III PURPOSE AND SCOPE OF CONTROLS
Purposes and Criteria
25. The Scott Report, the 1996 Green Paper and the
1998 White Paper each set out proposals for defining the purposes
of strategic export controls as set out below . Parallel with
these are the detailed principles to be applied to licence applications
set out in July 1997 "the Cook criteria"
and the EU Code of Conduct of June 1998. There would be evident
advantage both to those administering the system and those monitoring
it if the various points of slight contradiction or difference
of emphasis could be resolved in a common text. It is also unfortunate
that the Cook criteria and the EU Code should have preceded parliamentary
legitimisation of the basic principles from which they might in
logic have been expected to flow. We have sympathy with those
who question whether there is not some incoherence among these
PROPOSED PURPOSES OF STRATEGIC EXPORT CONTROLS
(i) complying with international treaty obligations
(a) to adhere to the UK's international obligations and commitments, including international arms embargoes
To adhere to the UK's international obligations and commitments, including international arms embargoes and international control regimes
(b) to prevent the proliferation of weapons of mass destruction and of missiles and unmanned air vehicles capable of delivering weapons of mass destruction
To prevent the proliferation of weapons of mass destruction and of missiles and unmanned air vehicles capable of delivering such weapons
(ii) protection of our armed forces
(c) to ensure the security of the UK, its dependencies and its armed forces abroad, and of allied countries
To safeguard the UK's security interests and those of allies and EU partners
(iv) avoidance of assistance to human rights abuses in foreign countries
(f) to avoid contributing to human rights abuses
(d) to avoid contributing to internal repression and instability within the country of destination of the licensed goods
To avoid contributing to internal repression
(e) to take into account the economic and technical capability of the recipient country, and to achieve the least diversion for armaments of human and economic resources
To avoid seriously undermining the economy of the recipient country
(vi) avoidance of assistance to aggression by foreign countries
(g) to avoid contributing to the prolongation or aggravation of existing armed conflicts between states
To avoid contributing to international aggression
(h) to preserve international and regional stability
To avoid damaging regional stability
(v) avoidance of assistance to serious crime in foreign countries
(i) to avoid contributing to terrorism and serious crime
To avoid contributing to terrorism and crime
(iii) prevention of terrorism
(j) to avoid re - export or diversion of goods, likely to prejudice purposes (a) to (i)
26. Sir Richard Scott's remark accompanying his original
list of six purposes that "the case for the inclusion of
additional purposes remains, in my view, to be made out"
is a warning against too ready an assumption that the latest list
is perfect. Three particular concerns have been raised:
(a) the omission of the
reference to human rights at (f) of the Green Paper list, on the
grounds that the fourth purpose of the 1998 list, "to avoid
contributing to internal repression", covers avoidance of
human rights abuses: some see this latter phrase as potentially
ambiguous and in danger of permitting exports of equipment which
would fall foul of a "human rights" principle.
(b) the omission of the
purpose set out at (j) of the Green Paper list, relating to avoidance
of re - export or diversion:
(c) the phraseology of
the purpose of the 1998 list relating to the economy of the recipient
country, in view of the differences in the similar passages relating
to the economies of recipient countries between the Cook criteria
and the EU Code of Conduct.
July 1997 criteria
27. The new Government came to office committed not
to permit the sale of arms to regimes that might use them for
internal repression or international aggression, and to work for
the introduction of a European Code of Conduct. The former commitment
was met by the publication in July 1997 of new criteria to be
used in considering arms export licence applications.
The criteria are to be applied to all military and dual - use
exports, including exports by the Government, which do not require
These criteria have no statutory force. They are open to amendment
by Government at any time. As we explain at para 5 above , we
have not set out to establish how these new criteria have been
applied: that will arise in the course of scrutiny of the Annual
Report. We do however emphasise to the House the Foreign Secretary's
statement that it was not "realistic or practical" to
revoke any of the 20,000 valid licences outstanding.
Licences under consideration may indeed have been held up close
to the point of approval: but the system is such that exports
will potentially still be continuing under licences granted prior
to May 1997.
