Insight,

Enforcement starts now: Grace period for defence export controls is over

08 May 2025

Significant and wide-ranging changes to Australia’s defence export controls regime were introduced in September 2024. The grace period for compliance with the new regulations ended on 1 March 2025, meaning that exporters must now have effective systems in place to comply.

The amendments to the Defence Trade Controls Act 2012 (Cth) and Defence Strategic Goods List (DSGL) are designed to safeguard Australian goods, technology and software, as well as those of Australia's key international partners.

Given the substantial penalties for non-compliance, it is critical that exporters (including those exporting within Australia) ensure their operations are compliant.

This alert summarises 7 keys things you need to know.

	Explanation	INDIVIDUAL	Example uses 2
Expanded scope of Goods and Technologies	The new regime broadens the range of goods and technologies subject to export controls. Key additions include: semiconductors specialised software used to design complex integrated circuits and advanced electronic system quantum computers software specially designed or modified for the development or production or digital computers technology for the development or production of components and software related to quantum computers technology related to unmanned aerial vehicles with a range of 300km Any exporter which exports goods and technologies must be alert to how the expanded scope of the DSGL may impact its operations, including supply chains and partnerships.
‘Exporting’ without leaving Australia	The regime makes it an offence to supply DSGL technology to foreign persons within Australia without appropriate authorisation. This includes transfer of DSGL technology (including the provision of certain information) to an exporter’s own employees or officers who are not Australian citizens or permanent residents. For any exporter which employs people who are not Australian citizens or permanent residents, and which may be supplying DSGL technology, it is crucial to understand the implications of the expanded rules for its workforce.
Giving assistance	The giving of ‘assistance’ – such as training or technical support – related to DSGL goods and technology is now also subject to export controls. This includes the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarisation, destruction, processing or use of military goods and non-military lethal goods. Exporters which provide such services within the scope of the export controls regime must ensure they comply with regulations.
Downstream supply	The regulations also cover the downstream supply of certain DSGL goods and technology, making it an offence to on-supply those DSGL goods or DSGL technology to a place outside Australia without appropriate authorisation. Overseas entities, including related entities of Australian exporters, are therefore captured by the export controls regime. We expect increased regulatory scrutiny on this issue in coming months and this issue will be in full spotlight.
Exemptions for exports to AUKUS partners	The new regime creates an export licence-free environment between AUKUS partners, aimed at facilitating collaboration while safeguarding the strategic interests of key allies. Permits are no longer required to supply certain goods, technology or services to the United Kingdom and the United States. However, the exemptions only apply in specific circumstances. Exporters which export certain goods, technology and services within scope of the DSGL to the United States and United Kingdom must ensure they are aware of how the exemptions apply to their operations.
Increased penalties	The penalties for non-compliance with the export controls regime are now more severe than ever. Violating these rules can result significant legal consequences, including imprisonment for 10 years, fines reaching $825,000, or both. Given the consequences, exporters should be confident that they comply.
Broader export controls framework	The new regime is one part of Australia’s broader export controls regulatory framework, including the Weapons of Mass Destruction (Prevention of Proliferation) Act 1995 (Cth) and Customs Act 1901 (Cth). Exporters should be aware of and ensure compliance with the broader framework for the export, supply, brokering and publication of military and dual-use goods, software and technology.

What’s next?

Exporters must take proactive steps to assess their operations and ensure compliance with the export control regulations.

If you have questions about how these regulations affect you, please contact the team at KWM. We can provide expert guidance and support to navigate the complexities of the regime with minimum disruption to your operations.

Interested in geopolitics and the current trade battles?

If so, you might like to read our recent piece on AI chips and U.S. export controls and what they mean for Asia. The global AI race is heating up and the U.S. export controls will apply globally from 15 May 2025.