Memorandum submitted by the Foreign and
UK Defence Export
Criteria and EU Code on Arms Exports
PART 1: UK DEFENCE EXPORT CRITERIA
1.1.1. The origin of the criteria lies in
the document "Labour's Policy Pledges for a Responsible Arms
Trade", issued in February 1997. The first of the eight pledges
"A Labour Government will not issue export
licences for the sale of arms to regimes which might use them
for internal repression or international aggression, nor will
we permit the sale of weapons in circumstances where this might
intensify or prolong existing armed conflicts or where these weapons
might be used to abuse human rights."
1.1.2. This commitment was restated verbatim
in the document "Road to the Manifesto" (p 14). The
Manifesto itself stated that "Labour will not permit the
sale of arms to regimes that might use them for internal repression
or international aggression."
1.2 THE REVIEW
1.2.1. On 8 May 1997, the Foreign Secretary
wrote to Cabinet colleagues proposing a review of the criteria
used to consider arms export licence applications. in order to
fulfil the commitments described above. The fact of the review
was announced to Parliament in answer to a written Parliamentary
Question on 22 May (text of question and answer at Annex A).
FCO officials involved in providing advice to the DTI on export
licence applications were instructed that pending the outcome
of the review they should assess licence applications against
the Manifesto commitment outlined above, as well as the existing
criteria; that they should err on the side of caution, submitting
to Ministers on any sensitive cases; and that they should consider
postponing the provision of advice to the DTI on any particularly
sensitive applications until after the outcome of the review.
1.2.2. The review was taken forward by officials
from the FCO's Non-Proliferation Department in consultation with
colleagues in interested FCO departments and other Government
Departments (primarily the DTI, the MoD and DFID). Following interdepartmental
agreement on the conclusions of the review, the Foreign Secretary
announced the new criteria to be used in considering arms export
licence applications on 28 July 1997 in answer to a written Parliamentary
Question (text of question and answer at Annex B).
1.3 THE FOREIGN
1.3.1 The announcement and the criteria
together provide a balanced overview of HMG's policy on arms exports.
The Foreign Secretary's statement opened with the assertion that
"The Government is committed to the maintenance of a strong
defence industry which is a strategic part of our industrial base
as well as of our defence effort." This, together with the
statement in paragraph 3 of the criteria that "full weight
should be given to the UK's national interests", confirms
HMG's view that responsible arms exports bring substantial economic
and security benefits.
1.3.2 The Foreign Secretary stated that
the criteria would be applied when considering applications for
licences to export goods controlled under Part III of Schedule
1 to the Export of Goods (Control) Order 1994, also known as the
UK Military List. This covers all categories of conventional weapons
and also paramilitary and an internal security equipment (eg water
cannon and some types of protected vehicle). The reference in
the statement to "advance approvals for promotion prior to
formal application for an export licence" relates to the
MoD-administered Form 680 process under which companies can seek
official approval for the promotion of specific equipment in specified
markets (although they still need to apply to the DTI for a licence
to export the equipment). The criteria are also applied to applications
to export dual-use goods (ie those controlled under Council Regulation
(EC) 3381/94 and the Dual Use and Related Goods (Export Control)
Regulations 1996), when there were grounds to believe that the
end-user of the goods would be the armed forces or internal security
forces of the recipient country. A further application of the
criteria, not covered in the statement, is to decisions on exports
of military goods by the Government, for which no licence is required.
1.3.3 The Foreign Secretary stated that
the Government considered that it would not be "realistic
or practical" to revoke licences issued by the previous administration.
The background to this statement is that there were over 20,000
such licences valid and in force on 28 July 1987.
1.3.4 Finally, the Foreign Secretary stated
that the criteria would not be applied mechanistically and that
individual applications would be considered case-by-case. In practice,
this means that policy is to consider all applications on their
merits, according to the nature of the equipment and the end-use
and end-user. The need for consistency with previous decisions
is a major factor, but does not imply automaticity (ie licence
applications are not refused or approved simply because similar
applications have been approved or refused).
1.4 THE CRITERIA
1.4.1 Paragraph 2 sets out the UK's international
obligations and commitments in the non-proliferation and export
control field. These are the cornerstones of HMG's strategic export
control policy. sub-para (d) sets out existing international guidelines
and criteria for conventional arms exports (texts at Annex C).
