Introduction
How can operators establish what does it mean for an item to be of 'dual-use' nature? In 2025, the Federal Administrative Court of Austria referred a question for preliminary ruling by the Court of Justice of the European Union ("CJEU", or the "Court") on Case C-538/25 (Flugzeugherstellerin) to seek clarification for this question.
In particular, the question concerned 'which of the criteria relied on by the parties to the main proceedings are relevant for establishing whether a training aircraft (and certain additional items and technology) can be of use ‘[also for] military purposes’, and thus be considered a dual-use item within the meaning of Regulation (EU) 2021/821 (‘the Dual-Use Regulation’)'. In summary, when assessing the question, the Court will have the opportunity to clarify one of the most difficult aspects that businesses in Europe – and, in parallel, their advisors – have to deal with:
What makes an item ultimately of dual-use nature?
The matter has not yet been judged by the Court, but on 24 September 2026, the Advocate General has delivered its Opinion in the case (the "Opinion"). While the Opinion is non-binding on the court, it tends to be ultimately followed by the judges and has certain influence on the final decision.
In this Insight, we aim to analyse the background that led to the dispute in the Austrian Court, the referral to the CJEU, the key findings set out in the Advocate General's Opinion, and which legal and practical implications the Opinion represents for EU economic operators.
The background of the dispute
Preliminary ruling procedures make it possible for Member States' local courts to refer questions to the CJEU, which will then provide the Court's interpretation in the matter, and ensure that an aligned understanding is applied throughout the Union.
The question referred to by the Federal Administrative Court of Austria (Bundesverwaltungsgericht) originated from the application of 'Flugzeugherstellerin', an Austrian developer and manufacturer of a two-seat type of training aircraft (the "Applicant"). Specifically, the Applicant wished to export the aircraft in one of the configurations in which it operates, the 'aerobatic model', together with additional supporting goods and technologies. The end-user would be the Myanmar Air Force.
In response to the Applicant's request for an export authorisation with the Austrian Federal Minister of Economy, Energy and Tourism (the "Respondent Authority"), a one-year export authorisation was granted in 2019. In 2020, the Applicant requested an extension in the export authorisation for the export of the aircraft-related goods and technologies that had not yet been exported. In 2021, however, the Respondent Authority rejected the application, on the basis that certain licensing criteria under Austrian law had not been met (the "2021 Decision").
The 2021 Decision was challenged and set aside by the Federal Administrative Court in 2023 for the absence of legal reasoning put forward by the Respondent Authority.
Ultimately, in 2023, the Respondent Authority initiated another authorisation procedure, which led to a negative decision in 2024, where it was stated that a licence could not be granted in light of the prohibition of the export of goods on the 'reasonable suspicion' that "(i) the export of the items in question may result in those items being used for the training of military pilots; (ii) it was technically possible to repurpose the aircraft type at issue for a different use, such as for military purposes; (iii) the end-user of the goods at issue was accused of persistent and systematic human rights violations; and (iv) there is sufficient evidence to suggest that the goods at issue, and in particular the technology (‘know-how’) for the development, manufacture and use of the training aircraft will be used or diverted for undesirable purposes" (the "2024 Decision").
The 2024 Decision was also challenged before the Federal Administrative Court, and the Applicant based its objection on the following arguments:
- The aircraft was not designed for military purposes;
- The conversion for military purposes would require additional technical data, non-available for the end-user;
- The Respondent Authority did not assess the evidence put forward by the Applicant; and
- The Respondent Authority refused to grant the Applicant access to material in the decision file.
In its initial evaluation of the case, the Federal Administrative Court found that the goods at issue were:
- Not included in Annex I to the EU Dual-Use Regulation;
- Not covered by the EU Common Military List;
- Not subject to restrictions under the EU Myanmar sanctions regime, which provides for an arms embargo.
The Court, therefore, concluded that the Respondent Authority had grounded its decision to deny the export authorisation on the basis of human rights considerations, an argument that can be supported by Article 9(1) of the Dual-Use Regulation, which authorises the prohibition on the export of dual-use items not listed under Annex I of the Regulation.
