Select Committee on Trade and Industry Minutes of Evidence


Memorandum submitted by British American Security Information Council (Basic)



  BASIC welcomes the opportunity to respond to the Department of Trade and Industry (DTI) White Paper on Strategic Export Controls. We broadly share the view put foward by the President of the Board of Trade that improved powers are necessary in the UK for the government to effectively control the export of arms and military-security technologies to prevent armed aggression and internal repression. However, we are concerned that some of the proposals in the White Paper will not meet this need, and that even after the UK government has implemented these new measures, it will still be faced with scandals of the kind investigated by Sir Richard Scott. The following therefore includes recommendations that we hope that the UK Government will give serious consideration.


  We agree that at the heart of Sir Richard Scott's critique of the current UK arms export system is the fundamental lack of government accountability and transparency to parliament. This is set out in his Report of the Inquiry into the Export of Defence Equipment and Dual Use Goods to Iraq, published in February 1996. However, we believe that no system of arms export control can operate effectively without adherence to clear normative criteria accepted by all those involved, and in today's global markets these criteria can only derive legitimacy if they are based upon respect for international law pertaining to the use of arms.

  In this respect, BASIC and our partner NGOs welcome the EU Code of Conduct which was agreed by the Council of Ministers in June 1998 as a step forward, but we are not convinced that the provisions of the Code are clear and consistent enough. In particular, we questioned the repeated use of the phrase "take into account" when setting out obligations to abide by fundamental ethical criteria, a phrase that will almost certainly be used to undermine full respect for those principles, including international law. For example, the EU Member States' obligation to prevent arms exports to recipients who would most likely use them for grave breaches of international humanitarian law is not clearly stated in the EU Code. In addition, there is a failure to include in the operative provisions of the Code measures to strictly control the activities of international arms brokers and deals involving licenced production exports. Nor does the Code provide for parliamentary scrutiny of arms exports and multilateral consultations over denials of export licences to ensure high common standards. Without such improvements in the EU Code, it is unlikely to be an adequate mechanism to prevent EU transactions for arms and dual use technologies contributing to external aggression and internal repression.


2.1  Parliamentary scrutiny

  The following two paragraphs, which set out the Government's thinking on this matter, contain positive proposals but the measures proposed will fall short of providing for adequate parliamentary scrutiny and still leave unanswered some key questions.

  2.1.7  "The Government does not consider that there should be parliamentary scrutiny of individual applications either before or after the decision on whether to grant a licence has been taken. Parliamentary scrutiny before licence decisions are taken would inevitably slow down significantly the process of decision making on those licence applications. Furthermore, any process involving publication of individual applications, whether before or after decisions have been taken would mean identifying companies and the nature of their planned or actual export business which would be likely to harm their competitive position. Overseas governments would also have a legitimate concern about the details of their purchases of defence-related equipment being made known to, for example, neighbouring countries. There would be the danger that they would seek in future to buy equipment from countries which would not disclose details of individual contracts."

  2.1.8  "...the Government is committed to greater transparency in the field of strategic exports and will report annually on the state of strategic export controls and their application. This is consistent with the Government's proposals for a Freedom of Information Act. It is likely that various Select Committees will wish to examine the annual report which, in turn, may lead to a parliamentary debate on it."

  BASIC welcomes the Government's commitment to publish an annual report on strategic exports, but if it is the intention of the Government to continue to deny comprehensive and meaningful export data to MPs in response to matters arising, the annual report will not meet the need for parliamentary scrutiny. Moreover, the proposal leaves open the nature of the report itself, as well as the nature of the new Freedom of Information Act, and we fear that these could be designed to deny the issuance of legitimate information necessary for meaningful debate.

  On 14th July 1998, Foreign Office Minister, Tony Lloyd stated that the forthcoming annual report: "will list by country of destination the numbers of export licences issued in each equipment category and give details of the military equipment for which licenses have been granted; and will set out the value of defence exports to each country."

