If an export licence is rejected by the German authorities, especially the BAFA, good advice is required. The lack of an export licence had a number of consequences.
On the one hand, the goods may not be exported. If the consignment is exported despite the fact that an export permit has not been issued, this is usually a felony. Companies without an export licence should therefore under no circumstances export the product to a third country.
On the other hand, there can be consequences under the sales contract. If the seller owes the export, for example because he has to deliver DDP or DAP, he must also arrange for the export permit. If he does not receive it, there is usually no case of force majeure. The seller is therefore liable for damages.
German authorities deny export permit – these are the next steps
If the export permit is not issued by German customs or BAFA, it must first be checked why this is the case. At least the following points should be checked:
- Is all the information in the application for an export licence complete?
- Is the information in the application consistent in itself and are there no contradictions?
- If there is no end-use declaration from the customer, why BAFA rejected the application?
- Was the letter of credit possibly not enclosed?
- Were previous export license applications rejected?
If all documents were available and if they were consistent in themselves, the rejection decision of BAFA must be carefully examined. If the export license has been rejected incorrectly, under German law the company is entitled to file a objection against the rejection of the export license and, if necessary, to enforce the export license by court action. However, this is problematic because the delivery dates under the purchase contract cannot be kept if a court case lasting several years follows.
In any case, it is important that the objection must be lodged within one month if the export licence has not been obtained. The matter is therefore often time-critical.
How to prevent the export license from being rejected
Companies should therefore, when considering an export project, make use of the possibility of a formal preliminary enquiry with BAFA. This is a possibilty provided for in German export law. This makes it possible to check in advance whether an export project is eligible for approval and, above all, to make it binding. From a legal point of view, this is a export licence assurance. This means that the authority is bound by them when the export licence is subsequently applied for.
The authority can only deviate from this assurance if the factual and legal situation has changed so seriously that the authority should never have given the assurance. In principle, this must be demonstrated by the authority. The hurdles for this are high because BAFA has to prove that Germany’s essential security interests are endangered if the export licence is granted after all.
If the export permit is refused despite the fact that the authority had previously promised to grant it, there is also the possibility of compensation for the company.