UK Export Controls: Technology
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This document outlines UK export controls on technology in accordance with international laws aimed at preventing the proliferation of weapons of mass destruction (WMDs). It details the responsibility of universities and research institutions in adhering to these regulations, the types of controlled technologies, exemptions, penalties for non-compliance, and provides guidance on how to develop an internal compliance program. Additionally, it compares UK controls with US regulations, emphasizing the implications of these frameworks on academic research and international collaboration.
UK Export Controls: Technology
- 1. UK Export Controls: Technology Richard Tauwhare, Green Light Exports Consulting UK 1
- 2. Context International law requires controls on the transfer of goods, software and technology to prevent WMD proliferation, misuse of conventional weapons or security equipment all EU countries maintain a system of export and transfer controls US imposes controls on transfers of US-origin military and dual-use technology to non-US persons. Apply within and outside US. Great majority of work at UK universities is exempt. But some university research projects – particularly those involving applied research or industry collaboration - need an export licence to carry out certain activities 2
- 3. Universities & Research Bodies 3 Export controls can potentially apply to academics and researchers in a wide range of subject disciplines. But science and engineering are most commonly affected, since their work in the wrong hands – e.g. rogue governments, terrorists - could lead to the advancement of programmes of: Nuclear weapons and nominally civil nuclear programmes clandestinely supporting nuclear weapons ambitions Biological weapons Chemical weapons missiles and UAVs capable of delivering WMD Advanced conventional weapons Controls have increasing importance as global proliferation and security risks increase, and as universities increasingly engage in international collaboration and outreach, and establish campuses and projects abroad
- 4. Penalties Export Controls impose legal obligations. Failure to comply is punishable by: withdrawal of licences fines in serious cases, criminal prosecution - of the institution and/or individuals. Up to 10 years jail Even minor cases can severely damage reputation, with potentially serious and wide-reaching negative impacts 4
- 5. Issues 1) Definitions 2) What is controlled 3) US Controls 4) How to comply 5
- 7. Technology Technology = ‘specific information necessary for the development, production or use of goods or software’ May be in forms such as: Blueprints, CAD files, plans, diagrams Models, formulae, tables Engineering specifications and designs Manufacturing instructions, test results Manuals and instructions for installation, operating and repair Technology required for the development, production or use of controlled goods remains under control even when applicable to non-controlled goods 7
- 8. ‘Export’ Export can take place via physical or electronic means: by being shipped or freighted overseas (including carriage of a laptop on a trip for example); or any electronic transfer (fax, email, telephone, text messaging, or video-conferencing) from within the UK to a person or place abroad. Can include: a UK person opening their emails abroad online courses open to non-UK persons overseas information held on servers accessible by non-UK persons overseas transmission by telephone if the technology is read out so as to achieve the same result as if the recipient had read it 8
- 9. ‘Transfer’ controls apply to transfers within the UK by any means when the transferor has been informed or is aware that the technology is intended for WMD purposes outside the EEA 9
- 10. 2) What is controlled 10
- 11. What is Controlled? Researchers need to determine ‘What is the end use of the research?’ and ‘Is it necessary for the development, production or use of any item covered by export controls?’ These items are defined in 3 ways: 1) Listed Items: goods, software and technology which is included on one of the lists of controlled items All Military and sensitive Dual-Use items (generally, civil technology which could be used for WMD purposes): require a licence for export anywhere outside the UK Less sensitive Dual-Use items: require a licence for export anywhere outside the EU 2) End-Use Controls: apply to any item, listed or not, which may be used for WMD: licensable to anywhere outside UK 3) Sanctioned End-Users: governments, organisations and individuals who are subject to sanctions: exports of some items are prohibited, others require a licence 11
- 12. Checking the UK & EU Lists A consolidated list of all UK and EU control lists is published on the gov.uk website Searches can be carried out by using the full lists or, alternatively, by registering to use the Goods Checker tool to check for items on the lists Or a ‘rating enquiry’ can be sent to the Export Control Organisation for a judgement on the licensability of an item for export 12
- 13. UK Control Lists: Where Technology is Controlled UK Military List ML22: technology for military goods or software UK National Dual Use Lists: PL80001c: explosives-related PL9005b: telecoms to Iran PL9008c: vessels, components, related goods, software PL9009c: aircraft, components and related goods EU Dual Use List: Sub-category E contains technology controls on the development, production or use of items in that Category Some others contain additional controls on specific technology ‘Annex IV’ lists items of particular sensitivity, requiring a licence for anywhere outside the UK, including within the EU 13
- 14. Exemptions Controls do not apply to listed software or technology if it is: already in the ‘public domain’ ‘basic scientific research’ needed for installing, operating, maintaining and repairing controlled items that have already been authorised for export the minimum needed to install, operate, maintain and repair non-military items, even if this information could have a military use the minimum necessary for a patent application 14
- 15. Exemptions: Public Domain “available without restriction upon further 15 dissemination (no account being taken of restrictions arising solely from copyright)” NOT to be “in the public domain” could mean it: needs to be bought from a supplier who controls the supply; requires registration; is restricted for access by certain people only; is subject to Government security classifications (e.g. commercially confidential information, Official Secrets Act, etc.)
