Guidance

Compliance code of practice for export licensing

Updated 23 December 2022

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This publication is available at https://www.gov.uk/government/publications/export-control-compliance-code-of-practice/compliance-code-of-practice-for-export-licensing

Who the code applies to

This code of practice applies to anyone using licences issued by Export Control Joint Unit (ECJU) including:

  • open general export licences (OGELs)
  • open individual export licences (OIELs)
  • open individual trade control licences (OITCLs)
  • standard individual trade control licences (SITCLs)
  • standard individual export licences (SIELs) for technology transfers
  • general trade licences
  • technical assistance licences

This code is voluntary. It gives advice and best practice guidance on how to develop your own export control compliance procedures, to help you meet the licence obligations.

Anyone using such licences is subject to audit. This takes the form of a visit by an ECJU compliance inspector.

You could be found non-compliant at an audit if you do not create and implement suitable procedures. This could result in your licence being suspended or revoked. You would then need to apply for a standard individual export licence (SIEL) to export controlled items.

Meeting the code of practice

Eight elements make up the code. These are practical measures you can put in place to ensure you meet a compliance audit.

They show:

  • what procedures need to be place
  • how to embed the procedures in your organisation
  • how ECJU’s compliance inspectors can see your commitment

See case studies showing examples of best practice approaches to licence compliance.

Committing to compliance

You must show your business commits to following:

  • UK export control law and regulations
  • other national controls where applicable

How to show your commitment to your staff

The company chairman, chief executive or other senior figure issues a statement to all staff in their business. It may be general or specific.

This statement:

  • clarifies the policy of the business on export control issues
  • underlines the importance of effective compliance procedures

See the example statement in annex A. You can use this or express your commitment in your own style and according to circumstances.

The export controls lead draws this compliance policy to the attention of all employees affected by export controls.

It could be made available through:

  • circulation as a self-contained policy statement
  • incorporation in any internal document about regulatory matters
  • inclusion in a quality manual
  • inclusion in any induction material for new personnel
  • dissemination through a company newsletter or intranet

Showing your company’s commitment to ECJU compliance inspectors

You can supply a copy of your compliance statement to ECJU’s compliance inspectors when they visit.

Nominating responsible personnel

You must minimise the risk of compliance failure at each stage of the export process by:

  • having clearly defined responsibilities
  • having a clear management chain regardless of the complexity of the business structure
  • maintaining an internal record of responsibilities
  • making sure all employees with any involvement in the export process are aware of:
    • when an export licence is needed
    • compliance processes
    • internal compliance contacts

How to show your commitment to your staff

A director takes responsibility for export control compliance within a business, or an operating unit. The director can delegate day to day responsibility to a named person within the organisation.

For most businesses it will be enough to name the responsible person or people in the statement of compliance.

The responsible person supplements this with an organisation chart. This sets out each element of delegated responsibility, giving details of the post (and individual) to which it is delegated. This is available to staff as a source for advice. The responsible person updates records or organisation charts as and when necessary. They take account of changes in personnel or business activities.

All job descriptions specify responsibilities in relation to export controls.

Showing your commitment to compliance inspectors

You can supply a contact list or organisation chart to ECJU’s compliance inspectors when they visit. It shows export control responsibilities throughout your business.

Informing and training staff

You must demonstrate that you have adequate procedures in place to:

  • inform staff about changes to export control guidance and regulation
  • train personnel about export controls

These procedures apply to staff who:

  • export goods
  • can export technology via electronic means
  • are involved in arranging the movement of goods between foreign countries

How to show your commitment to your staff

Regulations and guidance

The person with responsibility for export controls makes available to staff:

  • a reference list of sources of information, guidance and regulations
  • a list of contacts for advice

Relevant sources of law, information and guidance include:

The export controls lead establishes a process to:

  • update this information when changes occur
  • make staff aware when there are changes

Training

This takes the form of an assessment of the training needs of all staff in relation to export controls.

The export controls lead establishes appropriate programmes to meet the needs of those who:

  • are beginners
  • need advanced training
  • need specialist training
  • need updates when there are changes to regulations

Sources include the ECJU training on export control compliance.

Showing your commitment to compliance inspectors

You can show ECJU’s compliance inspectors documented procedures on how your staff are:

  • aware of where to access information on export controls
  • kept up-to-date about new regulations and guidance
  • trained on export controls

Company compliance procedures

You should draw up and operate compliance procedures that are effective for your business. These procedures for processing enquiries or orders should meet export control requirements.

They should:

  • reflect the best practices illustrated in this code
  • show that everything possible is done to prevent the export of licensable items without a valid licence

How to show your commitment to your staff

The person with responsibility for export controls establishes and maintains a checklist for all staff to follow. This covers all stages of the export process.

