Saferworld welcomes the Government's White Paper on Strategic Export Controls and the decision of the Trade and Industry Select Committee to undertake an inquiry into the whole area of ethical training. The willingness to finally confront these issues represents a crucial opportunity to establish a comprehensive export control system which ensures that concerns for human rights, regional security and sustainable development are placed above short term commercial gain.

  Whilst Saferworld welcomes these developments and many of the proposals for the White Paper, we feel that in key areas the recommendations must be strengthened. Failure to address these weaknesses will leave loopholes in the legislation that are vulnerable to exploitation by British arms exporters. The British contribution to dangerous arms proliferation which Sir Richard Scott highlighted, could therefore continue. This submission focuses on closing these loopholes.

SECTION 1. INTRODUCTION

"There are a number of controls other than on strategic exports operated under the 1939 Act...These controls are not included in the scope of [the] White Paper. If the 1939 Act were simply amended to implement the proposals contained in this White Paper, then these other controls would continue as at present. However, if the 1939 Act were to be repealed in full, then new legislation would need to make provision for these other controls. This is one of a number of considerations which the Government will be taking into account when deciding whether to amend or replace the 1939 Act." [1.4.1]

—  Saferworld believes that the case for new primary legislation is convincing. According to the previous government's Green Paper on Strategic Export Controls, the only operational parts of the 1939 Act are Sections 1, 8 and 9 relating to empowerment, interpretation and citation. Other sections (2, 3 and 7) are not used or relied upon, while sections 4 to 6 have been repealed. With so few provisions of the 1939 Act now utilised, it would appear to be in large part redundant. The fact that replacing the 1939 Act would mean drafting new legislation in areas other than strategic exports is not a convincing case for inaction.

 SECTION 2. ACCOUNTABILITY IN STRATEGIC EXPORT CONTROLS

Parliamentary Scrutiny:

  Of provision for parliamentary scrutiny of individual export licence applications. . .

"The Government does not consider that there should be parliamentary scrutiny of individual applications either before or after the decision 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 a danger that they would seek in future to buy equipment from countries which would not disclose details of individual contracts." [2.1.7]

"However, 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|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." [2.1.8]

  2.1  The Government White Paper thus puts forward a number of arguments against parliamentary scrutiny of individual licence applications, none of which appear convincing to Saferworld. In the first instance, the argument that prior parliamentary scrutiny of individual licence applications would slow down the decision-making process belies the fact that the primary purpose of strategic export licensing is not to be quick, but to be effective in ensuring that the full range of concerns are taken into consideration during the licensing process.

  2.2  Furthermore, the argument that the publication of individual applications would mean identifying companies and the nature of their planned or actual business does not, in Saferworld's view, stand up. Prior publication of export licences under consideration would not necessitate the revealing of commercially sensitive information. A basic description of the goods could be given in sufficient detail so as to allow parliamentarians and the public to conduct a proper assessment, but which would not, at the same time, affect commercial relations in any significant way. In addition, the UK Government's strong support for international transparency in the arms trade—and in particular its adherence to the UN Register—means that it should not be concerned with overseas governments' potential sensitivity regarding the release of information on defence equipment purchases, rather the Government should be encouraging all recipients of UK arms to provide comprehensive information to the UN Register. Furthermore, many arms deals are known and publicly reported in the press before they are concluded, while the forthcoming UK Government Annual Report on Strategic Exports means that information on UK arms exports will emerge eventually. Thus Saferworld believes that most efforts to increase parliamentary scrutiny of arms export licences in the UK are unlikely to have an appreciable impact on the level of commercial confidentiality which currently exists.

  2.3  Saferworld believes that a lack of parliamentary and public accountability in arms export decision-making leads to human rights, security and development concerns being disregarded in favour of short term commercial profit. While Saferworld wholeheartedly welcomes the decision taken by the Government to publish an Annual Report on Strategic Exports, it is still the case that such an Annual Report will only provide for scrutiny after the fact. Saferworld believes that proper parliamentary oversight of export licensing policy will only be achieved through prior parliamentary scrutiny of sensitive licences.

—  In order to ensure that arms export policy is truly accountable, Saferworld recommends that the Government publish a rolling register of arms export licence applications, which would allow for parliamentary and public scrutiny of proposed arms exports before any licences are granted.

