whats in the news

Watch or listen to nearly any news bulletin and the chances are there will be a piece on the threat of international terrorism, a rogue state or a new sanctions regime imposed by the UN of the West. So what does this have to do with businesses operating in the Thames Valley?

Well, potentially rather a lot if you are a business which exports goods, technology or software to foreign countries. The context for this connection is the control regime under UK law on the export of goods, technology or software which can be used for both civil and military purposes – known as ‘dual-use’ items. The dual-use regime, governed by The Export Control Order 2008 and associated UK Strategic Export Control Lists extends to goods or technology applications which may have no obvious link with military use or uses which could be considered unwelcome.

So, even a business producing medical materials or engaged in technology for environmental research may, if it is exporting its product outside the EU (and in some cases within the EU) find that it needs to have an export licence. Export can extend not only to trade in material goods or equipment but also to electonically transmitting software or information. There can be serious consequences for a business in breach of the export rules. Non-compliance can lead not only to criminal sanctions including fines or imprisonment but crucially can cause massive corporate reputational damage which can have a lasting impact on the company’s trading position and ability to engage in future contracts.

The dual-use export policy and enforcement regime falls under the remit of the UK Government’s Export Control Organisation (ECO), part of the Department for Business, Innovation & Skills (BIS). ECO is responsible for licensing dual-use items and carrying out compliance audits on businesses. It also acts as an information service providing advice, guidance and training on strategic export controls. Practically therefore, any business which may believe that it is affected by the dual-use regime should at least familiarise itself with the functions and services of ECO.

Businesses which operate in conjunction with US owned companies or which utilise components of US origin in their products will also need to consider whether they are complying with the strict US export regulatory regime for dual-use items which can, in some cases, have extra-territorial reach.

In this global environment, companies operating in the Thames Valley should consider whether they need to add these issues to their roster of checks and risk-management procedures.

Jonathan Durrant, Director, Dispute Resolution