House of Commons - Defence - Eleventh Report

Select Committee on Defence Eleventh Report

VI PRIOR SCRUTINY

February 2000 Report

74. In our February 2000 Report we set out our preliminary thoughts on the subject of prior parliamentary scrutiny of applications for export licences. We noted the opinions already expressed by the Trade and Industry and Foreign Affairs Committees in their Reports in 1998, and the fears expressed by the Foreign Secretary in evidence to us in November 1999 that any such system would introduce an unacceptable element of delay into the process. We reported on our visit to Sweden in November 1999 to examine the system of prior scrutiny in operation there, and our intention to seek further details of the operation in practice of the US system. We concluded that

" the case for parliamentary prior scrutiny of applications for strategic export licences stands or falls on a judgement as to whether licences for arms exports are, for whatever reason, deemed to be a sufficiently distinct category of Ministerial decision as to justify reversal of the normal constitutional pattern, whereby Ministers make decisions on casework and are accountable for their decisions after they are made".

While accepting that there were serious practical challenges to be met, we concluded that it was "well within the grasp of human ingenuity to devise a satisfactory system of prior scrutiny".[90]

May 2000 visit to Washington

75. In May 2000 one Member from each Committee paid a two-day visit to Washington DC to learn at first hand about the system in operation there of notification to Congress of applications for licences for arms exports. We had received a detailed memorandum on this from BASIC, which sets out the system in operation.[91] We had also a very useful private meeting in advance of the visit with a senior staff member of the Congressional Research Service with long experience of the system. We are most grateful to all those in Washington who helped to arrange a most instructive visit.

76. In the course of our visit and meetings with senior officials from a range of US Government Agencies we learned much of value to us in our continuing task of examining strategic arms exports which was not of direct relevance to the question of prior scrutiny. The administration of export licences was at that time a matter of some political controversy in the US, related in part to the question of satellite exports and to fears of leakage of technology to China. Problems encountered by allies of the USA in procuring spares and reloads during the Kosovo conflict had also served to underline to the Administration the laboriousness of the US system.

US-UK Differences

77. The strategic arms export system in the US has of course many differences which make comparison difficult.

Licensing is divided between the State Department for Military List goods and the Department of Commerce for dual-use goods.

In the absence of equivalents to the UK system of open licences, multiple applications may be required for goods which might in the UK be covered by a single OIEL.

Major arms exports are dealt with primarily on a Government-to-Government basis under the Foreign Military Sales system; such applications are by definition already endorsed by the Administration by the time they are notified to Congress.

The majority in Congress may be in opposition to the President's party and so disposed to use its power to restrict or make life difficult for the Executive. Furthermore, individual members of Congress, and in particular individual Senators and the staff known to enjoy their confidence, exercise a degree of individual power and influence not known, and not likely to be tolerated, at Westminster.

Controversial sales of arms from the USA over the past 30 years, of which there have been many, have generally involved sales to the Middle East which have been judged in the light of US policy towards Israel and the Arab nations, or sales to Greece or Turkey which have been viewed in the light of US policy towards the rivalry between those two nations. Sales of small arms to smaller countries have not generally received much attention, although human rights organisations have raised issues of this sort in relation to sales to a number of countries in Central and South America and South Asia.

Lessons of US

78. With these and many other differences in mind, it is still possible to draw some useful lessons from the US experience.

The US system is very limited in its formal coverage. The thresholds for notification to Congress of $50 million for general defence items and $14 million for major defence equipment lead to under 300 notifications a year. The thresholds are laid down in statute. They are not easy to change once established; any proposal to raise them in line with inflation runs the risk of leading to demands for their lowering. The majority of the notifications are for exports to NATO and other allied states. In contrast, over 60,000 licences a year are issued by the State Department for goods on the US Munitions List (the equivalent of the UK Military List). Congress is indeed notified in an annual report of potential future exports with a slightly lower threshold. It is also unlikely that the Executive would authorise exports below the notification thresholds which it knew would be opposed in Congress once discovered from the annual reports of licences granted. The fact remains that the thresholds do significantly constrain congressional prior scrutiny.

The maintenance of commercial confidentiality is not seen as a great problem, since pending licences are notified only once contracts are signed. Companies are apparently relaxed at the release of approximate contract values. Given the size of the proposed licences notified, the figures are likely to be broadly known within the industry in any event.

Notifications are, at the request of Congress, so far as possible made in unclassified form, omitting the sensitive details of, for example, particular weapons capabilities to be included or excluded from a proposed sale. In one or two cases recipient countries have asked that exact volumes be omitted, for obvious reasons. Classified briefings can be requested, but seem to be the exception rather than the rule.

The principal complaint of industry was the additional element of delay introduced into what was seen as an already excessively slow and bureaucratic system of licensing. The fact that licences could and would be given within a fixed period of days from formal notification meant, however, that the process of formal notification was regarded as a fair price to pay for accountability. The real problem arose from the practice of the State Department acceding to informally conveyed warnings from senior staff members of the relevant Senate Committee against initiating even the informal process of notification, which acts as a trigger for formal notification. As a result, pending applications can be delayed for months on end until this informal block on informal notification is lifted.

In addition to the exercise of this apparent power of blocking notification, serious inconvenience arises from the Congressional calendar, and the unwillingness of Congress to receive informal or formal notification during its periods of recess. Total periods of recess broadly reflect those at Westminster. They include periods of continuous recess for several months.

Strengths of US system

79. It would be easy to concentrate on the weaknesses we perceive in the US system. There are also strengths.

The system provides for a degree of transparency to parliamentarians and the public on major arms transfers.

There can be informal and private debate and discussion on particular sales.

The influence of minority viewpoints can be reflected in the final outcome by the addition of explicit or implicit conditions on licences, or by changes in the quantity or quality of the arms to be exported, without recourse to public debate and voting.