  If prior publication of arms export licence applications is not accepted, however, Saferworld would urge the Government to undertake, in parallel, the following two measures:

—  Firstly, the Government should allow for confidential scrutiny of full details of licence applications for exports to sensitive destinations (for example non-NATO countries plus Turkey) by a Parliamentary committee as occurs in Sweden. [It is interesting to note that a UK Parliamentary committee to scrutinise the work of the intelligence services already exists without any apparent danger to national security.]

—  Secondly, the Government should publish, electronically, on the world-wide web, information on all export licences as soon as they are granted. The new DTI system which allows for the submitting of export licence applications electronically, should mean that the Government is able to publish information in this format.

Purposes of Strategic Export Controls:

  "We propose that secondary legislation should provide that the purposes of strategic export controls are:

—  to adhere to the United Kingdom'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 United Kingdom's security interests and those of 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;

—  to avoid contributing to terrorism and crime." [2.2.3]

  2.4  The Government asserts that these purposes are consistent with the criteria announced by the Foreign Secretary and those of the EU Code. However, they lack the precision and level of detail contained within the guidelines of the Code of Conduct to which the Government is bound. They also do not convey accurately the concerns which motivate the purposes. For example, "to avoid contributing to internal repression" does not convey the full extent of the Government's commitment to upholding human rights within the context of its arms export policy.

  2.5  It should also be noted that by simply incorporating the broad purposes of export controls into legislation, the Government will miss the opportunity of addressing one of the root causes of the arms-to-Iraq affair ie a lack of transparency as to the precise purposes of strategic export control. The Scott Report highlighted the fact that the previous Government was able to change the guidelines governing exports from "should not approve orders for any defence equipment which could significantly enhance the capability of either side to prolong or exacerbate the conflict" to not supply equipment which could be "of direct and significant assistance in the conduct of offensive operations" without having to inform parliament. If only the broad purposes rather than the details of the export control guidelines are included within legislation, other subtle—yet significant changes—could still occur with potentially damaging consequences.

—  Saferworld believes that the guidelines of the Code of Conduct should be adopted into the secondary legislation as the purposes for which export controls are applied in the UK. This will necessitate an unequivocal statement from the UK Government that the EU Code of Conduct has superseded the less stringent "Cook" guidelines issued in July 1997. [19]

SECTION 3. POSSIBLE EXTENSIONS OF SCOPE OF EXPORT LICENSING POWERS

Trafficking and Brokering:

"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 of 1946 where this is necessary to implement a binding United Nations (UN) decision." [3.3.1]

"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 | The Government also believes that it would be right for it to have the power to impose controls on the involvement of persons in the UK or UK persons abroad in the trafficking and brokering of certain strategic goods, trading in which is the subject of widespread national and international condemnation. In particular, the Government proposes to impose controls on the trafficking of and brokering of deals involving certain types of equipment, the export from the UK of which has been banned because of evidence that goods of the same type have been used in torture. The Government is also committed to banning the transfer of anti-personnel landmines . . . the Government also proposes to impose trafficking and brokering controls on missiles capable of a range of at least 300km." [3.3.2]

"The Government considers that it would be sensible to take the power to control trafficking and brokering in goods for any of the purposes of strategic control as set out in legislation . . . The goods and/or destinations subject to controls on trafficking and brokering would be laid down in secondary legislation that would be subject to negative resolution procedure . . . However, 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 UK 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 and it is therefore right that resources for enforcement of such measures should be targeted on the most critical areas." [3.3.3]

  3.1  The argument that UK controls on brokering and trafficking should be more limited because they are also required to comply with the export control laws of the exporting country is not entirely convincing. Often brokering and trafficking agents target their efforts in countries with poor export and import controls, or in countries where a level of corruption exists which allows such controls to be easily circumvented. Stringent UK controls are therefore essential. Furthermore, the Government should consider the allocation of new resources in order to facilitate enforcement of legislation in this important area. Nevertheless, while detection and enforcement will undoubtedly be more problematic than in the case of actual exports from the UK, what is important is that such legal structures are in place so that when cases come to light, action can be taken.

—  Saferworld urges the Government to introduce, into new primary legislation on export controls, the power to control the activities of UK persons and UK persons abroad in the trafficking and brokering of all types of controlled goods and technologies between third countries. The licensing requirements for the activities of arms brokering and trafficking agents should be set out in seccondary legislation. This should state that all international arms brokering and trafficking agents domiciled in the UK should be required to register as such with the Department of Trade and Industry. Further, each individual transaction with these arms brokering and trafficking agents enter into should be subject to prior licenced approval by the UK Government. These licensed checks should be comparable with those required for actual transfers of goods from the UK. All agents who do not comply with the law in this regard should be subject to strict legal sanctions.

