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Lucy Jones

Lucy Jones

On the 18th June 2013, U.N. Secretary General Ban Ki-moon recommended changes to the sanctions that have been in place on Iraq since the invasion of Kuwait in 1990. If accepted, Ban’s recommendation would see the ongoing humanitarian dispute between Kuwait and Iraq (relating to missing Kuwaiti nationals, and border, property and other issues) dealt with under Chapter 6, rather than Chapter 7, of the U.N. Charter, which allows the Security Council to impose measures for peace-keeping, ranging from sanctions to military intervention. The change, if it is passed, will go a long way to restoring Iraq’s image and will enable it to move closer to a sanctions-free status.

Alpha is delighted to announce that two new members will shortly be joining the team. Cathy Gilhespy and Nick Mitchell join us from distinguished careers in UK Government and will be assisting with our work with firms, providing critical insights into the export licensing process and compliance.

Cathy Gilhespy

Cathy Gilhespy received a BSC in Chemistry and Physics from Royal Holloway College, London University in 1973. After completing her degree, she worked as a physicist at Marconi Elliott Avionic Systems Ltd. located in Borehamwood, Hertfordshire. She subsequently joined the Department of Employment where she worked in the Nuclear Installations Inspectorate from 1974 – 1986. From there, she worked for four years in HSE Mine Safety, running the national system of certification for mine managers and statutory officials.

Cathy was later Assistant Secretary to the Health and Safety Executive Management Board for the Nuclear Installations Inspectorate before moving on the Information Technology Unit at the Department of Trade and Industry. Her final post was as the Head of the Enforcement Unit for the Export Control Organisation (ECO) at the Department of Business Innovation and Skills (BIS), which she held from 1999 – 2011. Cathy took voluntary early retirement in June 2011.

Nick Mitchell

Nick Mitchell worked in the UK Government for 33 years before leaving the Department of Business, Innovation and Skills in 2011. He has been involved in a range of non-proliferation, counter proliferation and export control work since 1989. For 10 years he ran the Government’s main committee which co-ordinated the enforcement of export controls, having first-hand experience of implementing UN Sanctions against Iraq, collaboration with international partners, working with Customs to enforce controls but also with business to help them avoid become unwitting suppliers to WMD programmes.

After 18 months on counter-proliferation awareness, Nick spent 3 years on nuclear non-proliferation work, co-ordinating the UK’s policies and support in respect of the IAEA, such as nuclear safeguards and nuclear security. He negotiated for the UK at the NPT in New York and Geneva and at meetings of the Nuclear Suppliers Group, and has wide experience of international export control mechanisms. More recently he ran one of the Export Control Organisation’s Licensing Units, where he worked with various parts of Government, international partners and large numbers of exporters to administer the UK’s export control responsibilities.

 

 

 

Alpha is delighted to announce the arrival of four new experts.

Cathy Gilhespy and Nick Mitchell come to us having left distinguished roles in the UK Government's Export Control Organisation. To view their profiles, click here. Both Nick and Cathy will focus on improving export control implementation amongst  manufacturers and exporters. 

Geoffrey Smith and Glenn Anderson come to us from the Ministry of Defence. Geoff will focus on identifying and engaging manufacturers of technologies with nuclear end uses whereas Glenn will focus on the implementation of trade controls in the shipping and fast-freight forwarding industries. 

Project Alpha is pleased to announce the launch of its new website at: . Our new site will house all of the resources currently found on the existing webpages on the King’s College London site, and it will also provide additional resources, up-to-date news and notifications, forums, and links to the Project’s newly established services, such as e-learning.

Through the new website, users will be able to pose questions to, and share experiences with, experts and other practitioners about the practicalities of negotiating export licences; country-specific concerns; and a range of other issues (/alpha/forum/index). The new website also has secure areas in which members of the Project can access up-to-date information about specific markets, such as the EU and China.

We are still developing the site and welcome any comments or suggestions on what to improve, or how best we can provide your company with the resources that it needs. Please log-on, have a browse, and email comments to:  This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Background:The private sector has an important role to play in countering the illicit trade in technologies or services that could be used to sustain Weapons of Mass Destruction programmes in countries of concern. Firms are obliged to comply with the laws of the territories in which they operate; laws that include the requirements of UN Security Council Sanctions imposed on countries such as Iran. Nonetheless, given that countries such as Iran work to circumvent sanctions to develop their programmes with goods and services from the international marketplace, manufacturers, exporters, insurance, finance and shipping firms should take extra measures to ensure they do not inadvertently aid the implementation of sanctions.  

