Uploaded byGreen Light Exports Consulting Ltd
UK Export Controls: Taking a Strategic Approach
The document outlines the importance of a strategic approach to UK export licensing, highlighting how it can enhance exports, reduce costs, and safeguard reputations. It emphasizes the necessity of conducting due diligence, streamlining application processes, and establishing effective compliance systems to manage risks in both developed and emerging markets. The strategic use of export controls is presented as a crucial tool for navigating risks and maximizing opportunities in a competitive landscape.
More Related Content
Similar to UK Export Controls: Taking a Strategic Approach
UK Export Controls: Taking a Strategic Approach
- 1. UK Export Controls: A Strategic Approach 1
- 2. Why a ‘StrategicApproach’? 2 Adopting a strategic approach to export licensing can: boost your exports save you money protect your reputation
- 3. Finding New Markets If you are exporting a new defence or security product, or looking for new markets, the obvious places to start are the developed countries of the EU and NATO large, stable, transparent procurement but crowded markets, shrinking defence budgets on the other hand, there are the emerging markets, some with defence budgets increasing annually by over 10%. 3
- 4.
- 5. Managing the Risks successfully exploiting these opportunities requires navigating the correspondingly greater risks export controls - often seen as no more than a bureaucratic chore – can, if used strategically, be a valuable and low cost tool in managing such risks. In 3 main ways: 1) conduct due diligence early 2) streamline export licensing applications 3) put an effective compliance system in place 5
- 6. 1) Conduct DueDiligence Early 6
- 7. Due Diligence 7 If you do not do this for yourself, the Government, in assessing your export licence application, will do it for you and could refuse you a licence In 2013, on average, one licence was refused every working day as a result, substantial resources dedicated to marketing, tendering and contracting were lost can be avoided by using the risk assessment framework the Government uses in assessing all licence applications
- 8. 1 - Embargoes/Treaties 2 – Internal repression 3 – Internal tensions or … 4 – Regional instability 5 – UK National security 6 – Behaviour of buyer … 7 - Risk of diversion 8 – Economic … 0 50 100 150 200 250 TOTAL Why 196 export licences were refused in 2013 8
- 9. Due Diligence: Sanctions 9 Is the destination country subject to any sanctions? do not automatically assume these rule out all defence exports. In many cases, embargoes apply only to non-government actors while permitting defence supplies to the government and officially-approved bodies beware too of the rapidly-evolving nature of sanctions: the rules can change overnight and it is the exporter’s responsibility to keep up-to-date. Check carefully what is and is not permitted and subscribe to update alerts
- 10. Due Diligence: RedFlags and Denied Parties Know Your Customer are they on Google? do they have a legitimate reason for needing this equipment? 10 are the quantity and performance capability proportionate to the need? any unusual packing or trading terms requested? Is the customer on any lists of ‘denied parties’? Even inadvertently trading with someone on the lists can lead to severe penalties, including potentially being added to the lists yourself.
- 11. Due Diligence: NationalSecurity 11 Would your proposed export risk undermining the security of the UK or our allies? Applying for an MOD Form 680 will help to assess this. Since F680s (unlike export licences) precede tendering and contracting, they can give a valuable early indication of the Government’s assessment of the security risks F680s can cover market survey; promotion; demonstration overseas and in the UK; software for demonstration OGEL; Supply, Local Assembly and Local Manufacture But 2 downsides with F680s: not available for equipment or technology classified below Official – Sensitive do not take into account the other risks assessed in the export licensing process. So being granted one does not guarantee that you will subsequently be granted a licence
- 12. Due Diligence: OtherCriteria Would your proposed export fail the other export licensing criteria? These cover the risks of an export being misused to violate human rights or international humanitarian law provoke or prolong conflict or tension in the destination country be used aggressively against another country be diverted, whether to an agency involved in a WMD programme or with a record of repressive behaviour, or to terrorists or criminals. 12
- 13. 2) Streamline ExportLicence Applications 13
- 14. Streamlining Applications In most cases, securing export licences does not need to be burdensome nor cause delays There are 2 relatively simple areas where a surprising number of exporters go wrong 14
- 15. Streamlining: Open Licences Use Open licences as far as possible. 15 The UK licensing system, though it may seem clunky, in this respect at least is years ahead of those elsewhere. Open licences save 50,000 applications a year in the UK If your export is eligible for an Open General licence, you can register online and go ahead with unlimited shipments as long as you meet the conditions If there are none covering your particular export but you are (or will be) making multiple shipments to regular customers, try securing an Open Individual licence - these significantly cut the volume of paperwork
- 16. Streamlining: SIELs If you have to apply for Standard Individual Export Licences, do it early and fill in the form fully by far the greatest cause of delays is when officials need to request further information from the exporter this increases the turn-around time for an application from around 13 working days to, on average, 23 days. The two main pitfalls are incorrect End User Undertakings incomplete descriptions of the goods Since you already have all this information, it should not involve much extra effort to get it right first time. 16
- 17. 3) An Effective Compliance System 17
- 18. Compliance Systems The law does not specify how exporters should ensure they meet the 18 requirements: there is no ‘one size fits all’ approach, every situation is unique So you can choose to design a system which works best for you But where possible use existing systems, do not reinvent the wheel Keep it simple and fit for purpose, integrated into your standard processes rather than as an ‘add on’ which risks ‘dropping off’ ECO Compliance Code of Practice provides a framework of practical steps to keep licensing procedures simple but effective, drawn up by the Government in close consultation with industry.
- 19. Ten Key Pointsof Compliance Programmes 1) Company Compliance Statement – signed by a Director 2) Clear lines of responsibility 3) Compliance Procedures/Manual – in writing 4) End Use Controls checks 5) Screening: Customers; Suppliers; suspicious enquiries 6) Incorporate export control into Quality Management 7) Implement internal audit processes 8) Ongoing awareness raising and training of all involved 9) Record Keeping, Reporting 10) Emergency Management and Voluntary Disclosures
- 20. Conclusion Whydoes a car have brakes? So it can go fast A company that can take advantage of opportunities - and the inherent risks - will outstrip companies which cannot A relatively minor investment in adopting a strategic approach to export licensing can help exporters manage the risks and thereby unlock the returns to be found in the high growth, emerging markets.
- 21. Thank You Anyquestions? 21 Richard Tauwhare Green Light Exports Consulting Email: richard@greenlightexports.co.uk Web: www.greenlightexports.co.uk Phone: +44(0)770 311 0880