28. Before July 1997 there was no clear and comprehensive
public statement of arms export licensing policy. FCO desk officers
used a guidance booklet listing 13 factors to be taken into account
in considering applications: a copy was placed in the Library
of the House of Commons in March 1997 and was available to the
public on demand.
The Memorandum from the FCO printed with this Report sets out
in helpful fashion some of the changes in the criteria from these
immediately preceding ones. These include
- a "lowering of the burden of proof"
when considering the possibility of use of equipment for internal
repression or international aggression from "likely"
- guidance on judging what equipment might be so
used, including a reference at para 6 to "armoured personnel
carriers specially designed for internal security", and three
tests of the risk of international aggression
- the introduction of more detailed guidance on
the criterion relating to regional stability, on which the UK
has recently introduced a paper in The Wassenaar Arrangement.
These national criteria will probably have to be
adapted in light of the EU Code of Conduct, and of experience
gained in their application to the hard realities of difficult
cases. We welcome the publication of criteria for the grant
of arms exports licenses hitherto only technically accessible,
providing the necessary yardstick against which to judge licenses
granted or refused. Comparison of the new criteria with their
predecessors suggests however that the July 1997 criteria represent
a rather less radical break with past policy than is sometimes
represented to be the case. As before, Ministerial interpretation
of the criteria in difficult cases is the touchstone of their
EU Code of Conduct
29. The national criteria have since been edited
and merged with the pre - existent 8 EU Common Criteria for Arm
Exports into the EU Code of Conduct formally adopted on 8 June
1998, with a "no - undercut" mechanism bolted on. The
FCO Paper sets out some of the relatively minor differences between
the UK national criteria: the Anglo - French draft circulated
to partners in January 1998: and the finally agreed version.
The differences include
- exclusion from the EU Code of the specific exemplification
in the UK national criteria and the Anglo - French draft of "protection
of members of security forces from violence" as an example
of legitimate end - use of potentially repressive equipment:
- exclusion from the EU Code of the caveat in the
UK national criteria (and the Anglo - French draft) relating to
international aggression, that "a purely theoretical possibility"
of items being so used will not of itself lead to a refusal;
- replacement of a reference to an export "seriously
undermining the economy of a recipient country" in the UK
national criteria (and the Anglo - French draft) with "seriously
hamper[ing] the sustainable development of the recipient country"
and addition of consideration of relative levels of military and
The FCO paper notes that "The Code is one of
the major common Foreign and Security Policy achievements of the
UK's EU Presidency ........the Code should help to ensure a level
playing field for UK exporters while ensuring that our own licensing
policy should remain basically unchanged."
30. Crucial to the Code are the "no - undercut"
provisions set out in operative paragraphs 3 and 4 under which
a Member State circulates to all Member States outlines of licences
refused and the reason for such refusal. Before a Member State
grants a licence for an "essentially identical transaction",
it will consult the denying State(s). If it nonetheless proceeds
to grant a licence as any Member State is entitled to
do it will notify the denying State or State(s) with a
detailed explanation. The FCO told us that the UK and Germany
have circulated first tranches of denial notifications, others
have not yet done so. The UK has not been involved in any discussions
on potential undercuts.
31. There are self - evident weaknesses and uncertainties
in the Code's procedures, many of which have been criticised by
the NGOs concerned.
The FCO told us that the UK was "not aware" of any consultations
between other Member States on potential undercuts. Because consultations
are usually bilateral, they have no reason to know.
There is however an annual review process, in which the UK intends
to play a leading role. It is to be hoped that some of the potential
weaknesses identified can then be addressed. We also hope that
the countries applying for EU membership are taking active steps
towards not only "aligning themselves with the criteria"
but also enforcing them: it has to be observed that some Associated
States still seem to trade in arms with scant regard to UN or
32. The Minister confirmed in evidence to us that
the Code and the national criteria were complementary, but that
officials would naturally work to the national criteria.
The FCO paper referred to the criteria as "broadly similar"
and noted that consideration was being given to adopting a single
set of criteria based on those in the Code.
We strongly favour the adoption of a slightly modified set
of national criteria so long as it was clear that it was no more
restrictive than the current set in its practical implementation.