1.4.2 Paragraphs 1 and 4-9 are central to
the realisation of the commitments outlined in paragraphs 1.1
and 1.2 of this Memorandum. The statements that a licence will
not be issued if the arguments for doing so are outweighed by
concern that the goods might be used for internal repression or
international aggression (paragraph 1), and that HMG will not
issue a licence if there is a clearly identifiable risk that the
equipment in question might be used for internal repression (paragraph
4b)), are fully in line with these commitments. They also represent
a clear tightening of previous policy, which was to refuse a licence
if the equipment was "likely" to be misused: the terminology
used in the new criteria represents a lowering of the burden of
proof when considering the possibility of misuse. In addition,
unlike their predecessors the new criteria provide guidance on
equipment which might be used for internal repression (paragraph
5). Similarly, paragraph 9 provides guidance on the factors to
be taken into account when considering the risk that the intended
recipient might use the equipment aggressively against another
1.4.3 These paragraphs are frequently misinterpreted
or misquoted. Critics of decisions to issue certain licences often
claim that HMG has contravened its own policy of not selling arms
to regimes which are guilty of internal repression. The criteria
make it clear that the key factor is the risk that the particular
item of equipment covered by the export licence might be misused
for internal repression or international aggression. The general
record of the recipient country (or end-user) in respecting human
rights and fundamental freedoms is taken into account, but primarily
in order to inform the assessment of how the end-user might use
the equipment in question.
1.4.4 There has also been some criticism
by NGOs of the final part of paragraph 5(b), that the end-use
of equipment which has obvious application for internal repression
can be legitimate, such as the protection of the security forces
from violence. The thinking behind this statement is that even
security forces in repressive countries sometimes have to face
terrorist or criminal violence, and it would be wrong to deny
them the means to protect themselves against this. By definition,
however, the end-use of the equipment cannot be legitimate if
it also includes use for acts of internal repression. The final
part of paragraph 5(b) is therefore consistent with the commitment
in paragraph 4(b).
1.4.5 Some NGOs have also criticised the
use of the term "internal repression" on the grounds
that it is not clearly defined or internationally recognised,
and hence might not cover the gamut of possible human rights abuses.
In fact paragraph 7 gives (for the first time) a clear steer on
the meaning of the term, and underlines that it does include "suppression
or major violation of human rights and fundamental freedoms".
1.4.6 Paragraph 10 underlines that in addition
to the risk of equipment being used aggressively against another
country, the effect of the proposed export on regional stability
should also be taken into account. Judging the effect of a particular
export on regional stability is necessarily an inexact science,
although the criteria provide some guidance on the factors to
be considered. The UK has recently introduced in the Wassenaar
Arrangement (an export control arrangement involving 33 countries)
a paper setting out criteria for assessing whether a particular
transfer is likely to be destabalising; these will also be used
domestically to help inform judgements on the regional stability
1.4.7 Paragraph 11 underlines that the risk
of diversion will also be taken into account. Work is in hand
on ways to minimise this risk and an announcement will be made
in due course.
1.4.8 The final part of the Foreign Secretary's
statement noted that the Government would provide for parliamentary
consideration of the application of the criteria by reporting
annually on the application of the UK's strategic export controls.
The first such report will be published soon.
1.5.1 Licences to export arms and other
goods where export is controlled for strategic reasons are issued
by the Secretary of State for Trade and Industry through the DTI's
Export Control Organisation. All relevant individual licence applications
are circulated by the DTI to other Government Departments with
an interest as determined by the latter in line with their policy
responsibilities. This means that different departments have lead
responsibility for providing advice on those aspects of the criteria
related to their policy responsibilities. Hence the FCO leads
on the provision of advice relating to paragraphs 2, 3( c), 4-10
and (in concert with DFID) 11 (c). The MoD leads on paragraphs
3 (a), (d) and (e) (insofar as the latter concerns the defence
industry), and 12. The MoD also leads on risk of diversion (paragraph
11, other than sub-para (c)), though the FCO also sometimes comments
on this aspect.
1.5.2. Following the start of the review
of the criteria, there was a delay in the processing of some export
licence applications, due to the need for caution pending the
outcome of the review (see 1.2.1 above). After the announcement
of the new criteria, these delays continued given the importance
and sensitivity of initial decisions on the application of the
criteria and the consequent need for frequent Ministerial involvement.
With experience, the application of the criteria has become easier.
It is now clear that the policy of applying the criteria carefully
and rigorously need not ipso facto result in delays in considering
licence applications. The policy of case-by-case consideration
allows sufficient flexibility to make sensible and consistent
decisions on difficult cases.
PART TWO: THE EU CODE OF CONDUCT ON ARMS
2.1.1. As with the review of the national
criteria, the origin of work on the EU code of Conduct lies in
the eight policy pledges on the arms trade issued in February
1997. The fifth of these pledges stated that:
"Labour will work for the introduction
of a European Code of Conduct setting high common standards to
govern arms exports from all European Union Member States."
2.2.1. Similar commitments were also made
in the Road to the Manifesto and the Manifesto itself. The commitment
was reaffirmed by the Foreign Secretary when he announced the
outcome of the review of the national criteria (see Annex B).
