The Department for International Trade published a new Open General Export Licence (OGEL) on 1st February 2019 to cover the export of controlled dual-use items to EU Member States after Brexit. The licence will come into force at 11pm on 29th March 2019, if the UK leaves the EU without a deal.
Currently, trading controlled dual-use items within the EU does not require an export licence, as they are not considered exports until they are transferred outside the European Community. (The exception is those especially sensitive items subject to national controls and listed in Annex IV of the dual use regulation.
However, if the UK leaves the EU without a deal on 29 March 2019, an export licence will be required to transfer those dual-use items to EU member states from the UK. The purpose of this OGEL is to allow, subject to certain conditions, the export of these dual-use items from the UK to EU Member States and the Channel Islands after the exit date. Before using this licence, registration with the Export Control Joint Unit’s (ECJU’s) electronic licensing system, SPIRE, must be completed, stating where the records of exports or transfers will be kept and where the ECJU may inspect them.
When using the licence, it is a requirement that the records of all the exports under it must be maintained and retained for at least three years from the end of the calendar year in which the export takes place. The exporter must permit these records to be inspected and copied by the British authorities. Transactions may be subject to audit by ECJU compliance officers.
The record-keeping and audit requirements are obligations for organisations intending to trade dual-use items with the EU post-Brexit, and may be especially burdensome given that there were previously no such compliance requirements. This may prove challenging for organisations not previously familiar with the audit requirements and processes. Therefore, organisations involved in exporting to the EU must understand whether their products are included in the dual-use lists and, if so, the terms and conditions of the OGEL, register to use the licence before it comes into force, and put adequate compliance requirements in place.
To further understand how Brexit may affect your business, please contact our Regulatory Risk team.