We would also welcome confirmation that any proposed changes to
the EU Code of Conduct should be subjected to the new parliamentary
scrutiny procedures for Common Foreign and Security Policy proposals.
Trafficking and Brokering
33. The 1996 Green Paper referred briefly to "growing
concern about trafficking or brokering activities" and sought
views on future legislation.
The 1998 White Paper proposes to extend the controls already in
the Chemical Weapons Act to cover assistance by a UK person to
a foreigner overseas, and to extend these enhanced controls to
any activities in relation to weapons of mass destruction (WMD)
programmes, and associated ballistic or cruise missile programmes,
except the "official nuclear weapons programmes of NATO members"
and "certain missile and rocket programmes".
These proposals have not attracted much comment. Evidence from
BASIC questioned the legality under the Non Proliferation Treaty
of the proposed exemption of NATO nuclear weapons programmes.
The legislation on extension of the scope of controls over
participation in programmes of weapons of mass destruction could
usefully be accompanied by clarification of the legal position
under the Non Proliferation Treaty, and of the precise scope of
the exemptions it is intended to permit by licence.
34. The White Paper also proposes to take power to
exercise some control over trafficking and brokering in conventional
weapons. Recent examples which have raised concerns include the
brokering by UK companies of torture equipment such as electro
- shock batons, the activities in relation to Rwanda of the Isle
of Man registered company Mil-Tec, and most recently the arrangement
by Sandline to transfer weapons from Bulgaria to Sierra Leone.
For conventional weapons, the only current UK controls relate
to powers under the United Nations Act in relation to implementing
a binding UN decision. The White Paper proposes to extend this
control to cover trafficking and brokering in
(a) controlled goods
to countries subject to other embargoes, such as non - binding
UN decisions, EU, OSCE or national government embargoes:
(b) controlled goods
"trading in which is the subject of widespread national and
international condemnation," such as torture equipment: and
(c) missiles capable
of a range of at least 300 km.
The "goods and/or destinations" subject
to these controls would be laid down in secondary legislation
subject to negative resolution procedure. To the extent that this
increases current levels of parliamentary control, it is indeed
welcome, particularly if it provides an opportunity for greater
accountability over prohibited destinations as well as goods.
It would for example render illegal the brokering of arms to the
Democratic Republic of Congo, allegations of which have been made
in recent weeks.
35. The voluntary sector would like to see these
selective proposals for controls on trafficking and brokering
extended, in some cases to produce a system of registration of
The DMA supported the Government's efforts to try to do something
about brokering, while warning that the scope of any controls
would have to be carefully defined, and that there would be difficulties
in effective enforcement.As
the December 1996 Interdepartmental Committee following the Rwandan
arms dealing furore put it "The principal problems
with new legislation to prohibit trafficking generally seem likely
to concern enforceability. The offending events will take place
principally overseas and there can, therefore, be little or no
Customs & Excise regulatory control in the UK to detect illicit
activity. Enforcement would be heavily dependent on intelligence
- often after the event - about breaches, and evidence to sustain
a prosecution might not be easily available in the UK or from
abroad. International action might therefore be required to develop
effective enforcement against trafficking." We welcome
the limited proposals on trafficking and brokering, and recommend
that their extension be considered only once experience has been
gained of enforceability.
36. In late 1996 in the wake of the Mil - Tec affair
and concerned that the Government might be "rushed into introducing
some hastily and ill - thought out legislation", the DMA
submitted a paper to DTI suggesting that consideration be given
to statutory registration of brokers involved in shipping a clearly
defined range of lethal goods, and to an obligation of prior notification.
The DMA paper recognised that there were responsible and irresponsible
brokers, and that some kind of controls was needed, to enable
the Government to prosecute transgressors if they had broken the
The value of a registration system is partly deterrent, to the
extent that the availability of criminal sanctions may deter the
otherwise irresponsible or indifferent. An obligation on a licensed
dealer to notify could conceivably have alerted Sandline
if the directors of that company were genuinely unaware and if
they had been licensed of the stringent nature of the
UN sanctions regime on Sierra Leone. Any system would have to
be more than merely national; evidence to us suggested that the
German system of registration and notification is readily by -
It will, as the Minister noted, be difficult to police.
