House of Commons - Defence, Foreign Affairs, International Development and Trade And Industry

Select Committee on Defence, Foreign Affairs, International Development and Trade And Industry Third, Second, Third, Fourth Report

II SCRUTINY OF REPORTS

Sampling

Licences granted: 1997

9. We selected 12 licences granted in 1997 and sought information on the exact nature of the goods licensed, their number, value and intended end-user. We sought further written explanation of 5 of these licences: 2 for Eritrea, 2 for Syria and 1 for Bangladesh. The written information in several cases placed the grant of a licence in a more favourable light than could be conveyed in the terse shorthand used in the Reports. For example, equipment licensed to Angola described as "military trucks" included a wealth of mine location, marking and destruction equipment. The "armoured 4-wheel drive vehicles" licensed to Burundi and Rwanda turned out to be vehicles for UNHCR being returned following repair. Several licences did however give rise to concern which the further details provided could not on their own allay, such as licences granted for the export of naval equipment to Syria.

Licences granted: 1998

10. We selected 51 licences granted in 1998 for further scrutiny along the same lines,[20] and also a note on equipment described as "military image intensifier equipment" and "military imaging equipment", with particular reference to specific licences. We received preliminary details on those licences on 31 January 2000 and will be seeking further information on a number of them. Again, the preliminary details in some cases clarified the grant of a licence: for example, some, but not all, of the weapons licensed for Bahrain, Jordan and Morocco are for the personal sporting use of members of the ruling families. An astonishing variety of antique weapons was licensed for export to Morocco, for use by a film company. The clarification we sought of certain military image intensifier and imaging equipment licences revealed that two licences had been misdescribed,[21] and that in two further cases the equipment was intended for use on high speed passenger ferries to improve safety at night. A number of licences however continue to raise concerns, including some of those granted for Hong Kong and China, and for Morocco, on which we will report in due course.

Refusals and Revocations: general

11. The number or proportion of licence applications refused over a given period is of limited significance; where there has been a public change of policy, as was the case in 1997, applicants are unlikely to pursue licences where a refusal is a foregone conclusion, or where they have been advised in the pre-application period that it would be fruitless to pursue some export opportunities. The nature of licences refused, and the reasons given, do however provide one insight into the implementation of policy. We therefore sought details of the 45 Standard Individual Export Licences (SIELs) and 6 Open Individual Export Licences (OIELs) refused as referred to in the 1997 Annual Report and the 122 SIELs and 2 OIELs refused as referred to in the 1998 Report. Regrettably, a further 11 SIELs were refused during 1997 and, as a result of clerical error, neither listed in the Annual Report nor included in the original total. All were in respect of goods which required licences on the basis of their end-use rather than the nature of the goods: 8 of the 11 were to India or Pakistan. It has now emerged that 5 of the 122 SIELs referred to as having been refused in 1998 had in fact been refused in 1997 and had been included in the revised total for 1997 of 56 refusals. SIEL refusals for 1998 therefore totalled 117. To add to the confusion, a further licence application refused in 1997 has now been identified, for goods destined for India. That brings the 1997 total of SIEL refusals to 57.[22]

Refusals: 1997

12. Of the 56 SIELs refused in 1997 —

20 were on grounds of an unacceptable risk of diversion to a Weapons of Mass Destruction or ballistic missile programme

12 were on grounds of a clearly identifiable risk that the proposed export might be used for internal repression, either explicitly or by reference to doubts about the use to which the equipment might be put

13 were on grounds of an existing embargo or restrictive guidelines which required interpretation in individual cases

5 were refused on the grounds of an unacceptable risk of diversion to other undesirable user or users

3 were refused because of the prohibition in the Chemical Weapons Convention of the re-transfer of certain toxins to third parties

1 was refused in view of "an adverse effect on regional security tension"

1 was refused on domestic legal grounds, under the Firearms Act.

The remaining refusal was successfully appealed against. 5 of the 6 OIEL applications refused were on grounds of the desire "to monitor closely the export" of the items in question, and to know exactly the end-user and the end-use.

