Ensuring full compliance with export control laws can be complex and onerous, especially if doing business in politically unstable parts of the world. Following the UK’s exit from the EU, this is an issue many businesses are now having to get to grips with for the first time. The right legal advice can be essential to unblocking trade barriers, avoiding legal penalties and keeping your goods moving.
Andrew Skinner is an experienced regulatory trade lawyer (Solicitor) and has worked as an in-house lawyer for a leading global technology company, as well as in private practice. He is also a professionally qualified engineer and registered with the UK’s Engineering Council as a Chartered Engineer (CEng).
Whether you need advice on potential trade restrictions, are looking for a second opinion on export controls compliance or require urgent assistance with exporting goods that have been detained at the customs border, Andrew can provide fast, effective legal guidance.
His experience includes advising £100million+ turnover businesses and major international defence contractors, supporting other legal professionals dealing with international trade issues and working with customs authorities globally.
Our export advice services
We regularly support commercial clients with export control advice on issues including:
- Identifying which export controls apply to particular goods (including software & technology) and services
- Exporting strategic items specially designed or modified for military use
- Exporting dual-use items which can be used for civil or military purposes
- Export controls on encrypted devices
- Export licencing, including licence conditions, record keeping and UK government audits
- End-use controls on goods and services which are not military or dual-use controlled
- Resolving export control disputes with the UK Export Control Joint Unit (ECJU) and HMRC.
- Securing the release of goods frozen at the customs border due to export control issues
- General export control advice for other jurisdictions worldwide, including the exterritorial controls of the US Export Administration Regulations (EAR), International Traffic in Arms Regulations (ITAR) and Office of Foreign Assets Control (OFAC).
- Support for export control investigations and prosecutions
- General contractual issues and clauses relating to export controls
This is only a brief overview of the issues related to exporting goods that we are able to assist with, so please contact us to discuss how we can assist your business.
Andrew advises clients on a range of trade compliance issues in various sectors, including electronics, aerospace & defence, cosmetics, IT, automotive, nuclear engineering and industrial engineering. He delivers timely, pragmatic advice in a way that recognises the commercial demands faced by clients.
Typical clients range from business owners who may be unfamiliar with export controls and international trade barriers to compliance teams at major international businesses who require a second opinion or specific expertise on more niche matters outside of their experience.
Over the years, Andrew has helped clients to resolve a number of challenges, including:
- Helping a client secure the release of high value goods from the European Union, which were deemed to be export controlled under the national laws of the EU member state.
- Successfully challenging the export classification of goods detained by the UK border force resulting in HMRC discontinuing a criminal prosecution of the exporter.
- Advising a company on the use of open general trade control licences resulting in the company taking on additional business.
- Advising a company on a complex issue relating to US export controls and financial sanctions resulting in the company declining a commercial contract.
- Partnering a US law firm to advise subsidiaries of U.S. companies on the implications of EU export controls and sanctions laws to international transactions.
- Successfully challenging Singapore Customs on the classification and export licencing of encrypted goods, resulting in the discontinuation of legal proceedings.
Common questions about export controls
What are export controls and why do they matter for businesses?
Export controls are measures imposed by governments to regulate the transfer of goods to other states. There are several reasons why governments aim to control the export of goods, depending on the nature, recipient, destinations and future use of the proposed export.
It is therefore important to identify what restrictions may apply to a proposed transaction. For many companies, export controls are only relevant to certain areas of the business, but when applicable, they may prevent transactions from taking place, or require that they be licensed.
What goods are covered by export controls?
Strategic items (goods, software and technology) include most items that have been specially designed or modified for military use, as well as dual-use items which can be used for civil or military purposes. These items are listed in the military and dual-use control lists.
There is also a requirement to obtain an export licence for items not listed in the controls lists, that are, or may be, intended for uses in connection with weapons of mass destruction (WMD), or in military equipment in an embargoed destination, or for use as parts of military goods illegally obtained from the UK, irrespective of destination.
Who enforces export controls?
In the UK, the Export Control Joint Unit (ECJU) is responsible for regulating export controls. The ECJU is part of the Department for International Trade (DIT).
The US Export Administration Regulations (EAR) controls the export and re-export of most commercial items (goods, software, and technology) and certain munitions that have been transferred from the ITAR (US Military List).
Why do US export controls and sanctions matter if I am not trading with the US?
United States (US) export control laws are extraterritorial therefore resulting in exporters having to consider export control laws and licensing requirements of the United States, as well as those laws of their own country.
Similarly, the US Office of Foreign Assets Control (OFAC) sanctions complement US export control regulations administered by other agencies, and companies should always consider US OFAC sanctions regardless of whether or not a transaction is subject to the EAR or the ITAR.
Also, under certain sanctions programmes (such as the sanctions on Iran and North Korea), foreign persons, can be subjected to secondary sanctions. Secondary sanctions target non-US persons for engaging in certain activities contrary to US policy objectives, such as conducting business that benefits a sanctioned country or person, even if the activities have no US nexus. Foreign companies that engage in these types of activities can become subject to various measures, which may include the US government adding them to the OFAC SDN List or restricting their access to the US financial system.
What items are covered by the US Export Administration Regulations (EAR)?
Items subject to the EAR generally include:
- All items in the US, including items:
- in a US Foreign Trade Zone; or
- moving in transit in the US from one foreign country to another.
- All US origin items wherever they are located.
- Foreign-made (not made in the US) commodities that either incorporate controlled US origin commodities or are bundled with controlled US origin software in quantities that exceed specified levels.
- Certain foreign-made direct products of US origin technology or software.
- Certain commodities produced by any plant or major component of a plant located outside the US that is a direct product of US origin technology or software.
What happens if you fail to comply with UK export controls?
The UK enforces its export control regime rigorously. Exporters who commit export control offences in the United Kingdom are investigated by HMRC. In serious cases, HMRC officials may refer a matter to the Crown Prosecution Service which may decide to prosecute offences in the criminal courts.
Exporting any item without the relevant licence where the exporter deliberately does so in order to evade export control law, is chargeable with a fine or a custodial sentence of up to ten years’ imprisonment. Many other offences are offences of strict liability, meaning that a person may be found liable, even if unaware that a licence was required.
What are the penalties for non-compliance with US export controls?
Failure to comply with the US Export Administration Regulations may result in criminal or civil penalties, as well as denial of export privileges, revocation of US export licences and secondary sanctions. A denial of export privilege prevents the direct or indirect participation in any transaction subject to the EAR. Furthermore, a party (company or individual) may not participate in any export transaction which is subject to the EAR, where another party to that transaction is a denied party.
Criminal penalties under the Export Administration Regulations (EAR) can include up to 20 years imprisonment and up to $1 million in fines per violation, or both. Civil penalties for failing to comply with the EAR can reach the greater of $300,000 in fines, or twice the transaction value, per violation.
OFAC criminal penalties for wilful violations can include fines ranging up to $1 million per violation with the possibility of imprisonment for 20 years, or both. OFAC civil penalties vary considerably. In March of 2023, Wells Fargo Bank, N.A. (“Wells Fargo”) agreed to pay OFAC $30,000,000 to settle its potential civil liability for 124 apparent violations of three sanctions programs. This is the highest published penalty to date this year (2023).
Have a question about export controls that we haven’t answered?
Please get in touch and we will be happy to advise you.