Select Committee on International Development Second Special Report


APPENDIX: GOVERNMENT RESPONSE TO THE COMMITTEE'S REPORT ON THE FUTURE OF SANCTIONS

 The Government welcomes the International Development Committee's Report on the Future of Sanctions HC67(1999­2000) as a constructive and thoughtful contribution to the ongoing international debate on the future of sanctions, and has taken careful note of its conclusions.

 The International Development Committee has made a series of Conclusions and Recommendations. This response addresses the issues raised in the same order as they are presented in the Report. In certain cases the Government commentary applies to more than one preceding recommendation.

1. The overall purpose of this Report is not to comment on the merits of sanctions as a tool of foreign policy, nor to justify or condemn their use against particular regimes, but rather to assess the impact of sanctions on target regimes in humanitarian/ developmental terms and to examine existing proposals to reduce both unintended consequences and unwarranted harm (paragraph 4).

The Government shares the Committee's belief that careful consideration must be paid to the humanitarian impact of sanctions, and to ways to minimise any adverse consequences.

2. The fact that NGOs were not allowed the opportunity formally to provide input into the Government's review of sanctions must be regarded as a lost opportunity (paragraph 11).

We note the Committee's views. The Government welcomes, and is at all times willing to give serious consideration to, the views of NGOs with an interest in sanctions policy. We hold, for example, regular consultations on Iraq with NGOs such as Save the Children Fund. The Government notes that NGOs played a prominent role in the seminar organised and hosted by the Overseas Development Institute (ODI) in December 1998 at the request of the Department for International Development (DFID). The seminar, funded by DFID, was held in order to encourage a wide range of interested parties to consider together the impact of sanctions and the prospects for making sanctions "smarter". The report of that seminar was published in May 1999.

3. We remain concerned that the Government has published insufficient information to allow for an informed debate on international sanctions policy ­ both within domestic civil society and within multilateral organisations of which the UK is a member. There is still a need for a comprehensive statement by the Government of its sanctions policy. We recommend that the Government use the opportunity of its response to this Report to make such a statement in a Command Paper (paragraph 12).

The Secretary of State for Foreign and Commonwealth Affairs announced the conclusions of the Government's review of sanctions policy to Parliament on 15 March 1999. Subsequently, the Government has given a detailed explanation of its overall policy on sanctions, and of the way in which work on the policy, implementation and enforcement of sanctions is coordinated between Government Departments, in the two Memoranda previously submitted to the Committee by the Foreign and Commonwealth Office.

The Government believes that the case for sanctions remains compelling. They are the only coercive measure available to the international community, other than the threat or use of force, to respond to challenges to international peace and security. As the UN Secretary­General has noted in his Millennium report, they are an integral element of the collective security provisions of the UN Charter. We need them to bring into line those regimes which breach the boundaries of acceptable behaviour, defy the international community and ignore diplomatic efforts. UN sanctions binding on all UN Member States, with clear and well­defined objectives, can be expected to be the most effective.

The Government believes that to be as effective as possible international sanctions should be carefully targeted to have the maximum impact on the leadership of target regimes or the capability of their armed forces, while minimising the impact on ordinary people. They should be tailored to fit the specific circumstances, and should have effective arrangements for implementation, enforcement and monitoring. Humanitarian exemptions and the mechanisms for them to be implemented effectively should be built into sanctions regimes from the outset as appropriate, and the international community should, as far as possible, monitor and ensure the implementation of exemptions on the ground.

The Government is committed to promoting international debate on sanctions policy and implementation. For that reason, DFID decided to sponsor the above­mentioned ODI seminar on smarter sanctions in December 1998. The UK has since played an active role in the seminars hosted by the Swiss Government at Interlaken in 1998 and 1999 to formulate a policy of targeted financial sanctions and in the seminar hosted by the German Government in Bonn in November 1999 to consider how to enhance the role of travel sanctions and arms embargoes as effective instruments of UN policy. The conclusions of those seminars have since been published. The UK strongly supported the Canadian proposal to establish a working group on sanctions in the UN Security Council, and will make it a priority to contribute constructively to the work of this group. Our sanctions policy will remain under constant review in the light of these and other international consultations and of feedback received from UK civil society.

4. The Committee is concerned at the lack of reliable information on the humanitarian impact of sanctions on Iraq. Relief programmes will not be effective in the absence of such information on the nature and causes of humanitarian distress in Iraq (paragraph 24).

5. UNICEF estimated that, if the substantial reductions in child mortality achieved throughout Iraq in the 1980s had continued into the 1990s, there would have been half a million fewer deaths of children under five in the country as a whole in the eight year period from 1991 to 1998 (paragraph 27).

6. The UN panel concluded that "the gravity of the humanitarian situation of the Iraqi people is indisputable and cannot be overstated". Despite concerns about accurate information, there can be no doubt that conditions inside Iraq have declined appreciably since 1990. Evidence suggests that Iraqis are lacking essential goods and services such as potable water, nutrition and healthcare as well as longer term requirements such as education and social stability (paragraph 32).

7. Jeremy Carver, Partner and Head of International Law at Clifford Chance, argued that "It is not the imposition or maintenance of international sanctions, but the policies of the Iraqi Government which are the primary cause of this suffering (paragraph 33).