This assessment, however, remains subject to the analysis and review of the following question: what would qualify a good into being potentially applicable to both civilian and military purposes, resulting into it being subject to the same export restrictions as dual-use goods listed under Annex I of the EU Dual-Use Regulation? More specifically, the Austrian Federal Administrative Court referred the following questions to the CJEU:
‘(1) What circumstances are to be taken into account when assessing whether an item can be used also “for … military purposes” in accordance with [Article 2(1)] of [the Dual-Use Regulation]?
(a) Must an item be able to make a substantial contribution to the capabilities of the armed forces in order for there to be use also “for … military purposes” in accordance with [Article 2(1)] of [the Dual-Use Regulation]? Alternatively, can such use already exist in the event that the item is used for the training of military personnel, without the basic training that can be undertaken using the item being distinguishable from that given to comparable civilian personnel, and the specific military training of military personnel takes place, or has to take place, at a later time using a different item?
(b) In assessing whether an item can be used also “for … military purposes” in accordance with [Article 2(1)] of [the Dual-Use Regulation], must account be taken of the military capabilities of the [end-user] or recipient in the third country to which the item is to be exported, of the situation in the third country, of the possibility of the item being repurposed or of the risk of the item being diverted, or is the assessment based solely on the condition of the item when it is to be exported?
(2) Does Article 207 TFEU, read in conjunction with Article 10 of Regulation (EU) 2015/479 of the European Parliament and of the Council of 11 March 2015 on common rules for exports (OJ 2015 L 83, p. 34), or any other provision of EU law permit the application of a national legal provision for the purpose of examining and, as the case may be, prohibiting the export of an item to a third country on the ground of human rights considerations, regardless of whether the item concerned is a dual-use item in accordance with [Article 2(1)] of [the Dual-Use Regulation]?’
The Advocate General's Opinion, however, mainly concentrates on answering question (1).
Analysis and findings of the Advocate General
As indicated in the Advocate General's Opinion, this is the first time that the CJEU is asked to clarify the concept of 'dual-use items'. The question arises in a key moment in the EU export controls history, when exports to Russia and China, for instance, are subject to increased scrutiny, while guidance to businesses do not appear to follow the same pace.
Definition of 'dual-use items'
As found by the Advocate General, the definition of 'dual-use items' is construed broadly, and this was the intention of the legislator. A too narrow definition could result in the Dual-Use Regulation quickly becoming obsolete, a risk it still faces in light of the pace of development in highly advanced technologies.
In addition, the definition is structured to cover not only physical items, but also non-tangible goods, such as 'technology' and 'software'.
A limit in this broad definition is however established: it should cover only items "which can be used for civil and [also for] military purposes". How this limitation should be interpreted was in the core of the Advocate General's Opinion.
Broader versus narrower interpretation
According to the Opinion, the key aspect to be considered when establishing the interpretation of what entails a 'dual-use item' is whether the interpreter will adopt a broader or a narrower interpretation. As it could be expected, the Applicant advocates for a narrower interpretation, while Governmental authorities support a broader interpretation focused on security and strategic considerations.
To the Advocate General's Opinion, what influences the decision to adopt a broader interpretation comes from the current geopolitical order established in the world: as quoted by the Opinion, if states wish to guarantee peace, they must be prepared for war. Security concerns and defence interests, therefore, surpass free trade benefits and importance. While this view does not imply that free trade is entirely over, it does indicate that, in a balancing exercise of interests, security and defence concerns could take priority, if not established that they have, at least, equal importance. As the Advocate General puts forward, only a broad interpretation of the definition of 'dual-use items' is capable of ensuring that Member States' and the EU's strategic, security, and defence considerations are adequately covered and protected.