- 16. Exemptions: Basic Scientific Research “experimental or theoretical work undertaken principally to acquire knowledge of the fundamental principles or phenomena or observable facts and not primarily directed towards a specific practical aim or objective” Most university work comes under this definition so falls outside export controls unless End Use Controls or Sanctions apply (see below) some types of work will not qualify as basic research, typically: Applied research ‘commercially viable’ research 16
- 17. End-Use Controls Controls apply to any item (listed or unlisted) if an exporter has been either informed or is aware of or suspects … that the item to be exported is intended for “use in connection with the development, production, handling, operation, maintenance, storage, detection, identification or dissemination of chemical, biological or nuclear weapons or other nuclear explosive devices, or the development, production, maintenance or storage of missiles capable of delivery such weapons” End-use controls override the exemptions above 17
- 18. End-Use Controls “informed”? an exporter will be notified by the ECO in writing about a potential WMD use. “aware”? 18 a WMD intention has been made known to the exporter by the importer or end user or by any other means. “suspect”? A mere theoretical possibility does not amount to suspicion. But if there are specific reasons for suspicion, the exporter should contact ECO for advice. In some cases, exporters are required by law to make reasonable enquiries to be satisfied that there is no WMD purpose.
- 19. End-Use Controls: Technical Assistance 19 If the person giving technical assistance which is not part of an export or a technology transfer is informed or is aware that the assistance is to be used for WMD purposes, a licence is required (which is unlikely to be granted) covering: Technical assistance related to WMD end-use made by any means (including face-to-face discussions and demonstration) ; Technical assistance related to a WMD end-use made within the UK or by UK persons outside the EU (where the end-user is outside the EU).
- 20. Sanctions Sanctions can impose: Absolute prohibition of the export of certain items. This usually applies to items in the consolidated Military and Dual Use Lists but can go wider e.g. banning the export of oil production equipment licensing requirement for certain items not previously controlled end use controls if the exporter knows that the goods are destined for use with, or in relation to, a sanctioned activity, including for military use in a country subject to an arms embargo restrictions on the activities of named individuals, companies or organisations. For example they may require states to refuse visas (travel ban); freeze assets; prohibit trading with those individuals. UK lists of such persons are maintained by HM Treasury. US lists of Denied Parties are maintained by the Treasury, State and Commerce Depts. Sanctions override the exemptions above 20
- 21. 3) US Controls 21
- 22. US Controls Applicable in UK control the transfer of relevant technology from US persons to all foreign nationals (so-called “deemed exports”) regardless of potential end-use US controls have extraterritorial effect. Penalties for non-compliance can be severe 3 main regimes: ITAR: International Traffic in Arms Regulations, overseen by the State Department EAR: Export Administration Regulations, overseen by the Commerce Department Sanctions, Asset Freezes: overseen by the Treasury Department 22
- 23. ITAR – What Items are Covered Applies to all items on the US Munitions List (USML). Covers all sensitive military items and related technical data. Also includes some items which are not designed for military use Includes items of non-US origin but produced using ITAR-controlled data or defence services If you are in any doubt whether an item is subject to ITAR, non-US persons may request clarification from the US State Department (known as a ‘Commodity Jurisdiction’ request) access to any ITAR item must be strictly limited only to authorised individuals. Includes emails, servers, laptops. Imposes a substantial administrative burden. Consider whether you are prepared to accept this before agreeing to receive the item/data 23
- 24. ITAR – What Activities are Covered Controls physical and intangible export, re-export, transfer, release of items to a non-US person and release to a non-authorised person outside the US Re-export = transfer to new use, end user or destination of any item containing any article on USML, including software and tech data. Guidance: ‘making the material available for access’ Technical data = Information required for the design, development, production, manufacture, assembly, operations, repair, testing, maintenance or modification of defense articles. In any form including oral Defense services = furnishing of assistance (including training) to foreign persons, whether in the US or abroad, in the design, development, etc of defense articles; or the furnishing to foreign persons of any controlled technical data 24
