If you hold an Open Individual Export Licence (OIEL), you must satisfy the Export Control Organisation (ECO) that you are complying with all the procedures needed for using the licence, including familiarity with current export legislation.
To check this, the ECO will undertake a compliance audit of your business - usually within three months of your first OIEL being granted. The ECO also uses audits to check whether businesses are exporting goods or technology with an appropriate licence.
Timing of compliance audits
Compliance audits take place within a few months of your company being granted its first open licence (OIEL or OGEL) and thereafter at intervals of between three and 36 months. Most exporters are visited every 12-18 months. The exact timing depends on the ECO's risk assessment of your business. This takes into account factors such as:
- volume of exports
- variety of licences used
- compliance record
- procedures in place
- goods exported and destinations on the licences
- any special conditions
Reasons for revoking an OIEL
The emphasis in an ECO compliance audit is to help businesses take action to comply with the licence requirements.
Remedial measures, if required, are usually set out in a warning letter, with a timescale for implementation. If you have failed to demonstrate a sufficient level of compliance, the warning letter will then be followed by a revisit to check whether you have taken the necessary action to ensure compliance. If there has been little or no progress, ECO may consider suspending (or revoking) the relevant licence. In serious cases, HM Revenue & Customs officials may decide to prosecute.
Most non-compliance issues found by the ECO relate to documentation errors. Typical issues found on compliance audits, which might lead to a licence being revoked, include:
- lack of sufficient procedures in administering company use of licences.
- failure to keep adequate records as specified by the licence terms and conditions and as a result not being able to confirm correct usage of the licence.
- records not being available.
- failure to fully read all details of the licence.
You cannot appeal against an OIEL revocation decision by the ECO, due to the concessionary nature of the licence.
Penalties for non-compliance
Exporters should be aware that there are legal penalties for exporting controlled goods without a licence. This includes potential seizure of goods by customs, financial penalties or even a prison term.
For more information on penalties for unlicensed export of controlled goods, see licences and enforcement for international trading.