8. There is a clear consensus that the humanitarian and developmental situation in Iraq has deteriorated seriously since the imposition of comprehensive economic sanctions. Whilst details are often difficult to come by or to verify, even those who wish to maintain these sanctions accept that children, the ill, the vulnerable in Iraqi society are suffering. It is obvious that Saddam Hussein and his ruling elite continue to enjoy a privileged existence. Sanctions have clearly failed to hurt those responsible for past violations of international law. The deterioration of infrastructure, the limited supply of food, the absence of drugs all affect the poor to a disproportionate degree.

Not all this humanitarian distress is the direct result of the sanctions regime. There is a tendency to blame all such distress on sanctions in the absence of clear evidence. Moreover, it appears that Saddam Hussein is quite prepared to manipulate the sanctions regime and the exemptions scheme to his own ends, even if that involves hurting ordinary Iraqi people. The responsibility for the plight of the Iraqi people must ultimately lie with the Iraqi leadership.

This does not, however, entirely excuse the international community from a part in the suffering of the Iraqis. The reasons sanctions were imposed in the first place were precisely the untrustworthiness of Saddam Hussein, his well documented willingness to oppress his own people and neighbours, his contempt for humanitarian law. The international community cannot condemn Saddam Hussein for such behaviour and then complain that he is not allowing humanitarian exemptions to relieve suffering. What else could be expected? A sanctions regime which relies on the good faith of Saddam Hussein is fundamentally flawed.

We do not intend to set out a foreign policy agenda for our relations with Iraq. It is clear from the resolution recently presented to the UN by the United Kingdom Government that there is a desire to relieve the suffering of the Iraqi people. Whatever the wisdom of the original imposition of sanctions, careful thought must now be given as to how to move from the current impasse without giving succour to Saddam Hussein and his friends. Any move away from comprehensive sanctions should go hand in hand with measures designed to target the real culprits, not the poor of Iraq but their leadership. Possibilities include a concerted attempt to target and either freeze or sequester the assets of Saddam Hussein and those connected to him, and the indictment of Saddam Hussein and his close associates as war criminals. To bring to justice Saddam Hussein is also a humanitarian imperative and this should be done without delay. We find it difficult, however, to believe that there will be a case in the future where the UN would be justified in imposing comprehensive economic sanctions on a country. In an increasingly interdependent world such sanctions cause significant suffering. However carefully exemptions are planned, the fact is the comprehensive economic sanctions only further concentrate power in the hands of the ruling elite. The UN will lose credibility if it advocates the rights of the poor whilst at the same time causing, if only indirectly, their further impoverishment (paragraphs 38 to 42).

The Government fully agrees with the conclusion of the Committee that the responsibility for the plight of the Iraqi people must ultimately lie with the Iraqi leadership. When sanctions were imposed in 1990 in response to Iraq's illegal invasion and occupation of Kuwait, it was envisaged that they would last for only a matter of months, and even then there were humanitarian exemptions for food and medicine built into the sanctions regime from the outset. Since then, it has been the Iraqi Government which has prolonged sanctions by refusing to comply with its obligations to give up its weapons of mass destruction.

Meanwhile, the Iraqi Government has hindered the provision of humanitarian relief to the Iraqi people. A scheme to allow oils sales by Iraq to finance humanitarian goods was agreed by the Security Council as early as August 1991, but was never accepted by Iraq. A further scheme, the "oil for food" programme, was agreed by the Security Council in 1995; the Iraqi Government has persistently obstructed and manipulated the programme ever since it finally allowed it to start in December 1996. It is the Iraqi Government which sets the spending priorities under "oil for food". These have never reflected the most pressing needs of the Iraqi people. For example, the Iraqi Government alone decides what goes into the daily food basket. The average daily food ration at present is just 1993 calories, well below the figure of 2463 kcal recommended by the UN Secretary-General in 1998. Iraq has ignored UN recommendations to increase the protein element in the basket and has been criticised by the UN for failing to order enough basic foodstuffs to make up the food ration. It has ignored calls to give greater attention to the provision of basic pharmaceuticals, primary and preventive health­care services and material support for more effective distribution. Over one quarter of all medical supplies delivered to Iraq since the start of "oil for food" have not been distributed. The Government of Iraq has never acted on the Secretary­General's recommendation to introduce supplementary feeding programmes for those most in need. The Government of Iraq also denies access to NGOs and other agencies who are concerned to help bring relief to the Iraqi people.

The Government does not accept the claim that sanctions do not impact on the Iraqi regime, which remains beyond the pale for most of the international community. While there is evidence of the regime using resources for the benefit of the elite and not the majority, the effort which Saddam Hussein and his allies put into having sanctions lifted clearly disproves any suggestion that the regime is content with the present situation or finds it to its advantage.

The Government fully shares the Committee's concerns about the humanitarian situation in Iraq and agrees that the international community has a responsibility to the Iraqi people. Our most recent initiative aimed at improving that situation, UN Security Council resolution 1284, reflected our long­term commitment to helping the Iraqi people and created a new approach to the whole Iraq issue. SCR 1284 unconditionally lifted the ceiling on the amount of oil Iraq can export under "oil for food". With Iraq's oil revenues at current prices back to ­ if not above ­ their peak historical level of around $15 bn per annum, seen only briefly in 1980, this means a potential $10 billion a year is available for the humanitarian programme. In addition, the Security Council has adopted a new resolution doubling the amount of revenue available for spare parts for Iraq's oil industry to $600 million over a six month period. The Iraqi Oil Minister has just announced that Iraq will further increase its exports over a matter of weeks by about 700,000 barrels a day, taking its overall production to over 3 million barrels a day.

