Guidance

Compliance visits explained

Updated 6 December 2018

1. Introduction

This document aims to help business understand the export control joint unit’s (ECJU’s) inspection process. It is for guidance only and is not a statement of law. Before exporting you should refer to the legal provisions in force at the time.

It only applies to exporters holding the following licences:

• open general export licences (OGELs)
• open individual export licences (OILs)
• standard individual export licences (SIELs)
• standard individual trade control licences (SITCLs)
• standard individual export licences (SIELs) for electronic transfers only

This guidance provides information on:

• the background to export control compliance inspections
• when you will receive an inspection
• how to prepare for an inspection
• what a Compliance Inspector looks at during an inspection
• penalties you might face if you are not compliant with export control legislation

We aim for a transparent process to allow you, as licence holders, to prepare fully so both sides can get maximum benefit from the inspection and any subsequent interactions.

When using the licences referred to in this document, it is your responsibility to familiarise yourself with the legislation.

More information on export, trade and end use controls can be found:

• on GOV.UK
• via the OGEL and goods checker tools, which can be found at our online export licensing system
• Notices to exporters will inform you of any changes in legislation or our licences - you can sign up for free email alerts
• Our helpdesk is available from 8:30am to 4pm, email: exportcontrol.help@trade.gov.uk telephone 020 7215 4594

If you are new to export controls, we strongly recommend you take a course to improve your knowledge. ECJU runs courses throughout the year, in London and regionally. See our export control training bulletin. Other external organisations may also provide training.

2. Background

There is a statutory (legal) requirement, backed by the provisions of Article 31 of the Export Control Order 2008 (SI 2008/3231) that people authorised (by the Secretary of State) inspect export records to ensure that licences are being correctly used.

The ECJU’s online export licensing system provides information to HMRC’s online system (customs handling of import and export freight, known as CHIEF) for licence usage. HMRC can check that some licences are being used correctly, where the value and quantity of the number of exports is specified. But HMRC cannot check licences where value and quantity are not specified, or where information is transferred electronically. In these cases, ECJU acts on behalf of the Secretary of State to undertake these checks.

ECJU checks the following licences:

• open general export licences
• open individual export licences

Some standard individual licences (SILs) such as:

• standard individual trade control licences
• standard individual export licences (for the electronic transfer of technology or software)

3. Authority to carry out inspections

The Export Control Joint Unit (ECJU) holds this responsibility (as authorised by the Secretary of State) and not HMRC. The responsibility lies with ECJU because it is responsible for issuing licences for strategic goods. This function assures the UK Government that you are using the licences correctly.

Compliance inspectors will examine your export and transfer records. So, you will need to keep the required documentation for each export, for each licence that you have used (as part of the licence conditions). During the inspection, your compliance inspector will look at your export documentation to ensure you have met the terms and conditions of the licence under which you have exported/transferred the items. If we find any mistakes, we will advise you on the necessary action to correct these.

As part of this activity we will also:

• check that you have not exported/transferred controlled goods without the appropriate documentation or licence
• advise, and make you aware, of other applicable UK export controls (such as trade controls)
• provide guidance on the relevant legislation

4. Your legal obligations

By registering or applying for a licence from the ECJU, you have met some of your legal obligations. You should ensure you have carefully read the terms and conditions of the licence(s) you hold. Remember that your registration letter is not a licence, and you need to read the licence that is published on the GOV.UK website.

If you have registered for your licence through the ECJU’s online licensing system, this will have helped you to identify the control list entry of your goods, and the appropriate licence. But you will still need to read the licence you hold, and not rely solely on the summary of the licence provided during your registration. The licences clearly set out the documentation you need to obtain, and for how long you should retain these.

4.1 First time licence holders

First-time licence holders will be contacted by their allocated inspector, either by phone or email, within the first month of the inspector being allocated. We call this ‘first contact’. The compliance inspector will arrange a time and date to call you to discuss your licence(s) and to ensure you are aware of what is required for you to meet the terms and conditions of the licence(s) you hold. You should set aside a minimum of two hours for this activity - more if you make a lot of exports.

Following ‘first contact’, the inspection of your export records will follow at a later date. This will be based on the inspector’s assessment of the risk.

