New UK guidance on controlled technology transfers

The guidance provides that controlled software and technology is generally subject to an export licence requirement when it is transmitted to any location outside the United Kingdom. The requirement for a UK export licence is usually dependent on the location of transferor and the location of the intended recipient of the controlled technology.

This is especially noteworthy due to Brexit, as the rules on intangible technology exports between the United Kingdom and the European Union have now changed. Businesses involved in transfers of military or dual-use technology between the United Kingdom and the European Union, including between group companies, are advised to assess whether the new guidance has implications on their operations. 

In summary, the new UK guidance sets out:

• Who the UK export controls apply to.
• The definitions most relevant to technology (as set out in the key UK export control regulations) and the scope of the regulations around transferring military or dual-use technology.
• Forms of tangible transfers of technology (e.g. USB, hard drives, laptops, and tablets) and intangible transfers of technology (e.g. phone, video call, and email).
• Technology transfers within multinational companies that share common IT systems.
• Cloud storage and routing.
• Accessing or downloading controlled technology overseas, employee access to a company intranet when overseas, third party access overseas to intranets or cloud services, third party help desk and administration services, and IT system testing and maintenance.
• Export controls exemptions (including technology exceptions in the Export Control Order 2008, information in the public domain and for basic scientific research, technology required for the installation, operation, maintenance, or repair of non-military controlled items, and technology required for the installation, operation, maintenance, or repair of controlled items).
• General technology note (GTN) and Nuclear technology note (NTN) in the dual-use regulations.
• UK export licences that cover transfers of technology.
• Case studies demonstrating some helpful examples of UK technology transfers.

The new guidance clarifies the UK legal position on transfers of controlled technology by phone or video-conferencing, which have become increasingly prevalent with the rise of "working from home" in the context of the COVID-19 pandemic. Export controls apply where the technology is contained in a document and transmitted by audio- or video-conferencing means. This applies when the relevant part of that document is read out or described in such a way as to achieve substantially the same result as if it had been read out. A licence is also required where presentations display controlled technology and are viewed by overseas audiences, which includes screensharing to individuals or a wider audience, and where recordings of presentations containing controlled technology are viewed by overseas audiences.

Multinational companies that share common IT systems should take note that they must obtain an export licence to transfer technology to the intended recipients in their overseas offices or subsidiaries. Employees travelling between the United Kingdom and overseas offices with controlled technology stored on company or personal devices will also require an export licence.

For cloud transfers, the requirement for an export licence depends on the location of the exporter and recipient of the controlled information and not the location of the servers containing the controlled technology. Therefore, uploading controlled technology to a cloud-based storage is not considered a licensable transfer. However, if controlled technology is uploaded to a cloud and accessed by a person located outside the United Kingdom, this will be considered a licensable transfer even if the cloud is located in the United Kingdom.

Next Steps

Please contact us if you have any questions on this development or how we can help your organisation assess the implications of, and ensure compliance with, the new UK guidance on controlled technology transfers.

Authored by Aline Doussin, Imogen Brooks, and Iris Karaman.