China Continues to be the Leading Destination for UK Controlled Exports and Refusals
After export rules were tightened in 2022, the number of refusals more than doubled again, citing reasons such as sanctions, national security, and human rights.
Official figures reveal that throughout 2023, China remained the primary destination for the UK’s export license refusals, doubling the number seen in 2022.
This increase followed a significant rise in refusals of export licenses destined for China in 2022 due to new security regulations.
Despite the new rules for military end-use exports and the inclusion of China, Hong Kong, and Macau in the arms embargo list, China continues to be the top destination for controlled exports from the UK in terms of goods value.
The Export Control Joint Unit (ECJU) data for 2023 shows that China received 807 permanent standard individual export licenses (SIEL), second only to the United States with 1,041 licenses.
However, the total value of goods exported to China under these licenses reached £25.6 billion, nearly double that of South Korea (£13.1 billion) and triple that of India (£8.4 billion).
The ECJU noted that the actual exported goods value was likely lower than initially estimated.
In each quarter of 2022 and 2023, a few countries accounted for a significant portion of the total export value, with China featuring among the top destinations in seven out of eight quarters.
These licenses mostly covered information security equipment and software for information security equipment, as per the ECJU.
Furthermore, China saw the highest number of license refusals and a significant increase in refusals in 2023.
The rules implemented in 2022 for the export, transfer, brokering, and transit of controlled goods, software, and technology for strategic reasons had a major impact on exports to China.
Director Rosemary Pratt of ECJU highlighted that the rules influenced the doubling of refusals in 2022.
By 2022, 252 SIEL applications for exports to China were declined, a sharp increase from 119 in 2021 for China and Hong Kong.
In 2023, the number of refusals for licenses to China doubled again, reaching 578, with a refusal rate close to 42 percent.
Various criteria were used in the refusal of China and Hong Kong SIEL applications, including international commitments, risk of diversion to undesirable end-users, national security concerns, human rights issues, and peace and security preservation.
Additionally, a semiconductor-related goods license was revoked, and eight applications destined for Hong Kong were refused.
