Industry Blog

Everything you need to know about UK/EU Export Controls and Sanctions

Now that Brexit has finally materialised, traders based in the UK and the EU will have to alter their strategies significantly. The UK is no longer a part of the EU, and exporters need to keep track of numerous rules and regulations related to trade

Now that Brexit has finally materialised, traders based in the UK and the EU will have to alter their strategies significantly. The UK is no longer a part of the EU, and exporters need to keep track of numerous rules and regulations related to trade. One such type of rule is export controls and sanctions. Traders will now have to take action in terms of acquiring new licenses and categorising their products correctly. This blog focuses on discussing a few important aspects of UK/EU export controls and sanctions.

Key Regulation Differences

Up until now, the export of a majority of goods from the UK to the EU did not require any special license. All that was needed was a small amount of paperwork and the correct classification of products. However, this situation has changed after Brexit. Firstly, the existing export licenses issued by EU states to exporters in the UK will have to be reviewed under the new regulations. Secondly, traders who deal with defence equipment will have to be even more careful. This is because the classification and control of defence equipment are handled differently by the EU and the US. Therefore, it is important that exporters are aware of the latest regulations and are fully compliant with them.

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Controlled Items and Activities

Traders who deal with military and dual-use items need to check their licenses and ensure that they are adhering to EU laws. For example, the Annexure-IV of Dual-Use Regulation focuses on items that are exported from the UK to the EU, with a view of re-exporting them outside the EU in the future without any additional processing. Historically, traders were allowed to engage in such re-exports without the need for any additional licenses or permissions. These items will require a license from now on because the UK is no longer a part of the EU. The re-export of such items outside the EU will now be considered as a third-party transaction that requires additional documentation.

License audit, violations, and penalties

In addition to the above, importers and exporters based in the UK need to be aware of audits and penalties in case of non-compliance with the regulations. Although the UK government has already announced that it will be issuing open general export licenses in order to ease the compliance burden on exporters, you must keep an eye on the potential sanctions in case of any violation. After Brexit, audits are likely to become more stringent because the UK will not be considered as a part of the EU.

Further, if you are dealing with goods that have been classified as military items, then you would need additional licenses and permissions in order to export them. If you engage in such exports without obtaining the licenses, you would be liable for severe penalties. The possible penalties include monetary fines, cancellation of shipping, as well as other forms of sanctions. In order to avoid this situation, exporters and importers must be fully aware of the latest requirements and adhere to all compliance guidelines.

In case you are facing a challenge related to complying with trade regulations, you could always seek the help of industry experts. One such company is OCR Trade Management, a provider of end-to-end trade management solutions. Our global trade management software enables traders to keep track of all the latest compliance requirements and helps them in adhering to the licensing needs. Furthermore, the software allows traders to monitor and categorise their imports and exports. For more information about the company and its global trade management offerings, please contact us.