Revocations etc: 1997

13. 8 SIELs were revoked during the period, 5 as a result of the imposition of a UN embargo on Sierra Leone, 2 because the licence was reported lost and 1 because of advice from a UK police force on the list of authorised firearms dealers. 1 OIEL was revoked because of the failure of the firm in question to apply adequate compliance procedures, despite several visits and previous warnings. 18 OIELs had their coverage reduced.[23] Among the principal changes were the exclusion in August 1997 of Afghanistan from a number of OIELs covering electronic telecommunications equipment and cryptographic software and the exclusion of a number of countries from an OIEL covering ML5, in respect of military night sights, and ML13, in respect of body armour. We sought further written information on the refusals in 1997 of a SIEL for Taiwan, of an OIEL for Italy, and the exclusion of South Africa as a destination from 2 OIELs.

Refusals: 1998

14. Of the 117 SIELs refused in 1998

47 were on grounds of an unacceptable risk of diversion to a Weapons of Mass Destruction or chemical weapons programme

23 were on grounds of an existing embargo or restrictive guidelines which required interpretation in individual cases

2 were refused on the grounds of an unacceptable risk of diversion to other undesirable user or users or concerns about the end-user

21 were on grounds of a clearly identifiable risk that the proposed export might be used for internal repression

4 were on the grounds of a clearly identifiable risk of international aggression

1 was on the grounds of a threat to the UK's defence and security interests and those of our allies and EU partners.

The remaining refusal was successfully appealed against. 2 OIELs were refused: one covering electronic equipment to India, Israel and South Africa, and the other covering small arms to Switzerland.

Revocations etc: 1998

15. 6 OIELs had their destination coverage reduced, including the removal of Hong Kong from an OIEL for protective equipment, and of Afghanistan and Burma from an OIEL for software, a change omitted in error from the Annual Report.[24] The 1998 Annual Report stated that 6 standard licences, and one transshipment licence for the USA, had been revoked. 5 licences were in fact revoked; 2 were returned unused. 4 licences for Eritrea were revoked following the outbreak of fighting in May 1998 between Ethiopia and Eritrea, under the powers in Article 7(1) of the Export of Goods (Control) Order 1994 to vary or revoke export licences at any time; 2 other 1998 licences for Eritrea had already been used in full. One licence for India was revoked , having been issued in error.[25] We will be seeking further details on some of these decisions.

Refusals and revocations: conclusion

16. The details on refusals and revocations in 1997 and 1998 seem to reflect the entry into force of tighter criteria on the export of equipment which might be used for internal repression. They also demonstrate that the criteria on protection of the UK's national interests and regional security are capable of being implemented, in the latter case in relation to a relatively small amount of light weaponry. We recommend that future Reports should return to the practice of the annual ECO Reports and record by category the reasons for refusals and revocations of standard and open licences, and reductions in the coverage of OIELs, as we have above, since this provides an instructive analysis of the nature of decisions taken.

Appeals: general

17. Where applications for SIELs are refused, applicants are informed of their right to appeal. The appellant is asked to state the basis of the appeal and to identify any new circumstances to be taken into account. The appeal is considered at a more senior level than that at which the original application was handled.[26] There are plans to formalise appeals procedures, including the introduction of a statutory right of appeal, and, following the recommendation of the Trade and Industry Committee, a 30 working day target for decisions.[27]

Appeals: 1997

18. In 1997, there were 7 appeals against a refusal.[28] Three were from the same company, in relation to the proposed export of ammunition to private companies in the Philippines: one was for a fire control system to be exported to Cyprus: one was for dual-use goods under heading 1C010, for resin impregnated fibres, to be exported to Israel: one was for electronic equipment to be exported to India, subject to licensing because of its potential end-use. These appeals were all unsuccessful. The time taken between refusal of licence and settlement of appeal was not excessive. One appeal, in relation to specialised bomb disposal equipment to be exported to Macao, succeeded, almost 7 months after the original refusal.[29] We wrote to the companies concerned to offer them the opportunity to comment. One company replied, which had experienced the three refusals for licences to export ammunition to the Phillippines for resale onto the civilian market. They continued to contest the view of DTI that there was an unacceptable risk of diversion into criminal hands.[30] We also sought further information on the successful appeal.

