By Maya Lester KC & Michael O’Kane

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By Maya Lester KC & Michael O’Kane

UK Export Controls

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Thank you to Fieldfisher for their help with this page.

Introduction to Export Controls

UK export controls aim to manage the risks of international transfers of sensitive items that could be misused to undermine national security or to fuel conflict, terrorism, crime, human rights violations or the proliferation of Weapons of Mass Destruction (“WMD”).

The controls require the authorisation/licensing of the export, and in some cases the brokering or transhipment, of sensitive goods, software and technology (‘items’) including:

  • Military items: items that have been specially designed or modified for military use or are otherwise listed in the respective lists of military items (“Military Lists”);
  • Dual-use items: items that have been designed for civilian use but which have  potential military or security uses and are specified in the respective lists of dual-use items subject to controls (“Dual-use Lists”). The main categories include: nuclear; advanced machine tools; pathogens and toxins; toxic and high energy chemicals; high strength materials; high specification semiconductors, electronics, computers and telecommunications; cryptography; lasers, optics and sonar; navigation and avionics; submersibles; and aerospace and space;
  • End-use controls: any item intended: for use in a WMD programme; for use with military items exported without authorisation; for military use in a country subject to an arms embargo; or certain other uses in some instances (e.g. police, security, intelligence, cyber surveillance, terrorism). WMD programmes concern nuclear, chemical or biological weapons, or missiles capable of delivering them;
  • Civilian firearms and ammunition;
  • Torture items: items that could be used for capital punishment, torture, or cruel and inhuman or degrading treatment or punishment.

 

The EU, UK and US Military and Dual-Use Lists all share a common core of items agreed internationally by the four multilateral ‘Export Control Regime’ groups of countries that coordinate efforts to regulate the export of sensitive items:

  • Wassenaar Arrangement: lists all conventional military and most dual-use items;
  • Nuclear Suppliers Group: lists all items designed for use in the nuclear fuel cycle (the ‘Trigger List’) and other items with potential use in nuclear weapons programmes;
  • Australia Group: lists items with potential use in chemical or biological weapons programmes;
  • Missile Technology Control Regime: lists military and dual-use items with potential use in programmes for the means of delivery of WMD and advanced conventional weapons.

 

The UK adds further items to its lists on a national basis.

In contrast to trade sanctions, export controls generally apply to exports of controlled items to all destinations. However, the licensing architecture focuses the closest scrutiny on transactions that pose the highest risks while enabling lower risk business to be pursued with a reduced regulatory burden.

Goods, software and technology subject to export controls are listed on the UK Control Lists (see below).

 

Items

Items subject to export controls include the following:

  • Goods: these can take the form of equipment, components, materials, samples, chemicals and biological agents, etc.. The controls apply to finished products, to components specially designed for such products and to components that meet the definitions in the control lists in their own right;
  • Software: that is specially designed for the development, production or use of controlled goods, whether military or dual-use, as well as software that is specifically listed as subject to controls;
  • Technology or technical data: this is generally defined as the specific information required for the development, production or use of controlled goods or software. Controlled technology can take any form including data, research papers, designs, manuals and formulae.

 

Activities

Activities subject to export controls include the following:

  • Physical exports: export of controlled goods, on a permanent or temporary basis, including very small quantities, repairs and replacements. Exports include hand carrying controlled software or technology on paper or on a laptop, mobile phone or memory device when travelling;
  • Electronic transfers: transfers out of a country of controlled software or technology by any means. This includes email, phone, video conference, and download or access of documents by a person located overseas. ‘Software-as-a-Service’ via the cloud is not generally considered to be an export provided that no executable software is transferred. Similarly, transferring controlled software outside a country to be stored on a cloud server is not generally considered to be an export provided that its transfer and storage securely prevents access to it by anyone outside the country of origin (e.g. end-to-end encryption and identity management);
  • Technical assistance/services, generally defined as repairs, development, manufacture, assembly, testing, maintenance, or any other technical service related to controlled goods;
  • Brokering: facilitating the transfer of military and end-use controlled items from one third country to another;
  • Transit and trans-shipment: shipping military and end-use controlled items through a country from one third country to another;
  • Release of security classified information: some military and other sensitive items may be subject to national security classifications. Such items and information related to them may require separate authorisations, in addition to export licences, before they may be released or exported. These controls vary on a national basis and are not addressed further in this guidance.

