Fostering political will for implementing export controls

Víctor Manuel Sánchez-Colín

Foreign Affairs

Pedro Francisco Guerra-Morales

Economy

México

Mexico´s commitment to international security

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MEXICO • Has been a strong advocate of disarmament and

non-proliferation. • Promoted the creation of the first nuclear-weapons-

free zone (Tlatelolco Treaty), to which is depositary.

• Ratified all relevant international legal instruments that contribute to international peace and security.

• As an elected member of the UN Security Council, chaired the 1540 Committee in the 2009-2010 period.

Mexico´s commitment to international security

3

• Recognizes the key role that export control regimes play in reinforcing existing controls of weapons of mass destruction (WMD) and their delivery systems.

• Has applied for membership in:

• the Australia Group (March, 2011), and

• the Nuclear Suppliers Group (2007, renewed this year).

And has been admitted as 41st member of the Wassenaar Arrangement

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Mexico’s regime for export controls

2004

Apr. 28, 2004

UNSC Resolution

1540.

2005 2006

Mar. 26, 2006 2-year extension to

UNSC Resolution 1540.

2007 2008

Apr. 25, 2008 3-year extension to

UNSC Resolution 1810, 1540.

2009

July 3 Law Against

Chemical Weapons

Immediately after the 10-Year extention of Resolution 1540, Mexico launched its domestic

Export Control Regime.

2010 2011

Apr. 20, 2011 UNSC Resolution 1977,

1540´s 10-year extension Next review 2016.

June 16, 2011

Mexican Directive for

Export Controls

June 17, Mexico Files application

to the Wassenaar

Arrangement

2012

Mar. 2, 2012, Mexican Directive

on nuclear and nuclear-related export controls

2013

However, since 2002, Mexico has had export controls for conventional weapons, nuclear materials and toxic substances that lacked standards and best practices.

1. Non-proliferation + trade security

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1. While national commitment to non-proliferation policies is a quintessential requisite in the adoption of domestic export controls, it is not enough.

1.1 The time in which the exporting industry could export anything to any country is long gone… or perhaps, it never existed.

1.2 The exporting of conventional arms, dual-end use goods, technologies and related software is constricted by non-proliferation and disarming commitments. Historical experience, however, proves that these instruments are not enough.

1.3 A foolproof mechanism to avoid proliferation is the implementation of export controls

for conventional arms, dual-end use goods, technologies and related software; but the need of these mechanisms does not reap the necessary conviction amongst the exporting industries to endorse their full implementation.

Mexico’s regime for export controls

• Mexico has Federal legislation that provides the basis for export controls: – Foreign Trade Law, Customs Law, Federal Tax Code, Federal Administrative

Law, Customs Law Regulations, Tax Code of the Federation, and Federal Criminal Code.

• Since 2002, the Federal Government has implemented export controls through Directives published by the Ministry of Economy together with: • Ministry of Defense (weapons), • Ministries of Health, and Environment and Natural

Resources (chemical items), and • Ministry of Energy (radioactive materials).

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… is an essential requirement to implement an efficient export controls system.

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Foreign Relations

Economy (Commerce)

Customs

Defense

Energy

Health

Environment

Coordination amongst government agencies…

2. Paradigm shift in government

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2. As necessary conditions, additionally domestic authorities must develop:

2.1 Gubernatorial awareness that non-proliferation policies do not represent a major obstacle for commerce.

2.2 Conviction that safer international trade is a higher incentive for intense capital investments.

2.3 The notion that safe trade enhances its quality and volume. 2.4 The certainty that export controls regimes do not stand for burdensome

regulatory and administrative loads. 2.5 Insight that admittance to export controls regimes allows the domestic

development of high end technology industries, because it safeguards manufacturers, intellectual property and sectorial intellectual property.

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Mexican export controls system state of the art

Sept. 11 Oct. 11 Nov. 11 Dec. 11 Jan. 12 Feb. 12 Mar. 12 Apr. 12 May 12 June 12

Sept. 7, 2011.

Mexico City main outreach with export industry after several regional meetings

Oct. 20 Mexican Export Controls Directive enters into force

Nov. 17 WA Troika´s assessment visit to México

Dec. 13 Mexican Export Controls Directive is amended

One of the key aspects in the construction of the Mexican system of export controls program is the industry´s

conviction in the benefits of its adoption.

