A delay or, worse, a refusal of your export licence application can be costly and potentially damaging to your business. In this presentation at a conference in Manchester in July 2014, Richard Tauwhare of Green Light Exports, explains how licence applications are assessed, describes the main causes of delays and refusals, and gives practical advice on how companies can avoid them.

1. Export Licences:
How to Avoid Refusals & Delays
Manchester, 8 July 2014
Richard Tauwhare, Green Light Exports Consulting
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2. A Salutary Tale from the British Exporters
Association website
 An exporter won a contract to supply goods
to China. He had read that licences took 3
weeks and set about manufacture
 7 months have passed, some £150,000
has been spent on manufacture, the goods
are ready to be exported
 but the licence is still under discussion and
may be refused…
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3. Export Licences are NOT automatic
 In 2013 only 2% of SIELs were
refused
 But that equated to one licence
refused every working day
 As a result, companies had to break
contracts and write-off the costs of
securing them
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4. It’s not only the most sensitive destinations
In the first half of 2014, export licences (OIELs, OITCLs and
SIELs) were refused or rejected for:
 China
 India
 Iran
 Libya
 Pakistan
 Russia
 Saudi Arabia
 Turkey
 UAE
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 Brazil
 Indonesia
 Kuwait
 Malaysia
 Oman
 Qatar
 Thailand and…
 The US

5. Processing Times: On Target (mostly)
5
0
20
40
60
80
100
120
Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
SIELs: 70% in 20 days SIELs: 99% in 60 days SIELs median processing time OIELs: 60% in 60 days

6. 6
HOW TO AVOID REFUSALS
AND DELAYS
1)WHY CONTROLS EXIST
2) HOW LICENCES ARE ASSESSED
3) HOW YOU CAN HELP YOURSELF

7. UK Government Policy
“..the Government are committed to
 the maintenance of a strong defence
industry as part of our industrial base
 as well as of our defence effort, and
 recognises that defence exports can also
contribute to international stability …
 but believe that arms transfers must be
managed responsibly.”
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8.  May breach sanctions, embargoes or other
international agreements, and undermine
international security
 May proliferate WMD
 May compromise UK and our allies security
 May violate human rights or international
humanitarian law
 May undermine internal or regional stability and
fuel conflict
 May fall into the hands of terrorists or criminals
Irresponsible exports
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9. No-one wants UK Exports Misused
 Not the Government: misuse would breach international, EU, UK law and/or values, and could
undermine national, regional or international security
 Not Parliament, NGOs and the media: they scrutinise Government policy and actions closely
 Not the Courts: licensing decisions are open to Judicial Review, which can result in their being
reversed
 Not UK companies: misuse could severely damage their reputation and future business – no-one
wants newspaper headlines that their equipment has been used to repress innocent protesters, to
fuel a civil war, or for a terrorist attack
 So – though they may seem unhelpful or obstructive – licence application delays and refusals
ultimately help exporters by ensuring that the risks of every export are fully and rigorously assessed
 If the Government grants a licence, they in effect take responsibility off the exporter in the event
that the export is misused.
 It works – cases of misuse are very rare. Recent examples: despite criticism, the Government has
refused to name companies involved, as they applied for licences and acted in good faith
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10. 10
HOW TO AVOID REFUSALS
AND DELAYS
1) WHY CONTROLS EXIST
2) HOW LICENCES ARE ASSESSED
3) HOW YOU CAN HELP YOURSELF