- 25. ITAR – Technology Exemptions Similar to UK/EU (though with slightly different definitions): basic marketing information general scientific principles public domain (information which is ‘published and generally accessible to the public’) 25
- 26. ITAR – Deemed Export Transfer of technical data to a non-US national, wherever it takes place (in the US, the UK or elsewhere) is deemed to be an export ITAR-controlled technical data may only be passed to (or be accessible by) an authorised person in an authorised place for an authorised purpose Authorisation for such exports - typically a ‘Technical Assistance Agreement’ (TAA) - will specify all foreign parties to receive the specified data, both from the US to a foreign ‘licensee’ and any further transfer onward to a ‘sub-licensee’ Typically specifies the nationalities of people receiving access to the data – including any dual or third country nationals. Restrictions apply to nationals from outside NATO, EU, Australia, NZ and Japan. No clear definition of nationality but takes account of both citizenship and country of birth, with emphasis on the latter for ‘Prohibited Countries’ such as Iran, Syria, Sudan, Cuba and North Korea 26
- 27. EAR – What Items are Covered The Export Administration Regulations cover all items listed in the Commerce Control List (CCL). Mostly Dual-Use. But also less sensitive military items which US is in the process of moving from ITAR to ease the restrictions on them Technology = specific information necessary for the "development", "production", or "use" of a product. Can be technical assistance (instruction, skills training, working knowledge, consulting) or technical data (e.g. blueprints, plans, models, formulae, tables, designs, manuals) Some listings specify that controls apply to technology which is required for the development, production or use of a controlled product, even if that technology is applicable to a product controlled at a lower level Items not listed are classified as EAR99 and remain subject to some controls eg to embargoed destinations 27
- 28. EAR – ‘De Minimis’ If a non-US item incorporates over 25% US content (based on its ‘fair market value’), its re-export is subject to EAR rules 10% - 25%: EAR applies only for re-export to embargoed countries (Iran, Syria, Sudan, Cuba, DPRK) Under 10%: EAR does not apply except for ‘600 Series’ items (formerly ITAR-controlled military items) to embargoed countries If using de minimis for technology, you must submit a one-time report to the Commerce Department explaining your calculation 28
- 29. EAR - Exemptions Similar to UK and to ITAR. EAR does not apply to technology and software which is: published - includes information and software generally accessible to the interested public free of charge or at a price that does not exceed the cost of reproduction and distribution. fundamental research educational information patent applications NB Certain encryption software cannot be made publicly available 29
- 30. EAR – Licences For many combinations of item/destination, no licence is required. See the CCL and Country Chart Many others are eligible for ‘Licence Exceptions’ (similar to UK Open Licences). See the CCL. Specific to technology are: TSU (Technology and Software Unrestricted) - for technical data related to sales, operations TSR (Technology and Software Restricted) – for less sensitive destinations, requires a written assurance from the recipient EAR licence: if required, non-US persons can apply on-line to the Commerce Department using SNAP-R 30
- 31. EAR – Deemed Export Broadly the same as for ITAR (except EAR generally applies the definition of nationality to be the most recent country of citizenship) ‘No Licence Required’ and ‘Licence Exception’ rules apply - e.g. controls do not apply if the citizenships of individuals with access to the controlled technology are all of destinations for which no licence is required 31
- 32. EAR – Catch-All Controls Similar to UK/EU End-Use controls. Prohibits or requires licences for exports/re-exports of US-origin items to or for: a prohibited party: any individual or entity included in US denied party lists embargoed destinations: Cuba, Iran, Sudan, Syria and North Korea Proliferation of WMD: if you know or suspect (“have reason to know”) or the US Department of Commerce informs you military end-uses in China: if you know or have reason to know Diversion risk (‘Red Flags’): you must investigate and resolve any suspicions in writing before proceeding. Best practice is to use standardised end-use/user forms to be signed by the customer (see below). NB You may not take any action if you know or have reason to know that a violation has or is about to occur 32
- 33. 4) How to Comply 33
