During the passage of this Act there were vexed issues in the Lords and in the Commons as to how this Bill will affect academia and whether it could affect "sustainable development" to the third world , while the defence industry was particularly concerned about "brokerage" where British nationals resident in the UK or abroad will, for the first time be held accountable if they transfer goods or technology contrary to policy from one country to another without every touching the UK. Consultation with interested parties took place in Autumn 2002. After reviewing the results of the consultation, the Government finalised the orders and the first of the new controls came into force in March 2004. Softly, softly seems to have been the Government’s approach to the most far reaching changes in Export Control legislation since 1939. As a result many High Tech and Defence Exporters will be underestimate its effects and be caught unawares.
Export Controls will now extend to technical data, documents, research and all forms of communication including those over the Internet and oral disclosures, if they are in any way related to controlled technology or prohibited end uses. Essentially this is an enabling Act which gives the Secretary of State power to present a series of orders which will control the export of goods and technology from the UK and extraterritorially where they are under the control of a "UK person". This puts a UK Company in much the same situation in UK law, as a US Corporation and its subsidiaries abroad under the US Export Administration Regulations and any one anywhere in the world using technology controlled under the US ITAR (International Traffic in Arms Regulations).
To put the Act in context one has to cast ones mind back to the Iraqi Super Gun Affair and Sir Richard Scott’s Report on the Export of Defence and Dual Use equipment to Iraq in February 1996. The Parliamentary debate on this report almost brought about the collapse of John Major’s government. The issue was "Who armed Saddam Hussein?". In 1998 the Government published a White Paper on "Strategic Export Controls" which set out proposals for new primary export control legislation, taking account of Scott’s recommendations. This Act is the direct result and it also updates the old 1939 act by subjecting the Statutory Instruments that will eventually be issued to parliamentary scrutiny. In so doing HM Government is honouring promises to create "Transparency " and to explain the purpose for which an order imposing export controls or transfer controls is made. Some aspects of the Official Secrets Act also seem to have been embodied in the Bill
The Act imposes controls on "Technical Assistance Overseas" which is defined as "services used or capable of use or provided, in connection with developing or using controlled goods or technology". The Act also controls exports from the UK and the transfer of technology from the UK of certain technologies (and by UK persons anywhere by any means other than by export). The acquisition or disposal of goods that are themselves subject to export control or activities which facilitate such acquisitions or disposals are often referred to as trafficking and brokering . Any persons engaged in brokering will need a licence before they can act as facilitators or middle-men in arranging for arms or military related goods to be supplied between other countries.
The Act also gives the Secretary of State powers to require information, in addition to existing requirements. The Act also provides for the Secretary of State to introduce controls agreed in the EU or the United Nations relatively simply including an EU Joint Action agreed in June 2000 on the transfer by any means of technology or information where the provider knows or is informed by Government that the technology or info is intended for use in a WMD or related missile programme.
The Trade Controls should be viewed as a response to Dealers, Brokers and Traffickers who moved arms from the trouble spots of Europe to the trouble spots of Africa. The extension of the Transfer Controls on Technology however, is a clear reflection of the dangers in today’s world of Proliferation, particularly by Terrorists and Rogue Nations to which President Bush made so many references. Almost anything except foodstuffs and medicines may be controlled by reasons of military use or use in manufacture, research or deployment of Weapons of Mass Destruction.
The onus will be firmly on the Exporter not DTI. The Act provides for maximum penalties of up to 10 years imprisonment in the event of a serious breach. Prosecutions will be made much easier and unlike the situation covered by Scott there will be no possibility of defendants claiming that they got a "nod, nod, wink, wink" from HM Government.
In the wake of the Scott Report and the Iraqi gun affair some 10 years ago, companies developed in-house compliance programmes. Now in the wake of September 11, the controversy over WMD and tensions in the Middle East, companies must do so again. This time they must also exercise tight control over intangibles ; they must train and vet key technical personnel and closely assess any dealers in third countries with whom they share technology. Not to have taken Compliance measures is at best legally "reckless" and may leave members of the Board of any Public or Private sector Institution open to prosecution, with minimal legal grounds of defence if technology gets into the wrong hands.

An earlier version of this article first appeared in Croner’s International Trade Digest.