We welcome the proposals for new controls on trafficking and
brokering, and call on Ministers to explore further within the
EU and the Wassenaar Arrangement the benefits and potential pitfalls
of some multilaterally agreed form of licensing or registration
of arms dealers.
Transfer of Technology by Intangible Means
37. Technology has been subject to some degree of
export control under the 1939 Act, but limited to tangible transfers,
by paper, diskette or similar.
Transfers of technology by fax, e- mail or word of mouth are not
covered. The dangers of uncontrolled transfer of technology by
intangible means were raised in the 1996 Green Paper.
The 1998 White Paper proposes new legislation to make electronically
transmitted documents transferred abroad, whatever their form,
subject to licensing requirements, if "containing controlled
technology": and to support the proposal of the European
Commission to extend controls on dual-use goods to cover electronic
There is an irrefutable logic in the proposal which nearly all
involved accept; there is no argument in favour of the principle
of explicitly exempting such transfers from the licensing
regime. Grave doubts have however been expressed as to the
practicality of the proposals and fears raised as to their consequences
38. There is no clear idea of the extent of the problem
which this proposal seeks to address. The Minister told us "There
clearly is a gap here which does need to be plugged .... it is
difficult for us to give you an exact (category) of how much information
we are talking about because it is simply impossible to judge
The White Paper states that "it is difficult to make an accurate
assessment of the extent to which UK firms may be exporting technology
intangibly without consulting the government ..... such transfers
are likely to become more frequent in the future ...".
In 1997 there were only 232 individual applications for licences
for tangible transfer, much of which is permitted under two existing
Open General Export Licences. DTI assume that the increased requirement
as a result of the new controls "is unlikely to impose a
significant burden on industry particularly as it would be spread
over a large number of companies".
Existing open licences would permit intangible transfer as they
currently permit tangible transfer. Transfer of classified information
by any means would potentially be a breach of the Official Secrets
Act: the White Paper is therefore intended to catch technology
not caught thereby.
39. Defence exporters have made clear their concerns
over the potential burden on them, in having to consider for a
much wider range of transactions than at present whether they
should be seeking licensing, and over the enforceability of the
controls. The DMA felt that the proposal required a lot more thought,
warning that activities such as "post - sale servicing and
maintenance of software, providing update and support of on -
line instruction manuals" could be affected. It called for
study of the equivalent system in operation in the US and for
delay in introduction to provide time for detailed consultations
and for international discussions so that any new controls were
implemented in concert.
The SBAC suggested on the basis of an informal survey among its
members that the ratio of intangible transfers to tangible was
"very conservatively 4:1, suggesting a major potential burden
One manufacturer, GKN Westland, set out the problems in enforcement
for example, over high technology seminars and
suggested that any legislation would be impossible to enforce.
Evidence from Sir Brian Tovey on behalf of JETSECC emphasised
the need for multilateral agreements and the impossibility of
enforcement without the active co-operation of those involved.
40. Responses to the White Paper also came from a
variety of academic sources, fuelled by concerns that the proposals
could have serious and possibly unintended effects on the academic
research community and on teaching of overseas students, since
the transfer of any information with potential applications to
a WMD programme would be made subject to licensing. The Committee
of Vice - Chancellors and Principals (CVCP) claimed that the proposed
extension "poses an unacceptable threat to the operation
and standing of UK higher education" and that it "fails
to acknowledge that almost any advanced technology has a potential
The possible threat applies to teaching in a wide range of subjects,
not just nuclear physics and chemistry, but all those branches
of medicine relevant to a potential chemical and biological weapons
programme, and virtually all computer science research, much of
which is cooperative. As one respondent put it, "The restrictions
that previously only applied to physical hardware objects will
be extended to the software used to design, test, control or operate
them, or to integrate them into larger systems." It was also
implied by some respondents to the White Paper that the proposed
extension of controls was a somewhat sneaky attempt to control
the transfer of "strong" cryptography. The USA has apparently
tried and failed to prevent such transfers. It has also been implied
that the new controls sought will be unenforceable unless the
Government's agency has access to the necessary decryption, and
that this will be used as a justification to obtain sweeping decryption
powers: an implication firmly rejected by the Minister.
