Sheffield Forgemasters designs and produces highly specialised steel forgings and casting solutions for several sectors, including defence and marine, civil nuclear, steel processing, offshore oil and gas, renewable energy and power generation.
The Ministry of Defence-owned firm supplying components for the UK defence programme, including the SSN-AUKUS submarine programme – set to replace the existing Astute Class boats – along with other, international defence programme projects.
The company also trades with the US and other global defence partners, which requires them to keep up to date and compliant with the US’ notoriously strict and all-encompassing International Traffic in Arms Regulations (ITAR).
Compliance challenge
A change to the UK’s F680 approval criteria, requiring UK exporters to reapply when sharing ITAR-related materials with foreign actors, led export manager Emma Foers to explore whether Sheffield Forgemasters’ processes were already compliant, or if re-application was necessary.
Reflecting on the business implications of falling foul of rules, she says “you can’t overstate the importance of understanding export control changes”.
“So many organisations don’t seem to realise the implications. It leaves you open to huge fines and legal action.”
Gaining clarity
To gain full understanding of the criteria, Foers turned to the Chartered Institute of Export & International Trade, attending a consultancy session with one of our experts, Andy Bridges.
She said that the most valuable aspect of their discussion was understanding the kind of process changes that follow rule changes; a breakdown of the costs and implications for businesses. This, she says, isn’t always clear when changes to export control rules are announced.
While she keeps on top of high-level updates, having someone translate the information into practical changes to internal processes was helpful, taking the stress out of handling them. She says:
“Export control is often a small area for a lot of companies; you might have one or two people who need to make a snap decision based on new information.
“You need someone to drill down and find the practical steps for people working with that information: ‘These are the steps A, B and C that you need to take’”.
Relevant expertise
Bridges, whose background includes several defence industry posts, was able to do this clearly and effectively.
He and Foers discussed the F680 change, reviewed the company’s current approval status and the licencing it already has in place.
He explained that, because Sheffield Forgemasters has manufacturing licence agreements with its US defence customers, that includes a list of all the companies it works with – none of which are outside of the UK – its F680 approval should be unaffected by the change.
This saved the company time and resource otherwise directed towards reapplying.
Business value
Having also achieved the much-coveted Authorised Economic Operator (AEO) status, enabling Sheffield Forgemasters to manage their trade with less documentation and streamlined processes, Foers also felt like she had safeguarded a hard-won achievement.
Taking two years to secure, with preparations for the necessary audit split between just herself and one other colleague, it was a relief to know the company’s current practices were fully compliant and wouldn’t jeopardise its AEO status.
Additionally, under ITAR, UK companies have received fines well in excess of £40m, making confidence in your processes – that they’re correct and compliant – incredibly important financially, as well as reputationally.
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