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Keeping your exports compliant and penalty free

Export control legislation requires the exporter to consider whether they need an export licence and failure to obtain a licence, or observe its terms is a criminal offence.

Firearms, ammunition and linked components are subject to export controls, but so too are many commercially available materials, products, technologies and chemicals. Anything that could have a military application is likely to be subject to export licences, or may be covered by end-use controls or sanctions.

The war in Ukraine has magnified the importance of export compliance and due diligence. Photographs of a captured Russian tank, early in the conflict, showed a radio-jamming system which contained British parts and further investigation discovered many military units, including tanks and missile systems, using western technologies and now EU and UK customs are investigating how they get there and who supplied them.

Failure to obtain a licence when one is required or failure to observe the terms of a licence is a criminal offence for which the exporter is likely to be liable and ignorance is not an excuse.

Controlled items often find their way into countries under bans or sanctions, particularly when exporters have not carried out thorough due diligence on their buyer, or believe they are too small to be a target.

But non-compliance with export rules may incur financial and reputational damage, with UK fines running to hundreds of thousands of pounds, while in the US they have been known to run into tens of millions of dollars – plus jail sentences.

Often, exporters try to ignore compliance issues because they think it will cost them money, but this is not really the case and our customs experts can help them build a compliance regime that will avoid the risk of penalties and create a competitive advantage.

Our exporters are always compliant, which means they avoid the costs and fines of non-complianceTheir products are not at risk of being impounded, and assures their customers that products are safe to use or to re-export.

Exporting firms need to understand the intricacies of their supply chains, including all components and in particular US parts, as their export administration regulations state that if the amount of US-owned material in an end-product exceeds a set limit – i.e. 10% – they may only be re-exported with authorisation from the US Department of Commerce.

Under this rule a complete product could meet the requirements for export from the UK, but its components, or spare parts may exceed the US’ threshold and be blocked. The risk of getting the US compliance wrong is very expensive, and potentially liberty threatening.

PSP Worldwide Logistics is authorised to handle and transport the most dangerous and demanding cargoes, which means we have the expertise, resources and capability to make compliant and support the most complex global supply chains.

To learn more, or to discuss your situation EMAIL Michelle Redman, Operations Director.