11. EU Common Position
 Common Position 2008/944/CFSP defines the common
rules governing EU exports of military technology and
equipment
 Requires each Member State to assess export,
brokering & transit licence applications for items on the
EU Common Military List on a case-by-case basis
against 8 agreed Criteria
 In UK, the same Criteria are applied to all controlled
items, including dual use items and those under end-
use/catch-all control
 Taking account of prevailing circumstances and
foreseeable developments
 All EU share information on any refusals/denials: other
Member States should also refuse similar applications.
Consistency and level playing field
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12. How Licence Applications are Assessed:
The Consolidated EU and National Arms Export Licensing Criteria
1. UK’s International Commitments (DECC, FCO, MOD)
2. Human Rights and Internal Repression (FCO)
3. Internal Situation of recipient country (FCO)
4. Regional Stability (FCO)
5. National Security of UK and allies (MOD, CESG)
6. Behaviour of recipient country (FCO)
7. Diversion (FCO, MOD)
8. Economic Sustainability (DfID)
+ Other Factors – commercial, political, strategic
CRITERIA 1-4 ARE MANDATORY. DECISIONS SUBJECT TO JUDICIAL REVIEW
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13. The reasons for licence refusals in 2013
0 50 100 150 200 250
TOTAL
7 - Risk of diversion
5 – UK National security
3 – Internal tensions or conflict
1 - Embargoes/Treaties
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14. Criterion 1
International Commitments
 Will not issue an export licence if
approval would be inconsistent with:
UN, OSCE, EU and national arms
embargoes and non-proliferation
agreements.
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15. Respect for the UK’s International Commitments
a) Be aware of embargoed destinations – what’s prohibited and what’s not:
- Iraq - Armenia -Belarus -Eritrea
- Lebanon - Azerbaijan -Burma -Guinea
- Afghanistan - Libya -Ivory Coast -Liberia
- Iran - China -DR Congo -Sudan
- Syria - Somalia -DPRK -South Sudan
- Zimbabwe
b) Be aware of End-Use Controls:
- WMD
- Military End-Use
c) Be aware of licensing restrictions on other destinations e.g. Argentina, Russia, Egypt
Criterion 1
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16. Libya Arms Embargo: Prohibitions
 Following the conflict in 2011, the country is subject to:
• UN arms embargo on all Military Listed goods: covers the sale, supply,
transfer of the ML equipment, as well as financial assistance, technical
assistance, training or other assistance, including the provision of armed
mercenary personnel, related to military equipment or to military activities.
• EU embargo on “internal repression items” that are not Military Listed (check
the Council Regulation Annex)
• Financial Sanctions: see HMT’s list of individuals and entities
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17. Libya Arms Embargo: Exemptions
1) non-lethal military equipment intended solely for humanitarian
or protective use, and related technical assistance or training. No
notification required
2) Items temporarily exported by UN personnel, media,
humanitarian and development workers for their personal use only.
Protective clothing: no notification. Small arms, light weapons: notify
for no objection
3) arms and related materiel, including technical assistance, training,
financial and other assistance, intended solely for security or
disarmament assistance to the Libyan authorities. Non-lethal:
no notification. Lethal items: notify for no objection.
4) Other sales or supply of arms and related materiel, or provision of
assistance or personnel. Requires Sanctions Committee approval
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18. Financial Sanctions
• Whom are you exporting to?
• Person or entity subject to an asset freeze
• Separate licence is needed from HMT
• But issued only if there are grounds for exemption from the freeze
• NB US financial sanctions
• Violations of US sanctions can result in heavy fines, backed by the threat
of a company being added to the Denied Parties List – the ‘Death Penalty’
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19. Criterion 2
Internal Repression
Will not issue an export licence if there is
a clear risk that the export might be used for
internal repression
SOURCE:wikimedia.com
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20. Human Rights & International Humanitarian Law
a) End-user:
 do they have any record of repressive behaviour?
 are they likely in future to play a repressive role?
 do they have a legitimate need for the equipment?
b) Equipment or Technology:
 is it capable of being used for repression?
 how has it been used previously in the recipient state?
Criterion 2
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21. Criterion 3
Internal Conflict
Will not issue licences for exports which would
provoke or prolong armed conflicts or aggravate
existing tensions or conflicts in the country of final
destination.
SOURCE:wordpress.com
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22. Criterion 3
 Is there internal conflict in the destination country?
 Or high levels of tension?
 Who is the export going to?
 What are they going to do with it?
 What’s happened previously?
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23. Criterion 4
Regional Conflict
Will not issue an export licence if there is a clear risk that the
recipient would use the proposed export aggressively against
another country or to assert by force a territorial claim.
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24. Regional peace, security and stability
a) Is the destination country embroiled in a regional arms race?
b) How are neighbourly relations?
c) Are the borders disputed?
d) Any recent incursions / invasions / annexations of territory?
e) Is the equipment going to be used for legitimate national defence?
f) Is the destination country at war?
g) Will this equipment change their military capabilities?
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Criterion 4

25. Criterion 5
National Security
Will take into account:
(i) the risk of the goods concerned being used
against UK forces;
(ii) the risk of reverse engineering;
(iii) the need to protect UK military classified
information and capabilities.
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26. National Security
Will the export undermine the security of the UK or our allies?
Criterion 5
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27. Criterion 6
International Community
Will take into account the behaviour of
the buyer country with regard to the
international community, as regards in
particular to its attitude to terrorism,
the nature of its alliances and respect
for international law.
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28. Behaviour with respect to the international community
a) Does the destination country regularly violate international law?
b) Do they let terrorists operate from their shores?
c) Do they support organised crime?
Criterion 6
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29. Will assess the existence of a risk that the equipment will be
diverted within the buyer country or re-exported under
undesirable conditions.
Criterion 7 - Diversion 29