In light of this conclusion, the Advocate General supported the following answers to the initial question referred to the CJEU, that is, which elements must be considered when determining whether a good is dual-use:
Contribution to the capabilities of the armed forces need not be substantial
As indicated in the Opinion, the Dual-Use Regulation does not refer to any threshold that an item must meet to assert that it contributes to the capabilities of armed forces, so as to be qualified 'also for military purposes'. Furthermore, such an assessment demonstrates not to be feasible in practice. Similarly, an assessment of the contribution to the tasks carried out by the armed forces also demonstrate to be of limited practicality.
In light of this difficulty, the Opinion took the same view as the one proposed by the Greek, Spanish and French Governments: an item is capable of being used also for military purposes whenever there is any link between the item's potential uses and the armed forces of the third country in question.
The objective characteristics of the item alone are the ones to determine its potential 'dual-use', not the characteristics of the end-user
The conclusion found above additionally influences the second point of the first question referred to the CJEU. As put forward by the Advocate General, whenever it is objectively possible that an item may be used for military purposes, this should suffice. The attention, therefore, should be dedicated to the objective characteristics of the goods and their potential capability of being used for military purpose, and not to the end-user. In the Advocate General's Opinion, this will be the case in three different scenarios:
- The good may be simultaneously used for civilian and military purposes, such as certain modern telecommunications infrastructure;
- The good will have alternate uses, therefore it can be either used for civilian or for military purposes, and may be switched from one purpose to the other, without technical modification;
- The good is mainly designed and intended for civilian purposes, but can be repurposed for military objectives, such as civilian drones used in military combats.
To achieve these scenarios, therefore, what will be of actual relevance are the characteristics of the item and its potential capabilities of being used for military purposes. Account, therefore, must be taken of the item's physical and technical characteristics, including the objective possibility of repurposing.
The assessment of the end-user, in that case, must come in the next step of the licensing procedure: after having established that an item is objectively dual-use, the identity and qualification of the end-user, and also the country of export and the potential for diversion, will influence on the decision of granting, or not, an authorisation for the export. National competent authorities, therefore, must clearly justify the link established between the transaction's characteristics and the potential use of the item for a military purpose, and, accordingly, the decision to grant or not an export licence.
Relevance for Business Operators
As indicated above, the CJEU is not required to adopt the same view of the Advocate General's Opinion when answering questions referred to for preliminary ruling. However, as practice has demonstrated, this is often the case. Consequently, while we await the Court's final decision, the Opinion will likely operate as a useful interpretation resource for national competent authorities and for courts when assessing whether an item is or not of dual-use nature.
For business operators, this is of key relevance: as indicated in the Opinion, the main aspect that will determine whether an item is or not of dual-use nature are its own characteristics, technical description, and technology involved in its production. As practice has demonstrated, many economic operators, either providers of services or manufacturers of goods, still lack sufficient knowledge on the characteristics of their own products or services, or on the technology that resulted into them. This may result not only in the risk of wrong HS code classification being adopted, but also on export controls under the Dual-Use Regulation not being considered, or being wrongly assessed, as many companies still rely on the use of the "Dual-Use Correlation Table", which does not translate in the correct and accurate dual-use classification. Ultimately, this increases the risk of an export without the applicable licence taking place and a violation of export controls being found.
Another point to be considered in the Opinion is the clarification of each step of assessment to be put forward when a national competent authority decides whether or not to grant an export authorisation: (i) initially, the assessment of whether a good is, objectively, of dual-use nature, and, then (ii) assessing whether the end-user, the country of export, and the risk of diversion hinder the possibility of the export authorisation being granted.
Because of the division of these two steps into separate phases, economic operators, in addition to the assessment of the characteristics of the goods and services they intend to export, must exercise due care over their end-users. This should include not only assessing who the end-user of the goods is, but also in which sector they operate, by which parties they are owned or controlled, their business history and participation in the market, and the claimed end-use of the product. All these elements will be taken into account by the national competent authorities when assessing whether to grant an export licence. Evidence, therefore, must be carefully and duly documented, and due diligence procedures must be supported by an internal procedural framework.