EU Export Controls: Control AI Chips Now

Export Control in the EU is lagging behind. AI chips, drones, semiconductors—here's what needs to change, now.

The European Union’s export control regime is under real pressure. In a world marked by rising geopolitical tensions and tech-fuelled warfare, the current 2021 Dual-Use Regulation is outdated. Compliance professionals, exporters, and consultants across the EU, UK, and USA must recognize: standing still is not an option. If the EU wants to maintain control over critical technologies like AI chips, quantum computing, and dual-use drone components, then it needs hard legal power—fast.

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Key Questions Covered in This Blog:

• What’s wrong with the EU’s current Annex I?

• Why can’t the EU act as fast as the U.S. or China?

• What’s the Commission planning for 2025–2026?

• How can enforcement against circumvention be improved?

• What do businesses need to do now?

"The EU urgently needs legal power to act fast on export controls. Soft regulation and slow consensus won’t cut it in a world of drone warfare and AI escalation." Arne Mielken, Managing Director, Customs Manager Ltd

Abbreviations Used In This Blog:

• EU: European Union

• AI: Artificial Intelligence

• HPC: High-Performance Computing

• EAR: Export Administration Regulations (U.S.)

• DU: Dual-Use

• EC: European Commission

  
  

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What’s wrong with the EU’s current Annex I?

Annex I to the EU Dual-Use Regulation is too slow, too outdated, and too reliant on multilateral processes. While the U.S. blocked export of advanced AI chips to China and Russia years ago, the EU list hasn’t caught up. Why? Russia vetoed these controls at the Wassenaar Arrangement. The result: European exporters can still ship advanced semiconductor tools and AI chip technologies, unless national measures apply.

Why can’t the EU act as fast as the U.S. or China?

The EU lacks central authority to impose autonomous controls. Unlike the U.S. EAR system, where the Bureau of Industry and Security can update controls rapidly, the EU system depends on slow-moving multilateral consensus or disjointed national rules. The Commission is now proposing a legal upgrade: to let the EU add critical items not yet on multilateral lists, and impose them bloc-wide. That would be a game-changer.

What’s the Commission planning for 2025–2026?

The Commission’s evaluation of Regulation (EU) 2021/821 is underway. They aim to table amendments by late 2025, with potential new legal authority to control emerging tech unilaterally. They also propose stronger oversight: a permanent EU coordination body, real-time national control notifications, and expert groups made permanent. But 2026–28 is too late. Export control needs to move at the speed of innovation, not bureaucracy.

How can enforcement against circumvention be improved?

Current enforcement is patchy. Some Member States impose national bans or license requirements; others don’t. This enables diversion of sensitive goods via soft jurisdictions. New proposals include mandatory “No Russia” clauses in contracts, EU-wide Know-Your-Customer (KYC) obligations, and stronger transport/export due diligence. But it needs central EU guidance and classification, not 27 versions of interpretation.

What do businesses need to do now?

Don’t wait. Review your tech portfolio for AI chips, drone parts, HPC tooling, and other emerging tech. Map your exports, assess your exposure, and adopt a "beyond compliance" posture. Use the EU Sanctions & Export Helpdesk. Engage in consultations. And if you trade in dual-use, now is the time to pressure policymakers to act. The future of compliance will be unified, digital, and fast. Prepare accordingly.

Arne’s Takeaway

If you export sensitive technologies, time is against you. The EU must gain the legal muscle to act fast, just like the U.S. EAR system. Meanwhile, businesses can’t afford to wait for reforms. Get proactive. Review, revise, and reinforce your export compliance programs today.

Expert Recommendations

• Monitor the Commission’s revision of Regulation 2021/821.

• Engage with national authorities on export licensing changes.

• Invest in compliance automation and KYC tools.

Disclaimer This blog is for educational purposes only and does not constitute legal advice. Always consult with your legal or compliance team before making export decisions.

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