The risk is based around issues such as:

• licence usage
• number of licences
• compliance record and effectiveness of procedures
• volume of exports
• goods and destinations on the licences
• any special conditions which may be in place

5. Scheduling an inspection

Your Inspector will not visit you until you have started to use your licence(s), unless there are exceptional reasons, and then only if authorised by ECJU’s head of compliance.

5.1 Arranging an inspection

Timings

The time and date of your inspection are, in most cases, agreed six to eight weeks beforehand. In some exceptional cases we may use Article 31 of the Export Control Order 2008 (as amended), to undertake an ‘ad hoc’ inspection of your site, if we happen to be inspecting others in your area.

We usually aim for a specific date or range of dates, depending on our diaries. It is extremely important that you consider all those who need to be involved in the inspection (see Personnel) before agreeing a date.

Contact

We will either email or ring the person we have listed on our online licensing system as your business’s point of contact. You must ensure that all relevant contact details on the system are up to date - we need to be able to contact the right person.

Location

When discussing the date with your Inspector, you should agree which site (see Location of the inspection), is the best location for the inspection and/or how many sites are being covered at the meeting. This will allow your Inspector to ensure that sufficient time has been set aside.

Inspection Confirmation

Once a time and date for the inspection has been agreed, you will be emailed an Outlook calendar appointment. This will include:

• confirmation of the inspection
• a Pre-Visit Questionnaire (PVQ)

Please read both of these documents carefully. The PVQ will need to be completed and returned by the date indicated, as required by your licence.

5.2 Can I change the date of the inspection?

Inspectors carry out a very high number of inspections each year - this is why inspections are agreed so far in advance. It is unlikely that your inspector could accommodate a change of inspection date at short notice (ten working days or less). If this happens, ECJU might have to consider taking action against your business - see Annex B.

6. Location of the inspection

Your Inspector will examine the records at the sites where the extant licences have been registered, or those that have recently expired (and had not been previously inspected). You will not be charged for these inspections. Inspections should take place at the site address given on the licence, this is usually the address where the records relating to the exports, transfers and/or trade activities are held. Inspections may only take place at an address that is related to the exporter, in some way, on our online export licensing system.

Exceptions may be where your business:

• has several sites, which export independently to one another on separate licences, and you prefer the inspections for all sites to take place at a single location
• is based overseas (for those holding trade licences) or where you make very few exports, a ‘Remote Inspection’ may be required

In the second case we will ask for specific information to be sent to us. This is not standard practice and has to be agreed in advance with your Inspector.

7. What to expect

7.1 During the inspection

Your Inspector will:

• ask for the following information:
  • records or list of activities that have been undertaken under the licence(s) you hold - these could include:
    • exports
    • technology transfers
    • trade(s)
• choose a number of ‘transactions’ (exports, transfers, trade control activities etc) and ask to see the supporting paperwork for these

For each selected transaction we will usually:

• review the export documentation
• review the other documents which the licence conditions require, such as Consignee Undertaking, Ministry of Defence (MOD) approvals
• check the goods and their destination, to ensure they match the permissions on the licence and supporting documentation

The Compliance Inspector may need additional information, depending on:

• types of exports and destinations
• external information your Inspector may have
• responses given to questions, if these give cause for concern

7.2 Outcome

Your Inspector will tell you if there are any actions you need to take to improve your compliance levels, on either the licence(s) you hold or wider aspects of export controls that you need to consider as part of your business’s activities. This will be discussed at the end of your inspection and in the compliance report, a summary of which is sent to you via our online licensing system.

If significant errors have been identified, a ‘Warning Letter’ may be issued and HM Revenue and Customs (HMRC) informed. MOD will also be informed if the error includes failure to obtain their documentation.

More information on Warning Letters and non-compliance can be found in Annex B.

8. Personnel

8.1 From your business

We recommend that the following personnel from your business should attend, or be available to attend if required, at your compliance inspection:

• those involved in administering the licences
• project managers or technical personnel
• the senior responsible owner (SRO), such as the director or CEO (for at least the summary)

We ask that an SRO be present, at least for the summary of the meeting, to ensure that they are aware of the seriousness of such meetings. The SRO is legally responsible for compliance within a business, and therefore liable if a resulting prosecution takes place.

It is therefore in their best interest to attend at some point during an inspection. From experience, we have also found that having an SRO present (for at least part of the meeting), secures more help and support for those who administer the business’s internal export control processes. This in turn helps to reduce the likelihood of unlicensed shipments or breaches of licence conditions.

