Select Committee on Trade and Industry Minutes of Evidence

Annex E


  The Council of the European Union,

  BUILDING on the Common Criteria agreed at the Luxembourg and Lisbon European Councils in 1991 and 1992,

  RECOGNISING the special responsibility of arms exporting states,

  DETERMINED to set high common standards which should be regarded as the minimum for the management of, and restraint in, conventional arms transfers by all EU Member States, and to strengthen the exchange of relevant information with a view to achieving greater transparency,

  DETERMINED to prevent the export of equipment which might be used for internal repression or international aggression, or contribute to regional instability,

  WISHING within the framework of the CFSP to reinforce their cooperation and to promote their convergence in the field of conventional arms exports,

  NOTING complementary measures taken by the EU against illicit transfers, in the form of the EU Programme for Preventing and Combating Illicit Trafficking in Conventional Arms,

  ACKNOWLEDGING the wish of EU Members States to maintain a defence industry as part of their industrial base as well as their defence effort,

  RECOGNISING that states have a right to transfer the means of self-defence, consistent with the right of self-defence recognised by the UN Charter,

has drawn up the following Code of Conduct and operative provisions:


  Respect for the international commitments of EU member states, in particular the sanctions decreed by the UN Security Council and those decreed by the Community, agreements on non-proliferation and other subjects, as well as other international obligations.

  An export licence should be refused if approval would be inconsistent with, inter alia:

    (a)  the international obligations of member states and their commitments to enforce UN, OSCE and EU arms embargoes;

    (b)  the international obligations of member states under the Nuclear Non-Proliferation Treaty, the Biological and Toxin Weapons Convention and the Chemical Weapons Convention;

    (c)  their commitments in the frameworks of the Australia Group, the Missile Technology Regime, the Nuclear Suppliers Group and the Wassenaar Arrangement;

    (d)  their commitment not to export any form of anti-personnel landmine.


The respect of human rights in the country of final destination

  Having assessed the recipient country's attitude towards relevant principles established by international human rights instruments, Member States will:

    (a)  not issue an export licence if there is a clear risk that the proposed export might be used for internal repression;

    (b)  exercise special caution and vigilance in issuing licences, on a case-by-case basis and taking account of the nature of the equipment, to countries where serious violations of human rights have been established by the competent bodies of the UN, the Council of Europe or by the EU;

  For these purposes, equipment which might be used for internal repression will include, inter alia, equipment where there is evidence of the use of this or similar equipment for internal repression by the proposed end-user, or where there is reason to believe that the equipment will be diverted from its stated end-use or end-user and used for internal repression. In line with operative paragraph 1 of this Code, the nature of the equipment will be considered carefully, particularly if it is intended for internal security purposes. Internal repression includes, inter alia, torture and other cruel, inhuman and degrading treatment or punishment, summary or arbitrary executions, disappearances, arbitrary detentions and other major violations of human rights and fundamental freedoms as set out in relevant international human rights instruments, including the Universal Declaration on Human Rights and the International Covenant on Civil and Political Rights.


The internal situation in the country of final destination, as a function of the existence of tensions or armed conflicts

  Member States will not allow exports which would provoke or prolong armed conflicts or aggravate exisiting tensions or conflicts in the country of final destination.


Preservation of regional peace, security and stability

  Member States will not issue an export licence if there is a clear risk that the intended recipient would use the proposed export aggressively against another country or to assert by force a territorial claim.

  When considering these risks, EU Member States will take into account inter alia:

    (a)  the existence or likelihood of armed conflict between the recipient and another country;

    (b)  a claim against the territory of a neighbouring country which the recipient has in the past tried or threatened to pursue by means of force;

    (c)  whether the equipment would be likely to be used other than for the legitimate national security and defence of the recipient;

    (d)  the need not to affect adversely regional stability in any significant way.


The national security of the member states and of territories whose external relations are the responsibility of a Member State, as well as that of friendly and allied countries

  Member States will take into account:

    (a)  the potential effect of the proposed export on their defence and security interests and those of friends, allies and other member states, while recognising that this factor cannot affect consideration of the criteria on respect of human rights and on regional peace, security and stability;

    (b)  the risk of use of the goods concerned against their forces or those of friends, allies or other member states;

    (c)  the risk of reverse engineering or unintended technology transfer.


The behaviour of the buyer country with regard to the international community, as regards in particular to its attitude to terrorism, the nature of its alliances and respect for international law

  Member States will take into account inter alia the record of the buyer country with regard to:

    (a)  its support or encouragement of terrorism and international organised crime;

    (b)  its compliance with its international commitments, in particular on the non-use of force, including under international humanitarian law applicable to international and non-international conflicts;

    (c)  its commitment to non-proliferation and other areas of arms control and disarmament, in particular the signature, ratification and implementation of relevant arms control and disarmament conventions referred to in sub-para) (b) of Criterion One.


