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NOTICES TO EXPORTERS - 06/04 - February 2004
A third Order under the Export Control Act 2002 was laid before Parliament on the 11 February 2004: the Trade in Controlled Goods (Embargoed Destinations) Order 2004. The following is the text of XNP Notice 6/04.
Extra-territorial controls
This Order introduces extra-territorial controls on trade (trafficking and brokering) in military goods from a country outside the UK to specified embargoed destinations. These new controls will apply both to transactions arranged from the UK and also to transactions arranged overseas by UK persons (individuals and companies). Trade to non-embargoed destinations will be covered by a previous Order made under the Export Control Act last year.
These new controls will come into force on 3 March 2004. The Government do not expect British industry to be involved in trafficking and brokering of military equipment to embargoed destinations, and the new controls should not pose any additional burden on the majority of industry.
We do not expect to issue licences for trafficking and brokering to embargoed destinations except in exceptional circumstances. For instance, a licence could be granted for such trade where military equipment was for use in peacekeeping operations or humanitarian de-mining activities.
These new controls apply more strictly than controls on trade in conventional military goods to non-embargoed destinations, reflecting the generally undesirable nature of trafficking and brokering to embargoed destinations.
The controls are framed in terms of ‘supply and delivery’ of military goods to embargoed destinations and encompass any acts calculated to promote such supply or delivery, whether or not in return for a fee or other consideration. There are no specific exemptions for anyone involved only in ancillary support services, such as transportation, insurance or general advertising.
Trafficking and brokering in military goods
This Order will apply to trafficking and brokering in military goods to destinations subject to a full-scope EU, Organisation of Security and Co-operation in Europe (OSCE) or UK national embargo, regardless of whether the embargo itself requires the UK to impose trade as well as export controls. Trafficking and brokering relating to destinations subject to a binding UN arms embargo is already controlled under the United Nations Act 1946. The Government are currently considering how best to address trade to destinations subject to partial-scope arms embargoes.
Detailed user guidance has been produced in conjunction with industry representatives and will provide a comprehensive guide to the new controls for exporters. This guidance was published on the ECO website in early November 2003, and covers all the new controls including trade to embargoed destinations.
It is important that individuals and companies who may be affected by these new controls familiarise themselves with the published guidance, and consider whether they will need licence coverage for their business activities. Once the legislation comes into force, activities breaching the new controls will be subject to penalties including up to 10 years imprisonment.
More wide-ranging controls
More wide-ranging controls were introduced by the previous two Orders under the Export Control Act, laid before Parliament on 31 October 2003 and coming into force on 1 May 2004. The Orders introduced new controls on trade to non-embargoed destinations, on the transfer of military technology by electronic means and on the transfer, by any means, of technology and provision of technical assistance related to Weapons of Mass Destruction. It is vital that those affected by these new controls ensure that they obtain sufficient licence coverage for their business needs, by registering for the new Open General Licences and applying for individual licence coverage where necessary. This should be done as soon as possible, so that individual licences can be issued in time for the new controls coming into force.
For further details of strategic export controls please contact the ECO.
This notice is for information purposes only and has no force in law. Please note that where legal advice is required exporters should make their own arrangements.
February 2004
XNP Notice 06/04