30. Criterion 7
Risk of diversion
a) What is the risk of the export being diverted?
b) Is the end user in a position to receive the export securely?
c) Is the stated end user a front?
d) Can the destination country prevent it from being re-exported?
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31. Criterion 8
Economic Sustainability
Will take into account whether the proposed export
would seriously undermine the economy or
seriously hamper the sustainable development of the
recipient country.
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32. Economic Sustainability
Whether the proposed export would seriously undermine the economy or seriously hamper the sustainable
development of the recipient country.
 intended to prevent very poor countries spending large sums (for them) on unaffordable and
(possibly) unnecessary defence goods and systems, not to stop the UK exporting defence goods to
countries where there is some or even substantial poverty
 Only applies to countries eligible for assistance from the World Bank International Development
Association (with per capita GNI below $1,135)
 Only if the value of the proposed export exceeds 2.5% of the recipient country’s combined public
health and education spending is a more complex evaluation undertaken
Criterion 8
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33. Other Factors
Take into account:
 UK’s economic, commercial, financial interests
 UK’s international relations
 Collaborative defence projects
 UK’s strategic industrial base.
However, these factors cannot affect the application of the Criteria.
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34. 34
HOW TO AVOID REFUSALS
AND DELAYS
1) WHY CONTROLS EXIST
2) HOW LICENCES ARE ASSESSED
3) HOW YOU CAN HELP YOURSELF

35. Why does processing my application take
so long?
 Median processing time for SIELs is 13 days
 Two main reasons why it can be longer:
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 When ECO have to make a Request for Further Information, the
median rises to 23 days
 When the application concerns a high risk combination of item and
destination. Assessing the risks needs extra care. The most sensitive
cases are submitted for decisions by Ministers. This requires extra time
but 99% of cases are still turned around within 60 working days

36. Avoiding Requests for Further Information
Query Cause(s)
EUU EUU and ELA contain contradictory information. The EUU is out of date,
unsigned or is signed by multiple parties. It’s not possible to determine
who signed the EUU (no letter head). EUU contains an electronic
signature.
Tech Specs. The technical information does not include the relevant assessment
parameters from the related control entry.
Goods Descriptions The goods description should describe the goods, in sufficient detail. For
any items specially designed or modified for military use (or for the
development, production or use of military items), state the original
military use, or the design intent.
Third Parties There are third parties / ultimate end users listed on the EUU that are not
listed on the application.
Incorporation Knowing when your consignee is your end user because they are
incorporating or integrating your goods.

37. Be aware of the risks of your export being misused
 Do your own due diligence. Consider how the Consolidated Criteria apply to
your proposed export. In particular, be aware of:
 the political situation in the destination country
 any sanctions or embargoes
 any end use concerns – military, WMD, human rights
 your end-user – if they are new, check them out; Google
 The order – is it credible? Are the quantities reasonable?
 NB securing an F680 is not an indication of whether or not you will be granted
a licence. This is stated explicitly on all F680s. The assessments of F680s do
not consider all of the Criteria
 NB rejection of an OIEL still leaves open the option of applying for SIELs. But
do not be put off trying for OIELs wherever possible: they are a great option.
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38. Risk Assessment
Low Risk
Export/High
Risk End-User
Low Risk
Export/Low
Risk End-User
High Risk
Export/High
Risk End-User
High Risk
Export/Low
Risk End-User
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The Export
The End-User

39. Help and Advice
Support from BIS:
 Internet Guides and Access to SPIRE
 Check OGELs available www.ecochecker.bis.gov.uk
 Awareness seminars and workshops http://tinyurl.com/eco-training-courses
 “Notices to Exporters” http://blogs.bis.gov.uk/exportcontrol
 Advice: eco.help@bis.gsi.gov.uk or 020 7215 4594
Support from Green Light Exports: www.greenlightexports.co.uk
 Training and advice tailored to your needs on all aspects of UK, EU and US export controls
 Identifying exports likely to be refused a licence, before you invest resources in marketing etc.
 Identifying opportunities within the constraints of sanctions and embargoes
 assessing the risks of exports which are not yet controlled e.g. some cyber surveillance kit
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40. Thank you -
Any questions?
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Richard Tauwhare
Green Light Exports Consulting
Email: richard@greenlightexports.co.uk
Web: www.greenlightexports.co.uk
Phone: +44(0)770 311 0880