The Challenge of Illicit Technology Transfers to Countries of Concern

The efficacy of multilateral military and dual-use export control regimes, established in the 20th century, has been significantly impacted by illicit trafficking networks and gaps in export controls. Recent disclosures regarding the utilization of Western technology in weaponry by Russia have prompted apprehensions regarding the efficiency of sanctions and export control mechanisms established between 1975 and 1995. Nonetheless, the contemporary global landscape differs greatly from that of the late 20th century. This article explores the imperative to deal with precarious transactions, identify loopholes, and propose improved export controls, alongside awareness-raising policies, updated regulations, and adequate resources for national implementation agencies.

Loopholes in current export controls: the current state of affairs
Substantial evidence indicates that Western manufacturers have been exporting to Russia since its invasion of Ukraine in 2022. Detailed examinations of Russian military systems have revealed the incorporation of numerous foreign-made components. Furthermore, Western technologies have been detected in Iranian military unmanned aerial vehicles (UAVs). It is important to note that the companies producing these items may not be legally accountable for any misconduct, especially if the items transferred are not listed in any export control regulation.

Sanctions and export control mechanisms are amongst the extensively used non-military tools of retaliation, pressure, and deterrence. The technical expertise and item annexes of multilateral export control regimes have also been utilized for the implementation of sanctions. Nonetheless, the question arises as to whether the existing multilateral regimes can effectively address the contemporary needs and challenges. Despite endeavours to update and expand these regimes, there remain significant loopholes in export controls, severely undermining their effectiveness.

Risky transactions to countries of concern
Evidence suggests that illicit trafficking networks and entities in third countries are employing counterfeit components in Russian and Iranian weapons systems. Many of these components are dual-use, while some non-listed dual-use items are also part of the illicit supply chain. Illicit networks and parallel clandestine markets in countries without proper export control policies further exacerbate the challenges faced by export control mechanisms.

The involvement of illicit trafficking networks in armed conflicts and clandestine supply chains for states under international arms embargo poses a major challenge for governments in supplier countries. The smaller and more discreet these networks are, the more challenging it becomes for law enforcement to detect them. Moreover, illicit transfers take place in countries where sanctions and export control regulations do not apply, creating a ‘grey zone’ where illicit transfers are not against the law. Intangible technology transfers further complicate the enforcement of export and customs control regulations, necessitating an updated legal framework and specialized training for enforcement investigators.

Transfers of sensitive but not restricted dual-use products
Many of the technologies concerned are mass-produced industrial goods that are not subject to dual-use controls, making transfers to countries of concern a sensitive issue, but not illegal.

Furthermore, there is no international consensus on the definition of a ‘destabilising transfer’ or a ‘destabilising supply chain’, leading to disagreements on the nature of international security and regional dynamics. This lack of consensus extends to the engagement of non-members in export control policies and creates a ‘grey zone’ where profit-oriented trafficking networks exploit gaps in international sanctions regimes.

Challenges for effective export controls: dual-use technologies, derivatives, and intangible technology transfers
Addressing the challenges for effective technology-related restrictive measures involves considering the growing demand for dual-use technologies, non-listed dual-use technologies, intangible technology transfers, and direct investments in strategic sectors. Efforts to prevent the leakage of strategic technologies require close cooperation between government export control agencies, industry, and academia. This collaboration should lead to increased awareness and self-regulation among suppliers of sensitive technologies, as well as enhanced resources for relevant national agencies and better international cooperation.

In conclusion, enhancing export controls necessitates a unified strategy that encompasses raising awareness in industry and academia, addressing gaps in domestic legislation, increasing the resources of relevant national agencies, and enhancing international cooperation. The geographic spread of transactions and the complexity of illicit trafficking networks necessitate a review and assessment of engagement policies in multilateral export control regimes and the involvement of non-members. These efforts are crucial for the effectiveness of export controls in the present international scene.

Overall, the challenges posed by illicit technology transfers to countries of concern highlight the need for a comprehensive and coordinated approach to enhance the effectiveness of export controls and address the evolving nature of global trade and security.