Procurement Glossary
Dual use goods: definition, export control and procurement management
November 19, 2025
Dual-use goods are goods that can be used for both civilian and military purposes and are therefore subject to special export controls. In procurement management, these goods require special attention in supplier selection, compliance checks and international trade processing. Find out below what dual use goods are, what control approaches exist and how risks can be minimized.
Key Facts
- Dual-use goods are subject to strict export control regulations and licensing requirements
- Classification takes place via special commodity codes and export lists of the respective countries
- Compliance violations can lead to significant penalties and trade restrictions
- Supplier evaluation must include export control compliance and end-use audits
- Documentation and verification are mandatory for all transactions
Contents
Definition and meaning of dual use goods
Dual-use goods are a special category of goods that have both civilian and military applications and are therefore subject to international export controls.
Basic characteristics
Dual-use goods are characterized by their dual usability. Typical examples include high-performance computers, certain chemicals, precision tools or navigation technologies. Export control classifies these goods on the basis of international lists such as the EU Dual-Use Regulation or the US Export Administration Regulations.
Dual use goods vs. military goods
In contrast to purely military goods, dual-use goods have primarily civilian applications, but harbor potential for misuse. While military equipment is generally subject to approval, dual-use goods are subject to differentiated controls depending on the country of destination, end use and technical specifications.
Importance of dual use goods in Procurement
For purchasing organizations, dual use goods mean increased compliance requirements for supplier qualification, contract design and customs clearance. Correct classification and documentation is crucial for legally compliant procurement processes.
Process and control of dual use goods
The procurement of dual-use goods requires structured processes to ensure compliance and minimize risk.
Classification and approval procedure
The first step involves the clear classification of the goods based on the export lists. The commodity code is determined using special dual-use codes. It is then checked whether export licenses are required, depending on the country of destination and end use.
Supplier management and due diligence
Suppliers must provide comprehensive proof of compliance, including end-use declarations and export control certifications. The assessment also includes checking sanctions lists and verifying the supplier's actual business activities.
Documentation and verification
All transactions require complete documentation, from the commercial invoice to the end-use confirmation. The retention obligations typically extend over several years and must be available at all times for audits by the authorities.
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Operational KPIs for dual use goods
The management of dual-use goods requires specific key figures for monitoring compliance and operational efficiency.
Compliance key figures
The compliance rate measures the proportion of correctly classified and approved dual-use goods transactions. The number of compliance violations and their financial impact is also recorded. The average processing time for approval procedures shows the efficiency of the compliance processes.
Supplier performance indicators
The proportion of qualified dual-use goods suppliers with complete compliance documentation is continuously monitored. The supplier evaluation also includes the response time to compliance queries and the quality of the end-use certificates provided.
Process efficiency metrics
The average lead time from order to customs clearance shows the overall efficiency of the procurement process. In addition, the costs for compliance measures are measured in relation to the procurement volume in order to evaluate the economic efficiency of dual-use goods procurement.
Supply and control risks for dual-use goods
The procurement of dual-use goods involves specific risks that require proactive risk management.
Compliance and legal risks
Violations of export control regulations can lead to substantial fines, trade restrictions and criminal prosecution. Incomplete or incorrect classifications entail the risk of subsequent objections by authorities, leading to costly reworking.
Supply chain disruptions
Political tensions can lead to short-term changes in export regulations that disrupt established supply chains. Suppliers can lose their export licenses or new approval procedures can lead to considerable delays.
Reputational and business risks
Connections to problematic end users or countries of destination can damage the company's image and lead to loss of business. Complex regulation makes planning more difficult and can lead to unforeseen cost increases due to additional compliance measures.
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Practical example
A mechanical engineering company procures high-precision CNC controls from the USA for the production of industrial equipment. The controls fall under dual use goods regulations as they are also suitable for military applications. The company implements a structured compliance process:
- Classification of controls based on the US Export Administration Regulations
- Obtaining an export license from the US supplier for the German destination
- Provision of an end-use statement for civil industrial applications
- Documentation of all transactions for official audits
Trends & developments
The regulation of dual-use goods is subject to continuous adjustments due to technological developments and geopolitical changes.
Tightening of export controls
International tensions are leading to stricter controls, especially for high technologies such as semiconductors, AI systems and quantum technologies. New technologies are regularly added to the control lists, forcing procurement organizations to continuously adapt their compliance processes.
Digitalization of compliance processes
AI-based systems are increasingly supporting the automated classification of dual-use goods and sanctions list checks. Blockchain technologies enable improved traceability and documentation along the supply chain, which increases compliance security.
Extraterritorial application of regulations
US and European export controls are increasingly being applied extraterritorially, which also affects German companies when doing business with third countries. This requires global compliance strategies and increased coordination between international locations.
Conclusion
Dual-use goods require the highest compliance standards and structured risk management approaches in procurement management. Correct classification, approval procedures and supplier qualification are crucial for legally compliant procurement processes. In view of stricter international export controls and technological developments, companies must continuously adapt their compliance processes and use digital solutions to minimize risks.
FAQ
What are typical examples of dual-use goods?
Typical dual-use goods include high-performance computers, certain chemicals, precision tools, navigation technologies, encryption software and special materials such as carbon fibers. These goods primarily have civilian applications, but can also be used for military purposes.
How do I know if a good falls under dual use regulations?
Classification is based on special export lists such as the EU Dual-Use Regulation or US Export Administration Regulations. Technical specifications, performance parameters and areas of application are decisive. Export control experts or authorities should be consulted in case of uncertainty.
What permits are required for dual use goods?
Depending on the country of destination and end use, export licenses, transit licenses or transfer licenses may be required. Some countries have general licenses for certain dual use goods, while others require individual licenses.
What happens in the event of violations of dual use regulations?
Violations can lead to significant fines, trade restrictions, criminal prosecution and reputational damage. Companies can be placed on sanctions lists, which significantly restricts international business activities. Preventive compliance measures are therefore essential.
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