EXPORT (TRADE) COMPLIANCE FOR METALS AND PLASTICS.
ALL YOU NEED TO KNOW

To effectively communicate with suppliers and customers about export compliance, it is important to understand that it is a legal obligation for all parties involved. All metals and plastics have dual-use capabilities, meaning they can be used for both military and commercial purposes. In some cases, export/import licenses are required for dual -use products being shipped to various countries. For more information, please refer to the following links:
https://www.gov.uk/guidance/controls-on-dual-use-goods
https://www.gov.uk/guidance/export-and-import-licences-for-controlled-goods-and-trading-with-certain-countries
https://www.gov.uk/guidance/beginners-guide-to-export-controls#why-export-controls 

It is also a moral obligation to contribute to the fight against weapons of mass destruction (WMD). In recent years, an increasing number of companies and trade organizations internationally have been publishing similar webpages to raise awareness about export compliance. Some examples include the British Exporters Association
( https://bexa.co.uk/BExA/sharedcontent/shop/storelayouts/product_display.aspx?iProductId=725cf3fb-01c7-493d-89a5-b87e5e55ac22 )
and
The Superalloy Committee of the Specialty Steel Industry of North America
( http://ussuperalloys.com/topics/export_rules_regulations# ). 

The answer to this is a bit more complicated, but a simpler explanation is provided below:
As mentioned earlier, all products in nature have dual uses, even water We can categorize all conceivable products into four main categories 

• the non listed products that are of no interest to us ( example toys, water, food etc.), no need to talk more on these

• others are listed as dual use items in specific regulations. For example titanium -stabilized stainless steel 316Ti  and certain aluminium alloy tubes (7075 etc.) capable of having high tensile strength, are considered dual-use items and require special procedures for export-import transactions within the EU. If these items are sold from a UK company to an EU company, a license application to the UK ECO is necessary. These products are part of the Strategic Export Control List and require authorization.
  The EU Dual Use Items correlation list  categorizes these products, such as 316 Ti sheets, with E.U. TARIC 72193310, under the EU Dual Use Regulation No. 428., 1A005

•  THE LISTED Military products. Regarding metals that clearly head to military applications, such as metals with anti-ballistic properties, like "TL" metal plates, that are specifically designed for military applications and produced under "MIL" standards. Exporting these products from the UK to another country, whether in the EU or not, requires an application to the local ECO. This applies even to transaction s between two EU companies in different countries (have a look at the EU Directive No. 43).

• For military products not listed, such as specific metals used in military applications like air craft engines or armored vehicles, an application must be made to the UK ECO or German BAFA, even for transactions between EU companies
  Utility Metals will prepare the necessary application if the product is intended for military use.
  UK ECO and German BAFA have published a guidance on this.

ECO: please visit this link:
https://www.gov.uk/guidance/end-use-controls-applying-to-military-related-items 

BAFA: the exact link in BAFA's website is unknown, this guidance has been downloaded from a Linkedin post (png format):
https://drive.google.com/file/d/1Dj_5BY5l9hjnGZyxcE8xQDYOIb1ak9o9/view?usp=sharing
If the product you wish to buy from Utility Metals is heading to a military application (NATO), U.M. will not take chances, will prepare an application. 

No, it's not Utility Metals. The UK and the European Union are providing this information. When looking at aluminium, focus on the MPa values. Pay attention to the details, as it indicates the capability of aluminium to withstand certain pressures. When examining 3.1 certificates, you may notice varying tensile strength values across different production lots. For example, an aluminium alloy may theoretically reach 400 MPa in tensile strength, but actual values in certificates can vary between 380, 410, and 440 MPa. This variability is why it's important to apply for export approval beforehand. Exact Mpa values from the 3.1 certificates, are known usually only after goods have been imported.. Some suppliers include the exact MPa value of a specific lot in invoices to help customs officials determine if the items require an export authorization.  
Check the TARIC code of each product to see if it correlates with the EU Dual Use list. 

For metals heading to NATO projects, U.M. will handle inquiries only if the military project is NATO-related.
Please note that applying for a license does not guarantee approval, as it is at the discretion of the ECJU.
Additionally, if the project is related to a specific NATO country, U.M. may choose not to handle the inquiry.
Each license application is valid for a specific order/shipment only, and new applications must be made for future orders with the same products or quantities. While a specific type of license exists for repeated orders, approval is not guaranteed and decision making may take longer. It is recommended to submit a separate application for each order.