If you are still unsure as to who should attend the meeting, ask your Inspector when discussing arrangements for your inspection, they will be happy to advise.

8.2 Accompanied inspections

Sometimes your Inspector might bring someone with them to an inspection. These may be, but not limited to:

• an MOD adviser who needs to check how your business handles MOD processes and requirements
• advisers from another government department (usually where they have had direct engagement with you and they believe their attendance could clear up ongoing questions)
• another Compliance Inspector for general awareness and ensuring a consistent standard of inspections
• the Head of Compliance, in cases where there has been some kind of problem, or for consistency validation
• another member of the ECJU to improve their knowledge and experience of export controls

You should not assume that anything is wrong, or that you are seen as being in any way at risk, if person(s) other than your Inspector attend the meeting.

Your Inspector will tell you beforehand if they are going to be accompanied, and in most cases ask your consent.

9. The inspection process

9.1 Before the inspection meeting

You must ensure that your Inspector has received the following:

• fully completed and returned pre-meeting paperwork, by the date asked for by your Inspector, including the PVQ - this is also a requirement of your licence (if you have problems completing the document, ask your Inspector or one of the Compliance Support Staff for help before the deadline date)
• map and any necessary directions of how to get to the site (usually only required for first visit)

Your own preparation

Make sure that you have identified and gathered all the supporting documentation for your all your transactions (exports, transfers, trades). These must be easily retrievable on the day to save time. For more information see Annex C.

Documentation includes, but is not limited to:

• export documentation
• end-user/consignee undertakings
• paperwork from the Ministry of Defence (MOD)
• anything else needed to show you are complying with the conditions of the licence you have quoted on export documentation.

Ensure that all attendees from your business are:

• aware of the date and time of the inspection
• they have reserved time to attend the inspection
• understand why it is taking place
• understand their role(s) in the meeting

Remember to make your reception desk and/or security team aware of the visit (See ‘Security considerations’ below).

You should also:

• reserve a room big enough for papers to be spread out and for the number of people to be in attendance
• reserve a parking place for your Inspector

Security considerations

We are aware that some businesses have specific security requirements for their individual sites. Let your Inspector know about these when you’re agreeing the inspection date.

Please note that Inspectors are not permitted to provide any personal details (including date or country of birth, passport or driving licence) either on the day or in advance for identification purposes.

Compliance Inspectors will show you their departmental ID confirming that they work for the Department for Business and Trade, either in advance (scanned image) or on arrival at your premises. This government identification card is the only means of identification permitted. If this does not meet the security requirements of your business, you will need to arrange an alternative location for the meeting to take place.

It is important to remember, that while export/transfer/trade documentation may be commercially sensitive, the information that your Inspector reviews does not contain ‘controlled’ information or material sensitive to other governments

9.2 Running order of the inspection

Your Compliance Inspector will examine export, transfers and/or trade activities over the previous 12 months (as a minimum) or from the date as indicated on your PVQ.

Overview of your business

Only usually at first time inspection or if the business has changed significantly. We do not expect, and do not wish for, a full presentation on every aspect of your business. We are happy to have a brief overview of your activities if it is helpful, but please keep these relevant to the export/transfer/trade of controlled goods.

Your business processes

This will include such questions as:

• who has overall responsibility for compliance with export controls (usually a director or similar)
• how decisions are made on whether a licence is necessary or not and by whom
• when in the process is this decision made that a licence is/is not required - and by whom?
• whether a compliance statement is in place, see Annex 1 of the compliance code of practice
• if a written compliance procedure and/or compliance programme is in place - for example, awareness training for new staff
• evidence of good procedures and back-up for the people working day-to-day on this, for example what happens when the key person goes on leave

Have your paperwork ready

Your Compliance Inspector will usually begin inspecting your exports/transfers/trades at the start of the meeting. So it’s very important that all paperwork is ready for inspection.

List of transactions

Your Inspector will ask you for a list of all your transactions (exports, transfers, trade activities) that have taken place in the period stated in your PVQ. From this list, your Inspector will choose a variety of transactions for which they will need to see the supporting documentation.