Appeals: 1998

19. There were 15 appeals against a refusal of an SIEL in 1998, one of which was successful. Several cases took 8 or 9 months to determine, from the date of the original refusal. The longest wait was for over 10 months, for the proposed export of military vehicles to Indonesia. 8 of the refusals appealed against were for goods where there was considered to be a risk of diversion to programmes of weapons of mass destruction; 4 on grounds of the risk of use in internal repression, including weapons for a police force and police protective equipment; 1 based on the interpretation of Government guidelines; and 1 where it was judged that the state concerned could use the goods concerned to develop a technology which could pose a threat to the UK's security interests and those of her allies and partners. The only successful appeal was in relation to the export to India of goods requiring licensing as a result of their possible end-use.[31] We are pursuing some of the matters arising, as well as offering the companies concerned the chance to comment.

Appeals: conclusion

20. Intending exporters only rarely appeal against refusal of a licence, suggesting either that they are satisfied with, or at least resigned to, the decision made, or that they have little faith in an appeal system which the Government accepts is in need of reform. We recommend that summary details of appeals against refusals of a licence be published in the Annual Reports, showing in each case the outcome and the time elapsed between receipt of information from the appellant and determination of the appeal, as well as a brief description of the goods and end-user.

Conclusion

21. The publication of Annual Reports such as these cannot demonstrate the absence of errors of judgement; indeed it would be a bold Minister who would want to defend with the benefit of hindsight every licence given, amended or refused. We can report that from our sampling we have found grey areas which would benefit from more stringent and consistent parliamentary scrutiny, as our more detailed examination of licences for Indonesia has revealed. In the absence of the detailed papers and records of inter-departmental consultations on these licences, we cannot judge whether or not the decisions taken by Ministers were reasonable. Only a Committee with a specific remit to pursue individual licences could do that.

Indonesia

Revocation

22. When the new Government took office in May 1997 it was confronted with an "overhang" of around 20,000 valid licences granted under the previous administration. Although no commitment had been given that any licences would be revoked,[32] there was political pressure for the revocation of licences granted in November 1996 for the export of a second tranche of Hawk aircraft to Indonesia. The aircraft had not at that point been delivered. In July 1997 the Foreign Secretary's statement on the new criteria to be applied to arms exports included the announcement that it was "neither realistic nor practical" to repeal or revoke licences already granted. The Foreign Secretary told us that the problem of practicality arose from the length of time required to review all outstanding licences — "It could have taken us anything up to year during which time there would be virtually no new licences granted ... that was not a practical or feasible task".[33] Such a review would evidently have been time-consuming and largely fruitless. What might have been expected however was a review of licences for exports to those relatively few countries where it might be thought the incoming Government had a different policy as regards arms sales, or in respect of particular categories of goods, such as those likely to be used for purposes of internal repression. We obtained from the Government a list of all the licences valid as of May 1997 for export to Indonesia, numbering around 125. It does not take long to review this list. Other things being equal, it would have been entirely practical to have reviewed the 125 outstanding valid licences for Indonesia.

23. The suggestion that review of licences with a view to possible revocation was not realistic seems to owe much to the legal advice received by Government as to the potential for legal action by exporters if one or two individual licences — such as the Hawk aircraft or armoured vehicles supplied to Indonesia — had been revoked. The Foreign Secretary told us —