  BASIC is concerned that this proposal for the annual report does not go far enough to ensure effective parliamentary scrutiny. In our view, the annual report should at least include a record of all export licences granted and refused, as well as all actual deliveries, broken down month by month and country by country, and classified in meaningful categories covering all defence and law enforcement equipment and technology. This is roughly how the annual report on military list items is published in the USA (the so-called Section 655 reports), and it would be a simple matter for law enforcement equipment to be included. The publication of company names and individual contractual arrangements is not necessary. The EU Code of Conduct already provides for the production of annual reports by the Member States, some of which already publish them, and a UK annual report of high standard would encourage partner countries to follow suit.

  It is vital that the data be fully comprehensive if the Government is to be seen to be acting in good faith. This will mean the inclusion of certain types of arms exports currently excluded from any disclosure of information such as exports by those Government agencies that are exempt from export licence requirement by means of crown immunity, which could include DESO, the Disposal Sales Agency (DSA) and the Crown Agents.

  If meaningful descriptions and comprehensive lists of the exports are not provided, as is often the case at present when UK arms export data is provided to Parliament, then the annual report will be condemned from the outset and the debate over its content will become distorted. In this regard we welcome the Foreign and Commonwealth Office (FCO) daily briefing statement of 24 June 1998 that "The Government recognises that the categories in the Military List are broad and that wrong conclusions can be drawn about the details of licences which have been granted. That is why it is committed to publishing an open and transparent Annual Report on Strategic Export Controls to allow public scrutiny of the application of its export licencing policy. The report will make clear what military equipment has been licensed for export on a country by country basis."

  Another practice that inhibits legitimate parliamentary scrutiny is the system of Open General Export Licences (OGELs) and OGEL Transhipment Licences. Such licences permit the export of a wide range of defence and law enforcement equipment and technology to a number of specified countries, and exempt a company from the obligation to apply for an export licence from the DTI for each individual order. Companies in receipt of OGELS are required to submit to the Department of Trade & Industry details of deliveries within 30 days of shipment. However, such data has not been provided in response to questions by MPs and it would appear that the data is not being recorded on the ECLIPS computer system at the DTI. Currently the Government cannot give full details of licences granted and denied by itself or the previous administration. This situation needs to be urgently addressed.

  The annual report should also include a discussion of why certain items of defence and law enforcement equipment of technology may have been authorised to countries with poor human rights records, and what realistic safeguards have been established to ensure that the items are not used for human rights violations. It is expected that the annual report should also include recommendations to address weaknesses in the strategic export control systems.

  Nevertheless, it would be a great mistake to believe that a transparent and comprehensive annual report can replace the need to provide MPs with detailed answers to questions about exports of defence and law enforcement equipment and technologies. If the Government expects Parliament to confine its scrutiny of such a vital area of governance to a debate on annual data, this could even lower the level of parliamentary scrutiny.

  Nor should the issue of prior parliamentary scrutiny of individual licence applications be confused with the post facto discussion. Without some sort of parliamentary involvement in prior scrutiny, there is an ever-present danger in this particular business that a sensitive export approved by officials and Ministers is used to facilitate serious abuses or acts of aggression by the recipients. The consequent international outcry in such cases has focused on UK irresponsibility, with Parliament and media blaming the government and officials.

  In those cases where the intended recipient is in a region of armed conflict or has a poor human rights record, or where the equipment or technology would have a profound effect on the security situation of any country, it is essential in the public interest that an extremely strict application process is established. In the USA, Congress is able to scrutinise licence applications prior to approval by the State Department where the value of the proposed transaction exceeds $14m. This system has some merit but could be improved because it does not allow for the fact that some lower value applications present much greater risks to security. In Sweden, an all-party committee of MPs has powers to scrutinise and block sensitive licence applications.