Logical question.  Is trade compliance a regular business routine or does it typically occur as an incident? When something goes wrong then serious problems begin. 

Regarding your supplier:

Some suppliers have been in the metal business for over 100 years and have extensive knowledge of trade compliance. Trust your supplier's expertise and inquire if they have already checked with their local Export Control Organization legal department, or trade compliance department. Remind them of your commitment to following trade compliance rules and ask if the products are subject to export controls in their country.
If unsure, consider passing the order to Utility Metals for thorough verification and adherence to proper procedures.

Regarding your competition:

Choose to comply with regulations and discuss any concerns with your contractor's trade compliance department. Following the rules puts you ahead of the competition and ensures ethical business practices. If your contractor's subsidiary lacks a trade compliance department, reach out to the headquarters for guidance. It is unlikely that the headquarters, would condone non-compliance with laws or unethical practices. Complying with regulations, paying taxes, and following proper procedures will help you maintain a competitive edge and build a reputable business.

Defense industry and your competition:

If you are in the defense industry, you can easily find trade compliance or export control jobs on LinkedIn in the UK or EMEA region. Major defense contractors have large trade compliance departments showing the growing importance of trade compliance in the industry. While some EU countries may have lower awareness of trade compliance, Western European countries like the UK, Germany, France, Spain, Italy, Sweden, Denmark, Finland, and Austria and other, take it very seriously.

These trade compliance departments are not just for show; they ensure that everyone in the company, from top management to employees, suppliers, and customers , follow the rules.

When discussing participation in large projects with main contractors, having a trade compliance policy in place and demonstrating your commitment to following regulations can give you a competitive edge over competitors who may not have such policies in place. By showing your dedication to trade compliance, you increase your chances of winning contracts in the defense industry. 

If you choose not to adhere to regulations, your customers will notice. They can tell who is cutting corners and avoiding compliance. Even if you haven't received complaints, customers won't work in the future with subcontractors who don't follow the rules. This isn't just theory – watch webinars from chambers of commerce discussing trade compliance Companies that prioritize compliance, they are prepared for the future. Offering good prices and quality isn't enough to secure long-term business,  competition is fierce.

Your customer's trade compliance team seeks clarity and minimal concerns. On this webpage, Utility Metals provides information supported by web links to governmental or international authorities' documentation. U.M. can explain the reasoning behind product control determinations to any Exports Control Organization in the E.U./U.K./U.S. by referencing relevant legislation and logical reasoning.

Your benefits:

Following export control procedures can provide numerous benefits to a company, including:

1. Compliance with Regulations: Export control procedures ensure that a company is in compliance with relevant laws and regulations, This helps to avoid legal penalties, fines, and reputational damage.

2. Risk Management: Export control procedures help to identify and mitigate risks associated with exporting goods and services, such as the risk of diversion to unauthorized end-users or countries. This reduces the likelihood of non-compliance and potential legal consequences.

3. Enhanced Supply Chain Security: Export control procedures can help to ensure that a company's supply chain is secure and that goods and services are not being diverted or tampered with during transit.

4. Improved Customer and Partner  Relationships: By following export control procedures, a company can demonstrate its commitment to compliance and responsible business practices, which can enhance its reputation, credibility and relationships with customers.

5. Increased Efficiency: Export control procedures can help to streamline a company's export processes, reducing the time and resources required to comply with regulations and complete export transactions.

6. New jobs. Access to New Markets: Companies that follow export control procedures may be more likely to be granted licenses and permits to export to restricted countries or to participate in government contracts, which can provide access to new markets and revenue streams.

7. Reduced Liability: By following export control procedures, a company can reduce its liability in the event of a non-compliance issue, as it can demonstrate that it took reasonable steps to comply with regulations. Reduced risk of non-compliance and associated penalties

8. Improved Employee Awareness: Export control procedures can help to educate employees on the importance of compliance and the risks associated with non-compliance, which can lead to a more informed and vigilant workforce.

9. Competitive Advantage: Companies that follow export control procedures may be seen as more reliable and trustworthy by customers and partners, which can provide a competitive advantage in the market.

Overall, following export control procedures is essential for companies that engage in international trade, as it helps to ensure compliance with regulations, manage risks, and protect intellectual property, while also enhancing supply chain security, customer relationships, and access to new markets.

Consider the costs and benefits of trade compliance for your competitors. Investing in trade compliance services can save you time and money.