This suggests that the legal advice was that a review of all licences valid at the time would have been necessary to satisfy a court in the event of a judicial review that particular revocations had not been unreasonable or arbitrary. Legal advice obtained by outside bodies however apparently suggests that revocation by a Government of licences as a result of a change of foreign policy would be likely to survive legal challenge. It is after all not unusual for the imposition of an embargo, whether multilateral or unilateral, to involve revocation of licences. It may of course be that a Government revoking a licence in the absence of a multilateral embargo or an announced and evidently equitably applied national embargo would be obliged to demonstrate that its policy towards that country had indeed changed in such a way as to require the revocation. Although the Foreign Secretary candidly told us that if a licence for the Hawk exports to Indonesia under the Suharto regime had been presented under the present administration he would have sought to resist it, he was not able to answer the admittedly hypothetical question in subsequent written evidence as to under which of the criteria he would judge that it deserved to be rejected.[35] He did not suggest that there had been a self-evident and radical shift in Government policy. It is by no means clear that there was in 1997 a sufficiently radical shift in policy towards the supply of arms to Indonesia, beyond a heightened distaste for such exports in Government, to have survived legal challenge to the revocation of an individual licence.

24. The potential financial consequences of any revocation as a result of the ECGD guarantee,[36] and the effect of a revocation of a major export licence on the standing of the UK as a major supplier of defence equipment, must also have weighed in the balance. Neither have been referred to in evidence to us. The impression given is that the legal advice was the dominant influence. We regret that, despite several requests, the Government has not made available to us the legal advice provided to it on this point, either before the 3 November hearing as we asked or thereafter. On 26 November 1999 the Government told us that the Foreign Secretary's statement referred to above was in effect "a summary of the legal considerations which fed into the Government's decision, along with other policy and practical considerations"; it noted that legal advice was exempt from disclosure requirements.[37] That does of course not prevent Governments releasing such advice if in the public interest. On 25 January 2000 the Government, "in accordance with long-standing convention", refused our request to identify even the source of the legal advice given to Ministers.[38] We can only speculate how far Ministers would have pursued the option of revocation with any vigour given different legal advice. We conclude that it would have been practicable to have reviewed all valid licences for the export of arms to Indonesia; but that, in the absence of any radical and demonstrable change in the Government's policy towards supply of arms to Indonesia which would have stood up to judicial scrutiny, and possibly in the light of other commercial factors, Ministers were persuaded that revocation would be imprudent.

Licences granted 1997-99

25. In the course of questioning the Foreign Secretary and in subsequent written questions and answers, we have sought to gain a clearer idea of the Government's policy over the past two years on arms exports to Indonesia. In 1999 the Government told us in writing that applications had been considered against the background of its poor human rights record under then President Suharto and the illegal occupation of East Timor, but also the judgement that it had legitimate defence and domestic security interests. These considerations had led to the refusal of applications for items where there was judged to be a clearly identifiable risk that they might be used for internal repression. Conversely, goods such as naval equipment, body armour and machine gun spares had been allowed to be exported, in the absence of such a risk.[39] In November 1999, in response to our written queries, the Government repeated that all applications had been judged on a case by case basis against the criteria, and noted that many of the licences approved had been spares for equipment previously exported. It described military goods licensed as primarily "naval and air defence spares".[40]

26. We obtained from the Government a detailed list of all licences granted for Indonesia since May 1997, up to the embargo imposed in September 1999. We also have detailed information on the refusals of licences as recorded in the two Annual Reports. As the Foreign Secretary noted, licences were refused for goods such as armoured vehicles and sniper rifles which had been licensed under the previous administration.[41] Our analysis of the licences granted confirms that the majority were indeed in connection with equipment already supplied. The Foreign Secretary's emphasis on Indonesia's legitimate right to self -defence may explain the licensing of some arms which might otherwise have fallen foul of the criterion relating to regional conflict. There were also one or two individual licences for relatively expensive goods which must have been examined under the criterion on economic development, given the increasingly parlous nature of Indonesia's economy at the time. One licence for an aircraft simulator in particular accounted for a substantial whack of the total licensed for the year; it does not however figure on the list provided by the Secretary of State for International Development of licences to which her department raised objections.[42]