Project Alpha works in partnership with firms in numerous business sectors to counter proliferation-related trade. Alpha assists firms in implementing non-proliferation compliance systems. Partners of Project Alpha undertake to implement the measures that follow and actively to encourage those in their supply chain to do the same. The Code of Practice that Alpha works to was drafted by Rolls Royce and Dr Jonathan Brewer and has been recognised by the nuclear suppliers group as "good practice". 

Partners will:

  • Maintain a trade compliance system that initiates appropriate action when:

o    The technology to be exported is controlled;

o    The exporter ‘knows’ or ‘has reason to know’, ‘suspects’, or has ‘been informed’ that the export is destined for a WMD programme;

o    A party to the export is a designated entity

Partners undertake to:

  • Implement a compliance system based on sector-specific best practices and that is integrated into the company’s Corporate Social Responsibility framework;
  • Support and encourage key business partners, including distributors, subsidiaries, and agents, in implementing best-practice compliance systems;
  • Conduct background checks on customers using open-source material and terminate business deals with entities of proliferation concern;
  • Develop and implement corporate monitoring and detection systems to identify illicit procurement attempts for proliferation-sensitive goods[1];
  • Share suspicious enquiries & counter actions with government agencies and the private sector (through Project Alpha, if necessary);
  • Highlight adherence to non-proliferation with business partners and through the firm’s website;
  • Train all relevant staff against a trade compliance competence framework;
  • Implement measures to protect the intangible technology (such as design information) associated with proliferation-sensitive goods or processes;

Firms should refer to Project Alpha’s website where sector-specific guidance on implementing export compliance can be found. The website also contains the latest information on illicit procurement attempts to aid firms in implementing the measures detailed above.



[1] Note: This criteria applies to firms which trade in physical goods

Strategic Trade Controls: What Do Firms Need to Know?

  • Export controls are in place to prevent technology and goods from being acquired by those seeking to used them for  illicit military-related end uses and are an important tool of national security
  • Firms need to be aware of the control status of their products and of the potential uses of their goods in military or WMD programmes
  • A licence is required when exporting controlled goods and potentially when exporting non-listed goods to sensitive destinations
  • There are significant legal and financial risks associated with deliberate and inadvertent involvement in illicit transfers
  • A systematic approach to compliance is required to mitigate risks effectively
  • If firms have questions about the scope and requirements of export controls, they should contact Project Alpha at  This email address is being protected from spambots. You need JavaScript enabled to view it.
  • A link to your licensing authority can be found on this page

The Purpose of Export Controls

Export controls and sanctions are in place in order to allow national authorities (various departments of the British government in the UK case), an opportunity to assess the international security and proliferation risks associated with the export of certain sensitive military-related technologies. They allow a country’s government to act to safeguard the national security of that country and to avoid fuelling conflict or internal repression overseas.  

More specifically, some of the purposes of export controls are:

 

  •          To prevent goods from contributing to WMD programmes
  •          To prevent the transfer of goods which could contribute to sanctioned military programmes or cause regional instability
  •          To prevent those goods, for example as weapons, from contributing to human rights abuses
  •          To prevent those who support or direct the activities above from accessing the British, European, US, or international marketplace
  •  

The Scope of Export Controls

Export controls cover ‘technology’ which is taken to mean both tangible goods, as well as the intangible technology associated with controlled goods.  

The EU maintains a military list and a dual-use list. Military goods are largely what you might expect: arms, tanks, missiles, and other equipment specifically designed or prepared for a military end use. The dual-use list includes a relatively broad range of technologies that can be incorporated either into military goods or into weapons of mass destruction programmes.  

However, export controls can also encompass non-listed technologies. This typically occurs in cases where exporters ‘know or suspect’ that technology is destined for sanctioned entities or programmes of concern. A ‘catch-all’ control exists to allow uncontrolled goods to be prevented from reaching such destinations.  

Country-specific Restrictions

In addition to export controls which impose a licence requirement on any country regardless of destination, a range of country-specific restrictions or ‘sanctions’. These measures can restrict trade in a number of ways:

·         Introducing a presumption of denial for export licences

·         Prohibiting trade with certain entities in specified countries (designated entities)

·         Restricting investment in certain industry sectors, such as Iran’s oil and gas sector

UK Government Departments Involved

In the UK, as in most countries, there are multiple government departments involved in the export control process. This is because export controls cover a number of policy areas.

The principal organisation in the UK system is the Export Control Organisation (ECO) which is a part of the Department for Business Innovation and Skills (BIS). This is the organisation with which exporters communicate with when applying for export licenses.

A second lead organisation is HM Treasury, which advises on trade with designated entities.