The "oil for food" programme allows Iraq to import, in addition to food and medicine, spare parts to rehabilitate parts of the civilian infrastructure, including the water and electricity sectors and goods for the education sector. SCR 1284 provides for more and more timely provision of humanitarian goods. It also approves the use of "oil for food" revenue to meet local costs including those relating to training. It also calls on the Government of Iraq to address effectively the needs of vulnerable groups, including children, something we and others including the UN Secretary­General have been calling for since the start of "oil for food". The resolution also offers Iraq the prospect of the suspension of sanctions if it cooperates. Iraq and its allies often claim that Iraq has nothing to hide. If that is so, then Iraq has everything to gain by accepting resolution 1284.

The Government shares the Committee's concerns over the high rates of child and maternal mortality which are being reported, although we note that any statistics are dependent on Government of Iraq input and that UNICEF's figure is based on the considerable assumption that, were it not for sanctions, the substantial reduction in death rates in under fives in the 1980s would have continued throughout the next 10 years. The UK has always advocated and supported initiatives aimed at better targeting of humanitarian efforts to help the most vulnerable.

On the issue of information on the humanitarian situation in Iraq, there is regular reporting from the UN on implementation of the "oil for food" programme. The Government is also in regular contact with those NGOs who still operate in Iraq. But we share the Committee's desire for information from other reliable sources. This would enable us and other donors better to direct assistance to ensure that the most vulnerable receive it. The effectiveness of these relief programmes remains severely constrained by the behaviour of the Government of Iraq. We call on that Government to allow greater access by NGOs and other agencies to increase the volume of aid and to enable it to be delivered more effectively. We also support the Secretary­General's call to the Iraqi Government to improve cooperation and access for UN observers in Iraq. This would improve the implementation of "oil for food" and help ensure that this programme brings maximum benefit to the Iraqi people.

We support the Committee's recommendation that targeted states must be adequately integrated once sanctions have been lifted. Each case will of course have its own particular characteristics. When sanctions are lifted in Iraq, the initial need for outside assistance and investment will be partly offset by the country's large oil resources.

Regarding the human rights situation, the UN Special Rapporteur concluded in his most recent report that he had observed no improvement in the situation of human rights in Iraq. In fact the overall human rights situation was worsening. The prevailing regime of systematic human rights violations was contrary to Iraq's many international obligations, and remained a threat to peace and security in the region.

The Government shares the view that Saddam Hussein and other members of his regime should be brought to account for the atrocities they have committed over the years. The Government supports INDICT and other organisations which seek to bring them to justice. On the question of frozen assets, the UK already makes concerted efforts to target and freeze the assets of the Iraqi regime. We have followed up all leads, and as of December 1999 746 million US dollars in Iraqi assets in the UK had been frozen, in accordance with UN Security Council resolution 661.

The Government believes that every effort should be made by the international community, when imposing future sanctions regimes, to ensure that these are carefully designed to have the maximum impact on the target regime, while minimising the risk of harm to ordinary people. We give full weight to such considerations when negotiating on sanctions in the UN Security Council, the EU and other international organisations imposing sanctions of which the UK is a member. Comprehensive economic sanctions should be reserved for the most exceptional cases, such as Iraq, where the objective is to contain and isolate a very serious transgressor. In the case of Iraq, comprehensive economic sanctions have, for the past nine years, significantly reduced the threat from Saddam Hussein and his weapons of mass destruction.

9. We criticise the United Nations for not protesting immediately on the imposition of draconian sanctions against Burundi. The UN has a duty to monitor regional sanctions regimes and intervene when human rights are ignored or humanitarian needs neglected. We recommend that such a mechanism be implemented as soon as possible (paragraph 46).

10. It is essential that no sanctions regime should be imposed without accompanying measures to ensure that humanitarian goods and services are exempted from its provisions (paragraph 47).

11. The experience of Sierra Leone raises questions about the delegation of authority to police UN or other sanctions regimes or regional or sub­regional bodies. The UK, as a leading member of a number of sanctioning organisations, should ensure that whenever responsibility for the enforcement of sanctions is delegated to regional or sub­regional authorities, that those authorities should respect the provisions of the resolution and international human rights, including provisions for the exemption of humanitarian goods and services. If they fail to do so, then their authority to enforce sanctions should be rescinded. The Government should not support any sanctions regime ­ UN, EU or regional ­ that does not make adequate provision for the exemption of humanitarian goods and services(paragraph 49).

The Government notes the Committee's views on the impact of regional sanctions regimes. We will make representations to those responsible in any case where we see reason for concern that, as a result of sanctions, human rights are being ignored or humanitarian needs neglected. Where necessary, we will bring the matter to the attention of the UN Security Council. This includes, of course, those rare cases where responsibility for implementation of UN sanctions may have been delegated by the Security Council to a regional organisation. The Government supports the development of closer links on sanctions­related issues between the UN and regional organisations imposing sanctions.

The Government agrees that no sanctions regime should ever be imposed without the inclusion from the outset of humanitarian exemptions as appropriate. The Government will do its utmost to ensure that all organisations of which the UK is a member give priority, when imposing sanctions, to targeting those sanctions effectively. We will urge other regional organisations imposing sanctions to do likewise.

The Government notes the Committee's concern at the humanitarian impact of the regional sanctions regime imposed on Burundi in 1996, but recalls that UN Security Council Resolution 1072, adopted within a month of the imposition of sanctions, encouraged the Secretary-General, in consultation with the neighbouring States, other Member States, the OAU and international humanitarian organisations, to establish mechanisms to ensure the safe and timely delivery of humanitarian relief throughout Burundi. Humanitarian exemptions to the sanctions regime were eventually made in response to intensive lobbying by the UK and the rest of the international community.