27. TAPOL was "extremely concerned that Britain continues to upgrade the military capability of the Indonesian armed forces when they are being universally condemned for their brutality in East Timor..." and claimed that it was clear from the lists that the "Government is engaged in a policy of upgrading Indonesia's military capability".[43] In at least one case our inquiries suggest that the item licensed may indeed have constituted an upgrading of existing equipment. In another case however a licence was given on the explicit condition that the goods would not enhance the equipment beyond that originally supplied. The Foreign Secretary's responses to our questions suggest that there was no explicit policy either favouring or rejecting upgrading or enhancement of existing equipment.[44] The Government's July 1997 criteria on arms sales are silent on this point, as they are on the whole vexed question of follow-on equipment. Subsequent to our consideration of this issue in the context of Indonesia, there has been controversy over the question of the supply of spare parts for Hawk aircraft in Zimbabwe, as we set out below (para 39). In the course of our visit to Sweden we heard of a similar controversy there, which had been to some extent resolved by the establishment of guidelines on what constituted follow-on equipment. The Government should now draw up and publish guidelines governing the extent to which the UK feels bound to license spares for existing UK-supplied equipment.

28. It would appear that the UK criteria did not and do not rule out the licensing of arms sales to a regime which may be objectionable on the grounds of its human rights record, so long as there is no clearly identifiable risk that they will be used for internal repression. Paragraph 4 (a) of the UK criteria states that the government will "take into account respect for human rights and fundamental freedoms in the recipient country" and Criterion 2 of the EU code states that Member States will "exercise special caution and vigilance in issuing licences...to countries where serious violations of human rights have been established...". These provisions seem to fall some way short of a system whereby a licence can be refused simply because of pervasive abuse of human rights in the country to which arms are to be exported. Short of a multilateral or unilateral embargo, a refusal of a licence on pure "foreign policy" grounds would have to depend on the very broad provisions of Criterion 3 which demands that full weight be given to the UK's national interests. We note the assurance from the Foreign Secretary in evidence to us that he would look at any practical and realistic suggestions for revision of the criteria with an open mind.[45] We would welcome reassurance that Ministers are confident that the new national criteria on arms sales and the EU Code of Conduct do not prevent the exercise of their discretion, without fear of judicial review, to refuse licences on broad grounds of public policy, not explicitly covered by the criteria.

Embargo

29. On 11 September1999 the Foreign Secretary announced that the UK was suspending arms exports to Indonesia, and that it would be supporting a proposal for an EU embargo. On 13 September 1999 the EU General Affairs Council came to a political agreement on an embargo: on 16 September 1999 the EU Council came to a formal Common Position : on 11 October 1999 an EC Regulation was agreed. The embargo ran for four months and expired on 17 January 2000; it would have required unanimity among Member States to have renewed it.[46] The standard embargo is for six months although there are precedents for other periods.[47] Six of the current EU embargoes are without any expiry date — on Afghanistan, China, Libya, Sudan, the former Yugoslavia and Zaire. The embargoes on Burma, Ethiopia and Eritrea are renewable every six months.[48] The Foreign Secretary explained that the period chosen for Indonesia reflected the need to compromise between those who sought a longer and those who sought a shorter period.[49] Two statutory instruments were made on 16 September 1999, one varying all existing licences for Indonesia by prohibiting their use for 4 months and extending their validity thereafter by the same period, and the other blocking the transhipment without licence of goods otherwise requiring a licence. This second Order was amended by a third Order on 17 September 1999 to correct a minor error, the omission of a citation provision. The decision to extend the licences by the period "lost" as a result of the 4-month embargo has been attributed to the fact that the embargo was time-limited.[50] No similar extensions have been made to the validity of export licences in relation to previous EU embargoes.[51] The extension means that the licence granted for the Hawks by the previous Administration in November 1996, which would otherwise have expired in November 2000, is valid until 24 March 2001.[52]

30. On 13 October 1999, Regulations were laid under the European Communities Act to make it an offence to infringe the prohibition on the supply, sale, export and shipment to Indonesia of specified equipment, and participation in related activities, contained in Council Regulation EC 2158/99 of 11 October. There are two points arising from these Regulations which concern us —

(a) the regulations include a prohibition on "participation in related activities", apparently intended to cover trafficking and brokering. The 1998 White Paper on Strategic Export Controls proposed that powers should be given to control such activities in relation to controlled goods to destinations subject to EU and other embargoes. Such powers are currently available only in relation to UN embargoes. It is now clear that there are already powers to exercise controls in enforcing a Council Regulation which covers goods for which there is Community competence: in other words, dual-use goods. The absurd situation is that it was illegal to broker dual-use goods that might be used for internal repression to Indonesia — such as surveillance equipment — but not arms: a situation which only the long-delayed introduction of legislation can rectify.