2.2 WORK TOWARDS
2.2.1. A first draft of a Code of Conduct
was prepared by FCO officials and agreed with other interested
Government Departments in September 1997. The draft set out detailed
criteria for export licensing decisions by Member States. These
were based on the eight EU Common Criteria for Arms Exports, the
first seven of which had been agreed by the European Council in
1991, with the eighth being added in 1992. The draft elaborated
the Common Criteria using language from the UK's new national
criteria and the OSCE Principles Governing Conventional Arms Transfers.
2.2.2. The other key element in the draft
was the proposal for a "no-undercut mechanism". Under
this, Member States would circulate details of licence applications
refused; if one Member State was considering licensing an export
essentially identical to that denied by another Member State,
it would first have to consult the denying partner. The draft
specified that the final decision on whether to issue a licence
would rest with the Member State concerned. HMG's view was (and
is) that a binding no-undercut mechanism would not have been appropriate
in view of the differences in Member States' national arms export
policies (eg the Portugese national embargo against Indonesia,
the UK's national embargo against Argentina and Sweden's very
restrictive policy on arms exports to the Gulf). But the requirement
to consult before a potential undercut offers Member States the
chance to exert considerable moral pressure on others not to licence
exports which they had denied.
2.2.3. It was felt that one of the key factors
in achieving agreement on a Code of Conduct would be the attitude
of France, as the second largest arms exporter in the EU (behind
the UK) and also one of the Member States most attached to the
principle of national discretion in export licensing decisions.
In August 1997, the French Prime Minister had indicated his support
in principle for a Code of Conduct and his desire to work with
the UK on the issue. It was therefore decided to try to secure
an agreed Anglo-French draft which could then be circulated to
other EU partners. The Foreign Secretary wrote to his French counterpart
to this effect, and discussions with French officials on the UK
draft began in October. At the same time, we also shared our broad
ideas on the Code informally with other Member States and with
2.2.4 The agreed Anglo-French draft was
circulated to EU partners on 23 January. As we were entering sensitive
negotiations with partners, there was no intention to publish
the text. In the event a group of NGOs who had formed a coalition
to campaign on the Code (Amnesty International, OXFAM, Saferworld
and the British American Security Information Council (BASIC)
published a leaked copy of the draft (text at Annex D). It is
therefore open to those with an interest to compare the original
draft and the final version of the Code.
2.2.5 After three rounds of discussion in
COARM, the CFSP Working Group on Conventional Arms Exports, the
draft was submitted via the Political Committee to the General
Affairs Council (GAC). The GAC reached political agreement on
the Code on 25 May and formally adopted it on 8 June (text at
Annex E), thus achieving the objective of agreement during the
2.3 THE CODE
2.3.1 The third paragraph of the preamble
underlines the fact that the detailed criteria set out in the
Code are intended to represent minimum standards.
2.3.2 Each Criterion in the Code begins
with a chapeau which is the text of the relevant 1991-92 Common
2.3.3 Criterion One is essentially identical
to paragraph 2 of the UK's national criteria.
2.3.4 Criterion Two, on respect of human
rights, is essentially identical to paragraphs 4-7 of the national
criteria. The main addition is the commitment by Member States
to exercise "special caution and vigilance" in issuing
licences to countries which have committed serious human rights
violations. In the UK's view this indicates that such licence
applications need to be considered with particular care, but not
that there is a presumpton of denial.
2.3.5 The wording of Criterion Three is
based on that in the OSCE Principles Governing Conventional Arms
2.3.6 Criterion Four is the equivalent of
paragraphs 8-10 in the national criteria.
2.3.7 Criterion Five essentially reproduces
paragraphs 3(a), 12(a) and 12(d) of the national criteria, while
emphasising that these factors do not affect the application of
the criteria dealing with human rights and regional stability.
2.3.8 Criterion Six has no direct equivalent
in the national criteria. Most of the language is drawn from the
OSCE Principles, though the recipient country's attitude towards
international organised crime and international humanitarian law
are new factors.
2.3.9 Criterion Seven is essentially identical
to paragraph 11 of the national criteria, but adds that the recipient
country's ability to exercise effective export controls should
also be taken into account when considering the risk of diversion.
2.3.10 Criterion Eight is similar to paragraph
11(c) of the national criteria, although the consideration is
now whether the proposed export would hamper the development of
the recipient country ("undermine the economy" in the
national criteria). The requirement to take into account relative
levels of military and social expenditure is also new. NGOs had
pressed for the Code to specify a presumption of denial if the
intended recipient was considered to spend more on defence than
on health and education. It was felt that this would be unnecessarily
prescriptive and too difficult to judge accurately, but that a
more general reference to the issue would be useful.
