Export controls and sanctions news has dominated the headlines this week, as the UK government steps up its enforcement and hit non-complying businesses with significant fines.
Elsewhere, a bill to impose sanctions on Russia’s war economy is gaining traction in the US senate, while the EU struggles to impose measures on an Irish alumina plant allegedly supplying Russia, which also provides 37% of the bloc’s “smelt-grade” material.
The big picture: The UK government’s approach to export controls enforcement has led the international trade agenda this week.
The Export Controls Joint Unit (ECJU) began the week by issuing two compound settlements of around £20,000 and £200,000 for exporting military-listed goods without the appropriate licence.
On Thursday (30 July) the ECJU, a government body operated jointly by HMRC and the Department for Business, Innovation, Science and Trade, announced that aerospace firm Airbus had paid a fine of almost £6.5m for export licence breaches relating to poor record-keeping.
Chartered Institute of Export & International Trade export controls & defence director, Daniela Turiccki, said that the penalty “serves as a powerful reminder that compliance is not simply about identifying an available licence, but about fully understanding and adhering to the conditions attached to it”.
The importance of compliance – and due diligence – was illustrated earlier this week when new data suggested that sensitive goods are being transshipped to Russia via India, which could be a further point of vulnerability following the UK-India trade deal coming into effect earlier this month.
To learn more about compliance with export controls and sanctions, as well as best practices for ascertaining where your goods are really going, members can watch last month’s Lunchtime Learning session on Knowing Your Customer.
Good news/bad news: Five ambulances donated by the Chartered Institute to the Ukraine front line arrived at their destination earlier this month.
The vehicles were purchased from South Wales, refurbished by Kingham’s garage in Croydon and then driven across Europe by a team of volunteers led by Chartered Institute board member Rinat Abdrasilov and managing director of the garage, Keith Kingham.
Chartered Institute chairman Terry Scuoler CBE said that he “hopes that this will be the first part of something more that we can do to help” – which was realised with the organisation planning to donate the funds for another five ambulances.
There's also an opportunity to engage with reconstruction efforts in Ukraine, as the Department for Business, Innovation, Science and Trade heads to the sixth Rebuild Ukraine exhibit in Warsaw on 12 and 13 November.
The department's pavilion will showcase relevant expertise related to construction and energy, and is calling on UK businesses to register their interest.
Not such good news for EU Russian sanctions enforcement, as the FT reports that the EU is hesitant to take measures against Aughinish Alumina – the largest alumina producer in Europe – in case it jeopardises supplies to the EU’s beleaguered manufacturing sector.
Aughinish Alumina is based in Ireland and has Russian ownership. An investigation by the Irish government into whether the company’s product reached Russia via a compromised trading house ended inconclusively last week.
EU officials have warned that Europe’s car and defence sectors, plus its electricity grid, would suffer without the plant’s production capabilities, since it currently supplies 37% of the “smelt-grade” alumina consumed by EU industry.
One EU official told the publication “if we sanctioned the company, we’d be cutting ourselves off”.
It’s not expected that the matter will be discussed by the European Commission until after the institution returns from its summer break.
How’s stat? 86-12. That was the outcome of Tuesday’s (28 July) US senate vote to advance a Russia sanctions bill championed by the late Republican senator, Lindsey Graham.
The bill, if it passes, would sanction Russian leaders, key parts of its energy sector and the Russian ‘shadow fleet’ which exports energy products in contraventions of sanctions. It would need to go through the House of Representatives, before eventually going to the White House for presidential approval.
Politico reports that while some Democrats are confident the legislation could be passed by the end of the year, concerns have arisen that US President Donald Trump could derail it with amendments to pursue other agendas.
He told reporters at the White House on Wednesday (29 July) that he “would like them to add Iran as tariffs, not just the sanctions”, imposing punitive tariffs on buyers of Iranian oil.
Quote of the week: “Turnberry implementation has been associated with a marked contraction in the EU's bilateral goods trade surplus with the US.”
Global Trade Alert’s Simon Evenett crunched the numbers and came to this conclusion on the EU-US trade deal at the one-year anniversary mark.
The week in customs: The UK’s Carbon Adjustment Mechanism (CBAM) – which seeks to ensure UK firms don’t “offshore” carbon reduction targets by importing high-emission products from countries with less stringent environment regulations – comes into force on 1 January 2027.
The government has published new guidance for UK importers on what falls under scope of the regulation, and how they should prepare. That’s been distilled by Chartered Institute customs practice lead Caroline Rowden here.
What else we covered: HMRC experts and the Chartered Institute’s technical director Anna Doherty provided insight into the new BSI voluntary Customs Intermediary Standard, outlining what it means for businesses in practice.
Our director general Marco Forgione sent a letter to new prime minister Andy Burnham, welcoming him to the role, sharing the Chartered Institute’s willingness to work with him towards “delivering good growth to every post code of the UK’s nations and regions”, and why trade should be a cornerstone of that mission.
True facts: An illegal Iranian gambling network – “one of the biggest in the world” – has used a Middle East crypto-exchange to evade sanctions up to the value of US$4bn, a Reuters investigation has uncovered.
