Important Updates and Preparing for the AUKUS Licence-Free Environment

Introduction

Recent updates mark a significant milestone in Australia’s export control systems, driven by key announcements from Defence Export Controls (DEC) and the United States government. These developments highlight the progress made under the AUKUS partnership and their impact on Australian industry. In this blog post, we provide a comprehensive overview of these changes, along with essential action points for existing permit holders.

1. US Certification and National Exemption

On 15 August EDT / 16 August AEST, the US President notified Congress that Australia and the UK have been certified as having export control systems comparable to those of the United States. As a result, a national exemption from US export control licensing requirements has been granted to Australia and the UK.

This exemption is a significant achievement for Defence in the AUKUS partnership. The exemption will be officially published in the US Federal Register on 16 August EDT / 17 August AEST and will take effect from 1 September 2024.

While the new exemption presents advantages for Australian industry, it also introduces important administrative responsibilities and legal considerations. These include understanding the criminal offences and penalties under Australia’s Defence Trade Controls Act's new legislation and regulations, which apply regardless of whether the AUKUS exemption is utilised.

Key responsibilities of utilising the AUKUS exemption include registration, diligent record-keeping, and strict compliance with the new terms and conditions associated with the exemption. It's crucial for all stakeholders to familiarise themselves with these requirements to ensure full legal compliance and avoid potential penalties.

These efforts are offset by the benefit of expedited technology transfers. By bypassing the traditional licensing process through the US Department of State, the exemption is expected to provide a more streamlined and efficient flow of goods and technology, by reducing delays and enhancing operational efficiency for businesses engaged in defence exports.

2. Public Comment Period

The US Department of State will also open an additional 90-day public comment period to gather further input from industry regarding the operationalization of this exemption. This is an opportunity for ECAG members and other stakeholders to provide feedback that could shape the final details of this new regulatory environment.

3. Preparing for the AUKUS Licence-Free Environment

Existing permit holders who have previously exported to the US or the UK are now eligible to apply for registration under the new AUKUS licence-free environment ahead of its launch on 1 September 2024. Below are the steps you need to take to ensure compliance:

• Register with DEC: You must be registered with Defence Export Controls (DEC) and have an active DEC Client Registration Number (DCRN). Your current DCRN will remain unchanged.

  
  

• Complete the AUKUS Authorised User Enrolment Form: This form will collect information that will be shared with US and UK government departments to assess your application.

  
  

For those who do not apply before 1 September 2024, the registration process will be available through DEC’s new client portal, though processing may take up to 90 business days. It's important to note that existing Export Permits will not be affected during this process.

4. Record-Keeping and Compliance

Once registered for the AUKUS licence-free environment, you will be required to maintain relevant records as mandated by the Defence Trade Controls Amendment Act 2024. This will ensure that all activities under the new framework are fully compliant with the updated legislation.

5. Updates, Application and Operation under the new laws

There is still much needed clarity around the application of various sections of the new legislation and regulations, along with what best practice looks like. ECAG are involved in the DEC working group where some of these questions are being put forward for clarity. The current AIG export controls best practice guide is being updated, however this will take time.

DEC is introducing an online training module, this module is designed to provide a basic foundational understanding of the new laws and regulations and will take roughly 2-3 hours to complete, this is separate the Accreditation activity they are undertaking.

It's important to acknowledge that the practical application and operational aspects of these new laws will evolve over time. Adjustments and refinements will be necessary as we collectively adapt to the new regulatory landscape. ECAG is actively collaborating with DEC to ensure that our members have the most current and accurate information. We are committed to keeping you informed of all developments and providing support as you transition to this new environment. Regular updates and guidance will be shared as we continue to work closely with DEC throughout this process.

Conclusion

This update marks a pivotal moment for Australia’s role in the AUKUS partnership and the broader export control framework. The ECAG community has played a crucial role in reaching this point, and your continued engagement will be key to ensuring a smooth transition to the new licence-free environment.

We look forward to your feedback and questions as we approach the 1 September 2024 launch date.

This blog post is intended for informational purposes for ECAG members and is based on the latest updates from Defence Export Controls (DEC) as of August 2024.