—  Finally, in order to ensure that arms brokers and traffickers do not just move out of the UK and establish themselves in another EU country, the UK should press for the introduction of comparable legislation across the EU. A crucial element of EU controls on arms brokering and trafficking agents should be the adoption of an EU-wide register of "government-approved" arms brokering agents. If a brokering and trafficking agent is found to have broken the law in any one EU member state, they should be removed from the approved register and therefore prohibited from engaging in arms brokering and trafficking activities in any EU country.

SECTION 4. OTHER ISSUES NOT REQUIRING PRIMARY LEGISLATION

End-use monitoring

  "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 the Wassenaar Arrangement . . . The Government is currently reviewing the options." [5.2.1]

  4.1  End-use certification and monitoring requirements currently vary significantly across the EU. This presents the danger that unscrupulous companies will seek to establish themselves in countries which are perceived as having the weakest controls. Furthermore, importing Governments may also seek to purchase controlled goods from those EU Member States which are viewed as having weak controls. This could lead to the UK suffering a competitive disadvantage from operating potentially stricter controls.

  4.2  A number of EU countries currently continue to operate the International Import Certificate and Delivery Verification Certificate provisions which were devised within COCOM. It would appear, however, that such systems are now out of date. There is, therefore, a pressing need for the EU and partner governments to agree on, and adopt, best practice in the field of end-use certification and monitoring.

SAFERWORLD WOULD URGE THE UK GOVERNMENT TO:

—  Consult with EU and Wassenaar Arrangement Member States to agree the most effective means of certifying and monitoring end-use.

—  Establish minimum requirements for end-use certification—to include, for example, a commitment from the importing government that they will not re-export the goods in question and the right of the exporting government to conduct follow-up checks on the end-use of the goods.

—  Press for the adoption of a system whereby the end-use assurances given by an importer constitute a legally binding contract which, if broken, would lead to the termination of the contract and a withholding of spare parts, training and associated services in addition to a wider prohibition against the sale of military and other controlled items in the future.

Location of the licensing authority:

"The Government has concluded that the licensing authority should remain within the DTI." [5.3.3]

—  Saferworld thinks that the establishment of an independent agency (as exists in Germany and Sweden) which is free of trade promotion responsibilities is necessary to ensure that full weight is given to concerns of human rights, international security and development over trade promotion. However, if the Government cannot agree to this, at a minimum, a standing interdepartmental committee should be established which has the responsibility for scrutinising all sensitive export licences. These licences should be the same as those which we argue should be scrutinised by the Committee of Parliamentarians. Indeed, if the Government is considering introducing an interdepartmental committee of senior officials to look at appeals, the establishment of similar arrangements for processing sensitive applications would seem sensible. The roles and responsibilities of this committee in export licensing, along with that of the Ministries at large, should be spelled out in legislation.

SECTION 5. ADDITIONAL ISSUES OF CONCERN NOT COVERED BY THE WHITE PAPER

  5.1  One aspect of strategic export control not addressed by the Government White Paper but which is of growing concern to Saferworld relates to the licensed production of arms overseas. Increasingly this type of agreement is supplementing or even replacing the export of arms and related goods. Although the Government will require a licence for the export of controlled component parts and production equipment associated with any particular venture, the licensed production deal, itself, is not subject to Government control.

—  Once a licensed production facility has been established overseas the UK Government can exercise little or no control over the export of the resulting arms. In view of this fact, Saferworld believes that the UK Government shoudl set out in primary legislation the requirement that all licensed production deals involving UK-based defence firms be scrutinised and approved by the UK Government in advance of any contracts being signed. Saferworld also believes that, because licensed production deals involve the setting up of new centres of arms production over which the UK can have little control, scrutiny of and restrictions on the involvement of UK companies in such deals should be even greater than those applied to arms exports from the UK.

13 October 1998.

19   The guidelines of the Code of Conduct are stronger in some areas than the UK Guidelines. For example, the clause in the UK criteria which states that exports of repressive equipment, even to governments with a history of repression, may continue, "if the end-use is judged to be legitimate such as the protection of members of the security forces from violence" is not included in the Code.

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