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.
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