Experts on a panel discussion hosted by the Chartered Institute of Export & International Trade warned that changes already made by US president Donald Trump may signal a new approach to export controls compliance.
Accordingly, there is likely to be more uncertainty and unpredictability as the White House looks to use sanctions as a bargaining chip in its foreign policy.
No hesitation
“Trump doesn’t hesitate”, said George Grammas, partner at law firm Patton Squire Boggs in reference to the US president’s possible sanctions plans.
There is some uncertainty, as Trump piles on pressure on Ukraine to accept a peace deal that many have criticised as being too pro-Russia. There have been suggestions that the US might halt the sanctions applied against Russia for its illegal war, but this has yet to come to fruition.
So far, the White House has signalled it’s going to be “very tough” on China and Iran, said Grammas. Some Biden-era measures have already been repealed, including benefits given to Venezuela in exchange for free and fair elections; these were withdrawn shortly after the Republican returned to office.
“These are bargaining positions for a transactional administration, so removing those benefits can give them something else to work with.”
‘New rules’
Early on in his tenure, Trump terminated two of the “key” administrative figures in US export controls, both of whom had been in government for decades.
“We haven’t seen new rules, but we’ve seen repeals, and the signals are the Trump administration is going to very tough.”
It was likely to be harder for Trump to unwind the current sanctions system than with other pieces of Biden-era legislation, like the Inflation Reduction Act. However, it was a lot simpler to remove companies or individuals from any lists.
Tariffs are a “different type of lever” than export controls, aimed at bringing possible wayward nations to the negotiating table, added Grammas.
Keeping up to date
“Every day is changing so we need to keep up-to-date on export controls,” said Daniela Turiccki, the Chartered Institute’s Export Controls Advisory lead.
A webinar poll found that most traders thought their compliance systems were sufficiently updated, with over 80% saying that there were either ‘confident’ or ‘very confident’.
Turiccki warned, though, that there was still an issue with understanding and training around controls and sanctions, with many companies still not fully aware of how open general export licences (OGELs) operate.
Subscribing to newsletters like the Daily Update, monitoring government websites and “maintaining strong business relationships” were critical during this period, she said.
Another poll during the webinar also found that 42% wanted ‘clearer guidance’ on export controls topic, possibly signalling a continued need for education and information in this fast-moving area.
Incoterms and customs considerations
Emma Foers, a compliance manager at Sheffield Forgemasters, warned that companies should be diligent when it came to tariffs and controls, depending on what sanctions regime they were trading under.
Foers advocated the US-UK-Australia (AUKUS) regime, that has recently been expanded on, as a positive one for traders, but said that she was still “looking at exemptions for Trump”.
“We’re keeping close to our contracts, looking at Incoterms, just so we’re fully prepared and ready for any customs changes that come relatively quickly.
“It’s still unpredictable at the minute.”
Getting support
If you need any support or guidance with your export controls compliance, the Chartered Institute’s Export Controls Practice is here to help.
Our advisers – led by Turiccki – offer objective, specialised advice to support your business in meeting complex export control regulations and remaining compliant.
For more information, visit http://www.export.org.uk/advisory/export-controls-advisory-practice
