The UK government has issued a notice to UK traders on new export licence authorisation rules, after the US announced it would reduce licensing requirements for UK defence exporters.

This month, the US is set to publish reforms to its defence export controls regime, the International Traffic in Arms Regulations (ITAR), which will create an exemption from licensing requirements for both the UK and Australia.

The three nations are part of the AUKUS defence pact, formed in 2021 to counter China’s increasing military presence in the South China Sea.

Licencing changes

Following the US’ announcement last week, all three AUKUS nations have agreed to reform their export control requirements, making it easier to share military equipment and technology.

In addition to the US’ anticipated draft rules, Australia has already passed national legislation creating an equivalent exemption, while the UK’s Open General Export Licence (OGL) has already been formed.

Samantha Hodgkins, trade and customs specialist at the Institute of Export & International Trade (IOE&IT), welcomed the news, saying that US exemptions “will take a lot of the pain out of dealing with some ITAR products”.

It’s currently not clear which goods and technology will be covered by the exemption. The original AUKUS pact signed in 2021 was founded on ‘two pillars’: nuclear submarine exports and high-tech military solutions, including AI and quantum technologies.  

Practical steps

Having already discussed licensing requirements under AUKUS and their implications for traders on IOE&IT’s member-exclusive Lunchtime Learning series earlier this year, Hodgkins explains the steps exporters need to take to make sure they can benefit from the new exemption:

“The first step is to make sure that you’re included on the AUKUS nations’ Authorised Users list and that the entity you want to export, transfer, supply or deliver goods to is also a listed entity.”

Details of how to register for the list have yet to be published, however Hodgkins adds that exporters can still feedback on the UK’s OGL draft:

“This is your chance to have a say in a licence that you could be using every day.”

Traders are asked to send feedback to exportcontrol.help@businessandtrade.gov.uk, using “AUKUS OGL” as the email subject. This should be submitted by 1 July 2024.

AUKUS additions?

South Korea has expressed interest in joining AUKUS for the purpose of sharing ‘Pillar 2’ military equipment and technology.

After talks with his Australian counterpart in Melbourne, South Korean defence minister Shin Won-sik said that his country “welcome[s] that AUKUS members are considering Korea as an AUKUS Pillar 2 partner”.

“Korea’s defence science and technology capabilities will contribute to the peace and stability of the development of AUKUS Pillar 2 and regional peace.”

Won-Sik’s meeting follows last month’s reports that the three AUKUS members are also considering working with Japan.

Heightened tensions

These discussions coincide with heightened tensions between China and the Philippines in the South China Sea. The Philippines has accused China’s coast guard of aggression towards fishing vessels it claims falls within its own Exclusive Economic Zone (EEZ).

A Philippine naval taskforce dedicated to the South China Sea wrote in a statement that China’s actions were “illegal and irresponsible”, showing a “disregard for the Philippines' lawful exercise of its rights and entitlements in our own EEZ”.

A Chinese foreign ministry spokesperson characterised the fishing vessels’ presence as “provocative acts of infringement” and warned the Philippines not to further “challenge China's firm determination to safeguard its sovereignty”.