 

Overview of UK Export Controls

UK export controls are governed by the Export Control Act 2002, the Export Control Order 2008 and trade sanctions through regulations established under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA 2018). Assimilated and current EU law is also relevant, for example retained Council Regulation (EC) No 428/2009, which controls exports, brokering, technical assistance, transit and transfer of dual-use items.

Export controls apply to those exporting or transferring goods, software or technology, providing brokering services and certain types of academic research.

Exporters must apply for a licence from the Export Control Joint Unit (ECJU) if:

  • Concerned, or informed of concerns, about the intended end-use(r) of the export; or
  • Exporting items covered by trade sanctions.

Use the  OGEL and Goods Checker Tools to:

  • determine if the items are controlled
  • identify the appropriate control entry

Control entries are codes assigned to each good that needs authorisation.

 

Legislation

The main UK export control legislation is as follows:

  • Dual-use and end-use: the Assimilated Dual-Use Regulation (EC) No. 428/2009 (the former EU Dual-Use Regulation) establishes controls on dual-use items and end-use controls on all items. The main Dual-Use List is at Annex I and lists of highly sensitive dual-use items (subject to stricter licensing requirements) are at Annexes IIg and IV;
  • Military and additional dual-use and end-use: the Export Control Order 2008 establishes controls on military items and additional end-use and dual-use controls, as well as licensing and enforcement provisions. The UK Military List is at Schedule 2 and the UK dual-use control list is at Schedule 3 (this list is additional to those in the Assimilated Dual-Use Regulation);
  • Northern Ireland: under the terms of the Protocol on Ireland/Northern Ireland, the EU regulations set out in the section on EU legislation above apply directly in Northern Ireland. Movements of dual-use goods between Northern Ireland and the EU are treated as transfers, not exports. Movements of controlled goods between Great Britain and Northern Ireland are not subject to export controls.

 

Export Controls and Trade Sanctions

Under SAMLA 2018 Schedule 1, the UK government can make regulations imposing trade sanctions, which include preventing the import/export of goods or technology of a prescribed description to, for the benefit of, or from:

  • a prescribed country
  • designated persons, or
  • persons connected with a prescribed country.

For example, under the UK Russia Regulations, export restrictions have been imposed on (inter alia):

  • dual use, critical industry and military goods and technology ~ 22,
  • luxury goods ~ 46B, and
  • energy-related goods and technology ~ 40,

Import restrictions have been imposed on (inter alia):

  • iron and steel ~ 46D,

 

Export control classifications

Military and dual-use items are assigned an alphanumeric code based on the relevant entry in the military or dual-use lists if they meet the criteria defined in that entry. This code is referred to as a ‘control rating’ or ‘control entry’ in the UK.

Military

The UK military list has 22 categories, from ML1 (“Smooth-bore weapons with a calibre of less than 20 mm…etc.”) to ML22 (military technology).

Dual-use

The UK Dual-Use Lists (as set out in Annex 1 of the assimilated dual-use regulation) has ten categories:

  • Category 0: nuclear materials, facilities and equipment
  • Category 1: special materials and related equipment
  • Category 2: materials processing
  • Category 3: electronics
  • Category 4: computers
  • Category 5: telecommunications and information security
  • Category 6: sensors and lasers
  • Category 7: navigation and avionics
  • Category 8: marine; and
  • Category 9: aerospace and propulsion

Not Listed Items

This covers all items (goods, software and technology) that are not specifically listed as subject to export controls (i.e. the great majority of ordinary commercial and consumer goods). The UK generally refers to such items as “not listed”. Such items are not subject to export controls except if they are intended to be exported for a prohibited end-use or if their export is prohibited by sanctions on the end-user or destination country.

 

Exceptions

Generally, the main exceptions to the controls apply to:

  1. ‘In the public domain’: software and technology that is available without restriction upon further dissemination (no account being taken of restrictions arising solely from copyright);
  2. ‘Basic scientific research’: technology (except for WMD programmes) that is experimental or theoretical work undertaken principally to acquire knowledge of the fundamental principles or phenomena or observable facts and not primarily directed towards a specific practical aim or objective;
  3. Patents: transfers of technology (except nuclear technology) that is the minimum required for patent applications; and
  4. ‘Minimum necessary’ or previously authorised: the minimum necessary for the installation, operation, maintenance or repair of goods that are not controlled or whose export has been previously authorised to the same destination and end-use.