ECGD

31. We obtained from the Export Credits Guarantee Department (ECGD) an account of the support given in recent years for defence business in Indonesia by way of export credit guarantees, and in particular for the sale of Hawk aircraft.[54] ECGD has insured loans of £624 million for these aircraft, of which £335 million (42 per cent) has been paid. In September 1998 the Paris Club[55] completed a debt rescheduling agreement for Indonesia, rescheduling repayments of principal due over a 19 month period. Around £132 million of Hawk repayments are affected, as well as a number of other payments, mainly in respect of defence business. The settlement provides for repayments over 11 years, including a 3 year grace period. ECGD expressed confidence that interest payments would be maintained, and that the re-scheduled debt would also be repaid.

Conclusion

32. Our scrutiny of the implementation of policy on Indonesia has demonstrated the complexity and difficulty in giving effect to changes in policy from one administration to another. It has also exposed a surprising degree of ambiguity over the legal position as regards revocation of licences in these circumstances. The practical limitations of the new published criteria for deciding on licence applications have been exposed, as has the issue of "follow-on" licences for spares. We recommend that the Government examine the issues raised to identify lessons of general application which can and should be learned.

Pakistan

1997 Annual Report

33. The 1997 Annual Report, and subsequent corrections made following our request for details of licences refused,[56] shows for Pakistan —

93 SIELs were granted, 82 of them for Military List goods, including 35 in category ML9 covering naval equipment
2 OIELs covering Pakistan were granted for Military List goods, covering components for bridge systems and towed array sonars, and 2 OIELs for dual-use goods, covering information security equipment and software (5A002 and 5D00Z)
5 SIELs were refused, 4 of them covering goods subject to control because of concerns over use in activities connected with weapons of mass destruction or missiles: the fifth in category ML 3 (ammunition)
1 OIEL permitting export of goods of category ML5 (fire control systems) was amended by removal of Pakistan (and a number of other countries) as a permitted destination
1 SIEL for category ML2 (shotguns etc) was revoked following the loss of the licence
£6.54 m worth of defence equipment was exported in calendar year 1997.

Nuclear tests

34. On 10 July 1998, the Government announced that, following the nuclear weapons tests conducted by India and Pakistan, all export licence applications for items listed on the Nuclear Suppliers Group Dual-Use List would be denied to nuclear-related end-users in India and Pakistan, as would "all other goods to these end-users which could contribute to the Indian and Pakistani nuclear programmes". In addition, the Government stated that — "As the recent actions by both countries have demonstrated a lack of commitment to the principles of non-proliferation, and have adversely affected regional stability, we will consider all export licence applications concerning either country with particular vigilance."[57] The resultant delay in the process of assessment of licences as a result of this new policy of "particular vigilance" was referred to in evidence from the Minister responsible to the Trade and Industry Committee in November 1998.[58]

1998 Annual Report

35. The 1998 Annual Report shows for Pakistan —

132 SIELs granted, 100 of them for Military List goods (including 1 covering Military List and other goods)

19 OIELs covering Pakistan were granted for Military List goods, covering 6 different rating categories, including aircraft and aeroengine components and equipment, naval equipment, radar and military software. 16 OIELs were issued covering dual-use goods, for a range of categories

8 SIELs were refused, 7 of them subject to licensing because of end-use concerns: the remaining one in category 0A001, nuclear reactor equipment

The Government's announcement of 14 July 1998 (see above) anticipated consequential amendment of Open General Licences: the 1998 Annual Report does not reveal explicitly whether such changes were made in 1998[59]
The 1998 published figures for actual exports show a sum of £750,000.

