Regulatory intelligence for US exporters

UK Seeing Increase in China-Related Export License Denials, Official Says

LONDON -- The U.K. has seen a spike in export license refusals for shipments destined to China and expects that trend to continue, said Rosemary Pratt, director of the U.K.’s Export Control Joint Unit. She also said her agency is undergoing several export control reform initiatives that it hopes see progress on in the coming year, including an effort to assess the effectiveness of its military end-use (MEU) controls and evaluate and control emerging technologies.

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Pratt said the U.K. more than doubled the number of export license refusals for China in 2022 compared with the previous year, attributing the increase “largely” to the U.K.’s updated MEU export controls regime, which took effect in May 2022. Among several changes, the update added China to the list of MEU destinations that are subject to strict prohibitions.

“We know that this regulation has had a big impact,” Pratt said during a Sept. 25 defense industry conference in London hosted by SAE Media. For exporters submitting a standard individual export license application (SIEL), Pratt said those that involve China are experiencing about an 11.8% refusal rate compared with a 2.5% refusal rate for all other destinations.

“Our processing times and our refusal rates are higher for exports to China than almost any other destination, and this trend is just going upwards,” she said. “Those are exports that previously we couldn't have prevented that now we’re able to prevent, and we know that's a big impact.”

She said the U.K. is “currently in the midst” of a review of its updated MEU controls and is hoping to understand: “Has that played out as we expected? Has it fitted with the policy intention? And what’s the impact?” Pratt said “there's a whole set of businesses who are very, very concerned about the impact.”

The ECJU also is assessing how the new restrictions have affected license application processing times. In 2022, the U.K. completed 53% of SIEL applications for China in 20 days compared with 62% for all destinations, and 81% in 60 days compared with 89% for all destinations, Pratt said, adding that the agency is seeing “more complex” applications. “So that affects the whole system,” she said, “because it's not like I've also been given 25 extra people” to help with the workload. ECJU hopes to complete that review “in the autumn.”

She also said the U.K. is reviewing how its export controls apply to emerging technologies, and nearing “sort of the end.” But “there's more to come,” adding that the U.K. plans to request public feedback on any proposed changes, “and that will happen in the next couple of months.”