2.3.11 Paragraph 1 of the Operative Provisions
specifies that, as with the UK's national criteria, Member States
will consider licence applications on a case-by-case basis against
the criteria in the Code.
2.3.12 Operative Paragraph 5 specifies that
the Code will operate initially on the basis of national control
lists. In practice all bar one of these will cover all goods and
technology on the Wassenaar Arrangement Munitions List, which
14 Member States are committed to control as a result of their
participation in the Arrangement, plus whatever goods Member States
choose to impose national controls on. (The reason the Code does
not specify the Munitions List as the basis for its operation
is that France regards this as being a reference list only). Experts
are due to meet soon to begin work on a common list of military
equipment to which the Code will apply.
2.3.13 Although the ideas in Operative Paragraph
8 were not covered in the original draft, the UK supported their
introduction and would have preferred an even greater degree of
transparency in respect of the operation and application of the
2.3.14 Operative Paragraph 10 is similar
in effect to paragraph 3 of the national criteria, but the shorter
and less detailed treatment of the factors which may argue in
favour of an export reflects the reluctance of some Member States
to spell out these factors in a "restrictive" Code.
2.4 HMG'S ASSESSMENT
2.4.1 HMG's basic view of the Code was set
out on 3 June in a statement by Mr Fatchett, Minister of State
for Foreign and Commonwealth Affairs, in response to a written
Parliamentary Question (text of question and answer at Annex F).
The Code is one of the major Common Foreign and Security Policy
achievements of the UK's EU Presidency. It should be seen in the
context of the previous lack of progress in harmonising Member
States' arms export licensing policies, and of Member States'
widely differing interests in this area. Against this background,
agreement on the most detailed and comprehensive set of internationally-agreed
criteria and on a no-undercut mechanism of a kind never before
applied by a group of states to their conventional arms exports
represents a significant achievement. UK objectives for the Codethat
it should be as restrictive as our national criteria, but not
more sowere also met. As a result the Code should help
to ensure a level playing field for UK exporters while ensuring
that our own licensing policy should remain basically unchanged.
2.4.2 NGOs and other interested parties
have generally welcomed the Code as a worthwhile first step in
increasing responsibility and transparency in decision-making
by Member States on applications for arms export licences, while
criticising it for a number of perceived loopholes and omissions.
The main criticisms are dealt with below.
2.4.3 It is suggested that the Code is weakened
as a result of not having been adopted by a legally-binding Joint
Action or Common Position. HMG believes that this will not hinder
the operation of the Code and that the formula of a Council Declaration,
by which the Code was adopted, represents a solemn political commitment
by Member States.
2.4.4 It has also been argued that the no-undercut
mechanism is too weak, in that it allows only for bilateral consultation
before a potential undercut and bilateral notification afterwards.
HMG believes that the mechanism is enough to deter Member States
from undercutting others' denials without serious consideration
of all the factors. It establishes for the first time the principle
that a Member State should know if one of its refusals might be
undercut by another, and gives it the chance to dissuade the other
2.4.5 Finally, the Code has been criticised
for not addressing certain issues, including brokering and trafficking,
licensed production overseas, end-use controls and parliamentary
scrutiny of export licence applications. These criticisms fail
to recognise that the Code focusses on setting high common standards
for legal exports by EU Member States. The Code was never intended
to cover every aspect of defence exports, or to dictate the internal
licensing procedures to be followed by Member States. The UK is
addressing some of the above issues nationally, including through
the DTI White Paper on Strategic Export Controls.
2.5.1 Paragraph 11 of the Code's operative
provisions commits Member States to use their best endeavours
to encourage other arms exporters to subscribe to the principles
of the Code. Associated States and EFTA countries have aligned
themselves with the criteria. In addition, Member States including
the UK have disseminated details of the Code to other non-Member
States. But some Member States are reluctant to encourage other
arms exporters to associate themselves more formally with the
Code, or to become involved in the consultation mechanism.
2.5.2 The UK and Germany have circulated
first tranches of denial notifications. We understand that other
Member States plan to do so soon. As yet the UK has not been involved
in any consultations on potential undercuts, and are not aware
of any between other Member States.
2.5.3 COARM has asked experts to meet, probably
in October to begin work on a common list of military equipment
to which the Code will apply.
2.5.4 Operative paragraph 8 provides for
an annual review of the operation of the Code, to identify any
improvements which need to be made. Member States have started
to discuss the timing of the first review and future reviews.
The UK intends to play a leading role in the review process.
2.5.5 As the criteria in the Code and the
UK's national criteria are broadly similar, HMG is considering
whether to maintain the two sets in parallel or to adopt a single
set of criteria based on those in the Code.
19 October 1998
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