Compliance with export control and sanctions can sometimes be overlooked by companies when exporting.
However, the consequences of exporting without the required export licences can potentially prove costly and cause delays to your shipment. Equally important is the potential effect on your business in terms of loss of reputation, contractual penalties and logistical problems. As such, Unsworth UK find it essential to have complete understanding of export control and sanctions responsibilities, both nationally and internationally.
Export controls are criteria, laid out by the UK government, for which certain items must follow to be allowed to be exported. These include:
- high-technology goods
- products specially designed or modified for military purposes
- certain chemical precursors
- items that could be used in connection with weapons of mass destruction
In the UK, around 5% of exported goods are subjected to these export controls. If you intend to ship any of the previously mentioned items, you must maintain a compliance procedure that will keep you within the law. Not doing so could lead to a maximum of 10 years imprisonment, so it’s important to get it right!
Government Policy on Arms Export
The Consolidated EU and National Arms Export Licensing Criteria detail the government’s outlook on the export of arms. There are 8 criteria which must be followed.
- Respect for the UK’s international commitments, in particular sanctions decreed by the UN Security Council and those decreed by the European Community, agreements on non-proliferation and other subjects, as well as other international obligations.
- The respect of human rights and fundamental freedoms in the country of final destination.
- The internal situation in the country of final destination, as a function of the existence of tensions or armed conflicts.
- Preservation of regional peace, security and stability.
- The national security of the UK, of territories whose external relations are the UK¹s responsibility, and of allies, EU Member States and other friendly countries.
- The behaviour of the buyer country with regards to the international community as regards in particular its attitude to terrorism, the nature of its alliances and respect for international law.
- The existence of a risk that the equipment will be diverted within the buyer country or re-exported under undesirable conditions.
- The compatibility of the arms exports with the technical and economic capacity of the recipient country, taking into account the desirability that states should achieve their legitimate needs of security and defence with the least diversion for armaments of human and economic resources.
What the Controls Cover
The Export Control Act (implemented in May 2004) placed the following activities under control.
Intangible Transfer of Controlled Technology and Software: This relates in the main to military list products, including certain paramilitary products. This control was created to close a certain loophole in the previous law that prevents the digital or electronic transfer as opposed to just technology in the physical form.
Trade: This control enables those in the UK who participate, in whatever capacity, in the movement of arms or weapons to be prosecuted regardless of which countries the trade takes place in.
Weapons of mass destruction (WMD): This is reflective of the governments zero tolerance approach to activity that in any way to the trading of WMDs. Powers of prosecution have been extended to UK nationals, wherever they may be in the world.
Do Your Goods Need a Licence?
The Export Control Organisation has an online search tool, Goods Checker, which helps exporters determine whether their goods are controlled by export control legislation. You must first register with the Export Control Organisation before using the tool. After receiving a ‘rating’, you will then be able to use OGEL Checker to determine whether a General Licence covers the export of their goods to the destination required.
There are a variety of licences that cover this area:
Standard Individual Export Licence (SIEL) This allows the export of a particular amount and value of goods to a destination for a specific duration. The licence is valid generally for 2 year for permanent exports and 1 for temporary.
Open Individual Export Licence (OIEL) As the name suggests, this is specific to the individual exporter and covers multiple shipments with no limit on quantity or value.
Open General Export Licence (OGEL) This allows the holder to export different classes of goods without the need to apply for SIEL or OIEL.
Community General Export Authorisation (CGEA) The CGEA is the European Community equivalent of an OGEL, and concerns the control of exports of dual-use items and technology. It is a community licence valid in all 27 Member States of the EU and may be used to export qualifying goods to:
- New Zealand
To get more information on other licences, please visit the gov.uk website.
With over 40 years in the logistics industry and a dedicated customs team Unsworth UK are able to assist, in anyway, with the export process. Please do not hesitate to get in contact by emailing us at firstname.lastname@example.org or calling +44 (0) 20 8539 8899 and a member of our team will be happy to assist you.