Governments, including the UK Government, use export controls as a means to help to prevent or limit prohibited activities; for example, human rights abuses, development of weapons of mass destruction, and terrorism. They are also used to meet foreign policy and international treaty commitments for controlling intellectual property infringement and maintaining national and collective security.
As a Group we face a number of challenges in relation to export controls, both in terms of our own products and technology and also in relation to purchases of components from our suppliers. This policy outlines the Company’s standards and requirements with respect to export control. The Group’s overall policy is to comply with all relevant regulations relating to export controls, including both the UK’s Export Control Act 2002 and the US’ Export Controls Act 2018 which provides permanent authority for the US’ Export Administration Regulations (“EAR”).
Controlled goods and technology
We must correctly identify all inventory and finished goods that are controlled. This covers not only our own products but also the components, sub-assemblies and other materials that we procure from our suppliers.
The classification of our own products resides with the holder of the design authority. It is their responsibility to ensure that the product is correctly classified.
We should obtain a classification coding from our suppliers to identify any controlled items. However, if we believe the supplier’s classification of an item is incorrect, we should raise the matter with them and resolve it, rather than simply relying on the information provided without question.
If a control classification cannot be satisfactorily obtained then the Control List Classification Advice Service via SPIRE should be used to obtain a classification from the UK Government.
Controls extend beyond the physical goods themselves and apply equally to any associated drawings, designs, process documentation, etc. The range of controlled items is broad and can extend to physical items, such as samples, and electronic communications, such as emails, that contain technical information. We must ensure that any transfer of controlled goods or technology has a valid export licence, prior to making the transfer.
Both the UK and US Governments apply sanctions against various countries, regimes and individuals. The group has an internal Group Sanctions Policy in place to ensure compliance with UN, UK, EU and US sanctions. Group legal maintains a list of countries that we do not generally sell to which includes sanctioned countries. All Group businesses must ensure that they do not breach relevant sanctions when exporting1.
End-user / “catch-all”
An end-user / “catch-all” requirement also applies to exports. This means that goods that are not normally subject to export restrictions can require an export licence if there are concerns relating to the purposes of the end-user. This principally arises from government concerns linked to the development of weapons of mass destruction (“WMD”) and applies irrespective of whether the products are controlled.
Each business unit should follow a risk-based approach when considering end-user requirements. This should be based on, the nature of the export; the destination; and the risk of diversion. Exports destined for end users in the EU, and to the six countries2 covered by EU general export authorisations, are generally exempt from considering end-user requirements.
Each of us must be aware and ensure that no goods or technology are dispatched (or sent electronically) without due consideration and compliant authorisation. The end-use control must be considered on a case-by-case basis against the points detailed in the export control process. Any concerns must be reported to the business unit’s Finance Director or to Group Legal.
Record keeping and compliance
Licence applications and licences granted
All licence applications, both those granted and those rejected must be filed with the corresponding commercial paperwork. We must be able to demonstrate licence acceptance as part of the export process. All paperwork should be retained for possible audit inspection, from both internal audit and external (Government) audit.
We must retain all paperwork, including emails and other electronic data relating to licence applications for a minimum of six years after the export has taken place3.
Guidance and support
Export controls are complex and controls can be inadvertently breached through a lack of understanding of the rules that are in place. This is particularly the case in relation to the movement of drawings, designs, software etc. If you have any questions relating to the policy you can seek advice from the following sources:
Your business unit will have a designated person who acts as the lead on export controls. This person should be your first reference point for information and advice.
If you are unable to speak with the contact in your business unit or if it is not appropriate to do so, you can contact a member of the group legal team for advice. Contact details are available on the intranet.
Each business unit needs to have a process in place for the reporting of breaches of both the UK and US export control regulations with breaches being immediately reported to the designated person who acts as the lead on export controls.
1 Exporting applies broadly and includes, but is not limited to, hardware, software, services and peripherals (e.g. drawings & designs). It can also apply to travel with data devices, teleconferencing, remote access, shared data environments, etc.
2 Australia, Canada, Japan, New Zealand, Norway, Switzerland (including Liechtenstein) and the United States.
3 If a licence is refused and no export occurs, the retention period is 6 years from the date of notification of licence rejection.