Ensuring compliance with export controls and sanctions is becoming an increasingly prominent concern for internationally trading businesses, particularly following Russia’s invasion of Ukraine last year and the US’ tightening of restrictions on the trade of hi-tech items and expertise with China.
Government is enforcing these rules strictly, as evidenced by the news at the end of last year that HMRC penalised 12 businesses with compound settlements worth over £500,000.
Speaking to the IOE&IT Daily Update after the launch of the new export controls special interest group (SIG) earlier this week, Adrian Bond, the head of UK engagement for the government’s Export Control Joint Unit (ECJU), says his department is keen to provide export control professionals with the information needed to “show their business that export controls are not something to be dismissed, as there are serious consequences”.
The news about the penalties was issued through the ECJU’s regular ‘Notice to Exporters’ (NTE) bulletins, which Bond describes has the “main vehicle for keeping exporters of changes to controls, licences and processes” as well as “advice on how to keep compliant”.
“Not having someone signed up to review the notices can result in an exporter not knowing of a change that could potentially result in breaches of export controls and the consequences thereof,” he says.
Sanctions
New sanctions, restrictions and embargoes – particularly those imposed on Russia – have become a significant issue for many businesses, but Bond is keen to point those affected to the guidance that’s been published on gov.uk.
“The guidance often links to other resources and the restrictive measures themselves, and these often have to be reviewed in detail,” he says.
“Trade organisations, like the IOE&IT, also provide guidance and support,” he adds. “And if an exporter has any doubts, they should either apply for a licence to us for us to assess, or obtain their own legal advice to review how a restrictive measure might affect them.”
And for firms wanting to proactively support Ukraine by sending controlled items to the country, he points people to NTE 2022/11.
“My advice would be to ensure that if Ukraine is the intended destination, this is clear in the application,” he says. “I would also advise sending our helpline a brief e-mail with the SPIRE application reference to advise that there is a Ukrainian licence in the system.”
ECJU transformation
During a presentation to the new SIG on Monday, Bond said the ECJU is currently going through a “transformation programme” to modernise some of it services.
“This includes restructuring the Unit to be more robust and efficient, as well as upskilling colleagues to help retain expertise” he tells me. “And of course there’s the LITE programme which we’re working on as a replacement for SPIRE”.
According to NTE 2021/08, LITE will “streamline the [licence] application process using increased automation to support robust licence decision-making. With its intuitive user interface, LITE will save exporters time with faster processing of licence applications and better signposting to helpful advice.”
Bond says that, because LITE will be easier to use, traders shouldn’t need to do much by way of preparation to use it.
“Some exporters are supporting the development of it by responding to invitations to join the Beta programme and test the system,” he says. “In the end it should provide a smoother exporter journey with greater transparency as to where applications are.”