Accurate record keeping, conducting due diligence, training your team and understanding the rules and regulations – these were the key takeaway points that emerged from the Chartered Institute of Export & International Trade’s recent Global Trade Live webinar on economic security and the increasing use of export controls.
Fail to prepare, prepare to fail
The Chartered Institute’s head of content Will Barns-Graham hosted the event, which started with a conversation between Dov Boonin from the Department of Business, Innovation, Science and Trade (BIST) and Daniela Turiccki, director of defence and export controls at the Chartered Institute, on the role of export controls in maintaining economic security.
Both speakers agreed that due diligence across a company’s entire supply chain is essential to protecting a firm’s operations and national security.
As Turiccki noted:
“Sanctions are there to protect national and international security and to promote counter terrorism.
Depending on what jurisdiction you’re working with, there are a lot of different sanctions to pick up on, so businesses need to make sure they're aware of their whole supply chain.”
This includes conducting denied party screening, understanding the evolving sanctions regimes, as well as identifying potential circumvention routes, proper material sourcing and alternative end uses.
Nowadays there is a wide spectrum of sanctions and regulations relating to financial transactions, asset freezes or trade bans, arms embargos for the defence sector, or a product’s potential dual uses, which can impact a much broader range of sectors than most people realise.
It is ultimately the responsibility of each business to make sure they are aware of their supply chain and any inherent risks.
Economic security as a developing government policy
Picking up on this point, Boonin agreed that export controls are an important part of the government’s response to mitigating economic security risks.
Boonin said that:
“There are a range of external threat vectors that your business could face. For instance, physical risks from an external actor trying to gain access to the business’ property or assets.
“There are also personnel risks, where an employee or contractor seeks to gain access to physical or online assets or steal intellectual property.”
To help address these concerns the Economic Security Advisory Service was established in 2025 to make businesses aware of the potential threats they face as well as providing support to navigate controls correctly.
Economic security is an emerging field of policy structured around three P’s: protecting the economy, promoting secure growth and working with trusted international partners.
Boonin highlighted some important questions that businesses need to consider when planning for threat prevention:
“How do you secure your supply chains, how do you ensure your business is cyber secure, and how do you make sure your intellectual property and assets are secure as well?”
The advisory service, in conjunction with other government departments, provides a range of services to help firm’s tackle these economic security questions including a Cyber Action Toolkit and Supply Chain Resilience Guidance.
Contractual due diligence and export control compliance
Central to economic security planning is the principle of knowing your customer and fully understanding the agreements you have in place with them.
Whether the customer is based in the UK or internationally, it is essential that the contract aligns with the risk profile that you are willing to accept for your business.
It is the eventualities that have not been written into a contract that you need to be most worried about, Turiccki stated, because this is what leaves room for misinterpretation.
Most people and businesses are aware of the due diligence checks that are needed when a new client or customer is onboarded, but it is important that this isn’t treated as a one-time practice.
Ongoing monitoring is essential to maintaining compliance, as sanctions, the structure or ownership of a partner, and the products being shared between companies can all change over time.
Failure to stay up to date on these points can have severe consequences.
Turiccki said that in recent months we have seen reputational damage and substantial penalties – most notably the large fine handed down to Airbus – resulting from breaches of export controls. Penalties for non-compliance are significant, with even imprisonment a possibility.
Licensing to support economic security
The UK and its businesses need to be able to show international partners that the country is a secure place to do business, and strong export controls implementation and compliance is essential to this, said Adrian Bond of the Export Control Joint Unit (ECJU).
The agency conducts licensing of UK businesses’ dual use and military products to establish their compliance credentials, issuing about 16,000 licences to exporters for strategically controlled goods and conducting around 500 company inspections a year.
Based on these experiences, Bond highlighted that compliance processes around technology and software should be a particular focus as there aren’t the same checks in place that physical goods must pass.
Something as simple as sending the wrong email or sending information without the required licence can result in a breach that leads to hefty fines.
Understanding the restrictions and responsibilities that a licence places on a business is important to properly functioning security.
Bond said that:
“Open licences are an incredibly powerful tool for UK exporters that are used around a million times a year but with that power comes responsibility.
“They come with their own terms and conditions with which you have to be able to demonstrate compliance to the ECJU in the event of inspection.”
Having compliance officers in place who are very familiar with the terms and conditions of a firm’s open general export licences is essential to continue working within the rules and regulations, even as the business grows or its products change.
The webinar also featured a case study interview with Michael Broughan, projects and programme director at metals company Doncasters Group, who spoke about the export controls compliance support he had received from advisors at the Chartered Institute. You can read more about this here.
If you are interested in learning more about topics covered in this article, registration is open for the next Chartered Institute member-exclusive Export Control Special Interest Group which will be held online at 10am on 7 October
Member exclusive