  There is no doubt that excessive secrecy has been encouraged under the guise of "commercial confidentiality" and that this has lead to severe negative consequences as pointed out by Sir Richard Scott. The avoidance of criticism cannot be an acceptable reason to withhold information from Parliament, and therefore the public, about the activities of Government. The risk posed to commercial confidentiality in allowing some form of parliamentary scrutiny in such instances has to be weighed against the UK's obligations to ensure respect for international law and to protect the public interest in terms already set out in Government policy, including the EU Code of Conduct. Moreover, defence and security goods manufacturing companies and national governments are often well aware of strategic deals under negotiation. It is merely parliamentarians and the public which are "protected" from information as a result of such "commercial confidentiality" clauses.

  Another measure would be to establish a rolling register for all licence applications involving transfers to sensitive destinations that could be open for parliamentary inspection in advance of the licence application being considered. Adequate time for comment, debate and proper consideration could be allowed so that there was no delay in reaching a decision. The categories of information would need to be comprehensive and meaningful, but with company details excluded.

2.2  Purposes of strategic export controls

  2.2.2  "The Government considers that it is right that the purposes of strategic export controls should be set out in legislation. This will contribute to greater transparency of export licensing policy. However, the Government is also concerned to ensure that it retains the flexibility to respond to unforeseen circumstances, potentially at short notice. We therefore propose that new primary legislation should make provision for the purposes of strategic export control to be set out in secondary legislation. Orders introducing or amending the purposes should come into force with immediate effect, but require approval by Parliament within a set timescale in order to remain in force."

  BASIC welcomes the UK Government's proposal to set out the purposes for strategic export control in legislation approved by Parliament, but we are disappointed that the Government has conceived of such purposes as a matter which should be changed at short notice and therefore only included in secondary legislation. The purposes of strategic export controls set out in paragraph 2.2.3 of the White paper include fundamental principles which are incorporated into the EU Code of Conduct such as "to adhere to the UK's international obligations and commitments, including international arms embargoes and international control regimes", "to prevent the proliferation of weapons of mass destruction and of missiles and unmanned air vehicles capable of delivering such weapons", "to safeguard the UK's security interests and those of its allies and EU partners", "to avoid contributing to internal repression", "to avoid contributing to international aggression", "to avoid damaging regional stability", "to avoid seriously undermining the economy of the recipient country", and "to avoid contributing to terrorism and crime."

  There is no explanation as to why such purposes should be changed at short notice except the rather unconvincing claim that this would enable the Government "to respond to unforeseen circumstances". Also the purposes are couched in vague language.

  The fundamental purposes of strategic export controls should be incorporated into primary legislation and should include an explicit reference to the respect for international law regarding the possession and use of arms. This should include international humanitarian and human rights law. If more detailed criteria are required, these could be set out in the secondary legislation.


3.1  Weapons of Mass Destruction

  3.1.2  "The Government proposes that it should be made an offence for anyone in the UK or a UK person abroad to aid, abet, counsel or procure a foreigner overseas to develop, produce or use a chemical weapon. It is also for consideration whether it would be appropriate to make it an offence for anyone in the UK or a UK person abroad to aid, abet, counsel or procure a foreigner overseas to engage in military preparations or preparations of a military nature, intending to use chemical weapons."

  BASIC welcomes these broader applications and considers this to be consistent with the UK's obligations as a signatory of the Chemical Weapons Convention.

  3.1.3  "The Government considers that there is a strong case in principle for creating prohibitions in relation to biological and nuclear weapons which are equivalent to the current prohibitions in the CWA and the extension outlined above."

  The Government is correct to suggest broadening the restrictions on biological and nuclear weapons.

  "This is on the basis that biological and nuclear weapons (with the exemption of those in the five official nuclear weapons states) are, like chemical weapons, subject to international agreements outlawing them."

  BASIC is opposed to this proposal since the effectiveness of any law or treaty will be undercut by the exemption of the P5 countries. The relevant International Court of Justice ruling on this matter includes a legal obligation to pursue disarmament in good faith and, therefore, this proposed exemption cannot be regarded as permanent. Allowing the exemption of NATO members to procure nuclear technology is perceived as a constant threat to Russia and other countries.

  "In the case of nuclear weapons, we propose that the legislation should exempt involvement in the official nuclear weapons programmes of countries that are members of NATO."

