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Two recent HMRC Notices detailing settlements paid by exporters when exporting goods of a strategic nature and potential dual use goods. Be informed by attending our Understanding your Commodity Code and why they are important session on 26 September 2024 and gain a better understanding of how to check for these compliance issues.
Notice to exporters 2024/08: breaches of strategic export compound settlement issued
Introduction
Between January and March 2024, HM Revenue and Customs (HMRC) issued compound settlement offers to six UK exporters totalling just over £1.3 million.
These settlements relate to unlicensed exports of Military listed goods, dual use goods and related activity controlled by The Export Control Order 2008.
The 6 settlements made by UK companies were:
• January 2024 – £12,700.00 was paid for a breach of licence conditions in relation to the export of military goods
• February 2024 – £33,822.64 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
• February 2024 – £971,726.00 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
• February 2024 – £139,841.85 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008 and dual use goods controlled by Retained Regulation 428/2009
• March 2024 – £92,817.40 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
• March 2024 – £56,915.27 was paid relating to the unlicensed exports of military goods controlled by The Export Control Order 2008
Over the 12 months, HMRC has seen an increase in the number of voluntary disclosures relating to:
• Unlicenced exports
• Incorrect licence usage
• Breach of licence conditions
Exporters should ensure that they comply with licensing requirements.
NTE 2024/07: Russian sanctions compound settlement issued
Introduction
HM Revenue and Customs (HMRC) issued a compound settlement of over £1 million to a UK exporter in March 2024. The settlement of £1,058,781.79 relates to export of goods in breach of The Russia (Sanctions) (EU Exit) Regulations 2019.
Non-compliance with sanctions legislation is a serious offence. Those who breach sanctions may be subject to a range of enforcement actions, including large financial penalties or referral for criminal prosecution. Exporters should follow licensing requirements as laid out in Russia sanctions: guidance.
UK-Russia trade sanctions
The UK has:
• Significantly expanded and deepened its sanctions capability
• Reinforced cross-government co-ordination
• Increased investment in sanctions implementation and enforcement
The government works with UK businesses to ensure that sanctions are enforced. There is an increase in the number of voluntary disclosures to HMRC about sanctions breaches.
Over £20 billion of UK-Russia bilateral trade (2021 figures) is now under full or partial sanction. There is a:
• 94% fall in Russian imports into the UK
• 74% fall in UK exports to Russia
Goods and technology sanctions
The UK has comprehensive good and technology export sanctions in place, including:
• Military
• Critical industry
• Dual-use
• Aviation and space
• Defence and security
• Oil refining
• Quantum computing and advanced materials
• Goods used for Russia’s energy sector
• Jet fuel and fuel additives
• Luxury goods
• And other products which Russia depends on the UK and G7 partners for
The Common High Priority Items (CHP) list lists items critical to Russian weapons systems and its military development that are subject to UK sanctions.
Economic deterrence initiative
The government has committed £50 million to support a new Economic Deterrence Initiative to further boost our diplomatic and economic tools and improve sanctions implementation and enforcement and to tackle sanctions evasion across the UK’s trade, transport and financial sectors.
Deter, disrupt and demonstrate – UK sanctions in a contested world: UK sanctions strategy published in February 2024 sets out the UK Government’s approach to use sanctions to:
• Address global threat
• Promote international norms
• Protect the UK
Enforcement of sanctions is a main element of the strategy.
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