On Sierra Leone, the Government notes that the UK is at the forefront of efforts to secure lasting peace and stability after over eight years of brutal conflict. We have committed over 65 million pounds to Sierra Leone since March 1998 when the democratically elected Government was restored, and British MoD teams have helped the largest UN peacekeeping force in the world to deploy. Britain is helping to restore effective government, and is playing the leading role in the disarmament of former combatants. And British Ministry of Defence teams have helped the largest UN peacekeeping force in the world to deploy.

12. We recommend that, in its response to this Report, the Government give an account of its policy towards regional sanctions regimes, including means by which the Government could provide assistance to developing countries to build their capacity to design, implement and monitor regional sanctions regimes in accordance with humanitarian principles (paragraph 50).

The Government urges all regional organisations imposing sanctions to consider carefully how those sanctions can most effectively be targeted, implemented and enforced. Developing countries may indeed benefit from assistance in building their capacity to manage sanctions in accordance with humanitarian principles and to implement them effectively. The Government believes that the UN Secretariat can potentially be a valuable source of advice to developing countries in this regard. We will explore on a multilateral basis within the UN the options for the provision of such assistance.

13. The Committee recognises that sanctions, unless carefully targeted, have the capacity to kill more children than armed warfare (paragraph 54).

14. International human rights instruments provide widely accepted principles of conduct in international affairs against which decisions to impose sanctions should be measured and justified (paragraph 56).

The Government notes the Committee's comments, and agrees that sanctions regimes should always be designed to be in conformity with international human rights instruments.

15. The Committee is concerned at the disproportionate impact of sanctions on certain groups in society (paragraph 59).

16. The Committee recommends that all sanctions regimes should be accompanied by regular independent impact assessments. Sanctioning states and organisations should, as a matter of policy in the course of resolutions, affirm that vulnerable populations should be spared the adverse consequences of sanctions (paragraph 59).

The Government notes the Committee's recommendations and agrees that sanctions regimes should be designed, implemented and monitored as carefully as possible to minimise any adverse impact on vulnerable groups in society who have no connection to the target regime. This underscores the importance of having good quality baseline data in order to track impact.

17. We recommend that, in its response to this Report, the Government provide the Committee with details of existing measures taken to implement financial sanctions and a strategy for the relevant government departments to improve the effectiveness of such implementation, including the potential for the use of interdiction software. We are not convinced that enough effort is being expended by the United Kingdom Government to introduce effective procedures to implement financial sanctions. The United Kingdom is a world financial centre and a permanent member of the UN Security Council. If the United Kingdom does not take financial sanctions seriously, this fatally weakens the prospects for effective international action (paragraph 71).

The UK currently implements financial sanctions against four targets: Iraq, Angola (UNITA), Afghanistan (the Taliban) and the Federal Republic of Yugoslavia. In respect of Iraq, UK financial institutions are required to freeze all Iraqi accounts and gold bullion in the UK. In respect of Angola, Afghanistan and Serbia/FRY, institutions are required to freeze the funds of named targets.

The Government takes financial sanctions very seriously, and expends considerable effort in implementing them. Standards of implementation are already high, but we are nonetheless constantly reviewing how its effectiveness might be enhanced. The fact that the UK is a world financial centre does not necessarily mean that targeted accounts are held here. On the contrary, the high standard of regulation in the UK is likely to lead sanctions targets looking for a safe haven for their money to avoid any contact with UK financial institutions.

The Committee asked about the potential for the use of interdiction software. Interdiction software is used by US financial institutions to detect transactions which might violate sanctions. In the UK, it is the responsibility of financial institutions to ensure that targeted accounts are frozen, and up to them to decide which systems they wish to use to achieve this end. The Government is committed to ensuring compliance with financial sanctions. Failure to comply with financial sanctions is a criminal offence. Any suggestion of a sanctions breach will be investigated, and referred for prosecution as appropriate.

18. The Committee recognises the importance of information gathering in the implementation of sanctions. Financial sanctions will not be viable in the absence of timely and accurate information on the targeted states and individuals. In its review of sanctions, the Government fails to address the issue of information gathering. We believe that the most appropriate level at which to coordinate and direct financial sanctions is at the international level (paragraph 77).

The Government agrees that information gathering and exchange is vital to the successful implementation of financial sanctions. We believe that sanctions work best at the multilateral level, and that national action to implement and enforce UN sanctions should be coordinated internationally to be as effective and consistent as possible. It is important for Member States to seek information on target accounts proactively and share that information internationally as appropriate to ensure that as many target accounts as possible can be frozen. UK experts have regular contact with their overseas counterparts. Information is regularly exchanged between the UK and other UN and EU Member States, and international meetings on sanctions are held regularly.

19. At present, the UN Secretariat lacks the ability to gather the necessary information and the quality of national reporting to individual sanctions committees is poor. We consider it totally unacceptable that there is no individual or organisation within the United Nations with overall responsibility for targeting financial sanctions, for example against those who continue to enrich themselves while their people suffer. We recommend that the United Kingdom argue and gather support for the establishment of a properly staffed and financed sanctions unit within the United Nations to receive and coordinate information on financial sanctions enforcement and to press national governments to implement such financial sanctions promptly and effectively, in line with UN resolutions. In addition, an Office of Foreign Assets Control, on similar lines to that in the USA, should be set up in the United Kingdom (paragraph 78).