Contact an export compliance company, hire a lawyer specializing in export compliance or consider auditing companies for assistance. Each option comes with associated fees. 

Cost: €1,000 - €2,000 per day. This is not a VAT question that some companies may charge you €300. The cost may vary depending on the number of metals/sizes. For items like S355J2 round bars, the cost can be higher. For example, for a simple  order of  a total value of €480 for a defense project, this order may require an application to the local ECO. Consider hiring a dedicated exports compliance officer for your company. The average cost per year is between €30,000 and €100,000 (gross). Search online for more information. On average, a person with 8 years of experience in an EU country, earns €58,000 (gross) annually.

Study export compliance laws thoroughly, including local, UN, US, and EU regulations. Attend conferences, webinars, and seminars by Export Control Organizations. Contact the helpline of your country's Export Control Organization for guidance. Engage with Export Control Associations and social media groups for support. Invest time and effort now to save time and increase profit in the future by understanding and operating under international export compliance regulations.

How much will it cost you with U.M.?

 If you don't have the time or funds for the solutions mentioned above and are unsure about the control of your products,

using UM will not cost you anything.

Even if UM's prices are slightly higher (which is not always the case), consider the benefits of U.M.'s services. Compare this with the information provided in the paragraph. Have you gained or lost? Contact Utility Metals to determine if your goods are controlled.

IMPORTANT NOTICE: When applying for an order, the outcome may vary if a license or NLR (No License Required) is issued. This is determined by ECJU decisions and is beyond UM's control. It is crucial to prioritize export compliance and communicate with responsible suppliers. Provide detailed information in your inquiries, such as the nature of the project (military or civilian), intended use, destination country, and end use application (e.g., architectural facades or construction or defense). Customers should also gather and share this information with suppliers to ensure compliance with export regulations.

Time is an uncontrollable factor in the application process. On average, the response time is approximately 3 working weeks (21 working days). It may take longer or be quicker. For example, consider that large warehouses in Europe may wait for materials to arrive for a few days, and processing an order can take a week, adding an average of about 2 weeks to the timeline. Your contractor is aware of this waiting period and will not be surprised. With specific licenses, the time to receive goods at your warehouse can be expedited; you can discuss this with U.M. It's important to note that your competitors also face similar time challenges if they follow the procedures.

No, they may possibly be related. According to the UK's EXPORT CONTROL ACT OF 2002
https://www.legislation.gov.uk/ukpga/2002/28/contents

in Schedule 1, you can see that export and trade controls may be imposed in relation to goods from which military technology can be derived. We all know that military technology can be derived from either military products (specially designed, modified, manufactured for military use) or commercial products that can be used for military purposes ( the actual nature of dual -use products). Some good examples are 6061 sheets that can be used in stealth applications even in commercial aircraft, or 5083 H321 plates that have been used in armored vehicles as anti-ballistic plates. Military technology can be derived from these plates.

You can't just make a phone call or send an email hoping to find out. If it is unclear, then suppliers must apply. By applying, they assume all associated risks. Utility Metals prioritizes the control and location of the goods. Utility Metals evaluates each case individually 

YES, Utility Metals is experienced in export compliance and is open to exchanging ideas on the topic. The company has conducted studies on export compliance in the metals and plastics industry and has submitted them to well known international bodies specializing in export controls (EIFFEC/European Institute for export compliance, old Alpha initiative, UK's IOE Export Control Programme). U.M. has also submitted applications for licenses to the UK Export Control Organization. Utility Metals also follows its own strict Exports Compliance Policy and a public version is available for viewing in this link:
https://drive.google.com/file/d/1mSpL-uYPN8hNodSQFXOixEx7NCpyFBvC/view?usp=sharing 

 Any institution related to export compliance is welcome to contact Utility Metals for further discussion.

Complicated? It's even more complex than you think, a true legal maze with numerous factors and criteria affecting E.C.O.s in different countries when making decisions. Entrust Utility Metals with your order and let U.M. manage all of this for you, saving you money, time, and providing you with the assurance and peace of mind that you have complied correctly with local or international authorities.l 

Why companies pay taxes ? Why they submit annual returns ? Export Compliance is one more legal requirement that all companies have to follow. It is also as discussed above, a moral obligation to contribute in the fight against WMD 

Yes, results NLR or license. 

It is clear that if a supplier requests an end-use letter and applies for a license from the Exports Control Organization (E.C.O.) This demonstrates their adherence to current legislation. Choosing to place an order with a supplier who follows these regulations is advisable.

