Current Export and Trade Control Licensing Delays

As many UK companies are already aware, the UK Government has been working hard to try to address the current delays that are being widely experienced with the UK export and trade control licensing system. The situation is extremely challenging for all involved, and is fundamentally a knock-on from the 20th June 2019 Appeal Court ruling (on the Kingdom of Saudi Arabia and its coalition allies in Yemen) and the 15th October 2019 Ministerial announcement to Parliament (on licences for Turkey). ECJU is well aware of the issues that have been caused for companies, as a result, and the intense frustration that many of you are experiencing. The good news is that it is anticipated that ECJU should be able to start clearing the backlog in the near future, which will likely take at least c.3 months.

However, in the meantime, and to assist  the Government in its efforts to work its way through the backlog in a rational, thoughtful and strategic way, it has requested help from Industry to try to prioritise its efforts, and focus its finite resources on those cases which are really urgent and need to be expedited, so as to try to minimise the extent of any damage to UK Industry’s commercial interests. This will be a new, temporary approach which is going to be put in place to try to help to clear the current backlog of held up licence applications in a measured and controlled way, with companies seeking to try to highlight to HMG any REALLY urgent cases, which HAVE to be prioritised for processing, and where this claim for urgency can be fully and rationally justified by the applicants. Other cases will continue to be dealt with in chronological order on the basis of when they were received by the ECJU

To that end, the UK Government, first and foremost, will be seeking to try to focus on the most urgent priority cases, by working with the major prime contractors to see if it might be possible to coral together a number of relevant licence applications which are related to the same project, so these can be dealt with in small batches. These major prime contractors are to be directly contacted separately and individually by the UK Government.

Whilst this is going on, ADS had been asked to assist in the implementation of a temporary triage system whereby other UK exporters, outside of the major prime contractors, can seek help to prioritise their applications which are part of the backlog on the basis of perceived urgency. Such prioritisation efforts must be fully justifiable. If a company is able to provide sufficient justification that their case is really urgent and needs to be prioritised, then these cases can be raised with the ECJU for possible expediting. We need to be fair to all parties, but, especially if some justification can be provided as to why particular cases need to be expedited, that would be extremely useful for the ECJU. However, approaches by individual companies to ECJU need to be done sparingly and in an informed way, as seeking to expedite any particular licence through the system will, of necessity, result in diversion of resources from the processing of other cases. However, it must be made clear that cases will continue to be reviewed and decisions made on a strict case-by-case basis against the consolidated criteria – this is purely a prioritisation exercise to help manage the processing of cases, and it will not influence the decision, itself.

Clearly potential risk to contracts that have been awarded and where the company concerned has evidence it can share that business may about to be lost will be one key reason for possible prioritisation. The size of the order is not an issue, as what might be small, low-level business to a prime, might represent an existential threat to a smaller company, who is likely to have a much smaller financial tolerance level to losing business. Also, what might be a very small value contract could be for trial and demonstration purposes, and potentially lead on to significantly larger future business, and the establishment of a long-term, strategically-important commercial relationship. There will be other criteria for prioritisation.

The focus at the moment is on those licences which have been impacted by the 20th June 2019 Appeal Court ruling on Yemen, covering licences for any of the Saudi Arabian-led coalition partners active in Yemen (including: UAE, Kuwait, Bahrain, Jordan, Senegal, Sudan and Egypt), and I will be in touch separately regarding Turkey, in due course.

If any companies want to raise any cases that they feel need to be expedited due to their perceived urgency, they should send the details of their most urgent and pressing cases, including: the relevant licence application numbers; end user; date when the licence application was submitted; date when the contract was signed; and whether it relates to an item that is part of a wider supply chain, along with justification as to why your case(s) need to be expedited, to so he can see if he may be able to raise them with the Government for early resolution over the coming weeks.