41. On 14 May 1998 the Commission presented a proposal
for a Council Regulation on dual - use export controls, which
sought to extend the current authorisation requirement for the
export of dual - use items to cover "transmission of technologies
via electronic media, telephone and fax", but excluding "the
supply of services or the transmission of technology requiring
cross - border movement of natural persons."
The document is under discussion in a Council Working Party Group,
and it is understood that a final version is unlikely to be agreed
until the second half of 1999. We have been surprised to discover
that the document, specifically referred to in the White Paper,
has not apparently been deposited in Parliament, and so has not
been through the scrutiny process. Given the degree of controversy
raised over the proposals in the White Paper, there can be no
question of the United Kingdom agreeing to an extension in the
EU's dual - use regime, under whatever legal power, until a consensus
has been arrived at on the way forward on controls of intangible
transfer of technology generally.
42. We would be disturbed if there were good grounds
for suspecting that licensable information was being transferred
by intangible means in order to circumvent existing controls:
but we understand that there are no such grounds. If there is
deliberate evasion, it will remain exceedingly difficult to detect,
let alone prevent.
The proposed extension might deter deliberate evaders by the distinct
threat of a subsequent prosecution, while imposing a burden on
industry substantially greater than seems to be recognised by
the Department. It presents at worst a real nuisance to the academic
world. The Government's proposals are in two legs: the proposal
on non - documentary transfer and on publication of controlled
technology on the internet is limited to WMD programmes, in view
of difficulties of administration and enforcement and given "sensitivities
in relation to free speech and academic freedom".
The Government should consider limiting the proposed extension
of licensing requirements to electronic transfer of documentation
to technology related to weapons of mass destruction.
43. There are, in simple terms, two classes of goods
requiring licences to export: military goods as set out in Part
III of Schedule 1 to the Export of Goods (Control) Order as the
"Military List", and dual - use goods, set out in Schedule
2 to the Dual Use and Related Goods (Export Control) Regulations
The range of goods covered is vast: from main battle tanks to
chemical storage tanks. The Military List is 10 pages long. The
relevant part of the Dual - Use Regulations is around 145 pages,
with an index of 36 pages. The ECO makes laudable efforts to assist
intending exporters through this maze, including an Internet web
site which contains a full list of goods subject to export control
and the text of OGELs.
The 1996 Paper sought comments on "any points of technical
detail" on the range of goods subject to export control.
The 1998 White Paper refers only to work on agreeing a common
definition of the much - used phrase "specially designed"
and to the possibility of military end - use "catch - all"
44. AIUK seek extension of controls to a wider range
of military security and police goods and services than is presently
the case, in particular dual - use equipment not hitherto covered
which could be used for repressive internal security. Examples
given included firearms training systems for the Indonesian police:
traffic control cameras used for internal security in China and
Tibet: and computers such as those used in the past to automate
pass law enforcement in South Africa.
A number of bodies seek coverage of training and other non - goods
transfers, and of licensed production overseas.
45. Exporters raised a number of issues where the
need for licensing is far from self - evident. It is, of course,
true that "just because a thing is controlled does not mean
to say it is always going to be refused:"
but the complaint of exporters is that they should not be obliged
to seek licences for some categories of equipment currently covered.
One such category is purely defensive equipment. We received
evidence from RBR International Ltd, who export ballistic helmets
and shields, and, quite apart from fury at losing orders through
delays, question why "non - aggressive equipment which saves
lives" need be licensable. The "protection of members
of security forces from violence" is a specifically excluded
area under the Cook criteria, although not under Heading 2 of
the EU Code (see para above). An application for a licence to
export helmets and face shields to China was, after several months
of consideration, refused on grounds of an "unacceptable
risk of diversion for use for the purposes of internal repression".
An appeal against the refusal was turned down at ministerial level.
In written evidence to us, DTI state that "it was concluded
that the arguments in favour of allowing the export for the protection
of members of the security forces were outweighed by the clearly
identifiable risk that the goods might be used represively, for
example in the violent suppression of an incident such as Tiananmen."