We agree that the UN Secretariat has an active role to play in amassing and analysing as much information as possible to identify the targets of financial sanctions. Target accounts need to be identified and frozen swiftly before the funds are spirited away elsewhere. There is scope for the Secretariat to be more active in this area, and the UK will continue to lobby for this in New York.

The Government believes that there is a need for a dedicated and properly resourced capacity within the Secretariat to provide advice and support to the Security Council, the Sanctions Committees, Member States and regional organisations on all aspects of sanctions, including the targeting, implementation and enforcement of financial sanctions (see our response to Paragraph 28 below).

We do not share the Committee's view that an Office of Foreign Assets Control (OFAC) on US lines should be established in the UK. The bulk of OFAC's time and resources is devoted to unilateral US sanctions (notably against Cuba and Iran) and to action against drugs and illegal drug proceeds. The UK has never imposed unilateral financial sanctions. We consider that financial sanctions need to be multilateral to be effective.

In the UK, policy on financial sanctions rests with HM Treasury, whose agents, the Bank of England, are responsible for their implementation. There is a fully resourced unit at the Bank dedicated to work on financial sanctions, who carry out work similar to that of OFAC's licensing and compliance divisions. They have a strong track record, and the Government is satisfied with their operation.

20. The Committee recommends that the Government, in its response, include an assessment of the implication of off­shore financial centres for the implementation of financial sanctions regimes (paragraph 81).

Financial centres, such as some off­shore centres, that operate strict banking secrecy, or whose regulatory regimes fail to enable authorities to identify account holders or beneficial owners, are cause for concern. Their activities can reduce the effectiveness of the implementation of sanctions. Several international bodies are currently promoting initiatives to improve standards of regulation and international cooperation.

The UK implements UN financial sanctions in its Overseas Territories and Crown Dependencies by means of Orders in Council under the UN Act 1946. We have, in addition, implemented the EU financial sanctions against the Federal Republic of Yugoslavia in the Overseas Territories (with the exception of Bermuda, which is in the process of putting its own legislation in place) by means of Orders under the Royal Prerogative. These sanctions have also been implemented by the Crown Dependencies under their own legislation. These jurisdictions are all committed to complying with accepted international standards of financial regulation, and international standards to combat money laundering. This will boost their ability to implement financial sanctions effectively.

21. The Committee has heard very little of any efforts being made to identify and seize hidden Iraqi assets such as those described by the Iraqi opposition groups (paragraph 83).

The Government has no powers to sequestrate or to seize Iraqi assets; we only have powers to freeze them. The Bank of England has acted promptly upon all information received in its quest to freeze the funds of the Iraqi regime, and as of December 1999 746 million US dollars in Iraqi assets in the UK had been frozen.

22. The Committee welcomes the work of the Interlaken Seminars in elaborating a model law for the implementation of UN financial sanctions. In its response, we recommend that the Government give details of what, if any, aspects of United Kingdom law need to be changed to bring it into line with the Interlaken model law on the implementation of UN financial sanctions (paragraph 86).

The substance of the Interlaken model law is already reflected in UK law by virtue of the United Nations Act 1946, although there are some technical differences. The 1946 Act, like the Interlaken model law, enables the effective implementation of all UN sanctions, not only financial sanctions.

Jeremy Carver (who chaired the relevant Interlaken working group) said in his evidence to the Committee "We have a United Nations Act, the 1946 Act, which is very good, clean, simple and it works...". Indeed, the model law, which is aimed at States with no effective enabling legislation, was drawn up after consideration of the UK legislation and of the enabling legislation already in place in other States.

23. We recommend that there be a concerted international effort, sponsored by the United Nations, to introduce by a target date in all countries the necessary legislation for the implementation of UN sanctions regimes, including financial legislation. For developing countries, donors should consider how they can assist in this important aspect of capacity building (paragraph 89).

All UN Member States have a binding obligation to put in place the necessary legislation to implement UN sanctions as soon as possible after they have been agreed. Many Security Council resolutions imposing sanctions require Member States to notify the Sanctions Committee by a set date of the steps they have taken to implement those sanctions. The Government agrees that the UN should actively encourage Member States to fulfil these obligations. We will consider with the other members of the Security Council what steps might help ensure that all Member States fulfil their obligations in this regard, and will put forward the idea of a target date for discussion in the new Security Council working group on sanctions.

The Government notes the Committee's call for donors to consider how they can assist developing countries to put implementing legislation in place. We consider that the UN Secretariat can play a valuable role in this regard, as a centre of expertise on sanctions.

24. The Committee believes that although serious difficulties remain in the tracking of financial transactions and location of financial assets, targeted financial sanctions appear to be workable. It is apparent that major efforts will need to be expended to ensure that the international community as a whole, and individual member states in particular, acquire the necessary technical expertise to implement and enforce such sanctions (paragraph 91).

The Government shares the Committee's view that targeted financial sanctions are workable. Effective implementation and enforcement at international level will require a concerted effort to pierce the client confidentiality and banking secrecy laws which exist in a number of jurisdictions. The UK is already tackling these issues, in the context of the fight against financial crime and money laundering.

25. We reiterate our recommendations made in previous reports that the Government tighten controls on arms brokers and introduce end­use controls and push for similar measures to be adopted throughout the EU (paragraph 97).

