There I was happily driving back to Manchester from the Holyhead ferry after a few days helping a client in Ireland, when the phone rang. It was 2003 and I had just set up my own International Trade Consultancy. Leaving the world of employment was a tough thing to do but the timing had been right because by then I had 16 years of international selling experience and qualifications to go with it. The guy on the phone was from RBS. I had met him at a number of Export Club events where we had talked about business and football, and he had been kind enough to refer me to one of his clients, a manufacturer of Hi-Tech speedboats that were used by coastguards and security services.
So I followed the lead. The customer was concerned that they might need an Export License for four such vessels that were due to patrol oil platforms in the Gulf of Aden for a Canadian oil company. So I took them through the process, examined the purchase order, and agreed that we should send a Rating Enquiry Form to the Export Controls Organisation (ECO). Rating Enquiry Forms are simple documents used by ECO to establish the status of an export consignment, and to decide whether a license is needed. So we filled in the form with the key details of the proposed shipment and two weeks later received the decision that ‘no export license was required’ because the boats were for Civil use.
Manufacturing continued, and the company began to make arrangements for the sea trials, with the Canadian company ready to pay the balance for the goods upon successful trials. With six weeks to go until completion, we received a revision to the Purchase Order which just about changed everything. The customer details had changed, and we were no longer supplying to a Canadian Oil company, but to the Ministry of Defence for the Republic of Yemen. The specification had changed to include ‘hard points’ on the bow and stern of each vessel, which were clearly for mounting guns. Therefore the Civil status of the consignment had changed to either Dual Use (Civil and Military) or to plain Military use.
There was no option but for the company to make another Rating Enquiry, and after two weeks we received the predictable response that the consignment would need to be covered by an Export License. By this time the company had already agreed sea trial dates and officials from the Ministry of Defence for the Republic of Yemen were making arrangements to observe the trials and rubber stamp the deal. It can take up to four weeks to receive an Export License and the sea trials were scheduled for five weeks time, and the fact remained that the boats were going nowhere without one!
You have to bear in mind that even for Civil Use in the Gulf, it is likely that patrol vessels will need to be armed to some degree. It is an incredibly volatile region, and Yemen continues to have its own specific problems. The Export License was granted after four weeks for Dual Use and the Yemenis visited and observed successful sea trials. Had a license not been granted then £800,000 was at risk, and while the boats could have been sold eventually to another organisation, that is an expensive amount of stock for a small company to carry. Failure to obtain a license could have bankrupted the company.
However we achieved everything within a very tight timescale, and the boats were prepared for shipment to Manchester Airport where the Yemenis has commissioned a huge Antonov aircraft to collect all four once payment had been cleared through. That was my very first job as a freelance International Trade Consultant and covered every emotion from severe stress to elation! It illustrates how Exporters need to be aware of procedures that they may only need to perform once in a blue moon, and why regular International Trade Training updates are required for relevant staff. Non-compliance can cause bankruptcy, and failure to obtain the right licenses for equipment that might have a military or security use can result in imprisonment for company directors. Tread carefully.