This is not only a peculiarity of policy, but has to be read in
the context of the removal in June 1994 by an amending Order of
"anti - riot helmets" from the scope of licensing under
"Military helmets" however require a licence under heading
ML13.c. of the Military List, except for conventional steel helmets,
and those manufactured before 1945. It seems that "anti-riot
helmets" can be exported without a licence, while those designed
to stop bullets cannot; but then a licence is refused for military
helmets in case they are used as anti - riot helmets.
46. The other categories of equipment whose need
for licensing is not obvious is that designed to provide defence
against chemical or biological warfare. Such equipment is
sought by countries deciding to embark on prohibited programmes
of such warfare; but a growing number of countries are increasingly
seeking such equipment. In response to the 1996 Green Paper, Graseby
Dynamics, a major producer of such equipment, suggested that the
Government should be actively promoting the sale of defensive
NBC equipment: Stella - Meta, who manufacture water purification
equipment, questioned as to why it was licensable: and STI, a
major manufacturer of self - injecting syringes including those
providing antidotes to nerve and chemical agent poisoning, while
not questioning the licensability of such equipment, did call
for a simplified system. The DMA repeated in 1998 its 1996 questioning
of the need for such rigorous control of purely defensive equipment.
More generally, it expressed disappointment at the absence from
the 1998 White Paper of any sign of reduced coverage or clearer
categorisation as sought in 1996, for example, by the Chemical
Industries Association. Responses to the 1998 White Paper also
emphasised the sense of dissatisfaction among the NBC community
at the requirement for licensing.
47. There are difficulties as the 1996 Green
Paper warned in contemplating any change to the coverage
of strategic export controls, since they are agreed in the EU
and other fora, including among the 33 states within the Wassenaar
Arrangement. The Minister warned that changes could bring the
UK into conflict with internationally agreed standards.
As the Director ECO told the Managing Director of RBR, the text
of the Military List "has been agreed internationally through
the Wassenaar Arrangement, and to include any exemption would
require agreement by all 33 Wassenaar parties. This would obviously
be a very long term matter if indeed it was to prove possible".
Unilateral national decontrols are evidently undesirable, and
purely national controls are of doubtful efficacy. That should
not however, lead to a position where the lists are inflexible.
The Dual - Use list has been amended on several occasions over
recent years, as has the Military List. It may be that there is
a need for a more active mechanism within the Wassenaar Arrangement
for ongoing technical review and revision. The production of
a unified list covering military and dual - use goods under the
new Act and the revision within the EU of the basis for dual -
use controls present an opportunity for review of the present
48. We have some sympathy with the concerns expressed
by voluntary bodies over the freedom with which licensed production
arrangements can be set up overseas for the production and re
- export of goods whose export from the UK would have required
licensing and which might well have been refused.
The two examples most frequently given are of Land Rovers produced
in Turkey and exported therefrom as Otokars: and firearms to be
produced in Turkey under licence from Heckler & Koch. There
must in practice be some controls over the export of the necessary
technology and other intellectual property, although if the production
is to take place in many countries it will be covered by an open
licence. In our view, this concern underlines the need for closer
co - ordination within the Wassenaar Arrangement of destinations
to which export of sensitive equipment is likely to be prohibited,
and for a forum where decisions taken by nations within that Arrangement
can be publicly challenged and indeed publicly defended, in a
spirit of transparency. We recommend that the question of controls
on licensed production of arms and dual - use goods be addressed
within the Wassenaar Arrangement.
End - Use Control
49. Controls on the ultimate destination and use
of goods licensed for export are intended to prevent diversion
to third countries, through re - export, or use within the original
country of destination outside any conditions under which a licence
has been granted. Licence applications have to be accompanied
by "full supporting documentation". The ECO gives guidance
on the nature of such documentation under different circumstances,
including specimen wordings for consignees to use, such as "the
goods are for our own use at (full address of location) and
will not be re - exported or sold for export".
Reference to end - use "certificates" is unintentionally
misleading, since it suggests a degree of formality and commonality
of format unfortunately absent. There still seems to be a high
degree of flexibility in determining what is required by way of
end - user certification.
