In a time of national crisis, it has left many trade businesses and exporters with unanswered questions and uncertainty. However, there have been recent developments in the world of export controls and economic sanctions that Simon Lucas, partner in our litigation team, examines below.
ECJU issues notice on export licence handling during COVID-19 outbreak
The Export Control Joint Unit (ECJU) has issued a notice to exporters outlining the measures it is taking to ensure minimal disruption to export licencing whilst the UK attempts to stem the spread of coronavirus.
The notice seeks to reassure exporters that the ECJU will continue to operate as normally as possible during this period of uncertainty. Specifically, the notice confirms that the ECJU has put in place continuity measures allowing its key function of processing licence applications to continue so that businesses are able to export goods of a military or dual-use nature during the crisis. In addition, the ECJU has confirmed that it will continue to communicate with exporters regarding licence applications and decisions using SPIRE – the UK’s online export licencing system.
In order to prioritise licencing processing, the following non-essential services have been suspended or modified:
• the compliance and inspection programme will continue, although site audits will now be carried out remotely to allow the ECJU to comply with the new COVID-19 measures on social distancing;
• the control list and end-use advice services may be suspended to give priority to licence processing services. Any announcements in this regard will be made to exporters via SPIRE; and
• all government run export controls training courses have been cancelled for April, May and June 2020.
Processing export licences has been identified as a business-critical operation by the Department for International Trade. Consequently, every reasonable effort will be made to maintain this service. However, some disruption is inevitable and will potentially worsen depending upon the number of ECJU personnel who are struck down by the virus. With this in mind, we encourage businesses to make clear and complete licence applications in a timely manner and to monitor SPIRE regularly for further updates.
Brexit – ECJU and OFSI both publish guidance
The ECJU has issued a notice concerning export control arrangements during the Brexit transition period which is in place until 31 December 2020. The notice reassures exporters that existing export licencing arrangements will continue to apply until the end of the transition period, including arrangements for exporting strategic items. The notice adds that during the transition period, exporters are not required to apply for a licence to export dual-use items to EU member states.
The Office of Financial Sanctions Implementation (OFSI) published guidance on changes to the UK’s sanctions policies which will apply after the end of the transition period. After 11pm on 31 December 2020, the EU sanctions regime will no longer apply and the new UK sanctions regime, as set out in the Sanctions and Anti-Money Laundering Act 2018, will come into force. This new regime may affect the criteria used when imposing sanctions on a person or entity, the types of sanctions imposed (e.g. trade or financial) and any exemptions which may apply as well as how the government enforces those sanctions.
The guidance emphasises that businesses that may be affected by these changes should prepare for the new regime by checking the new legislation and reading the sanctions regime guidance. Our next bulletin will follow-up on the new UK sanctions policy.
OFSI updates financial sanctions
As part of its commitment to ensure that financial sanctions are properly implemented and enforced in the UK, OFSI has recently updated several financial sanctions which are in force. The recent updates are for financial sanctions imposed against the following countries: Egypt, the Democratic Republic of the Congo, Ukraine, Syria, Iraq, Tunisia, Libya, Zimbabwe and Mali. Exporters are encouraged to read the guidance in full before trading with businesses in any of these destinations.
European Commission updates list of dual-use controlled items and open general licences
The ECJU published a notice following the EU Commission’s decision to update the list of dual-use controlled items, i.e. those classified items requiring prior authorisation before export. The ECJU has subsequently issued further notices here and here which outline updates and amendments to licences which can be used to export the controlled items in question from the UK.
It is of critical importance that exporters who are currently registered to use any of the OGELs in question review the recent changes to check that they can still comply with the terms and conditions for use. If exporters are in any doubt, then they should contact the ECJU for clarification via SPIRE before making any further exports of controlled items.
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