The Legal Basis of Trade Sanctions Compliance
National trade control aligned with international sanctions rests on the law that establishes a permit-based regime for the export, import, transit and brokering of products defined by control lists. Under the law, the export of products specified in the control lists is carried out on the basis of an export permit issued in accordance with Georgian legislation. This means that taking sanctionable goods out of the country is not prohibited as such, but it is impermissible without a permit — the law bans not trade but unsanctioned trade. The first step of compliance is therefore always to determine whether a specific product or service falls within the control lists.
Dual-Use Products and Embargoes
Particular attention is devoted to dual-use products. Even the export of dual-use products not specified in the control list requires a permit where the permit-issuing authority has notified the exporter, on the basis of a reasonable assumption, that the product will be used, wholly or partly, in connection with the development, production or proliferation of biological or chemical weapons, nuclear weapons or other explosive devices containing nuclear material, or for military purposes where an arms embargo has been imposed under a United Nations Security Council resolution, international obligations or unilaterally by Georgia. Military purposes within the meaning of the law include the installation of products in military products, the use of industrial, testing or analytical equipment for the development or production of military products, and the use of semi-finished products for such production. A permit is likewise required where the exporter knows or has a reasonable assumption of such use — this constructive knowledge is the principal compliance risk.
Import, Transit and Brokering Services
For imports, the same logic applies: the import of products defined by the control lists is carried out on the basis of a duly issued import permit. As to transit, the transit of military products rests on a transit permit, and the transit of dual-use products marked in the control list with one or two asterisks likewise requires a transit permit. The rules on brokering services provide that brokering in military products is carried out under a permit, while brokering in dual-use products requires one where the broker has received a notification from the permit-issuing authority based on a reasonable assumption, or itself knows or reasonably assumes such end use. Sanctions risk therefore extends beyond the exporter to the intermediary — the broker and the carrier.