50. The end - user control regime has been extensively
criticised, notably as a result of the revelations in the Scott
Report and in our predecessors' BMARC Report. The Scott Report
contained evidence to suggest that a number of countries had been
notoriously willing to act as conduits for onward re - export
to Iraq, so that end - user certification from some countries
was effectively meaningless.
The Select Committee's inquiry revealed that in the late 1980s
most export licence applications had evidently inadequate
Procedures have been tightened. In 1996 the Select Committee expressed
satisfaction at the institution of procedures to increase the
likelihood of detecting diversion. It recommended, reflecting
the Scott Report, that applicants be required "to distinguish
between the potential and actual uses of military and dual - use
goods". DTI consulted on this; industry concerns as to its
practicality led to it not being introduced in the present form.
There will however be a reminder to applicants in the new electronic
format form to provide as much information as possible about end
The Committee also recommended, following the failure in the 1980s
to make the necessary connection between BMARC and Oerlikon, that
ways should be found of making checks on third parties.
We have been briefed in confidence on this during our visit to
the ECO, and in writing, and commend DTI for its positive response
to this recommendation.
51. The 1996 Green Paper invited views on "the
subject of end- use control generally".
The 1998 White Paper refers to the Labour Party's Manifesto commitment
to strengthening end - use monitoring and to seeking "co
- operation to build a common approach on effective monitoring
of end - use within the European Union and under the Wassenaar
Arrangement": but offered nothing concrete beyond the statement
that "the Government is currently reviewing the options".
52. The voluntary sector respondents who had made
a number of proposals in their responses to the 1996 Paper, and
had variously described existing arrangements as "badly flawed"
and "woefully inadequate", are naturally disappointed
at the absence of concrete proposals.
In earlier submissions, they had made various proposals largely
designed to enable either UK authorities or some acceptable independent
body to audit end - user certificate compliance, using inspection
as a means of verification. Some also sought the introduction
of so called "catch - all" military end - use control,
similar to the system in operation in Germany, whereby the current
obligation on an exporter to refer to any grounds for suspecting
that dual - use goods may be used in programmes of weapons of
mass destruction is in effect, extended to any military end -
use in certain sensitive destinations. They reiterate demands
for an internationalised system, based on the allegedly more proactive
system used in Belgium and elsewhere for checks in the receiving
Tapol state that "In the case of Indonesia, there has been
no attempt to monitor the use of equipment despite clear breaches
of assurances by the Indonesian Government that equipment would
not be used for internal aggression".
There is indeed no practicable or internationally accepted
verification or enforcement regime.
53. Exporters also have a number of reservations
about end - use, while sharing the preference expressed for a
common internationally accepted format. The DMA suggested in its
1996 response that there might be scope for a WEU harmonised format,
noting that the "suggested form" in use was totally
unlike any other nation's, and reflecting a view of several firms
that the requirements of the statement varied from one individual
official to another.
The DMA also suggested that an end - user statement should be
a condition of the use of a licence, rather than a prerequisite
for its grant. Several respondents emphasised the difficulties
confronting exporters of components who might well be unaware
of the identity of the ultimate end - user or of manufacturers
of relatively common products exported by the laboratory supply
industry principally to dealers.
54. The principal concern of exporters is that the
burden of monitoring end - use should not fall on them, but on
Governments, with far greater resources, and that there should
not be such a burden of intrusive verification in a recipient
state as to lead such states to place orders elsewhere.
The DMA stated that companies "should not be held responsible
for what use is made of their goods after delivery".
EEV, for example, stated that "We do all we can to
make sure that our customers are bona - fide, but ultimately we
have no control over what a foreign company or country does".
As Lucas Varity candidly observed, an end - user undertaking is
ultimately "a piece of paper supplied by the customer stating
the intended end use of a product. It guarantees nothing ....".
SBAC noted that "it guarantees nothing and should goods be
diverted or misused government has no extra - territorial powers
to prosecute the customer".