The stages are:

  • checking products, destinations and licences, including
    • which of your products or activities are subject to controls
    • information on customers
    • your licence options
  • checking all enquiries or orders, including
  • checking export procedures
  • checking records

See guidance on what you should include in a export control compliance checklist.

Showing your commitment to compliance inspectors

You can show ECJU’s compliance inspectors:

  • a considered plan of what is needed for compliance
  • clear and simple procedures, appropriate to the business’ structure and integrated with business functions
  • effective and appropriate procedures for processing enquiries or orders
  • comprehensive coverage, detailing requirements of all relevant functions from sales, through order administration, to credit and finance and despatch, and including where necessary maintenance and repair
  • adequate documentation

Handling suspicious enquiries or orders

You must develop awareness of risk indicators among your staff. This will help sales and order processing staff identify suspicious activity. It will protect your company against involvement in illegal activities.

Some potential customers aim to:

  • procure controlled items or components for proscribed purposes (such as proliferation of weapons of mass destruction or military end-uses)
  • divert controlled items or components to proscribed destinations (such as those under sanction or embargo)

How to show your commitment to your staff

The person with responsibility for export controls makes staff aware of:

  • types of activity that could be suspicious
  • what to do if they sense something suspicious

Indicators of suspicious activity

You should be suspicious if the customer:

  • is reluctant to offer information about the end-use of the items
  • is reluctant to provide clear answers to commercial or technical questions which are routine in normal negotiations
  • gives an unconvincing explanation about why they need the items, given their normal business, or the technical sophistication of the items
  • declines routine installation, training or maintenance services
  • offers unusually favourable terms, such as higher price or lump-sum cash payment
  • requests unusual shipping, packaging or labelling arrangements
  • is new to you and your knowledge about them is incomplete or inconsistent
  • is using an installation site that is:
    • in an area under strict security control or has severely restricted access
    • unusual in view of the type of equipment being installed
  • has unusual requirements for excessive confidentiality about final destinations, or customers, or specifications of items
  • requests excessive spare parts or has a lack of interest in any spare parts

Showing your commitment to compliance inspectors

You can show ECJU’s compliance inspectors how you:

  • train staff to spot suspicious activity
  • record actions taken when there is suspicious activity

Record-keeping

You should make sure that all activity around controlled goods:

  • is traceable
  • is easily checked
  • has an adequate audit trail

How to show your commitment to your staff

The person with responsibility for export controls:

  • creates a policy on the time, mode and place for maintaining and storing records
  • establishes record-keeping procedures as required by licence terms and conditions
  • communicates record-keeping policy and procedure to all relevant staff

Showing your commitment to compliance inspectors

You can show ECJU’s compliance inspectors how you:

  • maintain an up-to-date audit trail of all activities relating to your licences
  • store, retrieve and trace information relating to your licences

Provision for audits

You should establish a programme of regular internal audit of the system for export control compliance.

How to show your commitment to your staff

The person with responsibility for export controls establishes a programme of regular internal audit of the system for export control compliance.

The audit is one of the following:

  • a self-audit carried out according to a simple checklist of questions
  • is delegated to a central auditing function within the company

Showing your commitment to compliance inspectors

You can show ECJU’s compliance inspectors how you maintain standards in your compliance procedures through periodic appraisal.

Integrating with quality management practices

You should ensure full integration of both of the following:

  • procedures and practices for dealing with export control regulations
  • quality management systems applying to them

How to show your commitment to your staff

The person with responsibility for export controls briefs quality managers on the export controls code of practice.

Showing your commitment to compliance inspectors

You can show ECJU’s compliance inspectors that your quality management practices:

  • include export control compliance procedures
  • treat export control compliance procedures in the same manner as other business procedures

Annex A: illustrative example of management committing to compliance

Example statement you could issue to all staff with compliance responsibilities.

A message from the chairman

“The success of this company depends in large part on the business we do overseas.

Export controls imposed by the UK government affect a high proportion of our products and many of our overseas markets. We must understand the controls and be quite sure we follow them.

The purpose of these controls is to limit the supply of technology or strategic goods to countries proscribed. This is for reasons of proliferation, security, or terrorism. It is in the interest of us all that the controls are effective if it makes the world a safer place.

We must comply with the legislation. Failure to do so would bring serious penalties for the company and for the individuals concerned.

I have nominated (insert name) to be the person with overall responsibility within the company for export control matters, assisted by (insert name).

They will review the effectiveness of our current procedures. This is in light of the Export Control Joint Unit’s code of practice.

Each of us must be aware of our own role. We must not despatch any items without due clearance and authorisation.

This includes:

  • transmission of software or technology by any electronic means
  • arranging movement of goods between third countries

Information is available on how export controls affect your position. Make sure you are aware of it.”

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