Inspecting export documents

Take particular care that the documents you hold meet the specific terms required by those licences under which you have exported/transferred/trades items. For more guidance see Annex D. Any documentation presented must be complete to the Compliance Inspector’s satisfaction. The documents must meet the record keeping requirements and all the terms and conditions of the licence used. Annex E provides more detail on this, and other aspects, of the requirements of a compliance inspection. For guidance on some specific licence requirements, see Annex F.

Summing up

By the end of the inspection you should have a good understanding of how highly we have rated your ability to administer and comply with open licences and other relevant licences.

Your Inspector will run through the findings and any follow-up actions needed on either side. We strongly recommend that the Senior Responsible Owner (Director or Senior Manager) attends in case there are specific areas of concern that the Inspector needs to discuss.

If you have been found to be non-compliant with the terms and conditions of one or more of your licence(s) or other requirements in the export control legislation, the Compliance Inspector will discuss with you the actions you need to take before the next inspection, and when that might be. See Annex B for more information.

9.3 Follow up

Your Inspector will use the ECJU’s online licensing export system to issue a correspondence letter to you after the inspection. You will automatically receive an email from the system about this. This letter will confirm the outcome of the inspection and will set out action points and any recommendations discussed at your inspection.

Any actions given to you/your business must be acknowledged and responded to via the online licensing system. If you do not respond to the actions given by the deadline, you will be sent a reminder, and your Inspector will also be informed that you have not responded. Continued failure to respond may lead to a non-compliant outcome.

Successful inspection

If your Inspector has found you to be compliant with all the terms and conditions of the licence(s) you hold, and no actions or recommendations have been made, a compliance certificate may be awarded. See Annex G for more about this.

Consequence of an unsuccessful inspection

If you have failed to meet the terms and conditions of the licence(s) you hold, we see this as being non-compliant. You will then receive notification via the online licensing system and HM Revenue and Customs will be informed. Your Inspector will send your Senior Responsible Owner a warning letter (by post or e-mail) with the endorsement of ECJU’s Head of Compliance.

This letter will detail:

• the compliance failures identified
• remedial action required
• clarification as to what your business is intending to do to ensure no further instances of non-compliance occur in the future
• recommendation to make a Voluntary Declaration to HMRC
• consequences if there is a repetition of the errors arising at the re-visit (Annex B gives further details)
• date for a revisit to make a repeat inspection

9.4 Further Information

For more information about export control matters please contact:

General queries about strategic export licensing

Export Control Joint Unit
Department for Business and Trade
Old Admiralty Building
Admiralty Place
London
SW1A 2DY

Email exportcontrol.help@businessandtrade.gov.uk

Telephone 020 7215 4594

10. Annex A – Role of your Inspector

Compliance Inspectors are not Technical Officers, so they cannot give an opinion on the control list classification (CLC) entry (this can be found in the Consolidated list of strategic military and dual-use items that require export authorisation for your controlled items. They may, however, be able to identify items that might be controlled and sometimes suggest categories or control entries. It is however, your responsibility to check that you have selected the correct classification of items intended for export/transfer.

Inspectors cannot provide definitive advice on which licence would permit certain controlled activity (including exports, transfers or trafficking and brokering). Your Inspector may, however, discuss in generic terms what types of activities are controlled to help you determine whether your activities would be licensable. We may also suggest licence(s) that permit such exports - but you are responsible for ensuring you meet the terms and conditions of the licence.

10.1 Building relationships

In most cases, Compliance Inspectors are the only Export Control Joint Unit (ECJU) representatives that you see. Their role is to ensure you meet the terms and conditions of the licence(s) you hold, and they can help you improve your knowledge and awareness of your legal responsibilities. Inspections also provide an opportunity for you to ask questions about areas of policy, current and possible future situations that may affect you or your business and your specific circumstances. You can also ask your Inspector if you need clarification on the terms of a licence or further guidance. This should be done by email. But keep in mind that Inspectors are out of the office most of the time, so please allow 48 hours before chasing any queries. We ask for questions to be sent in an email so that both you and ECJU have a record of discussions and decisions made. This will also ensure a robust audit trail.

