Export reforms to boost AUKUS trade and collaboration

Australia, the United Kingdom and the United States have finalised the establishment of an export licence-free environment, which Defence says will unlock billions of dollars of investment and cutting red tape for Australian industry and its AUKUS partners.

Delivering on the AUKUS partners’ collective commitment just over a year ago to streamline defence trade, the partners have work quickly to implement generational legislative reforms that provide reciprocal national exemptions from their respective export control frameworks, says Australian Minister for Defence Richard Marles MP

“These critical reforms will revolutionise defence trade, innovation and cooperation, enabling collaboration at the speed and scale required to meet our challenging strategic circumstances,” he added.

Together, the partners’ respective national exemptions remove the licencing requirements for most controlled goods, technologies and services exported, re-exported or transferred to, or within, AUKUS nations. This will be critical in driving scientific and technological collaboration, including under AUKUS Pillar II Advanced Capabilities, said Marles.

From 1 September 2024, AUKUS partners will operate in this new export licence-free environment, significantly boosting defence trade and innovation, says Defence. It will support unprecedented levels of advanced scientific, technological and industrial cooperation, fast‑tracking the delivery of high-end capabilities to the ADF.

Importantly, says Defence, the new licence-free environment removes barriers to trade and collaboration and reduces costs to local businesses, supporting industry, higher education and research sectors in all three nations. This milestone delivers on key reforms that defence industry has been calling on for years, the department adds.

The changes to Australia’s export control mechanisms will enable:

• Licence-free tradefor over 70 per cent of defence exports from the US to Australia that are currently subject to International Traffic in Arms Regulations (ITAR).
• Licence-free tradefor over 80 per cent of defence trade from the US to Australia that are subject to Export Administration Regulations.
• The elimination of around 900 export permitsrequired under the previous export controls from Australia to the US and UK valued at $5 billion per year.
• The removal of approximately 200 export permitsrequired for defence exports from the UK to Australia valued at over $129 million per year.

Australia has implemented national exemptions for the UK and the US through the Defence Trade Controls Amendment Act 2024 and associated regulations. The US provided national exemptions through amendments to its International Traffic in Arms Regulations and Export Administration Regulations, and the UK provided national exemptions through an AUKUS-specific Open General Export Licence.

The Australian Government committed $28 million in the 2024-25 Budget to implement reforms under the Defence Trade Controls Amendment Act 2024, including to support industry engagement and accelerate trade between AUKUS partners.