UK Seeing More Export Control Disclosures, Shortening License Times
The U.K. saw an uptick in voluntary disclosures and penalties for export violations last year along with a rise in the percentage of first-time exporters that weren’t fully compliant with export control regulations, it said in its strategic export controls annual report released this month. The country also said it’s hoping to improve its export licensing process to reduce wait times.
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The U.K. said it received 310 disclosures in 2024, up from 260 in 2023. It also made 14 offers to settle violations stemming from voluntary disclosures, totaling about 5 billion pounds (about $6.7 billion), more than the roughly 2.2 billion pounds (about $3 billion) in penalties it issued in 2023.
The country didn’t give a specific reason for the increase, although it said its Fraud Investigation Service increased its export control and sanctions investigators by 40 in 2024, and it received more funding for “further growth.”
The U.K. added that 51 criminal investigations were ongoing in 2024, one trial was concluded and led to a conviction, and 14 cases resulted in a settlement. Five are awaiting a trial following a charging decision by the Crown Prosecution Service, and “the remaining investigations are ongoing,” the U.K. said.
The country’s revenue and customs agency worked with the U.K. Border Force to carry out 199 seizures of sanctioned and strategic goods that violated an export license or a country embargo. The customs agency also issued 167 warning letters as a result of voluntary disclosures and carried out 103 end-use cases, “where non-listed items were stopped from leaving the UK and brought within export controls.”
The U.K.’s Export Control Joint Unit also carried out several “first contacts” with new export license holders, which allows the agency to assess the export compliance “knowledge” of new exporters. Of the new exporters ECJU checked last year, 11 of them (22%) were non-compliant, the ECJU said, which meant the agency found “significant errors” in the use of their licenses or other export control issues. It also said 12 of them (24%) were “not fully compliant,” which meant the U.K. found “repeated minor administrative errors,” one “substantive error" or other issues involving an incorrect use of a license.
That marked an increase from the seven exporters that the U.K. determined were non-compliant and the seven exporters that it determined were not fully compliant in 2023, which represented about 30% of its total first-time compliance checks that year.
The ECJU’s compliance team said it issued 41 warning letters for “non-compliant outcomes” to company directors during 2024 for breaches of export licenses. “Exporters with licences that did not cover their goods or exports were recommended to surrender the licences,” the report said. The agency also suspended the license for one exporter “due to repeat infractions.”
The ECJU also processed 15,464 Standard Individual Export Licence applications last year, completing 60% within 20 working days, an improvement from 52% in 2023, the report said. The U.K. said this figure is still “below the target” of 70%, citing the “challenging operating context in which ECJU has been working.”
The agency said it’s prioritizing how to improve its licensing procedures “to efficiently manage the impact of high volumes of complex applications,” especially as it transitions from the Shared Primary Information Resource Environment (SPIRE), its legacy export licensing system, to Licensing for International Trade (LITE), the new one (see 2409190037).
Although the agency “strives to meet its licensing targets and is extremely mindful of the commercial pressures that businesses face,” it also said some destinations or goods “remain more challenging and will take longer than target times to complete.” ECJU said it’s receiving an increasingly “high proportion of complex applications."
Some of the more complicated applications involve sanctions against Russia, the agency said, which sometimes “require detailed checks on licensing grounds.” Others touch on goods destined to the Israel Defense Forces, goods for potential military end-use in China, expediting licenses for Ukraine, and “Change in Circumstances” reviews, which are “undertaken in response to the changing situations in destination countries” and call for “detailed and complex assessments of extant licences and new applications.”
The U.K. is hoping its additional resources help it process applications more quickly, including its new “dedicated data team” that monitors the agency’s “application pipeline.” The U.K. also has “new processes embedded to scrutinise the stock of long outstanding case stocks and improve the efficiency of the process to manage the most challenging cases where a refusal is a potential outcome.”