The Government notes the Committee's support for tighter controls on trafficking and brokering and for international action on this matter. The Government's White Paper on Strategic Export Controls contained proposals for tighter controls, and those proposals are currently under review in the light of responses received. The Government will announce proposals for new export control legislation, including on trafficking and brokering, following its review of the White Paper proposals. We also remain committed to constructive participation in international discussions on trafficking and brokering, and have made clear to EU partners that the UK would in principle be in favour of uniform EU controls.

The Government is already committed to ensuring that we do not license the export of strategic goods which might be diverted to end­users in embargoed destinations, and is considering what further steps, including at international level, might be taken to minimise the risk of diversion to these and other undesirable end­users. In addition, EU Member States are currently considering the possible inclusion in a new EC Regulation on Dual­Use Goods of a "military end­use" control, under which goods not otherwise subject to export control would become so if they were intended for certain types of military end­use in destinations subject to UN and EU arms embargoes.

26. The failure to enforce effectively the sanctions regime against UNITA is a scandal which must be urgently addressed by the international community (paragraph 98).

The Government agrees that there is an urgent need for a concerted effort by the international community to ensure that sanctions against UNITA are implemented and enforced effectively, in order to bring them back to the negotiating table. For too long, Angola has been ravaged by conflict. We cannot allow the misery to continue. In this regard, we welcome the work of UN Angola Sanctions Committee Chairman Robert Fowler, and the report of the Panel of Experts, presented to the Security Council on 15 March. The UK has worked closely with Ambassador Fowler, Chairman of the UN Sanctions Committee, and has supported the work of the Expert Panel both financially and operationally. The Government will give serious consideration to the Panel's recommendations on how these sanctions can be made to bite, and will support decisive action by the Security Council. The UK will continue to enforce sanctions against UNITA rigorously and to urge other Member States to do likewise. We will continue to pass as much information as possible on suspected violations of sanctions to the UN Angola Sanctions Committee.

27. We are concerned that, as a whole, the quality of national reporting to sanctions committees remains low, thereby reducing the effectiveness of sanctions regimes. We welcome the Minister's assurances that the Government will be giving an extra priority to intelligence gathering in regard to sanctions regimes imposed by organisations of which the UK is a member. We request details of the further action, procedures and resources dedicated to intelligence gathering with regard to sanctions regimes. The UK, as a permanent member of the UN Security Council, has an important role to play in encouraging other member states to be more active in the monitoring and enforcement of UN sanctions regimes (paragraph 100).

The UK takes very seriously its obligation to pass information on violations of sanctions to the UN Sanctions Committees, and does so frequently. We will continue to take every opportunity to urge other Member States to do likewise. The Government can confirm that extra priority has been given to ways in which the UK can contribute to improving the effectiveness of sanctions regimes. In accordance with long­standing practice, we do not comment on intelligence activity.

28. The Committee very much welcomes the initiative of Ambassador Fowler in establishing the expert studies and commends the Government for supporting the initiative. This does not address, however, the more general problem of the lack of capacity of the sanctions committees to monitor and enforce sanctions effectively. The UN must provide the human and financial resources necessary for the sanctions committees to do their jobs properly. We also ask the Government, in its response, to spell out what proposals it is putting to the UN to improve the capacity of sanctions committees. In addition to improving the capacity of sanctions committees, there is also a need to improve the capacity of countries surrounding a targeted state to monitor and restrict cross border trade in prohibited goods and services (paragraph 101).

The Government shares the Committee's view that the UN Sanctions Committees need more support from the UN Secretariat in order to carry out their responsibilities more effectively. An FCO/DFID fact finding mission visited New York at the end of March to explore the scope for strengthening the capacity of the Secretariat to provide advice on all aspects of sanctions to the Security Council, the Sanctions Committees and Member States. The mission met with the Secretariat, Security Council sanctions experts and other interested parties, including NGOs. We will be considering how to take this work forward in the light of their report. In formulating our proposals, we will also want to take account of the views of other Security Council members, and look forward to a productive dialogue on the way ahead in the new Security Council working group on sanctions established under the Canadian Presidency.

The Government notes, however, that the ultimate responsibility for implementation and enforcement of UN sanctions lies with individual Member States. We urge all States to conscientiously fulfil their obligations in this regard.

29. We trust that the Government will actively support and participate in the German Government's attempt to elaborate what has been described as "the next step" of smarter sanctions: arms embargoes and travel sanctions (paragraph 102).

The Government will continue to play an active role in the follow up to the conference hosted by the German Government in Bonn last December on arms embargoes and travel sanctions. Representatives of the Foreign and Commonwealth Office and HM Customs participated in the initial Bonn conference, a sanctions expert from the UK Mission to the UN took part in the subsequent working group meeting on travel sanctions held in New York in February and the Government intends to participate in future working group activity.

30. We welcome the publication of the draft Bill to ratify the United Kingdom's commitment to the international criminal court. We trust that the Bill will be included in the legislative programme of the next session to ensure that the United Kingdom is one of the first 60 states to ratify the agreement so as to bring it into force (paragraph 103).

We note the Committee's support for the draft Bill to ratify the UK's commitment to the International Criminal Court. We are committed to introducing the Bill as soon as the Parliamentary timetable allows.

31. The sudden withdrawal of development assistance can often have a similar or greater impact to the use of traditional sanctions. Full consideration should be given to the humanitarian/developmental impact of withdrawing government­to­government development assistance (paragraph 109).

