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Sanctions under a "no deal" withdrawal from the EU

Author: 
Editorial Staff

The UK's Department for International Trade has issued a new, contingency version of the Open General Export Licence (OGEL) for dual use goods exported to countries within the UK.

The bringing into force of the new licence is contingent upon the UK leaving the European Union without a deal. If there is a deal, the existing arrangements will continue at least during the transitional period. However, there is something odd going on..

A circular from the Department for International Trade dated 17 May 2019 tells of amendments to the open general export licence which relates to " the export of of dual-use items to EU member states" and the Channel Islands.

But, clicking on the link in the circular (https://www.gov.uk/government/...) takes one to page published on 1 February 2019. That document is published jointly by the DfT and the Export Control Joint Unit.

The page says "This open general export licence (OGEL) allows the export of dual-use items (with both a civilian and military application) from the UK to EU member states and the Channel Islands. This licence will come into force if the UK leaves the EU without a deal. You don’t need a licence to export dual-use items to EU member states or the Channel Islands before this date. This OGEL was published on 1 February 2019 to allow exporters time to: understand the terms and conditions of the licence [and] register to use the licence before it comes into force. "

It goes on to say that use of the licence, if it becomes necessary, is limited to those who have registered under "SPIRE," a licensing system operated by the Export Control Joint Unit. The Export Control Joint Unit describes itself as "Part of the Department for International Trade." So, not really a joint publication, then. One assumes that SPIRE is an acronym but if it is, the DfT doesn't make it easy to find and this author gave up. And in any case, by the DfT's own admission, it doesn't work. as of today, the SPIRE website says "HMRC's Chief System is currently experiencing problems which is resulting in delays in the transfer of SPIRE data to CHIEF. HMRC are aware of the problem and are working to correct it. Please bear with us at this time." Is "CHIEF" an acronym? It's not clear as they can't even decide whether it's supposed to be in capitals.

And that's not all. There's the following which shows that the DfT can't make its mind up what acronym to use even when it knows the name it wants to use
"Registering for the Open General Export Licence (Export of Dual-use item to EU Member States)

We have been informed that there are some difficulties in registering the above licence on SPIRE. The steps below set out the process:

1) Login into SPIRE
2) From the left-hand side menu click on "New Application"

3) Scroll down to "OGL/EU GEA", check the circle and click "Start Application" [so, is it OGEL or OGL?]

4) Click on the drop down menu and select "Open General Export Licence (Export of Dual-use item to EU Member States)", which is the first one on the list.

5) Click Next and then continue to fill out the form fully to complete the registration."

This is actually extremely important stuff because it all applies to sanctions. If the UK leaves the EU without a deal, then it must implement its own sanctions regime. At present, most UK sanctions in fact originate in the EU. Dual-use goods include anything that might be used for blocked purposes in sanctioned countries. By far the most famous example were metal tubes stopped en route to Syria a number of years ago: someone decided that, regardless of their stated purpose, they could be used for a so-called Iraqi Supergun supposedly being developed by General Gadaffi (the same Gadaffi who, also, was rumoured to be preparing a chemical warfare attack on London). But many products have caused problems for their companies: a home security camera sent to Iran, which investigations showed had, in fact, been installed on someone's home, resulted in a penalty because it had infra-red capability and that was deemed to be of use to the military. Even sales of police body protection have been stopped for some countries because they did not have an export licence and even though they said "Police" in the local language, it was said they could have been diverted to the military.

Within the EU, there are some restrictions between countries but there is, for items not on the blocked list, a nod to the freedom of movement of goods within the EU. All EU countries permit intra-EU transfer of products that it would, ordinarily, not allow past EU borders.

The not-actually-new Licence is designed to ensure that UK businesses which presently transfer products within the EU will continue to do so without interruption. Those products will continue to be subject, by reason of locality and relevant jurisdiction, subject to controls on what will be, legally, re-export from within the EU.

This is important for many businesses but the most important are, of course, weaponry and aerospace plus automotive. But it is the UK's boffins that are most at risk: the tiny companies that make stuff that is beyond the cutting edge of big business's current capability.

Given that even cold and hot weather boots can count as dual use, the importance of this notice cannot be overstated.

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