  BASIC wishes to point out that this proposal to exempt NATO is a breach of Articles I and II of the NPT and should not be accepted by the UK Government.

  3.1.4  "The government is also concerned that a UK person or company, might, without being directly involved in an attempt to produce a weapon of mass destruction, nevertheless, provide a service or information which could assist such a program."

  BASIC welcomes this proposal provided there are safeguards that would not lead to innocent scientists being prosecuted who were not deliberately involved. In addition to making it an offence to develop WMD when adequately warned by the Government or another source, UK universities should be forbidden to train nuclear scientists in applications that could, in any way, be used in nuclear weapons programmes. Furthermore, UK universities should be banned from allowing any students on any nuclear physics course from countries that are not signatories to the NPT.

  "Provision would be made in the legislation for the Secretary of State to grant a license to undertake such activity [namely the manufacture of ballistic and cruise missiles capable of ranges of at least 300km, which would otherwise be outlawed] to allow participation in official nuclear programmes in NATO countries and in certain missile and rocket programmes."

  BASIC is concerned that this proposal to allow the Secretary of State to grant a license to participate in otherwise illegal activities in solely NATO countries would be open to abuse. The proposal should support legislation that would force companies to publicise their trading in components that are likely to be used in the production of weapons of mass destruction. It should also provide for parliamentary scrutiny and accountability of those companies and persons engaged in such activities.

  The White Paper makes no mention of what steps will be taken to enforce and verify these new measures. In BASIC's view, there would have to be inspections held in other countries in order to enable the Government and international verification agencies to ensure that UK traders and manufacturers are not collaborating, consciously or unconsciously, with any clandestine weapons production or procurement programme. The UK Government should work with foreign governments to increase transparency measures in this regard. This would mean reciprocal exchange of information.

  The White Paper should have stated that the Government would be prepared to allow international verification teams to inspect UK manufacturing plants. In order for the verification teams to have any credibility and ensure enforcement of non-proliferation measures, such on-the-spot physical checks on manufacturing plants would have to be both scheduled and by surprise. Verification organizations would require ultimate discretion over what is searched. The ease of manufacturing weapons of mass destruction in secrecy would mean that searches would also have to be conducted at undeclared sites.

3.2  Transfer of technology by intangible means

  The Government proposes to introduce a new power to control transfer of technology by intangible means, for example via fax or email.

  3.2.1  "...While this power would enable the Government, if need arose, to introduce the same controls on other types of technology, we propose for the time being, to limit this wider offence to technology related to weapons of mass destruction and long-range missiles. The Government considers that it is right that controls on the transfer of information orally or through personal demonstration should be limited to the areas of greatest concern, in view of the difficulties of licensing such transfers, both for applicants and for the licensing authority, and given also that there are sensitivities in relation to free speech and academic freedom."

  BASIC accepts this proposal provided there are safeguards against the prosecution of persons who have no deliberate involvement. However, we would strongly recommend that the UK Government extend the prohibition on technology transfers by intangible means which is specifically designed, or lends itself, to use in the production of weapons with indiscriminate effects such as anti-personnel landmines, blinding laser weapons, and expanding ammunition as well as for instruments of torture or cruel, inhuman and degrading treatment.

3.3.   Trafficking and brokering

  3.3.1  "The 1939 Act gives the Government power only to control physical exports from and imports to the UK. As such, it does not allow the Government to impose controls on the involvement of persons in the UK or UK persons abroad in trafficking in goods between overseas countries or in brokering such deals . . . However, the Government does have the powers to control trafficking and brokering under the United Nations Act 1946 where this is necessary to implement a binding United Nations decision."

  3.3.2  "The Government believes that it would be right in principle to control the involvement of persons in the UK or UK persons abroad in trafficking and brokering in controlled goods to countries that are the subject of other types of embargo, whether as a result of non-binding decisions of the UN or decisions of the EU, OSCE or the UK Government; the Government proposes to impose controls on trafficking and brokering of deals involving certain types of equipment, the export from the UK of which has been banned because of evidence that the goods of the same type have been used in torture. The Government is also committed to banning the transfer of anti-personnel landmines. Finally, the Government also proposes to impose trafficking and brokering controls on missiles capable of a range of at least 300 km."

