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The Import and Export (Strategic Commodities) Regulations also impose licensing requirement on articles specified in Schedule 3 to the Regulations, or any technological document which includes information relating to any such article :

  • if the importer/exporter knows that the article or document is intended or likely to be used in any activity related to nuclear, chemical or biological weapons or missile capable of delivering them as specified in Schedule 4 to the Regulations; or

  • if he or she has grounds to suspect that the article or document may be used in any activity specified in Schedule 4.

These applications should also be made on import and export licence forms for strategic commodities.

Traders who have doubts about the end-use of their goods should make all reasonable enquiries as to the stated/intended use. Reasonable enquiries should include the sort of checks one would normally make before doing business with anyone and should, in particular, cover investigation of anything which led the trader to be suspicious in the first place. For example, traders should know something about the capability of the goods and technology they are selling. They should find out more about the end-use from their customer, the nature of the business activity of the end-user, dealer or buyer who wants to purchase the goods and consider whether the end-use is genuine. They should make sure that they record what they have done and any information on which their conclusions are based, including any written assurances. Traders should watch out for cases where :

  • the customer is reluctant to offer information about the end-use of the goods;

  • the customer is reluctant to provide clear answers to commercial or technical questions which are routine in normal negotiations;

  • an unconvincing explanation is given as to why the goods are required, in view of the customer's normal business or the technical sophistication of the goods;

  • the customer's order is considered to be inappropriate or for which the customer appears to have no legitimate need;

  • routine installation, training or maintenance services are declined;

  • unusually favourable payment terms such as higher price and/or lump-sum cash payment are offered;

  • unusual shipping, packaging or labelling arrangements are requested;

  • circuitous or commercially illogical routing is requested;

  • there are instruction to make direct shipments to trading companies, freight forwarders or export companies which have no apparent connection with the purchase;

  • the customer is new to the trader and their knowledge about him/her is incomplete;

  • the customer is unfamiliar with the product, its applications or performance;

  • the installation site is in an area under strict security control or is in an area to which access is severely restricted, or is unusual in view of the type of equipment being installed;

  • there are unusual requirements for excessive confidentiality about final destinations, customers, or specifications of items;

  • there are requests for excessive spare parts or lack of interest in any spare parts;

  • the dealer the trader is selling to is new to them, or has been evasive about customers;

  • the customer or end-user is a military body;

  • the order is itself unusual in any way e.g. the quantity and performance capabilities of the goods ordered significantly exceed, without satisfactory explanation, the amount or performance normally required for the stated end-use.

The above is a list of indicators of illegitimate transaction. If a trader still has suspicion after enquiries, he should submit a licence application to the Trade and Industry Department, giving all relevant information and stating the likely end-use of the goods and technology and the grounds for suspicion.

 
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Last Updated Date : 30 May 2011