process for identifying human rights concerns can make use of the information marshalled on the new BIS webpage, which includes information about the ECHRI Code of Conduct, sanctions, and inter-agency actions. The webpage also highlights some destination country-specific export controls, the DRL Guidance, and business advisories issued by the Department of State.

The FAQs further note that exporters can seek tailored guidance concerning a proposed export that may implicate human rights concerns by contacting the BIS Foreign Policy Division at Foreign.Policy@bis.doc.gov or 202-482-4252.

Takeaways

Given the United States’ pre-existing human rights measures, the announcement of the ECHRI Code of Conduct to the U.S. exporting community arguably serves more as a reminder of existing policies and risk assessments, including as applied to surveillance systems and technology, than signaling a significant change to familiar processes. For the global exporting community, and would-be end users of dual-use technologies, the Code of Conduct may foreshadow more significant changes to other countries’ licensing processes and product availability.

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