Export controls and universities

According to recent reports in several media outlets, HMRC is preparing to inform as many as 200 academics in UK universities that they are being investigated for potential breaches of export control rules. The reports (which the Government have denied) say the investigations arise as a result of the transfer to China of sensitive information with potential military applications.   Separately a report released last week by the think tank Civitas accuses a number of UK universities of having ties with Chinese military-linked research centres that are involved in the development of weapons of mass destruction and other advanced military technologies, including intercontinental ballistic and hypersonic missiles.

Export controls in outline

By way of reminder, the UK’s export control system places restrictions on the export (i.e. sending out of the UK) of certain goods and technology.  The government maintains UK Strategic Export Control Lists which form the basis of determining whether any products, software or technology (collectively referred to as “licensable goods”) are ‘controlled’ and therefore require an export licence.   Licensable goods are either controlled weaponry and military items or dual-use items (i.e. items that have both a civil and military use).   It is a criminal offence to export licensable goods without a licence.

Importantly for education and research institutions, “technology” includes specific information necessary for the "development", "production" or "use" of goods.  Such information may take the form of instructions, skills, training, working knowledge and consulting services.  A lot of university teaching or research exchange may involve the delivery of such matters, including in areas that may fall within the “dual use” category.

Exceptions exist for the transfer of technology already in the public domain or in the course of basic scientific research, but clearly the UK’s export control rules create significant compliance risks and exposure for UK universities and their staff.  The risks have only been increased by the current pandemic - with the consequential shift by universities to online teaching to students living outside the UK - and the potential that creates for the export of dual use information through online instruction.  

Universities may well be familiar with ATAS (Academic Technology Approval Scheme), which students from certain countries need to comply with when coming to the UK to study in certain academic areas. ATAS (operated by the Home Office) is separate to the export control system, as is the international sanctions regime (operated by the Office of Financial Sanctions Implementation) under which any form of economic activity with named individuals, organisations and institutions is prohibited.

What steps can institutions take?

Given the report of HMRC interest in international teaching and research activity, especially where that involves links with China, institutions may wish to review and refresh their policies and procedures for identifying and reviewing collaborations and activity that might engage export controls, international sanctions (and ATAS).   Institutions may also wish to review the terms of professional indemnity and other insurance policies, in case they provide relevant coverage for the University (or any affected individual) and, if they do, take note of any notification requirements.  Whilst it is against public policy for insurers to cover criminal fines, the legal costs of defending criminal prosecutions, or responding effectively to investigations, may well be covered by the University’s insurance programme.  

We can assist with the review of policies and procedures, with reviewing the University’s insurance arrangements and any notifications to the insurers.