The scale of government­to­government development assistance is based on a careful analysis of a range of factors, including levels of poverty, on government economic and social policies and on the quality of governance. The impact on the poor is a major factor in considering whether to suspend government­to­government development assistance.

32. The Committee requests that the Government provides the Committee with details of all countries to whom it has suspended development assistance for political reasons. This list should be updated annually in the Department for International Development's Departmental Annual Report (paragraph 110).

Since the present Government came to office in May 1997, government­to­government development assistance has been suspended on two occasions. Our bilateral cooperation programme with the Government of Pakistan was suspended on 15 October 1999 in response to the military coup of 12 October. We continue to provide assistance to poor people through non­governmental channels. Our bilateral cooperation programme with the Government of Sierra Leone was suspended on 27 May 1997, in response to the military coup. This programme recommenced in July 1999 following the Lome peace agreement.

The Government has continued the suspension of government­to­government development assistance where it was imposed by previous administrations to countries such as Sudan and Afghanistan.

Future DFID Departmental Reports will comment on any changes in the status of a government­to­government programme.

33. The Committee welcomes DFID's use of development partnerships to encourage good governance, respect for human rights and the elimination of corruption (paragraph 112).

The Government notes the Committee's endorsement of its approach.

34. We believe that the provision of oil ­ described as humanitarian by the Minister ­ solely to municipalities controlled by opponents of Milosevic serves to undermine fatally the impartiality and neutrality of humanitarian assistance. It is one thing to support principled humanitarian aid but quite another to use the risk of diversion as an excuse to supply such assistance solely to one's political allies (paragraph 117).

A humanitarian exemption was written into the EU oil embargo on the FRY from the very outset, and still applies. The Energy for Democracy programme, under which the EU donates heating oil to certain opposition­controlled municipalities in Serbia, has obvious humanitarian effects, as Mr Hain noted in his evidence to the Committee. But it is also political in intention, as he similarly made clear. It is a way in which the EU expresses its solidarity with the Serbian people ­ as opposed to the regime. For that reason, it is being resourced not from the humanitarian budget of the European Community Humanitarian Office (ECHO), but from the general European Community programme for the area (OBNOVA).

The Government agrees entirely with the Committee that humanitarian aid should be directed at those in greatest humanitarian need: this is one of DFID's "Principles for a New Humanitarianism". ECHO have made humanitarian assistance allocations where they see the greatest needs. However, large­scale reconstruction assistance to Serbia is out of the question while a man indicted by the International Criminal Tribunal for Yugoslavia (ICTY) for war crimes is President of the FRY, and while his corrupt regime controls the economy of the country.

35. More generally, we agree with the views of Dennis MacNamara and others on the danger that the definition of humanitarian, as opposed to developmental, assistance is too tightly drawn. The result is an effective embargo on what are in fact humanitarian requirements (paragraph 118).

In its general provision of assistance, the Government does not take a rigid view of the boundaries which categorise humanitarian and developmental assistance. There is close cooperation between the DFID departments responsible for humanitarian and for developmental assistance.

In the case of the Federal Republic of Yugoslavia to which Mr McNamara referred, EU sanctions are in place, but we have been monitoring the assessment of the humanitarian situation by OCHA (the UN Office for the Coordination of Humanitarian Affairs). In the case of Iraq, as the response to para 6 above makes clear, spare parts for the rehabilitation of Iraq's water, electricity and oil sectors are permissible under the "oil for food" programme.

36. The "dumping" of humanitarian assistance which undermines local production, is unacceptable and should have been avoided through prior impact assessments (paragraph 120).

37. The humanitarian response to the imposition of sanctions must take account of local procurement and of the local economy in the provision of humanitarian assistance (paragraph 120).

Humanitarian assistance should be provided on the basis of a rigorous assessment of need. DFID's analysis includes consideration of how the provision of such assistance may impact on the local economy, including its production and supply chains. In the case of Iraq, the Government has always been concerned about the effect of the "oil for food" programme on agriculture and on farmers' livelihoods. We ensured that resolution 1284 included provision to allow local procurement and for payment of local costs, including payment for services and training, to be met from "oil for food" revenues.

38. Sanctions regimes must take account of issues such as the level of economic development in the country targeted and groups that are likely to be disproportionately affected by the imposition of sanctions. Furthermore, sanctions regimes should be sufficiently flexible so as to allow for fine­tuning in response to any unforeseen adverse humanitarian consequences (paragraph 121).

The Government agrees with this recommendation. That is why, before the UK signs up to any new sanctions regime, an interdepartmental meeting is held to consider all the possible implications. DFID's assessment of any potential humanitarian impact is taken fully into account, and is instrumental in formulating the Government's negotiating position. The Government also agrees that, where appropriate humanitarian exemptions have not been put in place from the outset, sanctions regimes should be fine­tuned as necessary to provide for these.

39. The Committee endorses the findings of the Note by the President of the Security Council on the Work of the Sanctions Committees and recommends that a standing list of life­saving supplies be agreed, in consultation with national, international and non­governmental providers of humanitarian aid, for exemption from sanctions regimes (paragraph 127).

The Government endorses the finding of the Note that there should be exemptions from UN sanctions regimes for foodstuffs, pharmaceuticals and medical supplies, and that basic or standard medical and agricultural equipment and basic or standard educational items should also be exempted. At present, this recommendation only applies to the UN sanctions against Iraq. Exemption lists of agricultural items, educational items, medical items and foodstuffs have already been approved by the UN Iraq Sanctions Committee. The Committee will continue to review the lists and add items to them on a regular basis.

