Changes to UK export control licensing systems

Sandra Strong discusses recent changes to the export licensing system, and the implications for UK exporters.


An old saying dating back to the Greek philosopher Heraclitus is often translated as “there is nothing permanent except change”, and this could not be more true for people working in international trade. Just as we feel settled with procedures, laws and processes, they change.

Until the late 1990s, the UK was satisfied to have Strategic Exports controlled under the Emergency Powers (Defence) Act of 1939. As Lord Chief Justice Scott mused, “surely that particular emergency has passed”, when asked to look into the UK controls on military goods, following the Iraqi “supergun” incident, where pipes destined for Iraq were seized by UK Customs officers in April 1990 at Teesport. That is when things started to change.

Controlling military and strategic goods

It was not just the UK that started looking at controls on military and strategic goods, technology and software. In 1995 in Wassenaar, a town located in a suburb of The Hague, Netherlands, a number of countries reached an Agreement on the type of multilateral co-operation required on the exporting and sharing, or not, of strategic (dual-use) goods such as special materials, chemicals and high technology items. Participating states to the “Wassenaar Arrangement” seek, through their national policies, to ensure that transfers of these items do not contribute to the development or enhancement of military capabilities that could undermine regional and international security and stability, and are not diverted to support such capabilities. Since then we have not been able to resist changing and tweaking Export Control Legislation or the procedures and licensing requirements.

The UK currently has the following Control Lists specifying goods, technology and software that need an export licence for “strategic” purposes. The lists comprise a number of separate item listings, and this is without looking at legislation covering embargoes and sanctions that has also increased in the last five years.

  • UK Military List (Schedule 2 of the Export Control Order 2008).

  • UK Dual-Use List (Schedule 3 of the Export Control Order 2008).

  • EU Human Rights List (Annexes II and III of 2005 EC Regulation 1236/2005).

  • UK National Security and Paramilitary List (Article 9 of Export Control Order 2008).

  • UK National Radioactive Sources List (Schedule referred to in Article 2 of Export of Radioactive Sources (Control) Order 2006).

  • EU Dual-Use List (Annex I of the EU Dual-Use Regulation 428/2009).

  • EU General Export Authorisations (EU GEAs) (Annex II of the EU Dual-Use Regulation 428/2009 and Council Regulation (EC) No. 1232/2011).

  • Annex IV to EU Dual-Use Regulation 428/2009.

Reference: UK Strategic Export Control Lists.

In addition, the Wassenaar Arrangement Dual Use Goods and Technologies and Munitions List, on which the EU bases its Dual-Use Regulations, was amended and adopted in December 2012 and this has led to Partner States such as Australia, Japan, Malaysia, Singapore, USA and the EU adjusting their regulations (reference:

On a more practical point, in the past couple of years the export community within the UK has been subjected to a number of procedural and licensing changes that, unless businesses are really alert, can lead to delays and potential non-compliances. There follows a look at two areas of recent changes in the UK controls: the wording of Open General Export Licences (OGELS) and the definition of an End-User.

Changes to OGELs

2012 and 2013 have seen changes in the wording and structure of our OGELs. These are a boon to both industry and the Export Control Organisation (ECO) as they are said to replace around 50,000 Standard Individual Export Licence (SIEL) applications a year and permit companies to control themselves. As long as traders can provide evidence to support the terms and conditions of the OGEL used it can be used immediately (after first registering on the Shared Primary Information Resource Environment (SPIRE) prior to first-time use). However, when the terms and conditions change, and (with apologies to ECO) are poorly written, it is confusing and often easier to apply for a SIEL than to take the risk of getting it wrong. ECO is aware of these concerns and, in January 2013, won the Plain English Campaign’s Crystal Mark for clarity awarded to the re-written and re-issued OGELs: Military Goods, Software and Technology: Government or NATO End-Use; and Military Goods, Software and Technology. This does, however, beg the question of why these licences were re-issued again in July 2013. The answer is quite simple — to include the new EU Member State, Croatia.

End-User Undertakings

October 2012 saw the introduction of two new End User Undertakings required to support export licence applications — an End-User Undertaking and a Stockist Undertaking — but was a clear guidance note issued to explain the difference between the two? Not really, and adding to that the potentially vague status of “End-User”, is it any wonder that 2012 saw over a third of the licence applications submit to ECO via SPIRE being delayed due to Requests for Further Information (RFI)? Perhaps it could be called anecdotal, except it really did happen. Even ECO seemed confused by the differences, with different officers treating identical situations in different ways.

Military End-Use controls making goods “not on any list” potentially subject to export licensing controls, together with the risk of proliferations and diversion, has led to more UK export stoppages by HMRC and the Border Force, but only around 10% of the exports stopped were actually subject to controls. The cost to industry is large but not easy to calculate.

The effect on business

The reputation of UK Companies in a competitive situation is being damaged. How can one guarantee delivery timescales if goods (even when covered by a legitimate licence) are delayed? UK Trade and Investment takes companies trading in electronics, telecommunication equipment, software, chemicals, etc on Trade Missions to countries like India, Brazil, China and Middle Eastern countries to increase UK exports … and then the companies find out they will have to go through the export licensing process because their goods are on a list, or the country is flagged as a potential proliferator. Maybe we do not want to go back to the simplicity of the Emergency Powers (Defence) Act of 1939 (and it would be dangerous to do so) but have we now gone too far the other way?