The existence of a risk that the equipment will be diverted within the buyer country or re-exported under undesirable conditions

  In assessing the impact of the proposed export on the importing country and the risk that exported goods might be diverted to an undesirable end-user, the following will be considered:

    (a)  the legitimate defence and domestic security interests of the recipient country, including any involvement in UN or other peace-keeping activity;

    (b)  the technical capability of the recipient country to use the equipment;

    (c)  the capability of the recipient country to exert effective export controls;

    (d)  the risk of the arms being re-exported or diverted to terrorist organisations (anti-terrorist equipment would need particularly careful consideration in this context).


  The compatibility of the arms exports with the technical and economic capacity of the recipient country, taking into account the desirabilty that states should achieve their legitimate needs of security and defence with the least diversion for armaments of human and economic resources

  Member States will take into account, in the light of information from relevant sources such as UNDP, World Bank, IMF and OECD reports, whether the proposed export would seriously hamper the sustainable development of the recipient country. They will consider in this context the recipient country's relative levels of military and social expenditure, taking into account also any EU or bilateral aid.


  1.  Each EU Member State will assess export licence applications for military equipment made to it on a case-by-case basis against the provisions of the Code of Conduct.

  2.  This Code will not infringe on the right of Member States to operate more restrictive national policies.

  3.  EU Member States will circulate through diplomatic channels details of licences refused in accordance with the Code of Conduct for military equipment together with an explanation of why the licence has been refused. The details to be notified are set out in the form of a draft pro-forma at Annex A. Before any Member State grants a licence which has been denied by another Member State or States for an essentially identical transaction within the last three years, it will first consult the Member State or States which issued the denial(s). If following consultations, the Member State nevertheless decides to grant a licence, it will notify the Member State or States issuing the denial(s), giving a detailed explanation of its reasoning.

  The decision to transfer or deny the transfer of any item of military equipment will remian at the national discretion of each Member State. A denial of a licence is understood to take place when the member state has refused to authorise the actual sale or physical export of the item of military equipment concerned, where a sale would otherwise have come about, or the conclusion of the relevant contract. For these purposes, a notifiable denial may, in accordance with national procedures, include denial of permission to start negotiations or a negative response to a formal initial enquiry about a specific order.

  4.  EU Member States will keep such denials and consultations confidential and not use then for commercial advantage.

  5.  EU Member States will work for the early adoption of a common list of military equipment covered by the Code, based on similar national and international lists. Until then, the Code will operate on the basis of national control lists incorporating where appropriate elements from relevant international lists.

  6.  The criteria in this Code and the consultation procedure provided for by paragraph 3 of the operative provisions will also apply to dual-use goods as specified in Annex 1 of Council Decision 94/942/CFSP as amended, where there are grounds for believing that the end-user of such goods will be the armed forces or internal security forces or similar entities in the recipient country.

  7.  In order to maximise the efficiency of this Code, EU Member States will work within the framework of the CFSP to reinforce their cooperation and to promote their convergence in the field of conventional arms exports.

  8.  Each EU Member State will circulate to other EU Partners in confidence an annual report on its defence exports and on its implementation of the Code. These reports will be discussed at an annual meeting held within the framework of the CFSP. The meeting will also review the operation of the Code, identify any improvements which need to be made and submit to the Council a consolidated report, based on contributions from Member States.

  9.  EU Member States will, as appropriate, assess jointly through the CFSP framework the situation of potential or actual recipients of arms exports from EU Member States, in the light of the principles and criteria of the Code of Conduct.

  10.  It is recognised that Member States, where appropriate, may also take into account the effect of proposed exports on their economic, social, commercial and industrial interests, but that these factors will not affect the application of the above criteria.

  11.  EU Member States will use their best endeavours to encourage other arms exporting states to subscribe to the principles of this Code of Conduct.

  12.  This Code of Conduct and the operative provisions will replace any previous elaboration of the 1991 and 1992 Common Criteria.


……………………………. (name of Member State) has the honour to inform partnersof the following denial under the EU Code of Conduct:

Destination country:…………………………………………………

Short description of equipment, including quantity and where appropriate, technical specifications:……………………….

Proposed consignee:…………………………

Proposed end-user (if different):…………………………..

Reason for refusal:…………………………………..

Date of denial:……………………………………

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Prepared 10 December 1998