10.2 Awareness raising

Inspectors will also ask you about any other activities your business is involved in. This is to ensure that you are fully aware of all elements of your activities that may be licensable. These activities may include, but not restricted, to the following:

• transfer of technology or software by any means, for example electronically
• arranging and/or transferring goods between two or more overseas countries - or between different overseas sites of your own organisation
• sending goods to exhibitions or demonstrations overseas
• repairing items or sending items for repair overseas

Inspectors will explain that exports can been deemed to have taken place regardless of:

• who may receive them (for example, transferring goods to your partner/subsidiary organisations based outside the UK)
• whether items have been temporarily exported (you may be sending goods to exhibitions or for repair and you state Free of Charge (FOC) on the export documentation) or mode of transport (physical exports and electronic transfers may be licensable)

They will also advise you of what you should be ‘alert to’, for example what you should consider prior to accepting contracts with new customers This will include:

• how to be vigilant and responsible
• making enquiries about new customers (or even existing ones), and where you go to obtain information
• ensuring that you are confident that your controlled items arrive at the intended destination and that your customer is using them in the way you expect
• what to do if you are suspicious about new enquiries
• what to do if you are not sure about end-use controls

10.3 Keeping up-to-date

Inspectors will ask you how your business will keep up-to-date with changes in legislation and how you plan to keep your knowledge current. If you are not already aware, Inspectors will discuss the help and advice ECJU can offer, such as our website, checker tools and notices to exporters.

10.4 Questions and concerns

You may well have questions or concerns about your legal obligations under UK export or trade controls. Compliance Inspectors can be a useful source of information, but sometimes they may need to take your question away and discuss it with colleagues in the government’s export control community. We always attempt to get back to you within 48 hours of the question being raised - more difficult queries might take longer.

10.5 New licences

Although Inspectors do not issue licences, we may at times provide input into the decision as to whether a business has sufficient knowledge, experience and expertise to properly use an Open Individual Licence. In the case of a new OGL being developed, Compliance engage in the later stage of the process to ensure the terms and conditions of the licence are clear and achievable. At times they may challenge some of the conditions if they are deemed to be too onerous. This is done before publication.

10.6 Expert witnesses

Compliance Inspectors do not investigate or prosecute licence holders for breaches in export control legislation, but Inspectors are required to inform HMRC if we discover breaches of export controls. When breaches have been serious, and the Crown Prosecution Service deems it appropriate to take a case to the High Court, we are often required to present evidence in the case. This is why Inspectors are required to be clear and concise at inspections and when providing any advice.

11. Annex B - Enforcement

ECJU Inspectors are sometimes required to take measures against an exporter when requirements are not met. In these cases, ECJU and HMRC might take steps to ensure future compliance with the terms and conditions of the licence(s) you hold. Procedures available are without prejudice to the Secretary of State’s general powers to suspend or revoke licences by following other procedures.

11.1 Possible measures

Measures may be taken against you when infringements of the legislation or licence requirements have arisen. This may be due to:

• significant errors identified during inspection, where your documentation for the export/trade of controlled items (goods, technology or/and software) did not meet the licence’s conditions
• repeated infringements, despite having been informed previously by ECJU of the error
• failure to take the corrective action(s) identified through the online export licensing system and/or stated in a warning letter issued after a compliance inspection
• cancelling an inspection 10 working days or less before the agreed date
• your Inspector being unable to contact you, after having made several attempts to do so

In this case, your Inspector will write to you, sending the Warning Letter via ‘Recorded Signed For’. If your Inspector still receives no response, the Head of Compliance will write to you to inform you that your licence is suspended. If no contact remains, you will be informed that licence has been revoked. All correspondence will be emailed to the address listed on ECJU’s electronic licensing system.

11.2 What is a ‘significant error’?

This might include examples of exports of controlled items to destinations or countries not permitted under the terms of the licence, or not having the correct Ministry of Defence (MOD) authorisation in place before exporting controlled goods.

In these instances, your Inspector will issue a Warning Letter to the Senior Responsible Owner (SRO) within your business. This will be the legally responsible person who must ensure compliance with UK export controls - the managing director, for example.

11.3 Enforcement procedures

If measures are taken against your business, you will be issued with a ‘warning letter’. This will be titled ‘open general export licence: warning letter’. It will outline the failures and remedial actions required and ask that the letter be acknowledged by a specified date.

The person responding to the warning letter will be asked to outline the procedures that your business intends to put in place to ensure future compliance, along with their personal assurance to their Inspector. You should also state any remedial actions you have undertaken in response to the errors identified at audit. This should be done in writing and via the online export licensing system. Your Inspector will also recommend that you make a voluntary disclosure to HMRC.