Coup and aftermath

36. On 12 October 1999 a military coup led by General Pervez Musharraf overthrew the civilian and democratically elected government. Pakistan was suspended from the Councils of the Commonwealth. The UK Government halted developmental aid to the government, but made no formal announcement on arms exports. On 3 November 1999 the Secretary of State told us in oral evidence — "It is certainly too early to say yet what further steps might be taken in relation to arms ....". He stressed subsequently that, were an embargo desired, "We are very keen now to make sure that any embargo [to] which we are party is an international embargo .... by and large we would want to work through the European Union ....".[60]

37. On 12 January 2000 The Guardian published extracts from an alleged account of a meeting of officials on 8 December 1999 to discuss arms sales to Pakistan. The minutes — which Ministers have refused to place in the Library [61] — are alleged to record that there was in effect a moratorium on processing arms export applications until the situation became clearer, and that the EU showed "no signs" of wanting to contemplate an arms embargo. It also referred to dissent on what was described as "the Whitehall consensus in favour of processing outstanding export licence applications to Pakistan."[62] In response to our request for a note on this, the FCO told us on 18 January 2000 that —

In a debate on Pakistan in the House of Lords on 19 January 2000, the Parliamentary Under-Secretary of State repeated this statement and added "Obviously some considerations will apply more acutely to some than others".[64] No licences have in fact been issued since 12 October 1999; 2 have been refused. 76 applications for SIELs and 29 applications for OIELs to Pakistan were awaiting decision as of 14 January 2000; 41 of the SIEL applications and all the OIEL applications were made before 12 October 1999.[65]

38. We do not doubt that it was right to have taken time since October 1999 to have assessed the behaviour and intentions of the new regime before deciding on outstanding export licence applications. Indeed, the Government would have been open to justifiable criticism if it had not taken such time. We hope that it will not come to any hasty decisions on licences. The episode does however expose the difficulties in seeking to conduct a national policy in the absence of a formal embargo. In the absence of a discernible EU position on arms exports to Pakistan,[66] and while the UK neither denies or grants licences for Pakistan, the EU Code of Conduct machinery for consultation does not come into operation. Our EU partners may unwittingly "undercut" UK exporters whose licence applications are held up in an undeclared informal moratorium. We urge the Government to initiate discussions with our EU partners to establish a common position on defence and defence-related exports to Pakistan, so that there can be no question of advantage being taken by other member states of the suitably cautious approach being taken by the UK.

Zimbabwe

39. On 20 January 2000 a story appeared in the press suggesting that it had been decided to license the export of spares for Hawk aircraft operated by the Zimbabwe Air Force. While there has been no formal embargo in force, it would seem that there has been an informal suspension of such licences since the involvement of Zimbabwe's armed forces in the civil war in the Democratic Republic of Congo, and allegations of aerial attacks on civilians. On the same day, the Foreign Secretary, who was at the time in Cairo, answered questions on the subject at a press conference. He referred to a "commitment to provide spare parts" through the life of the aircraft, and continued —

"If you supply an aircraft and if you sell the aircraft then implicit in that is the obligation in explicitly entering into the contract that you will provide the spare parts for it and therefore there have to be truly exceptional circumstances in which you could suspend that contractual and implied commitment to service the planes that you have already sold.".

On 24 January 2000 we sought a note from the FCO on this matter, and details of several licences for Zimbabwe granted in 1998. The Minister of State at the Foreign Office was quoted as saying in Pretoria on 31 January 2000 that new rules would soon be applied to weapons exports to countries fighting in the Congo and that "each application will be judged very, very strictly against these very, very tight criteria".[67]

Pakistan and Zimbabwe

40. In the three months since our oral evidence session with the Foreign Secretary in November 1999, serious questions have arisen in respect of the application of strategic export controls over defence equipment destined for Pakistan and Zimbabwe, raising wider issues of public policy. In neither case have we had the opportunity of raising these issues with Ministers. We have therefore invited the Foreign Secretary to appear before us to give evidence on these issues.