  3.3.3  "The Government does not propose to use this power to introduce controls on trafficking and brokering of all goods that are subject to export controls. It is right in principle that controls on trafficking and brokering should be more limited than on actual exports from the UK as those involved in such activities will also be required to comply with the export control laws of the exporting country. Secondly, enforcement of controls on trafficking and brokering is less straightforward than the enforcement of controls on exports from the UK."

  3.4.1  "To assist in the enforcement of the expanded offences relating to weapons of mass destruction as well as on intangible transfers and trafficking and brokering, the Government proposes that new legislation should given HM Customs and Excise (HMC&E) the powers to require the production of records in respect of such transfers. The Government also considers there would be a case for giving HMC&E the power to require provision of information about supplies on the lines of the powers contained within the Sanctions Orders made under the United Nations Act 1946."

  BASIC welcomes the Government's intention to increase its powers to control trafficking and brokering to prevent any person in the UK or UK citizen overseas from providing arms to embargoed destinations. However, we are particularly concerned that the Government's proposals fall well short of the necessary measures needed to address this problem.

  Studies show that significant quantities of small arms and associated military equipment used in current conflict zones with mass human rights violations (referred to hereafter as "crisis zones") are transferred internationally through the activities of arms brokering agents and their international networks. Some of these agents and their networks have been based in, or operating from, the EU and Associated Countries. They also operate from countries significantly dependent on the EU, and sometimes are linked with international criminal trafficking in drugs and other products. The real cost to the EU and its partners of such activities can be measured in terms of lost export markets, lost opportunities for new productive investment abroad by civilian companies, and squandered development and relief assistance. This loss of potential income is massive compared to the income from low value arms, much of it regarded as surplus by EU and partner governments. There is therefore not only an urgent need, but also ample opportunity, to establish international co-operation to prevent such activities.

  The imposition of multilateral arms embargoes is often too late to prevent arms from being delivered to a "crisis zone". Where no international action has been taken to establish an arms embargo or restrictions against recipients who commit serious crimes in crisis zones, arms traders can easily operate. This is especially the case where there are poor domestic legal controls on the transactions of arms brokers because the arms they trade never pass through domestic territory. Even where an arms embargo is in place, brokers can evade the embargo through an array of techniques and international networking.

  The use of "off-shore" banking facilities to launder income from illegal or shady international arms deals is highlighted in the new UK Home Office report by Andrew Edwards. He found that an estimated 100,000 companies were registered in the UK offshore island tax havens, where they are allowed to conduct business in total secrecy without filing public accounts or revealing the names of their directors. The report estimates that these island companies hold between 5 and 10 per cent of the global offshore tax haven funds of$6 trillion, the UK part constituting over half of the UK's gross national product. It was by using such off-shore accounts that UK-based arms brokering agents and their network of subcontractors violated the international arms embargo against Rwanda in 1994. This was carried out by evading inadequate national arms control laws in their home countries, and by easily disguising the routes of their deliveries by choosing to operate where there are poor customs, transport and financial regulations.

  The Sandline affair and the arms to Rwanda scandal also show that where the terms of an arms embargo are not clearly set out in domestic law, an experienced arms broker based in the EU can find ways to complete the deal. This is made so much easier when there is no legal procedure by the home government to require arms brokers to seek and obtain licensed approval for each transaction even where the arms never touch domestic territory.

  The UK Government and its partner countries should consider ths US Government's new regulations to control international arms brokering. Any US citizen, wherever located, and any foreign person located in the USA or subject to US jurisdiction, who engages in such brokering activities involving military goods or services, must first register with the US Department of State. Each transaction must then be given prior written approval by the State Department. There may remain a loophole in respect of some crime control equipment on the Commerce control list as opposed to the Munitions list, but this new regulation would appear to be a significant advance and its operation should be closely studied.

