Appeals against refusal
57. As we had done in relation to the 1997 Report,
we contacted those companies which had appealed against refusal
of a licence, as recorded in the 1998 Report. There were 15 such
appeals, one of which was successful.
We received five responses to our invitation to comment.
- Dince Hill (Holdings) has dealt with export licensing
for many years. The Chairman of the company wrote that when an
appeal was made "nothing is ever heard of the matter again
... when we appeal we do not know to whom we are appealing, when
the appeal may be heard or whether the official who originally
made the decision is the same as he who considers the appeal."
He suggested that applicants should be present at appeals.
- Argent Steel had appealed against a refusal of
a licence to export a metal to Pakistan. The company felt that
it had been misled when originally seeking to discover if the
material would require a licence, and forwarded copies of its
correspondence. As a result of the refusal, upheld on appeal,
the company has material on its hands which it is difficult to
- Goodwin Air Plasma had appealed unsuccessfully
against the refusal of a licence to export cutting equipment to
Pakistan. Subsequent exports had led to the arrest, and subsequent
release without charge, of two of the company's executives. The
company stated that other manufacturers in the UK and elsewhere
in Europe were freely transferring similar equipment to Pakistan.
It also stated that inquiries as to whether equipment required
licensing took "many months" before receipt of a notification
that no licence was required was received. A detailed log of contacts
confirms this pattern.
- Meccasonics had appealed successfully against
the refusal of a licence to export a scanning system to India.
The company told us that the item was a replacement for an existing
item which had been licensed: and that DTI had told them that
"if you want a quick answer it will be no". The original
application took six months before rejection. The appeal took
a further six months, described by the Managing Director as "a
further six months of inactivity". He told us "The activities
of the DTI came close to bankrupting a small company."
- N P Aerospace appealed unsuccessfully against
refusal of a licence to export several specialised vehicles to
Indonesia. The Managing Director told us that the delay had caused
considerable embarrassment and expense: "it is quite unacceptable
to have to wait approximately six months for a reply to an appeal!"
58. We are disturbed that this large sample of
those companies with recent experience of appeals against refusals
of a licence should have had such uniformly bad experiences of
the operations of a Government department. The December 1998
Trade and Industry Committee Report noted that, in response to
criticisms in the Scott Report, the July 1998 White Paper had
proposed a statutorily established formal appeals mechanism. The
Committee's recommendation that there should be a time limit for
determination of appeals was accepted by the Government, who proposed
a target of 30 working days.
It also stated that when the target was not met "appellants
will be given as full as explanation as possible for this".
In 1998 scarcely any appeal seems to have been settled within
DTI's proposed 30 working day target. In our February Report we
called for publication of summary details of appeals in the Annual
The Government has accepted the basis of this recommendation.
We hope that the latest figures will show a significant improvement
on performance in handling appeals. Appeals against refusals
are taking too long to settle. There is no reason why an improved
appeals system cannot be introduced on a non-statutory basis prior
to the passage of legislation. We recommend that the appeal
procedure which it is proposed to bring on a statutory basis be
introduced as soon as possible. Given the relatively small number
of appeals against refusal, we also recommend that further consideration
be given to ways of ensuring that an appellant company can participate
in the appeal procedure, and be given a more detailed account
of the reasons for the original refusal and for the eventual decision
on an appeal.
59. In the course of our inquiries, we have
pursued two administrative errors or oversight which have come
to our attention more or less by chance
- The grant in error of a licence
to export very small quantities of two chemicals to India: by
the time the error came to light and the licence was revoked,
the goods had been delivered. We have been assured that "the
small quantities involved were commensurate only with research
laboratory or teaching use."
- In November 1998 the FCO recommended removal
of China as a destination from an OIEL covering some dual
use equipment with potential military use. This followed a reassessment
of the original OIEL, undertaken only because the company requested
It then took over a year for the decision to be taken in December
1999 to remove China from the coverage of the OIEL. It took a
further four months for effect to be given to the decision, owing
to an "administrative oversight". Written evidence to
us on 5 June 2000 stated that "to the best of DTI's knowledge,
no goods were actually shipped." We requested clarification.
On 19 June 2000, we were told that the company had told the DTI
that to the best of their knowledge no goods had been shipped
under the licence.
60. The best system is of course susceptible to human
error and oversight. We have however become increasingly concerned
at the frequency with which our written inquiries, covering only
a diminutive part of the ECO's activity, have uncovered minor
but potentially significant error. It is not as though licensing
activity, at least in the eyes of those on the receiving end,
were conducted at breakneck speed. The effects of minor errors
and oversights could be grave. We seek some reassurance that
efforts are being made to enhance the performance of the Export
Control Organisation and that the lessons are learned from the
sorts of errors to which we have drawn attention.
47 HC 225, para 10 Back
number was subsequently corrected to 31: HC 225, Ev, p 84 Back
225, para 10 Back
Qq108, 110 Back
4799, Rec 9 Back
p 19, A 3 (a) Back
A 3 (b) Back
225, para 19 : Ev, p 76 Back
p 25, App 8 Back
p 26, App 9 Back
p29 , App 12 Back
App 11 Back
65, para 66: HC 270, page x Back
225, para 20 Back
4799, Rec 31 Back
p 20, A 4 Back
p19, A2 Back
p 22 Back