Other government departments are also involved such as: the Foreign and Commonwealth Office (FCO), which sets the strategic objectives and conduct diplomacy relating to the UK’s international commitments; the Ministry of Defence (MOD), which deals with military and technical issues; the Department for Energy and Climate Change (DECC), which deals with nuclear issues; the Department for International Development (DFiD), in cases where exports may have implications for UK development assistance; and HMRC and the UK Border Service, which undertake enforcement actions when necessary.

The Requirements of Export Controls

UK export control legislation usually requires that the exporter holds an export licence at the time of export. A valid licence is required, in most cases, if the goods are controlled or they are destined for a sanctioned destination or an end-user of concern.

Open licences are available in all EU countries, providing exporters with a more simple way to export less proliferation-sensitive goods to less sensitive destinations. With these types of licences, the emphasis is on registration, the record-keeping of the exporter, and compliance audits carried out by government representatives.

Licence applications are both made by exporters and assessed by government through the online Spire system.

The Consequences of Non-Compliance

There are significant risks associated with non-compliance with export controls. These include legal risks – fines of hundreds of thousands of pounds and imprisonment of several years – as well as reputational risks and associated financial costs. A number of case studies of UK prosecutions can be found on the ECO website.

However, exporters should be aware that compliance with export controls does not fully mitigate risks. Firms can be compliant with the law and still have their goods diverted to programmes of concern. Extra due-diligence is important in this regard. Exporters should contact their national authority or Alpha when in doubt.

Managing Compliance and Non-proliferation Requirements

Given the detailed and sometimes changing requirements of export controls, it is important that firms take a systematic approach to compliance and non-proliferation to mitigate risks fully. This should include ensuring that a senior official is responsible for trade compliance and include providing training to all relevant staff. More information about best practice compliance can be found here

Each country maintains its own export licensing system. A link to yours can be found on the following page.

Many countries allow exporters to apply for licences electronically. For example, all UK licence applications must be submitted through the SPIRE system.

 

On the 28th February 2013, Dr. Lucy Jones represented Project Alpha at the Joint Seminar of the European Nuclear Energy Forum and the Dual Use Coordination Group, held at the European Economic and Social Committee buildings in Brussels. 

The European Nuclear Energy Forum (ENEF) was founded in 2007, following an initiative from the European Commission, which was endorsed by the leaders of the 27 EU Member States during their March 2007 summit. ENEF provides platform for discussion of the opportunities and risks of nuclear energy as well as the associated issues of transparency. The Dual-Use Coordination Group is composed of member states' representatives and is chaired by the European Commission. Its mandate, as established in Article 23 of the Dual-Use Regulation (428/2009), is to examine questions from the member states or the Commission concerning the implementation of the Dual-Use Regulation.

The purpose of the February 2013 meeting was to bring together stakeholders and member states' licensing and enforcement authorities in order to explore possible improvements to the EU's nuclear export control regime, as part of DG-TRADE’s ongoing review of the current system. More specifically, the seminar focussed on the transfer of sensitive and non-sensitive nuclear items, and other key issues in the dual-use area, such as what controls are required to facilitate the safe transfer of intangibles.

Seminar members broached the topic of and, in many cases advocated, the re-introduction into the EU’s control regime of a distinction between the transfer of sensitive and non-sensitive nuclear items, which would support legitimate trade and which was in place before the revisions to the EU export control system in 2000. One suggested approach was to introduce a general licence for intra-EU transfers of both non-sensitive physical goods, as well as intangibles. The forum was particularly attendant to the special conditions arising from the increasingly intangible nature of sensitive and non-sensitive technologies, particularly those transferred on modern computing equipment, such as smartphones, and via the internet. 

The seminar found that, since the Nuclear Suppliers Group differentiates between sensitive and non-sensitive goods, so too should the EU, allowing member states more freedom than is currently possible to engage in legitimate trade of dual-use goods and technologies. Suggestions for how to facilitate legitimate trade included: allowing member states to apply for National General Authorisations for intra-EU transfers; and large project licences to cover the multiple licences that may presently be incurred when large-scale projects are taking place; a review of Annex IV and the removal of some goods and many technologies (intangibles). On the latter point, one industry member contributed experience of working on a large-scale project, during which 92 export licences had to be obtained for the bidding process alone. The forum found such practices to be prohibitive to effective project management and intra-EU trade.

The forum will continue to evaluate the effectiveness of the EU’s export control regime and to engage with industry operators in the EU to provide them with a platform for articulating concerns and suggestions. Project Alpha is fully supportive of ENEF’s approach to outreach and is pleased to announce that it is now a member of the ENEF forum. Alpha will continue to engage with the other members of the forum on critical issues pertaining to non-proliferation and export controls both within the EU and elsewhere.

 

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