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Latest Changes in UK Export Controls

On February 22, the United Kingdom (UK) brought into effect the Export Control (North Korea Sanctions and Iran, Ivory Coast and Syria Amendment) Order 2017 (Statutory Instruments 2017/83), amending, among others, the Export Control (North Korea and Ivory Coast Sanctions and Syria Amendment) Order 2013 (Statutory Instruments 2013/3182).  In addition, it amended the Export Control Order 2008 to include changes to the UK Strategic Export Control Lists.

THE EXPORT CONTROL (NORTH KOREA SANCTIONS AND IRAN, IVORY COAST AND SYRIA AMENDMENT) ORDER 2017

North Korea

The Export Control Order 2017 updates and revokes the Export Control (North Korea and Ivory Coast Sanctions and Syria Amendment) Order 2013, which prohibited:

– Trade with North Korea in dual-use goods and technology as listed in Annex I to Council Regulation (EC) No 428/2009;
– Trade with North Korea in goods and technology which would contribute to North Korea’s nuclear-related, other weapons of mass destruction-related or ballistic missile-related program, and on the provision of related service; and
– Trade in luxury goods as listed in Annex III of EU Council Regulation No 329/2007.

The Export Control Order 2017 includes the above restrictions and provides for enforcement of the North Korea sanctions amended in 2016 by the United Nations and the European Union.  Moreover, it provides for national offences, penalties and licensing provisions as specified in the European Union’s Council Regulation (EC) No. 329/2007 of 27 March 2007 concerning restrictive measures against the Democratic People’s Republic of Korea.

Ivory Coast, Iran and Syria

The Export Control Order 2017 also makes amendments to the Export Control Order 2008 by moving the Ivory Coast from Part 2 of Schedule 4 (embargoed destinations) to that Order to Part 4 of Schedule 4 (destination subject to transit control) as sanctions against the Ivory Coast have recently been lifted.  In addition, it makes amendments to the Export Control (Syria Sanctions) Order 2013.  This amendment, along with the amendment to the Export Control Order 2008, re-enacts and therefore continues the amendments that were contained in the Export Control (North Korea and Ivory Coast Sanctions and Syria Amendment) Order 2013, which is revoked by this order.  Finally, the Export Control Order 2017 amends the Export Control (Iran Sanctions) Order 2016 by correcting a small drafting error.

The following changes are made:

– Articles 5 to 12 create offences for contravention of the trade restrictions in the North Korea Regulation.
– Article 13 creates offences for the circumvention of the trade restrictions in the North Korea Regulation.
– Article 14 supplements the provisions of the North Korea Regulation that allow a competent authority to authorize activities that are otherwise prohibited. Article 14(1) makes it an offence knowingly and recklessly to provide false information for the purpose of obtaining an authorization and article 8(3) makes it an offence to fail to comply with authorization requirements or conditions.
– Article 15 sets out the penalties relating to the offences in the Order.
– Article 16 applies the ancillary provisions relevant to the enforcement of customs and excise legislation to the enforcement of this Order.
– Article 17 omits Ivory Coast from the list in Part 2 of Schedule 4 to the Export Control Order 2008 (Statutory Instruments 2008/3231) and inserts it into the list in Part 4 of Schedule 4 to that Order, reflecting the fact that the Ivory Coast is no longer an embargoed destination.
– Article 18 makes a minor amendment to the Export Control (Iran Sanctions) Order 2016 (Statutory Instruments 2016/503).
– Article 19 makes a minor amendment to the Export Control (Syria Sanctions) Order 2013 (Statutory Instruments 2013/2012). This amendment, along with the amendment to the Export Control Order 2008 in article 17(b)(ii), re-enacts and therefore continues the amendments that were contained in the Export Control (North Korea and Ivory Coast Sanctions and Syria Amendment) Order 2013, which is revoked by this Order.

CHANGES TO THE EXPORT CONTROL ORDER 2008

On February 15, the UK ECO published a notice on the amended Export Control Order 2008.  The amendment includes changes to the UK Military List (Schedule 2), the UK Dual-Use List (Schedule 3), and the list with Information Security Items (Schedule 5) of the order.

The amending order makes several changes to the UK schedule 2 to the main order, which includes the military goods, software and technology subject to UK export controls.  These changes reflect amendments made to the EU Common Military List following agreement to alter this list in the Wassenaar Arrangement, a multilateral export control regime for conventional arms and dual-use goods and technology.  These changes need to be incorporated into UK control lists to reflect the UK commitment to the international non-proliferation regime.

The main changes are to:

– The definitions for “library”, “spacecraft” and “software”,
– ML 1, note on “deactivation”; and
– Text revisions to ML9, ML13, ML17 and ML21.

Also, there are a number of minor typographical changes made throughout the control entries in the schedule.  The national control (PL5017) within this schedule has been deleted (on equipment and test models).

The order itself has been amended in article 2(1) to remove the reference to the deleted national control PL5017 from the definition of European military items.  Article 26 is amended to ensure that a UK license now authorizes the export or transfer of minimum technology required for the installation of goods and software listed In Schedules 2 and 3 of the order.  Article 30 is deleted (registration and record keeping – information security items) together with the associated references to article 30 in articles 28, 31 and 38.  The deletion of article 30 means schedule 5 (Information security Items) has also been deleted.  Schedule 3 has been amended to make some minor amendments to the controls on firearms.

The latest edition of the UK Strategic Export Control Lists, published on February 23, is available at here.

UPDATE AND AMENDMENT OF SIX OGELs

The Export Control Organisation has updated and amended 6 open general export licenses (OGELs). Changes are detailed in the overview below.

– OGEL: PCBs and components for military goods. Main reason for change: Schedule 1 replaced with revised list.
– OGEL: military goods: A400M collaborative programme. Main reason for change: Control list classification table: removal of rating code PL501.
– OGEL: military components. Main reason for change: Control list classification table: removal of rating code PL501.
– OGEL: military goods, software and technology: government or NATO end use. Main reason for change: Control list classification table: removal of rating code PL501.
– OGEL: exports under the US-UK defence trade cooperation treaty. Main reason for change: Control list classification table: removal of rating code PL501.
– OGEL: military goods, software and technology. Main reason for change: Control list classification table: removal of rating code PL501.

The changes reflect amendments to the Export Control Order 2008 which came into force on 22 February and the replacement of Schedule 1 to the OGEL for printed circuit boards (PCBs) and components for military goods. All the licenses have been updated to refer to the new Department for International Trade, of which Export Control Organization forms a part.

Furthermore, control list classification PL5017 has been removed from five of the amended OGELs. You will still need to complete an annual return at the end of the calendar year in December if you have been using OGELs to export PL5017 goods during 2017.

The range of PCBs and Components for military goods listed in Schedule 1 to that OGEL has been considerably extended to include a wide range of additional minor components for equipment controlled in ML5, ML6, ML9, ML10 and ML11. Exporters are encouraged to familiarize themselves with the new schedule and to consider use of this OGEL if appropriate.

See Open general export licenses (OGELs) for further information about OGELs.

CONCLUDING REMARKS

UK Exporters should determine how these changes impact their business operations, and amend their Internal Compliance Programs accordingly.  To stay up-to-date with the latest (UK) regulatory changes subscribe to the EX/IM Daily Update (“The Daily Bugle”) here.

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* Authors: Alexander P. Bosch, Program Manager, apbosch@fullcirclecompliance.eu; and Vincent J.A. Goossen, Program Manager, vjagoossen@fullcirclecompliance.eu.

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