Five Eyes Export Control Agreement

Five Eyes Export Control Agreement
Photo by: Wojtek Paczes

A Five Eyes export control agreement seeks to enhance the security concerns of Australia, Canada, New Zealand, the United Kingdom, and the United States by formally committing to coordinate export control enforcement efforts.  Matthew S. Axelrod, Assistant Secretary of Commerce for Export Enforcement, stated that this will result in detentions, public identification, and penalties for actors who evade export controls.

This joint effort will serve to minimize gaps in export compliance investigations and enforcement.  It will also leverage enforcement resources to expand the participating nations’ enforcement capacity.  Additionally, these nations will engage members in private industry sectors to mitigate export diversions.

The restriction of technologies that could be used for the proliferation of weapons by Russia against the Ukraine were specifically mentioned by Axelrod in his comments, though recent comments have also been focused on China.

Continuing Efforts by the Bureau of Industry and Security

These international efforts coordinate with recent efforts by the Bureau of Industry and Security (BIS) to enforce the Export Administration Regulations (EAR).  These regulations from the Department of Commerce, have in recent years sought to further secure technologies that are being sought by Russia and China through illicit procurement methods.  

This is not the first mention of international coordination by the United States.  The U.S. has worked with Japan recently in efforts to mitigate circumvention and evasion of sanctions leveled against Russia.  Actions by the Office of Foreign Assets Control (OFAC) have recently engaged international partners to enforce sanctions and prosecute money laundering operations.

Aside from international efforts, U.S. agencies involved in export compliance have joined forces to combat illicit export of sensitive technologies.  These efforts are combining the capabilities of the Department of Justice, the FBI, and Homeland Security Investigations into the Disruptive Technology Strike Force.

The History of Five Eyes

Early beginnings of this alliance can be traced to cooperative efforts between code breakers of the United States and the United Kingdom during World War II in 1941.  This took place at Bletchley Park and preceded official U.S. involvement in the conflict.  

Five Eyes was formalized after the war and shifted its efforts in response to cold war threats posed by the Soviet Union and China.  The agreement was later signed by Canada, Australia, and New Zealand.  This agreement, though in effect for decades, was not made known to the public until 2010.  

As the cold war receded with the fall of the Soviet Union, the alliance continued to be repurposed to support international security concerns.  During the 1990’s, participating agencies focused their efforts on the “war on terror”.  Their efforts have continued in the fields of signals intelligence, defense intelligence, and human intelligence.

There is a great deal of controversy surrounding Five Eyes over its methods, as it monitors worldwide communications, even on its own citizens.  It remains, however, to be an extremely powerful espionage alliance.

A Five Eyes working group was hosted by the Canada Border Services Agencey to focus on controls and sanctions in June of 2023.  These discussions focused on the integration of methods for export compliance integration between the participating countries.

Increased Risks for Businesses Exporting Controlled Technologies

The Five Eyes export control agreement, while furthering the national security interests of the involved nations, creates additional risks for businesses involved in the export of controlled technologies that may unintentionally export goods to restricted parties.  This applies to export by means of an exchange of information or actual shipment to foreign nationals.

Businesses must ensure that they do not violate export regulations by enacting viable Export Compliance Programs (ECP).   These programs are a requirement for both the Export Administration Regulations and the International Traffic in Arms Regulations (ITAR).  While businesses involved with the ITAR have been proactive in compliance, many involved with the export of dual-use goods enumerated in the EAR have been less diligent.

Export Compliance Management Programs establish clearly defined policies and procedures for all departments within an organization.  They ensure that registration, item classifications, license applications, denied part screening, and security measures are taken that will prevent violation.  They also ensure that training, auditing, and record keeping are maintained according to requirements.

CVG Strategy Export Compliance Management Programs

Export Compliance is an important subject for businesses engaged in sales of items that are intended for international sales or could result in international sales.  Failure to comply with regulations can result in criminal prosecution including imprisonment and fines.  It can also result in civil penalties and disbarment from export activities. 

CVG Strategy can help you in understanding the ITAR and EAR, and help you establish a coherent and effective export compliance system.   We can perform export control classifications, perform audits, assist in filings for export licenses and educate your team.  Regardless of whether your business falls under EAR or ITAR, CVG Strategy has the expertise to help.  

Kevin Gholston

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