NEW EU DUAL-USE LIST COMES INTO FORCE
Commission Delegated Regulation (EU) 2018/1922, updating the EU dual-use list in Regulation (EC) 428/2009, came into force on 14 December 2018.
It is important to review classifications in light of these changes and to ensure that the current list is used when assessing exports.
PENSIONER JAILED for TRAFFICKING FIGHTER JET PARTS to IRAN
A retired company boss has been jailed for trafficking fighter jet parts to Iran in violation of Weapons of Mass Destruction controls.
Alexander George, 77, from Bristol, has been jailed for two-and-a-half years for shipping military items to Iran, including Russian MiG and US F4 Phantom parts sent through various companies and countries, following an investigation by HM Revenue and Customs (HMRC).
Two others, Paul Attwater, 65, and his 66-year-old wife Iris, both of Telford, Shropshire, were handed suspended six-month prison sentences last month for sourcing dual-use aircraft parts from the US and shipping them to George’s companies in Malaysia and Dubai, which then sent them to Iran.
The UK operates a strict licensing regime to uphold international sanctions and to ensure military equipment and dual-use items, which could be used by both the military and civilian sectors, do not fall into the wrong hands.
HMRC investigators found George was shipping the aircraft parts to Iran via companies he owned in Malaysia and Dubai. He brought in the Attwaters to try and hide the smuggling operation further and they shipped parts, including those that they knew were restricted under Weapons of Mass Destruction controls, through their company.
Simon York, Director, Fraud Investigation Service, HMRC, said:
“These three sold banned items that ended up in Iran. They didn’t care what these parts might be used for, as long as they got paid.
“This was a calculated and cynical attempt to undermine strict trade embargoes and internationally agreed
controls. They knew the rules and weaved increasingly elaborate plans to stay under the radar.
“This case, and these sentences, send a clear warning to others that if you try and shift illegal goods to
sanctioned and embargoed countries – we will catch you and you will face justice.”
Effective controls and enforcement on Weapons of Mass Destruction, military and dual-use goods contribute to the UK’s national security and is a priority for the UK government.
George bought the aircraft parts from the United States and sent them to his companies in Malaysia and Dubai before illegally sending them on to Iran.
But he became concerned he was being investigated and even searched the internet to find out who was wanted by the FBI, CIA and Interpol for selling aircraft parts to Iran. George then brought in the Attwaters, who operated Pairs Aviation Ltd from Crawley, East Sussex, to act as a buffer by ordering the parts and shipping them to George’s companies in Malaysia.
A number of exports from Pairs Aviation had been blocked by early 2010 over fears the items were ending up in Iran. All three directors were warned about exporting without a licence. George was questioned by HMRC officers at Heathrow Airport in August and December 2010 and denied he was dealing in aircraft parts. He told officers he was dealing in wheelbarrows, goggles and gloves for the construction industry.
The trio decided to add an extra layer to the supply chain in a bid to further disguise their criminal trade. They began shipping the items to Holland, in the name of a company registered in the British Virgin Islands called Wiky Global Corp, before they were sent to Malaysia and then Iran.
George and Iris Attwater were convicted of knowingly exporting controlled military or dual-use goods between February 2010 and March 2016 after a trial at Southwark Crown Court.
Paul Attwater changed his plea to guilty towards the end of the trial. The Attwaters were each sentenced to a six-month suspended prison sentence at the same court on 26 October 2018.
George was sentenced to two-and-a-half years in prison at the Old Bailey today (22 November 2018).
HMRC estimates that George made profits of more than £5 million from the illegal sales and the Attwaters
made a further £500,000 profit.
Action to recover the money, under the Proceeds of Crime Act, will now follow.
Luke Dockwray, Senior Specialist Prosecutor at the Crown Prosecution Service, said:
“Alex George, Paul Attwater and Iris Attwater sold aircraft components to countries and customers they knew required a license from the government.
“Despite being warned the goods they were exporting were at risk of being used in a Weapons of Mass
Destruction programme, the defendants introduced new corporate entities into the trading chain to disguise the destination of the sales, in order to continue their supply.
“The CPS worked closely with HMRC to present the complex trading chains to the jury to demonstrate the
criminal activity of these defendants.”
COMPANY FINED £100,000 FOR ILLEGAL EXPORTS and UNUSUAL UK PROSECUTION CASE
In April 2018 Her Majesty’s Revenue & Customs (HMRC) issued a compound penalty of £109,312.50 to a UK exporter. This related to unlicensed exports of military goods controlled by The Export Control Order 2008.
Export control legislation is enforced by HMRC, working with the Crown Prosecution Service. Where appropriate, HMRC can use their powers to offer a compound penalty in lieu of prosecution.
Also in April 2018, Her Majesty’s Revenue & Customs (HMRC) recently prosecuted Carbosynth Limited for unlicensed exports of controlled chemicals.
Unusually, this was pursuant to section 68(1) of the Customs and Excise Management Act 1979 in relation to The Export Control Order 2008 and the EU Dual Use Controls (Council Regulation (EC) No 428/2009).
Section 68(1) concerns strict liability and is rarely the basis of a prosecution, action usually reserved for the more serious Section 68(2) intentional offence.
Carbosynth made unlicensed exports of ‘dual use’ chemicals:
- benzilic acid
They also exported military list chemicals 1,2,4-butanetriol and decaborane.
The chemicals were exported variously to Japan, India, South Korea, Israel, USA, Germany and Canada.
On 18 April 2018, at City of London Magistrates’ Court, the company entered a guilty plea against the 6 counts and was ordered to pay £4,269.96.