On December 8, 2021, the UK government announced a package of measures revise certain aspects of the UK export control regime following the completion of a government review of the regime. The measures include revisions to the licensing criteria for strategic export controls, an extension of the scope of military end-use controls, and stronger controls on exports to China. Taken together, these measures represent a major overhaul of the UK’s export control regime. Affected companies should carefully analyze the new requirements to ensure that they remain compliant, in particular given the substantial revisions to the authorization criteria for strategic export controls, which have been applied with immediate effect.
UK Strategic Export License Criteria
In one declaration to the British parliament, the Secretary of State for International Trade introduced a substantially revised version of the eight licensing criteria for strategic export controls, which will now be known as the Strategic Export Licensing Criteria (” new criteria ”). The new criteria replace the Consolidated criteria for granting EU and US arms export licenses were announced to the UK Parliament on March 25, 2014.
The new criteria will be applied with immediate effect to all licensing decisions (including decisions on appeal) for:
- the export, transfer, trade (brokering) and transit / transshipment of goods, software and technologies subject to control for strategic reasons (collectively “articles”); and
- to the extent that they are subject to control, the provision of technical assistance or other services related to these elements.
Some of the criteria may also be applied to MOD 680 applications, along with other considerations and the evaluation of proposals for donation of controlled equipment to governments of other countries.
The main revisions reflected in the new criteria are:
- Criterion 2 – Extension of the circumstances in which the UK government will not license proceedings where there is a clear risk that objects could be used to facilitate internal repression or a serious violation of international humanitarian law. The definition of “internal repression” has also been broadened to include serious violations of human rights and fundamental freedoms (previously the definition only applied to major violations).
- Third criterion – This criterion, which deals with the preservation of internal peace and security, has been considerably modified. The circumstances in which the UK government will not grant a license have been extended to cases where there is a clear risk that the whole package will “undermine internal peace and security”. The range of factors to be taken into account when assessing the potential of items to undermine internal peace and security has also been broadened.
- Criterion four – Extension of the focus of the criterion to the preservation of peace and security in general (previously the criterion targeted regional peace, security and stability). The range of factors to consider when assessing the impact of articles on peace and security has been broadened to include whether the articles could be used to commit or facilitate gender-based violence or serious violence against women or children. Factors relevant to assessing an element’s impact on conflict and stability in a region have also been expanded to include, inter alia, humanitarian objectives or impacts.
- Sixth criterion – Broadening of the circumstances in which the UK government will not grant a license to cases where there is a clear risk that objects could be used to facilitate or commit an offense related to transnational organized crime (previously the criterion only focused on terrorism offenses).
- Criterion Seven – Extension of factors the UK government should take into account when assessing the risk that items may be diverted to an unwanted end user or for unwanted end use to include the risk of unwanted end use by either user declared final or other party.
- Other factors – The new criteria also contain a catch-all provision allowing the UK government, in exceptional circumstances, to decide not to grant a license for reasons other than those set out in criteria one to eight where the relevant elements may have an impact significant negative on UK international relations.
The new criteria will be applied on a case-by-case basis taking into account all relevant information available at the time a license application is assessed. Announcing the new criteria, the Secretary of State for International Trade said the UK government “will not refuse a license based on a purely theoretical risk of violation of one or more of the [the New] Criteria ”and will continue to take into account advice received from the Foreign, Commonwealth and Development Department, the Department of Defense and other government departments and agencies, as appropriate.
Revisions to the 2008 Export Control Ordinance
Improved military end-use controls
Existing military end-use controls in the UK can only be applied to the export of otherwise uncontrolled items that are intended for use as components or production equipment of military equipment in an embargoed destination. . According to the Secretary of State for International Trade, the status quo “does not allow [the UK government] to fully respond to threats to national security, international peace and security and human rights resulting from the use of unlisted items by the military, police or security forces, or entities acting on their behalf, in an embargoed destination.
The UK government therefore intends to broaden the definition of “military end use” to remove this limitation and allow such control on a case-by-case basis. According to a notice issued by the Joint Export Control Unit of the Department for International Trade, the control would only be applied when the UK government notifies the exporter that a proposed export is, or may be, for military end use. in an embargoed destination. .
In order to minimize the impact on legitimate trade, there will be exceptions for:
- medical supplies and equipment for hospitals or other public health establishments providing medical services; and
- food, clothing and / or other consumer goods generally available to the public and sold from stock at retail outlets without restriction.
On January 12, 2021, the then Minister of Foreign Affairs announcement a package of measures to combat forced labor and human rights violations in China’s Xinjiang region, which included a review of export controls as they apply to the Xinjiang region. The review concluded that there were anomalies and inconsistencies in the UK export control regime.
As a result of the review’s findings, China will be added to the list of destinations subject to military end-use controls to rectify an anomaly derived from the way the EU arms embargo was imposed. in 1989 and the drafting of the current legal text. This will not change the extent of the partial arms embargo imposed on China.
Improving military end-use controls and adding China to the list of destinations subject to such controls will require legislative changes to the 2008 Export Control Ordinance before they come into force. The UK government has indicated it will present these amendments to parliament in spring 2022.
According to the Secretary of State for International Trade, “[t]Together these changes  to strenghten [the UK’s] ability to prevent exports that could be used directly or indirectly to facilitate human rights violations in all destinations subject to military end-use controls.