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UK
Export Control Act -
(An
Overview)
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Softly, softly seems to have been the
Government’s approach to the most far
reaching changes in Export Control
legislation since 1939. As a result many
High Tech and Defence Exporters will
underestimate its effects and be caught
unawares. Because
of the need for surveillance to counter
Terrorism all hardware, software and
technical data or script to do with
Encryption are particularly sensitive and
must be classified under the Strategic List
and closely controlled. UN, US, UK and EU
Sanctions. Legislation is constantly changing
and is subject to severe penalties and
criminal prosecution
if breached |
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Export
Controls now extend to technical data,
documents, research and all forms of
communication including those over the
Internet and oral disclosures, if they are
in any way related to controlled technology
or prohibited end uses. Essentially this is
an enabling Act which gives the Secretary of
State power to present a series of orders
which will control the export of goods and
technology from the UK and
extraterritorially where they are under the
control of a "UK person". This puts a UK
Company in much the same situation in UK
law, as a US Corporation and its
subsidiaries abroad under the US Export
Administration Regulations and any one
anywhere in the world using technology
controlled under the US ITAR (International
Traffic in Arms Regulations). |
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To put the Act
in context one has to cast ones mind back to
the Iraqi Super Gun Affair and Sir Richard
Scott’s Report on the Export of Defence and
Dual Use equipment to Iraq in February 1996.
The Parliamentary debate on this report
almost brought about the collapse of John
Major’s government. The issue was "Who armed
Saddam Hussein?". In 1998 the Government
published a White Paper on "Strategic Export
Controls" which set out proposals for new
primary export control legislation, taking
account of Scott’s recommendations. This Act
is the direct result and it also updates the
old 1939 act by subjecting the Statutory
Instruments that will eventually be issued
to parliamentary scrutiny. In so doing HM
Government is honouring promises to create
"Transparency " and to explain the purpose
for which an order imposing export controls
or transfer controls is made. Some aspects
of the Official Secrets Act also seem to
have been embodied in the Act. |
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The Act
imposes controls on "Technical Assistance
Overseas" which is defined as "services used
or capable of use or provided, in connection
with developing or using controlled goods or
technology". The Act also controls exports
from the UK and the transfer of technology
from the UK of certain technologies (and by
UK persons anywhere by any means other than
by export). The acquisition or disposal of
goods that are themselves subject to export
control or activities which facilitate such
acquisitions or disposals are often referred
to as trafficking and brokering . Any
persons engaged in brokering will need a
licence before they can act as facilitators
or middle-men in arranging for arms or
military related goods to be supplied
between other countries. Where
exporters deal in products which embed
Encryption controls tantamount to those on
Military List products should be applied
internally unless and until the Encryption
Algorithm has been ruled "Uncontrolled or
NLR ( No License Required) by a definitive
classification by BIS or "Mass Market" by
close technical analysis in house . To
export without having made and recorded such
rulings or analyses could be construed as an
offence subject to Criminal prosecution and
penalties by the UK Border Force and the regulations
subordinate to this law". Companies must
also inform their freight forwarders of
controlled products, Conversely if a freight
forwarder slips up he too may be subjected
to investigation and penalties |
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The Act also
gives the Secretary of State powers to
require information, in addition to existing
requirements. The Act also provides for the
Secretary of State to introduce controls
agreed in the EU or the United Nations
relatively simply including an EU Joint
Action agreed in June 2000 on the transfer
by any means of technology or information
where the provider knows or is informed by
Government that the technology or info is
intended for use in a WMD or related missile
programme. The
list of countries subject to some form of
Sanctions is extensive and constantly
changing in response to the turmoil in the
Middle East, parts of Africa, Iraq and Iran
as well as North Korea and Russia. Most
difficult of all is the issue of indirect
supply though agents and distributors to
Military or Paramilitary other Government
agencies or individuals, companies and
countries subject to sanction. In come cases
the prohibitions extend even all forms of
contact. |
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The Trade
Controls should be viewed as a response to
Dealers, Brokers and Traffickers who moved
arms from the trouble spots of Europe to the
trouble spots of Africa. The extension of
the Transfer Controls on Technology however,
is a clear reflection of the dangers in
today’s world of Proliferation, particularly
by Terrorists and Rogue Nations. Almost
anything except foodstuffs and medicines may
be controlled by reasons of military use or
use in manufacture, research or deployment
of Weapons of Mass Destruction. The
Act provides for maximum penalties of up to
10 years imprisonment in the event of a
serious breach. |
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All those involved in
exporting including staff, senior managers
and directors can only protect themselves
against human error and ignorance of the law
by Training as part of a compliance
Programme and by exercising tight control. They
must train and vet key technical personnel
and closely assess any dealers in third
countries with whom they share technology.
Not to have taken Compliance measures is at
best legally "reckless" and may leave
members of the Board of any Public or
Private sector Institution open to
prosecution, with minimal legal grounds of
defence if technology gets into the wrong
hands. |
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