  However, in today's global markets, even where international arms transfers brokered by agents and shipped by intermediaries may start as a transaction by obtaining approval from their home government, they entail a high risk of subsequently being transferred of used unlawfully. The deal could be authorised and licensed by the home government where the arms orginate. Less likely, the cargo could be checked and approved by the authorities in the territory of transhipment or transit. Moreover, the original licenses and end-user certificates, even less the checks in transit, are not usually monitored by the home government of the territory or jurisdiction where the brokering agent is registered of domiciled. The illicit character of the deal may only become manifect after the initial delivery when the authorised recipient in a state with very weak controls can then easily transfer the arms to other users not mentioned on the original end user documentation. Furthermore, the illegal character of the transaction could manifest itself when the arms are used for serious violations of international law. The only way such illegal acts can be avoided is by an international agreement to establish a more thorough system of regulation of those traders who initiate multi-state transactions in the first place.

  The strengthening of import/export regulations on small arms transfers is a major aim of the new Inter-American Convention Against the Illicit Manufacturing and Trafficking in Firearms, Ammunition and Explosives and Other Related Materials, as well as the Model Regulations agreed by the Inter-American Drug Abuse Control Commission in 1997. As part of the EU Programme for Preventing and Combating Illicity Trafficking in Conventional Arms, the UK and its partners should study these American initiatives, and develop specific regulations for the EU to control international arms brokering that help combat illicit transfers. The UK and its partners should also work to include regulations on brokering in the forthcoming UN Firearms Protocol. However, the UK Government and its partners should bear in mind that the American agreements lack any explicit reference to international law, unlike the EU Code of Conduct on Conventional Arms Transfers and the recommendations of the UN Panel of Government Experts on Small Arms. For reasons explained above, the omission of any reference to existing international law is likely to undermine any efforts in arms control.

  Nevertheless, the enactment of improved laws and regulations is worthless without governments helping each other build the capacity for enforcement. We therefore welcome the UK Government's commitment to improve the legal powers of UK customs and excise authorities. However, more attention is required to improve the overall capacity and co-ordination of the UK licensing authorities, customs, police and intelligence agencies. It is essential that there be much greater investment of resources by the Government in building such capacity at home and abroad. The cost of such investment by the UK and its partners is likely to be small by comparison with the loss of resources caused by violent crime and armed conflict fuelled by the unlawful use of small arms and illicit arms trafficking. We welcome efforts by the UK Government to assist poorer countries in this regard. However, experience shows that any such efforts at capacity building will flounder unless existing international standards for the conduct of law enforcement agencies are fully respected. Successful law enforcement requires the co-operation of wider civil society and local communities, no more so than in poor countries with large porous borders, and this is quickly undermined if law enforcers are allowed to commit abuses.

  One area of particular neglect is the inability of customs officials in many countries to monitor cargoes, whether by sea or air. Often this is due to inadequate resources, poor training and insufficient checking of containers against documentation. Better border and customs control could also be enhanced by the marking of weapons at the point of manufacture and also at each point of import.

  BASIC would therefore strongly urge the Government to give consideration to the following recommendations:

    (a)  Legislation should be enacted requiring all arms brokering agents and arms shipping agents domiciled in the UK to be registered. Any agents found to have provided false or seriously misleading information, or to have broken the law of any country regarding arms transfers, should not be registered. The register should be made available to the public so that public scrutiny is possible. All UK registered brokers should be required to submit copies of export licences and end user certificates to the DTI whether or not these licences or certificates are issued in the UK. Regular checks should be made to verify the authenticity of such documentation, and the legitimate receipt of goods.

    (b)  The UK and its partners should closely study the US regulations governing brokering as well as international regimes for curbing the drug trade, including measures to enable the inspection of bank accounts and other company data. They should consider measures to ensure transparency of companies involved in the arms trade and an end to the secrecy of tax haven accounts.