Particular dislike was expressed by Sir Brian Tovey of the optional
provision in the 1994 EU Dual - Use Regulation, taken up only
by the UK and Germany, to require that goods require a licence
if the exporter has "grounds for suspecting" that they
may be used in connection with a weapons of mass destruction programme
the so - called "catch - all" clause. He suggested
that legal advice might unnecessarily discourage firms from exporting,
and that firms were being asked to exercise the sort of intelligence
function which was the Government's responsibility.
It is of course open to Government to refuse to grant a licence.
55. A few well - publicised cases apart, generally
dating back a decade or more, no evidence has been forthcoming
of widespread breaches of end - user certification. While it is
for example possible that both the Indian and the Pakistani nuclear
programme may have benefited at some level from British equipment,
exported under dual - use licenses, we have seen no evidence to
that effect. There is however much to be said for a general EU,
or preferably, wider agreement on mutual end - use verification,
and systematic certification based on the prevailing best practice.
The Minister told us that it was a "very, very difficult
issue" and that it was being taken forward within the EU:
she reasserted the Government's absolute commitment to taking
it forward. Without introducing extra - territorial controls,
there are limits on what can realistically be achieved. We
share the sense of disappointment that there should as yet be
nothing to show on the work done on creating a more effective
end - use regime.
46 K2.18 Back
p7: p20: p101, para 12 and Qq 19ff: Appendix 26, see Qq 92 -
3 for Ministerial response and Ev, p111, para 1.4.5 Back
p35: p127, para 1.3 Back
p40, para 1.3.2 Back
para 1.3.3 Back
p151: House of Commons Library Deposited Paper 3/5026 Back
p110 - 112 Back
pp112 - 114 Back
p113, para 2.4.1 Back
p114, para 2.5.2 Back
a full critique, see Ev, p107 - 110: also pp128 - 9 Back
p108, para 3.1 Back
p114 , 2.5.1 Back
p114 , para 2.5.5 Back
334, 2.3.6 - 8 Back
3989, 3.1.1 - 3.1.4 Back
p141, 3.1.3 Back
eg Ev, p134, 2.3 Back
p21 & Q13: p104, 13 - 16: Ev, p143 Back
pp38 - 9 Back
68 Ibid Back
69 Q14 Back
123 - 126 Back
& Ev, p150, A3 Back
3349, para 2.3.6 Back
3989, para 3.2.1 - 3.2.3 Back
74 Q72 Back
3989, p25: also Ev, p 68 Back
3989, para 3.2.1; Q60,; Ev, p151, A3 & p70, fn 25 Back
p38: Q60. Also Ev, p58 Back
GKN Westland: not printed Back
Ev, p58, para 5 Back
pp131 - 3 Back
83 Q120 Back
(1998) 257 final, Article 3 Back
a legal perspective, see Ev, pp93 - 100 Back
3929, 3.2.1 Back
details, see Ev, pp69 - 70 , Annex A. There is a third category
potentially covering any goods which the intending exporter has
grounds for suspecting may be used in connection with a weapons
of mass destruction programme Back
3349, 2.3.3. Back
3989, 5.1 Back
Ev, p106, 24ff Back
93 Q100 Back
p , & Q46 Back
Appendix 20 Back
1994, No. 1632 Back
pp45 - 6 Back
98 Q94 Back
p69: p89, 5.1 Back
pp13 - 14: 22: 145 Back
p64, para3.2.2 Back
passim; quoted by AIUK,1996,p9. Back
Report, paras 39 & 70-72 Back
p64, para 3.2.2 and footnote Back
paras 85 - 86 Back
3349, 2.3.5 Back
3989, 5.2.1 Back
p12: p21: p102, paras 19 - 22: p105, paras 17 - 19: p135, para
2. 4 Back
Qq 24ff & Ev p21: p135, para 2 . 4 Back
p102, para 19 Back
- 16: EEV,1996,p3: Lucas,1996 Back
Ev, p46 & p59: GEC - Marconi 1996, 3: Ev, p149 Back
also CBI,1996,p2: Ev, Appendix 25 Back
116 EEV,1996,3 Back
p137, para 5.2 Back
75ff and Ev, p58: also p37 and Appendix 26 Back
107 - 8 Back