- 34. Internal Compliance Programme A compliance programme for exporters of technology, like those for exporters of goods, needs to be tailored to the work of the university or body concerned. Ideally it should include: a) Policy statement of commitment to compliance, endorsed, championed and regularly reinforced at senior level, setting the culture and making available necessary resources. Integral part of Research Conduct or Ethics Policy b) Procedures to identify any proposed activities which are prohibited or require a licence; to apply for licences; and to keep the necessary records. Tailored to risk level. Integrate into project funding and initiation processes c) People clearly assigned responsibilities for compliance, with a central source of advice, oversight, review and up-dating d) Awareness and Training to ensure all relevant staff are aware of the responsibilities applicable to them 34
- 35. Main Types of UK Export Licence Open General Export Licences: defined goods, destinations and conditions specified in published licences Open Individual Export Licences: specific goods to specific destinations, not quantity-specific Standard Individual Export Licences: specific quantity of specific goods to specific end user. SIELs for goods also authorise the export of the minimum technology required for their installation, operation, maintenance and repair, to the same destination and end-user For solely technology exports, these licences can continue for the life of a project and cover all technology exports within it 35
- 36. Open General Licences - Technology 36 3 technology-specific OGELs with wide coverage: Technology for military goods Technology for Dual Use items Access overseas to software and technology for military goods: individual use only Generally, these list the specific items which are or are not permitted and which countries are not covered. No annual reporting is required
- 37. Record Keeping For all exports subject to licences, keep records of: What technology and software is being exported Where and to whom it is being exported Who is conducting the transfers Dates over which these activities take place ECO guidance: “….we are not requiring records to be kept of every email to a particular end-user if a transfer takes place over a prolonged period. It is sufficient to identify the technology transferred, the dates between which it was transferred, and the identity of the end-user.” 37
- 38. Compliance Audits Any body registering to use an OGEL or being granted an Open Individual Export Licence or a Standard Individual Export Licence for electronic transfers of software or technology will be subject to periodic audits by the Export Control Organisation. They will check: Your understanding of export control legislation as it relates to your situation. how you comply with these controls Your systems to ensure all the appropriate people are trained and kept up-to-date if applicable, your knowledge of the ratings of any technology you are exporting (ideally written down). Your procedures (ideally in writing) to ensure technology or software which need a licence are covered by one, and the person who is transferring or exporting it knows the licence conditions. Your records and systems 38
- 39. US Controls Should be integrated into compliance programme require all potential suppliers of items which is subject to any US controls to inform you in advance Before accepting any US-controlled item, check and agree all conditions on the US supplier’s export licence or (for ITAR) Technical Assistance Agreement Ensure you have mechanisms in place to comply with all the US requirements 39
- 40. US Controls - Certification US suppliers or their subsidiaries may seek some form of certification from UK bodies as a condition of supply These can be over-comprehensive and ask the UK body to give undertakings which it cannot realistically enforce (e.g. ‘not to engage in any direct or indirect research which has or may have military application’) Reasonable undertakings include not to use the imported technology: for any military-related purpose Not to re-export/disclose it to non-authorised persons and to seek appropriate authorisation before doing so 40
- 41. Tips If an email contains licensable technology, highlight it in the subject line If your laptop contains licensable technology, do you need to take it abroad? Include export control requirements in your travel authorisation process Give staff standard letters on licensing requirements, to carry with laptops Ask partners and customers for advice on the regulations in their country Use the flow charts below (Source: Export Control Organisation) 41
- 42. Flow Chart: Basic Awareness 42
- 43. 43
- 44. Thank you - Any questions? Richard Tauwhare Green Light Exports Consulting Email: richard@greenlightexports.co.uk Web: www.greenlightexports.co.uk Phone: +44(0)770 311 0880 44