A further compliance inspection, known as a revisit, will then usually take place within six to eight months to ensure that your business is now compliant with the terms and conditions of the licence(s) held.

Failure to reply to a warning letter with the information required may result in further actions being taken, such as the suspension of your licence(s).

If you have received one warning letter and then on second inspection are still found to be non-compliant against the same licence, the licence where the non-compliance has remained will be suspended for a period of three months. This will mean that you will not be able to export goods, under that specific licence, for that period.

If after that period, a subsequent inspection reveals that the business is still non-compliant, then that licence will be revoked.

If your open licence is revoked you will still be permitted to apply for a standard individual export licence (SIEL) that, if granted, will allow you to export controlled goods, technology or software. These licences are valid for two years.

12. Annex C – Records

For the inspection, you must have a list of your exports to hand. This should ideally be a spread sheet or an export log (folders are acceptable) of all shipments made under the licences being inspected.

Your list should include:

• which licence was used to export/transfer the goods, technology or software in question
• or confirmation that no licence was required (NLR) against the export

During a compliance inspection your Inspector will look at a representative sample of the records of exports against each licence exported. You will not be told in advance which exports are to be inspected. So it is imperative that all supporting documentation is easily to hand.

13. Annex D – Documents inspected

Our licences are site-specific. You should ensure that any exports from any site are covered by a licence. In some cases, one licence may cover several sites, but you must be very careful if you have such a licence, as any export documentation accompanying the items must state the site where the export licence is held, not the site that the goods are being exported from (if different). If this is the case, your Inspector will need to understand the relationship between the different sites.

You must ensure that your licence has:

• the site address
• this address must be the same address as given on your export documentation
• it should also be the same as the address where your export records are kept

You should take particular care that the documents held by yourself meet the specific terms required by those licences, for example undertakings. For more guidance visit: Open individual export licence (OIEL) undertaking template.

These should be:

• original
• on the end-user’s or consignee’s headed paper
• signed
• matching the licence, with appropriate wording
• valid on the date on which the export was made

The documents must meet the record-keeping requirements and all the terms and conditions of the licence used.

To ensure you can meet the requirements of the licence(s) you hold, you should always:

• read the licence conditions very carefully
• check that any supporting documentation meets the criteria prior to export/transfer/trade

It is easier to obtain correct documentation before you agree a sale, rather than trying to obtain the documentation once goods have left the UK.

All documentation must satisfy your compliance inspector. If it doesn’t, your Inspector will be happy to explain any issues.

14. Annex E – Topics covered at inspection

14.1 Business information

• other sites
• number of employees
• goods/software/technology exported
• trade controls
• temporary exports

Customers, markets and competitors for controlled items

• overseas
• agents/distributors
• checking of customers

Licensability

• the UK Control List Classification control entry, see the consolidated list of strategic military and dual-use items that require export authorisation
• the person in your organisation who decides which control entry applies to your goods

Responsibility

• overall
• day-to-day
• cover in absence
• reporting structure for export activity
• compliance statement
• export control training procedures
• desk instructions
• keeping up-to-date

Order process

• when is the decision made about the need for a licence
• who decides which licence is applicable
• how information is stored and maintained on your computer system
• checks on end-user undertaking
• checks on end-use/user
• checks prior to export/transfer/trade

Record keeping

• retention policy
• maintaining end-user undertakings for the period identified in the pre-visit questionnaire (PVQ)

Most of the topics above are covered in the PVQ, issued with your calendar appointment and confirmation. Remember that these need to be returned to your Inspector by the date given in the letter. Failure to do so may result in a protracted inspection, or in the worst case, be considered a breach of your licence conditions.

15. Annex F – Additional Guidance of specific conditions or licences

15.1 Licence conditions

Sometimes controlled items exported from the UK may be moved to another destination without first being returned to the UK. You will need to ensure that you have carried out due diligence with your customer to be sure you are certain where your controlled items may eventually end up - also that this destination is permitted by the licence under which you are exporting the goods.

An example of the above would be controlled items exported for a ‘platform’, such as a specific type of ship or aircraft. You should check where the platform might end up and ensure your licence covers that destination. Remember that some licences have an ‘after incorporation’ clause, so that even if the goods are being installed into something else, such as a platform, and that item is subsequently exported, you need to ensure your licence provides cover for where the platform may be eventually used.

