ANNEX II
Clerk's Note of Visit to Sweden, 29 November 1999
1. Matters of arms exports had long been discussed
in the Royal Council on Foreign Affairs, chaired by the King,
as a means of settling delicate and important matters "en
famille", particularly important in the context of neutrality/non-alignment.
Arms exports began to dominate discussion, particularly with the
rows over the Bofors exports to India in the early 1980s. An Advisory
Board on Exports of Military Equipment was therefore established
by Parliament in 1985, consisting of representatives of the main
(but not all) parties. This Board carried forward the culture
and ethos of the Royal Council. In 1995 it was reorganised. The
Inspectorate of Strategic Products (ISP) was set up in 1996, by
including the smaller parties' representatives hitherto excluded,
and making it an advisory body to the ISP. It is now known as
the Export Control Council (ECC). The ISP is funded by a levy
on defence and dual-use sales.
2. The ECC membership is appointed by Government
on the basis of nominations by the parties of serving or former
parliamentarians. In order to ensure equal gender representation
each party nominates a man and woman for each allocated slot.
Members serve 4-year renewable terms and are not readily removeable
from office during their terms. They are paid an honorarium for
each meeting attended, which is not the practice for parliamentary
committees. They are not a parliamentary body; do not have parliamentary
staff; and do not report to Parliament. No formal minutes are
taken.
3. The ECC meets 9 or 10 times a year for about
2 hours on each occasion. It carries out one field trip a year
to a company or companies. The agenda is circulated beforehand.
The ISP decides what matters to bring to the ECC's attention.
The defence industry (which consists of 40 firms but which is
dominated by Celsius and SAAB, shortly to merge) submits quarterly
marketing reports to ISP. Most Swedish defence exports are to
North America and the EU and Australia; 22 percent go to Asia
and 12 percent to Latin America.
4. ISP advises companies on the basis of precedent
as to the likelihood of a licence being granted; an "advisory
opinion". ISP informs the ECC of cases where he has given
a positive advisory opinion, without it being necessary to seek
the ECC's advice. Since ISP follows a cautious approach of seeking
advice if in doubt, the ECC has never had to say that it would
have wished to be consulted on the issuing of such an opinion.
Many prospects on which an advisory opinion has been sought do
not result in exports. At each meeting there are 3 or 4 difficult
cases to be considered, including any deferred from a previous
meeting for further consideration.
5. The discussion takes place on the basis of
a presentation by ISP of the firm's request for an advisory opinion;
an MFA country assessment; and a MoD presentation of the Swedish
defence viewpoint, including maintenance of the industrial base
or more usually nowadays of the design competence. After discussion,
members announce their individual views, without a vote and with
members from the same party free to differ. The discussion can
be deferred, on more than one occasion. The ECC can propose that
the matter be referred to Ministers as being a principal issue
and/or to the Royal Council on Foreign Affairs.
6. The ISP listens and then goes away to make
his own decision , if necessary after receiving and/or seeking
any advice from the Minister. He is an independent authority,
so cannot be instructed by either the ECC or Ministers, but is
under an obligation to respect Swedish foreign policy and so is
free to discuss cases or broader issues with Ministers. The Minister
is briefed on the ECC meeting by an official who attends.
7. There are no refusals of licences recorded
as this is effectively done at an earlier stage, but ISP may start
recording negative advisory opinions for the purpose of the EU
Code. Licences have been revoked. There is no redress for a refusal
by way of judicial review or appeal, but a shared interest in
avoiding "late denials" after contract signature, since
licences are in effect given at the last moment.
8. The role of the ECC is to —
(a) interpret the guidelines
(including the EU Code) in cases of difficulty, thus ensuring
that they are not being arbitrarily or mischievously misinterpreted
by the ISP and providing a degree of continuity and certainty
for the exporters - the two NGOs stressed that it made the Government
more accountable as it was not left unsupervised to interpret
its own guidelines;
(b) provide democratic cover — "
as a proxy for Parliament" — for arms exports, while
removing detailed discussion based on privileged information from
potentially embarrassing, ill-informed and divisive public debate;
(c) assist in the building of a national consensus
where new circumstances — such as a coup or a return to
democratic government — calls for a change in policies and
public preconceptions.
9. ECC members sign a statement promising confidentiality
on appointment. The ISP noted that he would be happy to pass on
information at the highest level of confidentiality if necessary,
but that this was not normally needed; and that he provided the
ECC with oral briefing where it was highly sensitive. ECC members
do not discuss with party colleagues or in committees the details
of ECC business, but can and do use the insight gained as background
to work on Committees. The members are expected to represent their
parties in some way, although not bind them to particular views,
and an ECC member might consult a party leader (who would in any
event be on the Royal Council). ECC members are criticised by
party colleagues for the views they are assumed to have expressed
and may feel constrained from responding. The NGOs described the
inability of ECC members to participate fully in debates on matters
of public controversy as sometimes hilarious. ECC members do not
seek nor — by and large — receive the views of either
the intending exporter or the NGOs.
10. Parliamentary accountability is provided
by detailed scrutiny by the Foreign Affairs Committee of the Annual
Report, which is debated; through the powers of the Constitution
Committee (as on follow-on orders referred to below); and through
PQs where answers are constrained by confidentiality. It is difficult
to conduct debate in detail. There is perhaps an "element
of hostage-taking" as the debate is out of the public domain,
and the NGOs suggested that the Government did indeed on occasions
pray in aid the apparent assent of the ECC when decisions were
criticised.
11. There is no general complaint of any delaying
effect of the system, which is seen by industry as "quick
enough"; but on occasions the ECC is criticised by them as
being ill-prepared and unwilling to come to a view.
12. A recent issue which has gained publicity
is that of follow-on licences, in the light of cases of further
naval guns going to Indonesia following an earlier delivery and
of spare parts and ammo to India for the Bofors howitzers and
grenade-launchers supplied 20 and more years ago. In 1996 the
Parliamentary Committee on the Constitution investigated the definition
of follow-on orders and guidelines were promulgated to assist
interpretation of what could constitute such an order.
13. The main changes in prospect are the SAAB-Celsius
merger and the advanced stage of negotiations on the Letter of
Intent between 6 European nations. While the issue of export licensing
of jointly produced goods is already there the old Schmidt-Debré
rule will no longer apply. For Sweden the main issue is the export
of Gripen to the Gulf, where Celsius are hopeful of assent.
14. The main concentration of the ECC is on Military
List goods. The ISP is keen to involve the ECC more in interpretation
of comparable guidelines on dual-use goods, for example
the problems of control of cryptography. The presumption on these
is positive, relying on other nations information and for WMDs
the various regimes. The ECC is not concerned with end-use
controls, where Sweden has a standard format form on bank-note
paper; but the ISP might refer a case to the ECC on end-user concern
grounds. There is movement in COARM to a First Pillar list of
prohibited torture etc goods. There is no brokering;
it requires a license and none has been issued. There is one official
to coordinate arms exports and some defence attachés.
15. The NGOs were admiring of the UK Report and
mentioned Norway and Finland as having useful levels of transparency.
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