DTI
15 February 1996
BRITAIN'S EXPORT CONTROL SYSTEM
Trade is vital to every nation and the UK more than most. Twenty five
per cent of this country's gross domestic product comes from trade.
Part of the responsibilities of a trading nation are effective export
controls. The picture painted of Britain's Export Control
Organisation (ECO) by Sir Richard Scott in his report is seven years
out of date and does not take account of the continuous evolution and
improvement since then and therefore does not reflect the Export
Control Organisation of today.
What is the Export Control Organisation? The role of the ECO is, in
co-operation with other Government Departments, to control exports to
minimise the risks of exports being made which the Government
considers to be against the national interest.
It is the ECO's responsibility to administer the statutory
regulations implementing export controls. However, whilst ensuring
that the national interest is protected, the ECO sees it as
important to do that in a way which does not place an unnecessary
burden on industry. This is achieved in the following ways:
* by streamlining procedures to minimise delays and inconvenience
to exporters and introducing open licensing with proper
safeguards;
* by working to ensure, insofar as it is possible, that controls are
applied evenly among like-minded countries so that UK exporters
face fair competition;
* by keeping exporters informed of developments in policy and
regulations;
* by talking to business to ensure their views are taken into
account;
Changes made since the 1980s
Most of the events looked at in Sir Richard Scott's report took place
in the 1980s, and it is important to note that many of the lessons
have already been learnt, and changes implemented.
The ECO did not exist in its current form prior to 1988. Before 1988
the ECO's functions were spread throughout various divisions and
locations within DTI. Following a review in 1988 the various
functions were brought together in one organisation, in one building.
Over the years a number of other changes have been made to DTI's
export control procedures, including:
* the establishment of a new section within the ECO to process
export licence applications for sensitive destinations. The
list of destinations subject to special licensing procedures
is drawn up in accordance with national, foreign and security
policy objectives taking into account international agreements
or embargoes to which the UK is party, the non-proliferation
credentials of the country concerned and our knowledge or the
effectiveness of their export controls;
* the introduction of revised procedures including:
- technical assessment of all licence applications;
- a requirement in all cases for a full and unambiguous
statement of the intended end-use and end user;
- a requirement for requests for a formal assessment of
whether goods require a licence to be made in writing;
- introduction of the rating request form. Exporters must make
clear if the goods are for military, chemical, biological or
nuclear weapons or missiles for their delivery;
- revision to the export licence application form to
incorporate an explicit question on whether the goods are
designed for military purposes. Subsequent changes also
introduced explicit questions about design for purposes
associated with chemical, biological or nuclear weapons or
missiles for their delivery;
* introduction of a new computer system of licence processing
involving built in safeguards;
* the publication of more detailed and comprehensive guidance to
exporters in guidance notes accompanying licence application
forms and in literature, describing in detail the purpose of
controls and their operations;
* the introduction of an `end-use' control which places a legal
responsibility on the exporter to take all reasonable steps to
ensure that goods are not being exported for the purposes of
chemical, biological or nuclear weapons or missiles to deliver
them, and making it an offence to export goods without a
licence where the exporter is informed, knows or suspects they
are for such purposes;
* developing closer links with and improving co-ordination
between other Government Departments who advise DTI on licence
applications for example, by strengthening our liaison with HM
Customs and Excise, the investigating and prosecuting
authority.
In addition, a new section, the Compliance Unit, has been established
within the ECO to monitor exporters' compliance with the conditions
of Open Export Licences and to ensure that exporters are aware of
their responsibilities with regard to export legislation. Since its
formation in 1991, the Unit has made approximately 300 visits to
companies each year. Most companies holding Open Individual Export
Licences (OIELs) have been visited at least once and regular revisits
are planned at one year intervals for holders of military OIELs and
at two year intervals for others. An increasing number of visits are
planned to registered users of Open General Export Licences (OGELs).
General Information
In 1994, over 45,000 export licensing telephone enquiries were
handled, an increase of 19.5 per cent over the previous year. This
indicates an increased awareness of export controls among exporters,
helped by the ECO's awareness programme of seminars and other
publicity, and also by the continued high profile of UN- sponsored
export controls against Iraq, and other countries.
The total number of applications for individual export and tranship-
ment licences fell again in 1994 for the seventh year running: a
total of 17,007, compared with 20,044 in 1993, 76,000 in 1989 and
over 97,000 in 1987. This means that licensing staff can concentrate
their attention on cases that are likely to be sensitive.
Notes
OPEN LICENCES
Open Individual Export Licences (OIELS) - provide for multiple
shipment of a range of specified goods to agreed destinations. These
are granted to exporters with a proven track record of successful
individual export licence applications. They cover relatively less
sensitive goods and destinations; there are legally binding
conditions attached including keeping records of shipments that must
be available for inspection by DTI and the provision of undertakings
on end use.
Open General Export Licences (OGELS) - provide automatic permission
for any exporter to export a wide range of goods to a wide range of
destinations. OGELS exist primarily for industrial goods and
non-sensitive destinations. To use these, an exporter must usually
register with DTI and keep records of shipments available for
inspection.
