For German startups, the same rules apply in the form of German laws and EU regulations as for all other companies. This also applies to the scope of application of the so-called “export control”. The term export control is in so far misleading as its complex rules already apply before and independently of an export – contrary to what some companies as well as young startups suspect in the first impression. The risk of overlooking the export control rules and their applicability in individual cases is much greater for startups than for established companies, since a completely new business idea has to be brought to life operationally by a new company in the shortest possible time and under high pressure.
The foreign and security policy interests of Germany and international agreements of the EU and its member states set limits to the so-called and basically free foreign trade with the rules of export control. The responsibility for compliance with these limits lies with the companies and, within the companies, primarily with the management of the company. Export control regulations are complex and subject to constant change. Especially startups in the field of mechanical engineering, electronics, artificial intelligence, software development, emerging technologies need to know whether their product (in the form of a physical commodity, software or technology) is a product listed or not listed under export control law and could be used for critical, e.g. military, uses. This may result in an export license requirement or, in certain cases, an export ban. An export of technology and software already exists if it is made available electronically in Germany for downloading from abroad. Technical and other services may also be subject to export control in certain cases and may trigger approval requirements. Violations of licensing requirements can be prosecuted as an administrative offence with high fines or as a criminal offence with a monetary penalty or imprisonment. In addition to the export control assessment of their own “product”, startups must also check with whom they do business and avoid that business partners, investors or employees are on “blacklists” of the EU and also of other countries, such as e.g. the USA or Japan. As a rule, neither directly nor indirectly economic resources may be made available to persons listed in this way. In other words, no business may be done with such persons.
The geopolitical decisions of the EU and other states such as the US often use export control instruments, such as sanctions/embargoes against countries and persons – also with regard to certain goods – in order to achieve political goals vis-à-vis the sanctioned party (e.g. Russia, Belarus, Iran, North Korea, Syria). Like established companies, startups must be careful not to unintentionally violate such and other compliance rules of export control. It is therefore necessary to check beforehand whether and to what extent a startup is affected by export control. On the basis of such a risk analysis and adapted to the size and business of the startup, an internal compliance program would then have to be installed if necessary.