    (c)  The UK Government should ensure that custom officials at transit ports and airports should be provided with sufficient resources and empowered to inspect physical cargoes and check such cargoes match valid documentation, including cargoes in transit. They should be able to question transport crews, and have equipment to x-ray containers. Routine checking of cargo manifests against actual cargo, as well as flight plans against flight directions, times and registration numbers, should be carried out. A more robust regulatory regime and controls at the airports where arms flights originate would further limit the secret supply of weapons via air.

    (d)  All transactions conducted by registered arms brokers and shippers in the UK and partner countries should require prior licence authority from the Government. Any decision to authorise such a licence should be in strict conformity with the EU Code of Conduct, particularly the obligation of governments to prevent arms transfers where there is a clear risk that these would facilitate serious violations of human rights or international humanitarian law. Decisions should also ensure that any arms exported are not sent to countries where they are likely to be diverted or re-exported against the stated purposes of end-use, including the likelihood that the arms may be used for violations of human rights or humanitarian law. The UK should encourage EU Member States and their partners should adopt an agreement to co-operate in the prosecution of arms dealers who contravene such controls.

    (e)  All arms transfers, including those conducted by brokers, should be subject to the provision of a valid end-use certificate. The UK Government should encourage all its partners to adopt a common end user certificate that should stipulate that if the arms supplied are subsequently found to have been misused for serious violations of international human rights and humanitarian law, the contract(s) would be rendered null and void. In such circumstances, no further deliveries of that type of weapon or military equipment should be permitted to the armed forces of the recipient, nor spare parts, maintenance, training associated with supplies, until appropriate action has been taken to bring the perpetrators to justice.

    (f)  Information on illicit arms transfers should be pooled in a central agency with the assistance of Interpol. The UK Government and its partners should also find ways to co-operate in information gathering with UN agencies, NGOs and individual researchers who are able to collect field data and anecdotal accounts from local witnesses who have credible evidence to suspect that cargoes could be illicit arms traffic. In addition, a pooling arrangement on the part of interested NGOs should be supported which might facilitate the establishment of a central database of these transfers to help predict the pattern of new transfers in the future and assist in crisis early warning. Resources and training should be made available to achieve this.

  BASIC also welcomes the Government's proposal to prohibit trafficking and brokering in anti-personnel mines, strategic missiles and goods of a type for which there is evidence of their use in torture. However, we suggest that the list of prohibited items should be extended to include other weapons with indiscriminate effects such as expanding ammunition and bliding laser weapons. This list should be kept under review as new technologies are developed. The process should include, for example, the refusal to register by the UK authorities of patent applications for equipment that might produce indiscriminate effects or facilitate torture. The Comptroller of the Patent Service can deny patents on the following grounds: "565(e) that [it] is socially objectionable, or 566(a) for an invention. . . which would generally be expected to encourage offensive, immoral or anti-social behaviour"

  The Government should also include in the definition of brokering and trafficking the activities of "promotion" and "advertising", as well as "design" and "installation". UK companies and nationals have been found to advertise internationally the availability of equipment prohibited in the UK, while at the same time denying they will sell it.


4.4  Time limits for processing licence applications

  4.4.1  "The Government has concluded that licensing by default should not be adopted as it would introduce a risk of licences being granted that were contrary to the UK's international obligations or the Government's own policy."

  BASIC supports the Government's decision. If a default system of licence approval was introduced, export licences could be granted for defence or law enforcement equipment which could result in serious abuses or international aggression in the recipient country.

  4.6.3  "The Government does not propose to grant third parties the right to appeal against a licence being granted."

  BASIC urges the Government to reconsider this proposal. It is vital that MPs, NGOs, and other concerned citizens have the right to appeal against licences if a system of adequate prior parliamentary or public scrutiny of licences is established (see above).


5.1  Coverage of controls

  5.1.1  "The 1996 consultation exercise sought views on the technical detail of the goods subject to export control as listed in the Export of Goods (Control) Order 1994 and the Annex to Council Decision 94/942/CFSP on the control of exports of dual-use goods. Attention was drawn in particular to the difficulties associated with interpretation of the phrase "specially designed". In the light of the results of the consultation and Sir Richard Scott's comments, the Government is developing proposals for defining the terms "specially designed" and "specially designed for military use" as used in the EGCO and the Dual-Use and Related Goods (Export Control) Regulations. It is hoped that consulting in Europe and more widely will lead to their adoption internationally.