Moving goods from one destination to another rather than bringing them back to the UK and re-exporting them is acceptable, providing the conditions/restrictions that apply to each licence used are met. For example, that both are permitted destinations on the same open individual licence, or it fulfils all open general export licence conditions to both destinations. If you’re unsure, check with your Licence Inspector before exporting the goods.

For OILs containing a wide-definition government-only clause (government direct, government agencies or companies whose use of the goods is in direct support of a Government contract) it is acceptable for the goods to be consigned to an agent or distributor in the destination country - an intermediary rather than the government end-user. It is also permissible for the goods to pass through multiple consignees who simply handle the goods in the destination country. But you should ensure there is a clear audit trail through the various consignees, from the UK to the government end user - and that your Licence Inspector is happy with the record keeping.

Some licences have specific requirements for the Ministry of Defence (MOD). For approving the export or transfer of goods or technology classified ‘official - sensitive’ or above include the following:

• physical exports or postal shipments: security transportation plan
• courier exports: MOD issues an ‘authority to carry documents’ certificate
• electronic transfers above unclassified must be on an approved encryption system - which must, itself, be approved by MOD

Electronic transfers of controlled technology or software

For this type of activity you may maintain generic records (such as summaries of transfers under a specified contract on a spreadsheet) detailing controlled electronic transfers of technology. The records required are set out at Articles 29-30 of the Export Control Order 2008

As well as specific requirements in each licence, if generic records are maintained you need not retain the original communication, although you may wish to do this for your own purposes in case questions arise at the inspection.

If the actual communication (email perhaps) is retained as the sole record of an electronic transfer, then this communication must meet the record-keeping requirements of Articles 29 and 30 of the Export Control Order 2008 and any specific requirements of the licence used.

There is no need to make a specific reference to the licence on the email or fax where controlled technology or software is transferred by electronic means. But you must, when asked, be able to identify the licence used and demonstrate compliance with all the terms and conditions.

Trade control licences

Supporting documentation generally, but not always, needs to relate to the activity in the UK rather than an export from a third country. Undertakings are not always necessary, but, if needed, will be specified in the licence.

Open individual trade control licences have conditions specific to your application (along with standard conditions) that your Inspector will check at the inspection. These will generally include specific details of the trading activity, such as names and addresses of source and destination, description of goods and dates of trading. Additional conditions could involve more detailed proof of the trading activity (such as advertisements or promotional material) but these will be stated clearly within the licence.

Undertakings

Undertakings issued by a head office (or equivalent), but specifically covering exports from a range of other sites, are acceptable so long as it is clear that the signatory has management authority over those sites. The document must also include the names and addresses of all the sites covered. Undertaking must be original and, on the business’s headed paper.

Government Purchase Orders (GPOs) and government contracts

GPOs, which are quantity-specific, may be a valid supporting document for certain licences, until the stated quantity of the goods has been delivered. You should check with your Inspector beforehand to ensure your GPO meets the conditions of the licence. A business acting on behalf of ‘a government’ cannot issue a purchase order on behalf of the government.

Definitions and interpretations

‘Exhibition’, ‘demonstration’, ‘government bodies’.

Exhibition: when equipment and/or technology is displayed by you, and you have no control over the visitors, or who views your equipment or technology at that event. These are usually static events. For such activities, all of your exhibits must be at an unclassified level.

Demonstration: this is when your equipment and/or technology is shown by you, where you know those attending, and you explain your items in greater depth and demonstrate its capabilities to your potential customer. These events are usually closed and there has to be a pre-agreed level of classification to an audience known to you.

Government bodies: The status of some agencies in relation to the definition of government depends on the country concerned. Some, like the FBI in the USA, can be considered as a government body, others such as a local police force may not. Compliance Inspectors will seek clarification on a case-by-case basis.

Be aware that some government bodies also act as agents to support and maintain their own platforms sold to other countries that may not be covered by your licence. You must ensure that you undertake sufficient due diligence, prior to export, so that the items you are exporting, even after incorporation, remain in destinations permitted by the licence.

16. Annex G – fully compliant certificates

You are deemed fully compliant if, on the day of the inspection, you are able to fully demonstrate compliance with all the terms and conditions of the licences used for export and no actions or recommendations are outstanding. You may then be emailed a pdf Certificate of Compliance. These certificates are discretionary.