Exporting tech from Australia into the UK or the US is now easier than ever! This is because, in 2021, Australia, the UK and the US established a trilateral security partnership (AUKUS) to promote information and technology sharing.
The partnership reduced the regulatory requirements for trading technology amongst the three countries. However, you still need to conduct due diligence and adhere to the country’s export controls for national and international security.
Such controls are essential in reducing the risks associated with data transfer, privacy, and security, especially with encrypted devices (5A002) goods. Left unchecked, such concerns can lead to irreversible security violations.
But what controls should you be aware of when exporting technology from Australia?
This article discusses the Australian export control laws and how you can utilise export licensing to export 5A002 goods from Australia. You will also learn the significance of an exporter of record in ensuring compliance during and after exportation.
Understanding Export Control Laws in Australia
The Australian export control laws are a set of national legislation and international regulations for controlled goods.
These laws govern the movement of sensitive technologies, goods, and software beyond Australian borders, ensuring they comply with the country’s national interests.
The Defence Export Controls (DEC), a unit within the Department of Defence, is responsible for implementing the export control system.
Controlled goods and technologies are categorised as either ‘dual-use’ or ‘defence’ under three main categories:
1. Defence and Strategic Goods List (DSGL)
The DSGL is a compilation of commercial goods and military technologies that are prohibited or restricted for export. Goods under this list may not be exported from Australia unless a relevant authority grants permission or a licence.
Items under this category include:
- Goods with a clear military application such as weapons
- Dual-use goods serving both military and civilian purposes such as information systems and telecommunication equipment.
Note: You must assess if your goods are listed under DSGL before exportation so you can apply for the required permit through the DEC’s office.
If unsure of the application process, you can consider engaging an experienced exporter of record such as Blackthorne. This ensures timely acquisition of required licences and seamless clearance.
2. Weapons of Mass Destruction Act 1995 (WMD Act)
The WMD Act regulates the export (or service provision) of technologies and goods that can assist or be used in a WMD program.
WMD programs include plans that lead to the development, stockpiling, or acquisition of any biological, nuclear, or chemicals that can potentially deliver such weapons.
The Act is used as a ‘catch-all’ mechanism for goods that may not be regulated under DSGL and grants the Minister of Defence authority to:
- Prohibit the exportation of WMD goods
- Issue a licence or permit for the exportation of goods that align with Australia’s national security interests.
End-use declarations are significant when exporting goods suspected to fall under the WMD regulation. By declaring the intended end-use and intended user, you demonstrate that your goods have legitimate and non-military applications.
3. Military End-Use Provisions, Customs Act 1901 (AUS)
Section 112 BA of the Customs Act regulates non-DSGL goods that may be intended for military end-use against Australian interests. These include military-end-use goods that can prejudice the country’s defence, security, or international relations.
The Defence Minister issues a notice prohibiting the supply or exportation of goods suspected to fall under this category.
What Does ECCN 5A002 Mean?
The Export Control Classification Number (ECCN) is used to identify dual-use goods under various categories using a more specific code than the HS codes. The code helps establish licence requirements and exemptions when exporting controlled goods.
ECCN 5A002 is such a code under the Defence and Strategic Control list of encrypted items. It means goods under category five, part two (Cat 5P2), which entails encrypted goods with information security as the primary purpose.
Goods under this category meet the following criteria:
- Utilise cryptography to maintain confidentiality
- Employ encryption with a symmetric key length exceeding 56 bits, or equivalent
- Possess cryptographic capabilities that are usable, activated, or can be enabled through insecure activation methods
Examples of ECCN 5A002 goods include:
- Telecommunication equipment with built-in encryption
- Firewalls, routers, and VPN appliances
- Encryption software
- Security monitoring systems
Note: To establish the licensing requirements for goods you intend to export, you need to determine if your goods have a specific ECCN. The process can be challenging for IT products due to the detailed specifications for the various categories.
Hence, you can consider collaborating with a technology exporter of record such as Blackthorne to help determine your licensing requirements.
ECCN 5A002 Licence Requirements
All Australian-controlled technology (including 5A002 goods) is listed on the Defence and Strategic Goods List (DSGL).
Additionally, technology incorporating US-origin elements such as blueprints or components may also be subject to US export regulations.
Hence, as an exporter, you must ensure adherence to export control policies to avoid delays during customs clearance, and adverse penalties due to non-compliance.
Here are the licensing requirements to consider when exporting 5A002 goods from Australia:
1. The Export Licensing Procedure
Once you have established your goods require a licence for exportation, you must apply for a licence through the Defence Export Controls (DEC) Office.
The application process includes:
- Confirming 5A002 associated controls for your goods
- Completing necessary documentation, including technical specifications, end-use, and end-user statements
- The DEC office reviews your application and grants the permit to export the goods if they find your transaction legitimate.
2. Supporting Documentation
Here are the documents you may need when applying for the export licence:
- End-use statements: Documents confirming the intended end-use of the goods by the end-user
- Technical specifications: Technical details including encryption capabilities, and quality assurance certificates
- End-user certificates: A consent from the receiving party confirming their identity and the intended end-use of the goods.
3. End-Use and End-User Considerations
Here’s what the DEC office checks before granting the licence:
- End-use: Evaluates whether the goods will be used for legitimate purposes or can potentially support military operations or WMD programs
- End-user: They ensure the recipient is not a prohibited entity. That is, the destination country is not subject to an active trade sanction and they are not involved in malicious activities.
4. Active Sanctions and Embargoes
Like many other countries, Australia limits the exportation of certain types of goods to some destinations. That means exporting to such destinations requires a permit from DEC and the Department of Foreign Affairs and Trade (DFAT).
Some of the current Australian sanctions include:
- Russia
- Syria
- Zimbabwe
- Myanmar
You can find an updated list of current sanctions implemented under the Australian sanction law on the DFAT’s sanctions website.
5. Record Keeping and Long-term Compliance
One of the critical challenges when exporting 5A002 goods from Australia is ensuring adherence to the ever-evolving export regulations. This is especially because you must stay ahead of regulatory updates and ensure compliance during and after exportation.
Long-term compliance includes ensuring your licences are up-to-date and that all your transaction records are kept for the minimum required period.
Failure to comply with regulatory requirements can lead to severe penalties, including:
- Suspension of export privileges
- Imprisonment
- Ban from participating in the export of controlled technology
- Civil fines and penalties.
Hence, it’s essential to ensure compliance with all regulations for safe, timely, and cost-efficient export transactions.
Exporting 5A002 Goods from Australia with an EOR
As a technology exporter of record with over 25 years of experience, Blackthorne understands how daunting it can be to export 5A002 goods from Australia.
That’s why we have IT specialists with a global footprint of over 200 countries to help with ensuring compliance.
Here’s how we ensure compliance during and after your export transaction:
- Determining the licences and permits required for your goods
- Acquiring required export and import licences in time to facilitate the customs clearance process
- Ensuring safe delivery to your destination country through our door-to-door global logistics services
- Supporting and maintaining your technology equipment to ensure adherence to quality standards
- Tracking licences and permits to ensure timely renewal for licences with expiry limitations
- Storing your export transaction records for the minimum required time to facilitate auditing by regulatory authorities
- Handling any queries regarding your transaction during and after shipment
- Ensuring cost-efficient, timely, and secure transactions at lower costs.
Hence, you do not need to bear the hassle of ensuring compliance when we can guide you through our export licensing consultation. So, what part of your transaction do you find challenging when exporting from Australia?
We are only a button-click away. You can call or email us, and our team of experts will get back to you soonest.