  5.1.2  "The Government is also looking at the possibility of introducing some form of military end-use or `catch all' control. In parallel, the European Commission has also made proposals for a military end-use control on exports of dual-use goods to UN-embargoed destinations."

  BASIC urges the Government to introduce a military end-use control, and to make this consistent with the lists of controlled goods, this should be defined as "military and law enforcement" end-use control. This would recognise the reality of the spread of modern policing technologies and their wider security applications, and the use of military equipment and personnel in law enforcement in many countries. The Scott Report recognised this problem when it pointed out that: "It should be borne in mind that `defence equipment and defence related' equipment may include items licensable under the Industrial List, as well as items licensable under the Military List. `Dual use' items are capable of being put to a military or a civilian use . . ."

  BASIC is also extremely concerned by the weakness in UK licencing of overseas sales of rights to production where a UK producers sells the rights to manufacture its products under licence in another country. Such agreements are increasingly supplementing, or even taking the place of, physical exports. Only where components, machine tools or other technology is solely for the production of controlled goods is a licence required. This omits from the UK controls a wide range of equipment used in security operations. For example, UK exporters of armoured vehicle components have had them classified as purely "civilian". Under the present export control system, once a UK company has agreed a licenced production deal, the UK Government relinquishes all control of where the products end up.

  All such overseas licence production deals should fall within the arms control licencing system if the final end products are clearly for use in defence or law enforcement. The UK should not allow the licensed production of such equipment where there is a risk that it will be transferred to recipients who are likely to commit serious abuses or acts of armed aggression.

  UK companies that export military and security services in the form of training and logistical equipment should also be subject to export criteria and licence regulation. This is a sphere of export activity that has given rise to a number of recent controversies.

5.2  End-use monitoring

  5.2.1  "In February 1997, Labour committed itself, if elected, to strengthen monitoring of the end-use of defence exports to prevent diversion to third countries and to ensure that exported equipment is used only on the conditions under which the export licence has been granted. The statement also said that we would seek co-operation to build a common approach on effective monitoring of end-use within the European Union and under the Wassenaar Arrangement. The Goverenment is currently reviewing the options."

  BASIC is extremely concerned at the lack of progress in this area and urges the Government to initiate proposals that can be tabled with EU and Wassenaar Arrangement members. Proposals regarding licences and end use certificates should follow the measures outlined above under controls on trafficking and brokering. The Government and its partners should also develop effective ways to ensure access to areas of armed conflict to check the use of equipment.

5.3  Location of the export licencing authority

  5.3.1  "A majority of those responding to the consultation favoured Government responsibility for licencing remaining with DTI. This is the Government's view."

  BASIC is not convinced that the DTI should retain responsibility for issuing licences because it also holds responsibility for promoting UK exports, a role which presents a conflict of interests without a clear mechanism to manage such conflict. This was clearly identified by the Scott report as a problem. The FCO and the MOD also have manifest conflicts of interest without means to resolve them. The MOD massively promotes arms sales through the Defense Export Services Organisation (DESO) which has a worldwide network of offices.

  The Government should consider the establishment of a single, independent authority with responsibility for both export licence applications and enforcement of export controls. The MOD, FCO, DfiD, DTI, and intelligence agencies would be consulted, circulated information and given opportunities to input, but primary responsibility for overall control and enforcement would be located in one independent authority which would not have a contradictory promotional or marketing role. One possibility would be to locate the new single, independent export control authority within HM Customs and Excise.

5.4  Charging for export licences

  5.4.1  "The Government accepts in particular the argument that changing would put UK exporters at a competitive disadvantage compared with their counterparts abroad who do not have to pay for export licences."

  BASIC suggests that the Government consider the introduction of the Swedish system of charging exporters of military and security equipment for the overall administrative cost of regulation.

September 1998

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