Jan. 25 Mexico is admitted as the 41st member of the Wassenaar Arrangement

Mar. 2, 2012 Export Controls Directive on Nuclear and nuclear-related list

June 2012 Publication of Additional NSG lists

Outreach is an important tool

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With the government’s conviction on the benefits of export controls for trade, the effort should be directed to companies that do not know their advantages. In Mexico, the most important companies requested the Mexican government’s admission to Wassenaar.

AW is the regime that covers more fully the items that are

exported from Mexico

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WEF Competitiveness Index 2011 of the Wassenaar countries and Mexico

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0.00

1.00

2.00

3.00

4.00

5.00

6.00

Switzerland

Sweden

United States

Netherlands

Japan

Hong Kong SAR

Taiwan, China

Belgium

Saudi Arabia

Austria

Malaysia

Luxembourg

New Zealand

United Arab Emirates

Ireland

Chile

Estonia

Puerto R

ico

Bahrain

Thailand

Poland

Italy

Portugal

Cyprus

Panama

Malta

Brazil

Azerbaijan

Slovenia

Turkey

Costa R

ica

Uruguay

Vietnam

Peru

Slovak R

epublic

Jordan

Morocco

Philippines

Rom

ania

Macedonia, FYR

Trinidad and Tobago

Nam

ibia

Argentina

Algeria

Lebanon

Países en AW: Países fuera de AW: Fuente: World Economic Forum | www.weforum.org/gcr

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The countries of the Wassenaar Arrangement are in the segment of the world's most competitive countries, according to the WEF.

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Country Attraction of

Financial Markets

Human Capital

Business Enviroment

Index

1 India 3.1 2.8 1.1 7.0

2 China 2.6 2.6 1.3 6.5

3 Malaysia 2.8 1.4 1.8 6.0

4 Egypt 3.1 1.4 1.4 5.8

5 Indonesia 3.2 1.5 1.0 5.8

6 Mexico 2.7 1.6 1.4 5.7

7 Thailand 3.0 1.4 1.3 5.7

8 Vietnam 3.3 1.2 1.2 5.7

9 Philippines 3.2 1.3 1.8 5.7

10 Chile 2.4 1.3 1.8 5.5

Mexico is the 6th country on the Global Services Location Index 2011 of A.T. Kearny

It is the first country in North America because of its human capital availability and financial attractiveness

Source: A.T. Kearny Global Services Location IndexTM 2011

Business opportunities

3. Lessons learnt

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3.1 Governmental awareness of export control regime’s importance as tool for non-proliferation is a necessary condition, but not sufficient, for the implementation of a domestic export control regime.

3.2. Ministries or departments of Economy or Trade should enforce the conviction

amongst exporters—and, above all, amongst their governmental equals—that export controls breed security in trade and, therefore, in its sponsoring. The construction of a domestic export control system must be done from the export basis.

3.3 Precise coordination amongst governmental agencies (Foreign Relations,

Defense, Customs, Commerce, Energy and Environment Protection) is a necessary requisite for the successful adoption of an export control regime and the further inclusion of the country to multilateral regimes.

Lessons learnt

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3.4. The construction of a domestic export control system must be done from the export industry basis.

3.5 The conviction in the exporting industry that the need to protect its exports is

the necessary element for a successful exports control regime. 3.6 Any enforcement attempt will not suffice if the exporting industries do not

assume the conviction of having a strong export controls regime. 3.7 In short, it is indispensable that both the exporting sector and governmental

agencies consider export controls regimes as necessary and beneficial for the promotion of exports.

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Thanks

Gracias

New Institutions in Mexican Export Controls Regime

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1. A single procedure for application and permit issuance. 2. A strong operational coordination with Customs. 3. Export Control Committee. Instance to the application review and

coordination between agencies. 4. End-use and end-user statements. 5. Control lists. Sensitive and very sensitive items. 6. Adoption of the Wassenaar categories of the lists. 7. Intangible items. General Software Note. 8. Exceptions. 9. Catch-all controls. 10.Risk analysis, each agency with its respective competence. Very

sensitive cases summited before Committee.