Introduction

 

The Export Control Organisation (ECO), who deal with export licences within the UK, had proposed that export licences that are currently free for UK exporters, would be subject to a charge from April 2012.  The plans to set charges within this timeframe have now been abandoned but the ECO has not ruled out that it may apply a charging regime in the future.

 

General Aims

 

The basic intention was to make the ECO cost neutral.  This means that any costs incurred by the ECO and the services it uses from other Government Departments needs to be funded.

 

There were no firm proposals on the costs associated with licences but the outline figures were £200 for a SIEL (Standard Individual Export Licence); between £1500 to £2000 for an OIEL (Open Individual Export Licence) and about £500 for every OGEL (Open General Export Licence) registration. The OIELs and OGELs will also carry an annual renewal fee.  The ECO were considering charging for other services, such as Classification enquiries (Ratings).

 

A standard charge was being proposed, rather than one based on the value of the licence or the turnover of the applicant organisation, as the same amount of work is needed whatever the value of the goods.

 

Comments

 

The fact that a charging regime has been postponed doesn’t mean that it has gone away and this topic is likely to be raised again, possibly for introduction in 2013.

 

A charging system seems less of a problem to the military sector who generally charge higher prices or deal in larger units.  For the Dual Use area, it could be a real problem.  Export Licences are required for some basic components such as Zigbee devices, FPLAs etc.  Selling prices of these can be from £5 upwards.  At present, there is a burden on any company that exports these devices as the cost to implement and maintain an export compliance system will be more than £5 per item exported.  If a blanket charge of £200 is then added, the export of many electronic items in small quantities will become financially prohibitive.

 

If a charging regime is introduced that is prohibitive to some users of the system, they may decide not to bother and export without a licence.  If companies take this approach, less licences will be applied for and the cost recovery required for each will rise to meet the costs of the ECO.  Before any charging system is introduced, the full impact on all exporters must be fully considered.  A proportionate outcome will only be achieved if the position of all exporters is understood and this will only happen if those affected by the scheme make their views known.

 

Before any system is introduced, there will need to be a public consultation, but comments at this stage may be too late to affect the overall policy.  The voice of the Dual Use Community needs to be heard and if you are likely to be affected by these proposals you need to engage with the ECO as soon as possible.

 

Conclusion

 

It is still likely that the ECO is going to introduce a charging scheme for export licences at some point in the future.  The only way to make sure that the burden from such a scheme is proportionate is to lobby the ECO now to make views from the electronic and related industries known.

 

 

 

 

 

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