 

Export Licences

Types of Export Licences:

The main export licences are:

  • General licences: these are available to all exporters and cover the supply of unlimited quantities of lower-risk items to lower-risk destinations, subject to certain conditions. They are intended to make export licensing of such transactions as simple as possible. These include UK’s Open General Export Licences (“OGELS”) and retained GEAs;
  • Global licences: these cover unlimited quantities of specified goods to specified customers or sectors from a single exporter, subject to certain conditions. They are intended to simplify export licensing for exporters of large quantities of controlled items and/or customers. These include the UK’s Open Individual Export Licences (“OIELs”);
  • Individual licences: these cover specified quantities of specified goods to a single specified customer from a single exporter, subject to certain conditions. These are required if no general or global licence is applicable. These include the UK’s Standard Individual Export Licences (“SIELs”).

 

Other licences are available and defined in relevant guidance:

  • Retained General Export Authorisations (GEAs)
  • Union General Export Authorisations (GEAs)
  • Standard Individual Trade Control Licences (SITCLs)
  • Open Individual Trade Control Licences (OITCLs)
  • Open General Trade Control Licences (OGTCLs)
  • Standard Individual Transhipment Licences (SITLs)
  • Open General Transhipment Licences (OGTLs)
  • General Trade Licences (GTLs)
  • Technical Assistance Licences
  • Financial Services and Brokering Services Licences
  • Syria Humanitarian Licences
  • Financial Services, Brokering Services and Technical Assistance Licences under UK sanctions regimes
  • Professional and Business Services Licences
  • Licence for energy-related goods
  • Licences for drugs used in execution by lethal injection
  • Global Project Licences (GPLs)

 

Applying for an Export Licence

Exporters can apply for an export licence through the ECJU’s online systems.

Use the LITE service to apply for most SIELs.

Use the SPIRE service to:

  • Register for OGELs
  • Apply for OIELs
  • Apply for the following SIELs:

Applications must include details about the end use and end user of the item being exported.

 

Relevant Government Bodies

The ECJU is the primary body in charge of UK export controls. It brings together policy and expertise from:

  • The Department for Business and Trade, which is responsible for: the statutory & regulatory framework for export controls; and licensing decisions;
  • The Foreign, Commonwealth & Development Office (FCDO), which provides advice on whether an export complies with wider UK government policy; and
  • The Ministry of Defence (MOD), which considers the military, operational, technical and security aspects of proposals to export goods to foreign end users.

The Office of Trade Sanctions Implementation (OTSI) is responsible for trade sanctions (see UK Enforcement).

HMRC is responsible for enforcement.

 

Enforcement

Part 6 of the Export Control Order 2008 governs the enforcement of UK export controls. HMRC is responsible for the enforcement of UK export controls (working with the Border Force). Breaches of export controls are criminal offences.

Breaching export controls is generally a criminal offence. In escalating order, the main penalties generally imposed for breaches are as follows:

  • Warning letter: this generally applies to first-time offences that are minor or voluntarily disclosed;
  • Withdrawal of export licences: this may be applied in the event that compliance errors are repeated;
  • Civil fine: in the UK, these generally take the form of ‘compound penalties’ in lieu of prosecution, typically calculated at three times the value of the items in question less up to 50% discount for a voluntary disclosure
  • Prosecution: this is generally reserved to instances of deliberate breaches. In the UK penalties range up to unlimited fines and/or ten years imprisonment

Exporters that discover they may have breached export controls should make a voluntary disclosure to HMRC to report the breach:

Voluntary disclosure

Strategic Exports and Sanctions Enforcement Policy
Customs Debt, Enforcement & Law, Customs & Border Design, HMRC, 14 Westfield Avenue
London
E20 1HZ

Email exports.strategic@hmrc.gov.uk

 

Open licence returns

Exporters are required annually to provide details of all trades taking place under certain licences. Returns can be submitted using the SPIRE online export licensing system.

Guidance

 

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