This is simply U.M. adhering to the standard Compliance Code of Practice from March 2010, issued by the Department for Business Innovation & Skills in the U.K. The relevant link can be found here: https://www.gov.uk/government/publications/compliance-code-of-practice. Additionally, U.M. is also aligning with international export compliance practices.

As seen in the previous Questions/Answers, both national and EU legislation, as well as other international regulations, govern the supply chain of products from the producer or wholesaler to various end destinations. Import controls are in place, making all parties in the supply chain (seller/transporter/buyer) accountable for the sale of a product.
In case of any issues, authorities will investigate all parties involved, including end users.
Even if you follow all the rules, your customer may still face challenges beyond your control. Stay informed by referring to the annual document issued by the BIS, available at the following link:
https://www.bis.gov/sites/default/files/press-release-uploads/2024-07/DLTH2Y%20Update%20PR%20v3.pdf 

Order from Utility Metals to determine if the products you require are subject to any controls.

ABSOLUTELY YES! Utility Metals is more than happy to provide detailed information on the origin and control status of the products it purchases from you.

Would Utility Metals be willing to sign this letter? It has already signed similar letters from export compliance departments of U.K. companies with U.S. interests, and Utility Metals is happy to do so.

No, the application will only be submitted to the ECJU. However, in the US, they will be able to see that significant procedures have been followed. It is typical for UK/EU companies to also apply to SNAP and/or DDTC. If you would like UM to submit the application, UM would be willing to do so, but you will need to cover the annual registration cost for DDTC, which is approximately $2000 USD per year.

Yes, more info can be seen here:

https://www.gov.uk/guidance/import-controls#import-licensing

Utility Metals would never be against Exports Compliance. Constructive criticism is only for purposes of building a better and industry friendly exports compliance system. These international organisations active in export compliance have presented successes in the fight against proliferation of WMD by the time most of us were not even born. The progress has been very good in the last years, yet, this large effort has to continue. 

Utility Metals often hears this complaint from customers, but it is important to understand that international trade compliance operates on a "guilty until proven innocent basis. Trust but verify is a key principle. While it may be temporarily inconvenient, following trade compliance practices will lead to long term positive results

Are you located in the EU? Do you believe that your government will hire you as a subcontractor to, let's say, manufacture a corvette or an armored truck but will keep it a secret? All countries in the U.N. publicly announce their annual production in any military system. Not only that, but they also announce how many units are sold and where. Check the various UN websites and see for your self.
Now, if your project is too hush -hush, UM is not interested, as it is looking only for straightforward business. If your goods are controlled, you will be asked to sign a detailed end -user undertaking letter.

You are correct, an 18-year-old individual with little experience can easily complete the online form in under 30 minutes. It's that simple. Take a close look at the responses provided by ECOs for license applications.
Their decisions rely on the information submitted by the applicant.
Did the applicant consider the legal requirements? Did they include a thorough explanatory letter with their submission? Submitting an application involves more than just filling out a form; it requires understanding trade compliance regulations and effectively communicating with the local ECO. 

In 2023, the ECJU released a statement revealing that they receive a significant number of requests (~14,500 per year) for advisory services.
They have requested that companies refrain from submitting requests concerning customers in the US, Australia, and EU countries.
This indicates that UK companies prioritize risk management and seek extensive advice before entering new business ventures.
If you are not an EU customers, U.M. may possibly utilize the ECJU advisory service.
For more information on the end user advisory service, visit:
https://www.gov.uk/government/publications/notice-to-exporters-202321-end-user-advisory-service/nte-202321-end-user-advisory-service 

No, ECJU imposes fines on a regular basis, see this link:
https://www.gov.uk/government/publications/notice-to-exporters-202201-uk-exporters-fined-for-unlicensed-strategic-exports/nte-202201-uk-exporters-fined-for-unlicensed-strategic-exports 

and this link:

https://www.gov.uk/government/publications/notice-to-exporters-202408-breaches-of-strategic-export-compound-settlement-issued/notice-to-exporters-202408-breaches-of-strategic-export-compound-settlement-issued 

Place great emphasis on the "Retained EU regulation 428. Dual use items in the EU regulation are Dual use items also in the UK.
Don't forget that some of the metals may be used as components to be incorporated into larger military systems systems so these are military rated goods. 

New generation plastics with high temperature resistance may require export authorization