From September 24-26, 2024, Export Controls Australia Group (ECAG) participated in the 18th Annual Defence Exports Conference, hosted by SAE Media Group. This marked the first time Australia was represented at the conference, where global defence leaders and regulatory experts convened to discuss export control compliance, sanctions, and defense trade partnerships. Representatives from the US, UK, EU, Japan, South Korea, and other nations shared updates on their export control frameworks and challenges.
One of the standout presentations was from a global freight forwarder who highlighted the importance of managing compliance, particularly educating clients about where freight forwarders fit into the export control matrix. The presentation emphasised the role of freight forwarders in guiding companies through complex compliance requirements, particularly in the defence and dual use sector. This company emphasised the importance of keeping freight forwarders in the loop on compliance requirements, specifically, the importance of showing your freight forwarder the export control licence/licenses or exemptions you are operating under. This enables the freight forwarder to plan the route and transit logistics accordingly.
The UK’s approach to progressive sanctions against Russia was a significant talking point, with experts outlining how $400 billion worth of goods had been sanctioned, effectively curbing Russia's war effort and reducing its war capabilities by an estimated four years. This illustrated the power of targeted sanctions in shaping geopolitical outcomes. Discussion also focused on the imminent next package of sanctions and the impact and effectiveness of progressive sanctions to curb bad state actor behaviour.
The Japanese perspective on military technology exports also provided a fresh viewpoint. Japanese speakers discussed the gradual shift in public sentiment regarding military exports, noting that Japan is increasingly working with like-minded nations to ensure arms transfers are secure and policy-driven. This shift signals Japan's evolving role in global defence cooperation, where collaboration is seen as essential for enhancing both security and technology exchange.
A leading German military technology company highlighted the growing need for additional budget and resources dedicated to export control compliance. The company noted a fivefold increase in its export control training budget since 2017 due to the increasing complexity of regulations and sanctions. Interestingly, this company identified the ratio of export control practitioner per licence or agreement, stating that it had one export control practitioner per product or contract. This is a different ration than what is commonly seen in Australian defence companies, where it is often one practitioner to every 15 or so licences. While this is a subjective and potentially arbitrary statistic as the complexity of each licence is unknown, it could indicate a greater recognition in Europe on the technical difficulty and business significance of managing export licences. On a separate but connected note, this speaker focused on how enforcement actions are also on the rise in Germany, pushing companies to adopt a more proactive and forward-looking approach to compliance.
Another key theme of the conference was the expanding scope of export control and sanctions compliance roles, as highlighted by international legal experts. It was said that a key reason for this is the blurring of the lines between defence technology and dual use technology. This can be seen through the defence sector increasingly incorporating advanced technologies like AI, quantum computing, unmanned vehicles and drones, so that even traditionally non defence dual-use companies must now factor export controls into their operations. This is leading to a rethinking of supply chains, including the need for robust security measures and investments in compliance-related tools and technologies as a cost of doing business (not just defence business).
The adoption of digital tools to support compliance was also a prominent topic. Conference attendees learned how organisations globally, including the US Congress, are leveraging digital tools to better manage export controls and sanctions. These tools help companies focus efforts based on risk and provide evidence of due diligence through data archives. Discussions also explored how smaller companies could access right-sized digital tools to meet their specific needs. This discussion touched on how digital export controls and sanctions tools can help smaller companies focus human efforts on the higher-risk transactions within their organisations, and allowing more automated workflows for lower risk transactions.
A recurring challenge identified throughout the conference was the difficulty in recruiting experienced trade control personnel. As export control and sanctions become more complex, companies are increasingly aware of the need for specialised skill sets in these areas, prompting discussions on developing talent and creating a pipeline for future practitioners. Interestingly, the speaker in this area showcased the different skillsets required for export control practitioners versus sanctions. The learning here was that export controllers needed higher analytical, interpretative and risk-based reasoning skills, whereas sanctions practitioners focused mostly on human behaviour within a transaction to identify diversion risks and red-flags.
ECAG’s presentation on Australian export control reforms, new offences, and the AUKUS Partners’ exception was well received. Multinational companies were particularly interested in the new regulatory framework for operating within the Australian defence landscape and sought guidance on how to support their Australian subsidiaries, clients and supply chains to comply with these evolving requirements. The new Australian offences in sections 10A, 10B and 10C were a central focus, with ECAG providing insight into how these developments will shape Australia’s defence exports with international partners, and how international companies can align with the changes to ensure compliance. Ultimately, this presentation underscored Australia's growing role in global defence exports and partnerships.
ECAG’s participation at the conference was a valuable opportunity to engage with global experts, share insights, and further Australia’s presence in international discussions on export controls and defence collaboration.
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