40. The Committee further recommends that other means of expediting the delivery of humanitarian goods and services be considered including institutional exemptions for members of the UN system, their non­governmental implementing partners, and international members of the ICRC and IFRC, coupled with increased end­use monitoring (paragraph 131).

The Government notes this recommendation and will give it careful consideration in negotiating future sanctions regimes.

41. The Committee agrees that whenever sanctions are imposed, serious thought must also be given to, and preparations made for, a future in which they have been lifted (paragraph 133).

42. The Committee believes that sanctioning organisations have an obligation to ensure that targeted states are adequately reintegrated into the international community once sanctions have been lifted to ensure that the long term humanitarian impact on the population is minimised. We recommend that once sanctions have been lifted donors ­ bilateral and multilateral ­ should agree a coordinated strategy for post­sanctions reconstruction. We invite the Government, in its response to this Report, to provide the Committee with details of any preparations it is making for the eventual lifting of existing sanctions regimes such as those imposed against Iraq (paragraph 136).

The Government agrees that, when imposing sanctions, thought must be given to the exit strategy. This is particularly important where comprehensive economic sanctions have been imposed. The Government supports the Committee's recommendation that targeted states must be adequately reintegrated into the international community once sanctions have been lifted. Each case will of course have its own particular characteristics. A coordinated approach between bilateral and multilateral donors is desirable. When sanctions on Iraq are lifted, the initial need for outside assistance will be partly offset by the country's large oil resources. The international community will want to ensure at that time that adequate humanitarian supplies are reaching those who need them. The Government of Iraq will need to allow greater access to Iraq by NGOs for a comprehensive reconstruction programme to operate effectively.

In the case of Yugoslavia, a democratic post­Milosevic FRY would be eligible to join the processes of supporting peace and stability in the Balkans currently being developed between the international community and other countries in the region. Many of the sanctions imposed on Serbia would be lifted quickly and Serbia would begin to enjoy the normal benefits of running an open market economy: foreign direct investment, an improved trading relationship with regional countries and the EU, and reconstruction programmes. A closer relationship with the EU and the Stability Pact would also bring long­lasting economic benefits. Work is already taking place to help independent Serb economists, experts and policymakers to formulate their ideas for the transition, and to develop close regional and international links in anticipation of the eventual end of Serbia's political isolation. A democratic government, which had demonstrated its commitment to economic and social reform, would be able to initiate discussions with multilateral agencies such as the World Bank, the IMF and the EU, as well as with a range of bilateral donors.

43. The Committee is concerned that, in many cases, existing mechanisms for monitoring the humanitarian/developmental impact of sanctions are inadequate. We recommend that all sanctions regimes should have provision for an ongoing system of monitoring their impact. To this end, use should be made of existing expertise in the field ­ from UN organisations, ECHO and other governmental and non­governmental organisations (paragraph 138).

The Government agrees that all sanctions regimes should be objectively monitored ­ both for their humanitarian impact and for their effectiveness. With regard to Iraq, we pay careful attention to UN reporting on the humanitarian situation. With regard to sanctions against the FRY, we have been making regular reference to OCHA's assessments of the humanitarian situation.

As outlined in the response to paragraph 28 above, the Government is discussing with Security Council members and with the UN Secretariat ways in which a dedicated capacity might be developed within the Secretariat to provide advice on all aspects of sanctions, drawing on as wide as possible an array of existing expertise in this field.

44. The Committee agrees that serious thought must be given to exit strategies from sanctions regimes. The Committee requests that, in its response to this Report, the Government provides an assessment of the merits of placing a time limit on the application of sanctions regimes (paragraph 141).

In certain circumstances, the Government would not rule out the policy option of time­limited sanctions. But in general, we believe that these are unlikely to be effective. The main argument against them is that target governments (or rebel groups) are likely to sit tight and wait for the sanctions to expire, rather than complying with the criteria for lift. A more effective option, in our view, would be to build into a sanctions regime a provision for formal review at regular intervals. This would ensure that attention would be focussed regularly on the impact of sanctions, which could then be fine­tuned accordingly.

45. The current debate on the future of sanctions is a welcome product of the renewed international commitment to the political, economic and social rights of the poor. We are convinced that these rights are infringed by the blunt instrument of comprehensive economic sanctions. To target sanctions against those truly responsible, to gather the necessary intelligence and invest in the required technology, require an internationally coordinated investment of both money and effort. The United Kingdom must take a lead by putting in place a system which can target and monitor sanctions effectively, instead of the present, somewhat casual approach. As importantly, the United Nations should convene an international conference to ensure a global commitment to a fairer and more effective sanctions policy (paragraph 142).

The Government takes its responsibilities to implement and enforce international sanctions very seriously indeed, and invests a great deal of effort in this regard. That is why, since July 1998, there has been a dedicated Sanctions Unit in the Foreign and Commonwealth Office. This Unit has responsibility for coordinating all aspects of Government work on sanctions, including negotiations on new sanctions regimes, implementation, enforcement and sanctions policy in general. To the best of our knowledge, the UK is the only UN Member State to have such a system in place. We are constantly reviewing and upgrading our approach to implementation.

The Government fully recognises the urgent need for a concerted approach to targeting and monitoring targeted sanctions at the international level. We note the Committee's recommendation that the UN should convene an international conference on sanctions. The UK will play an active role in the new UN Security Council working group looking at generic sanctions issues, and will consider various ways in which we can promote international work to enhance the design and implementation of targeted sanctions.


 
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