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Guidance on suspending or revoking a company's ability to use Open General Licences

General

Most companies take export controls seriously and comply with the controls which are in place. Breach of export control legislation or licence conditions (whether the licence is a general or an individual one) can lead to criminal prosecution. The Secretary of State also has power to suspend or revoke licences. This power may be used in addition to criminal prosecution or as an alternative. This guidance sets out some of the circumstances in which the Secretary of State may consider suspension or revocation of open general licences for individual exporters.

The most common case where the Secretary of State would consider suspending or revoking the benefit of an open general licence for a particular exporter is likely to be where there have been minor infringements of the legislation or licence requirements and the exporter has failed to take corrective action within a reasonable period. This guidance explains the sorts of procedures which will adopted in those cases.

However there will be other cases where it would not be appropriate to follow those procedures and this guidance is without prejudice to the Secretary of State’s general powers to suspend or revoke licences by following other procedures. There may be instances, for example where an exporter is being investigated or prosecuted in relation to a possible criminal offence, or has been found guilty of a criminal offence under the export control legislation, when it would appropriate to take speedier action and there may be little or no warning that an open general licence is to be revoked for that exporter.

Suspension or revocation of an Open Licence will not necessarily prevent a company from being able to export as they will still be able to apply for Standard Individual Export Licences (SIELs). However, as with all SIEL applications, an end-user undertaking or Government purchase order will need to be obtained for each licence and the time it takes for the application to be processed (target 20 working days) will need to be factored into the timing of the export.

Suspension or revocation for non-compliance

Occasionally administrative errors occur in relation to compliance with licence conditions or legislation which, when identified, are quickly remedied. However, some companies are slower to act when non-compliance is found at an ECO compliance visit and this can lead to a number of re-visits before the company is fully compliant. ECO has put in place warning procedures to address this issue and any company found non-compliant at a visit will be given guidance as to what to improve, and an opportunity to do so, within a specified timescale. If no improvement is made, ECO may suspend or revoke the company’s OIELs or suspend or revoke its ability to use one or more OGLs. Suspension will not necessarily preclude other action being taken.

What specific situations are the warning procedures likely to apply to?

As mentioned above, we would not wish to target companies who have made small administrative errors, for example when a key member of staff was not available at the time of export; however it is important to make clear to such a company that a simple check list would stop this occurring in future. A “warning letter” (see warning procedures below) would be sent, and we would expect to see full compliance at the next visit.

Below is a list of the sorts of breaches which Compliance Officers find on visits which could result in suspending the use of an OGL. This is not intended to be a comprehensive list and, as mentioned above, does not preclude us from suspending licences in other circumstances and following different procedures, for example where an exporter has been found to have breached UK export controls.

We would look to suspend licences if a company had been sent a “warning letter” but had not shown compliance to the satisfaction of the ECO by the time a revisit occurred.

Which kind of non compliance will the warning procedures apply to?

Non-compliance manifests itself mainly as missing or incorrect paperwork, leading to an inability to demonstrate all the terms and conditions of a licence or legislation are being met.
Examples include:

• Missing undertakings or no paperwork showing a link to a Government where one is required.
• Failure to obtain MoD F680 approval where it is specifically required.
• Failure to reference the licence on paperwork
• Failure to keep adequate records of exports, particularly in relation to electronic transfers.
  • The overarching record keeping requirements are listed in Article 14 of the Export of Goods, Transfer of Technology and Provision of Technical Assistance (Control) Order 2003. The following information is required under that:
    • Description of goods
    • Date of export
    • Quantity
    • Name and address of exporter
    • Name and address of consignee
    • Where possible, the name and address of the end-user of the goods.

Warning procedures for suspending a company’s use of OGLs in cases of minor non compliance with the requirements of the Licence or relevant export control legislation

If a company has received a letter suspending their use of an OGL, they will still be able to apply for SIELs, submitting valid end-user undertakings with each application so that they can continue their business, but they will not be able to use the OGL until the period of licence suspension is over. The period of suspension will only come to an end after the exporter has fulfilled ECO’s requirements as stated in the warning letter.

The warning procedures are as follows:

1. A compliance visit is undertaken and minor non-compliance is found.
2. ECO will then send a “warning letter” to the company outlining the steps they need to take to ensure compliance with the controls and stipulates a date by which this is to be completed. All companies who are not fully compliant will receive such a letter. The timescale will be decided by the Compliance Officer after discussion with the company at, or shortly after, the visit.
3. A revisit is arranged for the date contained in the warning letter. If the company is found to be compliant, no further action is taken
4. If the exporter is found not to have taken the steps necessary to ensure compliance with the controls, they will be sent a letter suspending the use of their OGL for a period of time.
5. A revisit will take place before the end of the period of suspension. After this visit it will be decided whether the period of licence suspension should come to an end. Where the company has restored compliance, the licence suspension period will come to an end on the date indicated in the warning letter. Where full compliance has not been restored the Secretary of State may decide to extend the suspension for a further period. If this happens a further warning letter will be issued which identifies the action which needs to be taken, a further compliance visit arranged and period of suspension identified.
6. If at the end of that further period of suspension little or no improvement is found, the Secretary of State may conclude that one or more OGLs should be revoked in relation to that exporter. In which case the company will be notified in writing to this effect.

A similar mechanism operates for OIEL suspension.

ECO will be amending OGL conditions in due course to ensure that these procedures are brought to exporters’ attention.

Export Control Organisation

Updated: 16 May 2008

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