How do dual use export controls apply to UK businesses?

  • Posted on

Dual-use goods are items which can be used both for military and civil purposes. This extends to goods used for the manufacture of nuclear weapons that can also be used for non-explosive purposes.

Due to their nature, these items are subject to dual-use export controls for which you need a license to export from Great Britain. There is a consolidated list of these items on the website if you want to check them for yourself.

In this post we’re going to cover what dual-use export controls are and what impact they have on UK businesses.

What are the dual-use export controls?

UK dual-use export controls are based primarily on the Export Control Act 2002 (ECA 2002), the associated Export Control Order 2008, SI 2008/3231, and retained EU regulations, amended by UK Regulations to ensure their applicability after the full withdrawal of the UK from the EU on 1 January 2021.

“Dual-use items” are defined in Article 2(1) of the Export Control Order 2008 as items, including software and technology, which can be used for both civil and military purposes.

Dual-use items can range from raw materials to components and complete systems, such as nickel alloys, semi-conductor chips, or thermal imaging cameras. They could also be items used in the production or development of military goods, such as machine tools, chemical manufacturing equipment and computers.

Dual-use items are listed in the Council Regulation (EC) 428/2009, as retained under the EU (Withdrawal) Act 2018 for Great Britain, and include physical goods, software and technology. Annex I dual-use items are described in Council Regulation (EC) 428/2009 in the following broad categories. Annex IV items are more heavily controlled and are not considered for the purpose of this blog.

Control categories items

0. nuclear materials

1. materials, chemicals, micro-organisms and toxins

2. materials processing

3. electronics

4. computers

5. telecommunications and information security

6. sensors and lasers

7. navigation and avionics

8. marine

9. aerospace and propulsion

Each category is further sub-divided into groups A to E, as follows:

A: systems equipment and components

B: test, inspection and production equipment

C: materials

D: software

E: technology

These categories are highly technical and items classified against the dual-use export control lists are given an export control classification number (ECCN), which is determined by the technical specification of the item against the control list entry. Exporters can check if their items are list controlled in the consolidated list of strategic military and dual use items.

What impact do dual-use export controls have on UK businesses?

A dual-use export licence is needed to export Annex I dual-use controlled items from Great Britain to any country, including the Channel Islands. An export licence is not required to export Annex I dual-use controlled goods from Great Britain to Northern Ireland, however the exporter must inform the consignee in writing (in the shipping documents) that the items require a licence if subsequently exported outside of the European Union.

The administration of the UK export control system is the responsibility of the Export Control Joint Unit (ECJU). The ECJU is part of the Department for International Trade (DIT). The ECJU considers applications for and issues licences for strategic goods. For transfers outside Great Britain, the main indicator that a licence is required is that the items for export are listed on the dual-use or military control lists. If the items for export are not listed on the control lists, exporters might still need to obtain an export authorisation because of concerns about the destination, particular recipient or end-use of the item, including countries subject to embargoes or sanctions. Accordingly, exporters need to be cautious not only about what goods are to be exported, but also where they export their items, to whom, and for what end-use.

Exporters can apply for an export licence using the ECJU’s online portal ‘SPIRE’. There are many different types of export licence available from the Export Control Joint Unit. The process of obtaining an export licence in SPIRE will depend on which type of licence is available to the exporter. As an example, Open General Export Licence ‘Export of Dual-Use items to EU Member States,’ permits the dual use exports from the UK to EU member states and the Channel Islands.

Registration of an Open General Export Licence will notify the Export Control Joint Unit (ECJU), which will make the exporter subject to ECJU compliance audits. An OGEL is not restricted by value or quantity, and it can be used immediately subject to compliance with all terms and conditions. Exporters should ensure that the licence is declared and recorded in the customs entry for dual-use exports from Great Britain, and they obtain a copy of the customs document (SAD) for their records. Furthermore, exporters should ensure that they keep detailed records of each export when using any Open General Export Licence, as they will need to provide evidence of their compliance when audited by the Export Control Joint Unit. Exporters should also ensure that they submit detail of all licenced exports in their annual ‘Open Licence Return’ through SPIRE.

Penalties and fines

Breaching dual-use export controls is a criminal offence. Penalties can vary depending on the nature of the offence and include:

  • revocation of licences
  • seizure of items
  • issuing of a compound penalty fine
  • imprisonment for up to 10 years

Have a question about dual-use controlled items?

Please get in touch for fast, expert advice from an export controls and sanctions lawyer. For a free initial 15-minute consultation to find out how Andrew can help you, please call +44 (0) 1423 734019 or make an enquiry. All enquiries will be responded to promptly.

    Get in touch

    Please fill in the form and we’ll get back to you as soon as we can.