Other destinations

41. We sought notes from the Government on the operation in 1997 of the licensing system in respect of a few selected countries, as a means of exploring how general policy considerations feed into specific decisions.[68]

Morocco: there are two particular concerns, human rights and the conflict over the Western Sahara.[69] In 1997 the Report recorded the export of 25-pounder guns and of an unspecified number of shotguns, as well as a submachine gun and spares. The 25-pounder guns are used for ceremonial and saluting purposes and the shotguns for hunting. Licences for pistols and machine guns were given for use in production of a film. The Government told us "We take every care not to license equipment if there is a clear risk that it might be used by Morocco to assert its claim [to Western Sahara] by force". The 1998 Report records the licensing of further military equipment, including machine guns, submachine guns, revolvers, rifles, and semiautomatic pistols, as well as crowd control ammunition and CS grenades. One licence was refused. We will be seeking further details of some of these licences: we refer to the outcome of our inquiry into others at para 10 above.
Nigeria: there is an EU arms embargo in place. The Government told us that licences for goods not on the Military List were considered against their potential military end-use and whether "there were any human rights angles". In 1998 the export of three armoured Land Rovers for use by the Central Bank of Nigeria for the escort of currency was licensed as an explicit exception to the EU embargo.[70]
Sri Lanka: The Government told us that it believed that the democratically elected Government "has a legitimate requirement for military equipment to defend itself against the Liberation Tigers of Tamil Eelam (LTTE) ....most of the export licences issued between May and December 1997 were for military equipment for use by the Sri Lankan security forces against the LTTE". This equipment included submachine guns and machine guns and ammunition. In 1998 50 licences were issued for goods on the Military List, some covering similar equipment. 3 licences were refused.

Channel Islands

42. Concern has been expressed over licences for export to the Channel Islands. 55 were listed in the 1997 Annual Report, for shotguns, pistols, stun grenades and vintage machine guns, among other goods. The DMA noted —

"We were a little surprised to see reference, on page 33 to the list of export licences applied for to ship goods to the Channel Islands, as we had never realised that export licences were required for this part of the United Kingdom. If this is the case, then we would be somewhat worried about how many companies in Industry were equally unaware of this requirement and accidentally infringing the regulations in ignorance."[

Saferworld questioned "as to what legitimate need there is in the Channel Islands, for such apparently large quantities of small arms."[72] Amnesty International UK noted that the Channel Islands were the ninth largest recipient of small arms export licences, and set out the impossibility in the absence of volume figures of assessing the true significance of this: "if larger numbers of weapons are involved, concerns over transhipment to other destinations might be raised."[73] In oral evidence their Campaigns Director noted —

"These could be perfectly innocuous sporting arms for the police, but if it turned out that the quantities were actually rather large, people might start to think, "Hold on, what's going on here?".[74]

In 1998 there were 74 SIELs for Military List goods, including military vintage aircraft, smoke grenades, stun grenades and shotguns. Were the Islands becoming a major offshore arsenal — or a conduit for arming less desirable regimes?

43. Recent Written Answers should have allayed some anxieties. The Jersey and Guernsey Customs & Excise Departments send to the ECO all applications for licences to export controlled goods, and follow advice received. The "machine guns" referred to in 1997 were (another) "typographical error": all that was licensed was a World War II machine gun tripod for museum display. The Guernsey Police apparently require 10 stun grenades a year for training purposes.[75] It would evidently help if this sort of detailed information was published in the normal course of events. We recommend that the Annual Report contain details of the volume and nature of exports which have been licensed from overseas territories and Crown dependencies.

20 Ev, pp 81-2 Back

21 Ev, p 84 Back

22 Ev, p 79 and 83 Back

23 HC 540, Ev, p 72-3, Annex Bii Back

24 Ev, pp 80 and 85 Back

25 Ev, p 80 Back

26 HC 65, p 65, para 3.2.9 Back

27 HC 65, para 66 and HC 270 Back

28 HC 540, Ev, p 70, Annex A Back

29 The Annual Report at pp 59-60 seems to include this SIEL - identified as PL 5006 on the Military List - as both issued and refused Back

30 HC 540, Ev, p 91-2 Back

31 Ev, p 76 Back