Select Committee on International Development Sixth Report


107. The 1998 White Paper reiterated that the Government was committed "to strengthen monitoring of the end-use of defence exports to prevent diversion to third countries and to ensure that exported equipment is used only on the condition under which the export licence has been granted".[174] It provided very little additional information as to how the Government was seeking to realise that objective, noting only that "the Government is currently reviewing the options".

108. In evidence to the Committees in November 1999, the Foreign Secretary elaborated on some of the possible means by which end-use could be verified: "we have stepped up our inspections at place of receipt where we do from time to time inspect to make sure that the weapons are where they said they would be."[175] In a supplementary memorandum to the Committees, the Foreign Secretary provided a number of examples of post- export monitoring.[176] The memorandum stated that "We are unaware of any case in which arms or military equipment exported from the UK under a licence issued since May 1997 were subsequently diverted or re-exported to an undesirable end-user".[177] The 1999 Annual Report on Strategic Export Controls reveals that the risk of diversion or re-export to undesirable end-users accounted for the second highest number of refusals of licence applications in 1999.

109. Our February 2000 Report looked to the Government to address concerns over end-use in the next Annual Report.[178] We returned to the issue of end-use monitoring in our May 2000 evidence session with the then Minister of State at the FCO, Peter Hain, in relation to the risk of equipment being supplied to Hong Kong being diverted to mainland China. He told us that officials from the FCO, DTI, MoD, Customs & Excise regularly visited Hong Kong to see how effectively its control system is working: "we do not just stand back and accept their word, we actually go out and check it."[179] He went on to state "we consider very stringently the risk of diversion. We do not close our eyes, as it were, and nod this stuff through. If we were to find that any such equipment was being diverted then obviously we would put a stop to it".[180]

110. The 1999 Annual Report set out means by which the risk of diversion can be minimised.[181] Cm 5091 states that:

    "We have sought to minimise the risk of a UK defence exports being diverted to undesirable end-users, by putting in place a number of procedures to strengthen the process of risk assessment at the export licensing stage. We regularly seek additional details of proposed end-use and end-users, including through our overseas posts, to inform this process, and to satisfy ourselves about the end-users' reliability and integrity before issuing a licence." [182]

111. The draft Bill itself does not include any provisions on end-use monitoring. The Secretary of State told us that he was confident that measures already in place were sufficient, but emphasised his readiness to consider proposals put forward in response to the consultation on the Bill. UKWGA called for the opportunity offered by the Bill to be used to introduce on the one hand a standardised end-user documentation system, and on the other a systematic system of monitoring end-use in the country of destination.[183] The former could be included in the proposed statutory basis for current administrative procedures. On the latter we have doubts as to whether there is any need for legislation, or indeed whether legislation would be appropriate. The UKWGA witnesses accepted that post-delivery monitoring was really a question of political will. The sort of monitoring sought is already carried out, albeit, as the Secretary of State accepted, not in as systematic a way as should perhaps be the case. [184] There is a good case for some public assurances that post-export end-use monitoring is carried out thoroughly and systematically, and for an explicit commitment to recognise the importance of that task when, for example, assessing the staffing requirements of overseas posts, including defence staff.

112. There have been suggestions that there is a requirement for legal authority for the suspension or revocation of a licence where there are grounds for suspecting that an end-use condition has been broken, or for refusal of subsequent licence applications to that or similar end-users. Where only part of a delivery has been made, a revocation could be effective. The Secretary of State expressed his confidence that he had such powers.[185] We welcome the clear assurance from the Secretary of State that he has sufficient legal powers to revoke a licence where there has been a breach of end-use conditions.

113. It is also suggested that the Government should adopt a system whereby end-use undertakings take the form of legally-binding contracts which contain a list of proscribed uses and a prohibition on unauthorized re-export. The difficulty in this is of course in enforcement. Unless it could be shown that the UK supplier was culpably negligent in some way, action could hardly be taken against the supplier where the contract terms were broken. As Lord Scott put it, — "I do not think one could make the exporter responsible for some diversionary activity of the purchaser that he, the exporter, genuinely did not know about or had any reason to expect would happen."[186] It would be as logical to take action against the Government which had authorised the export. It is barely credible to imagine pursuit of a foreign end-user for breach of contract in such cases, especially where the end-user is the government of that country.

114. The Secretary of State told us that "we have to be absolutely vigilant that people are delivering on the commitments that they have given to us...We have go to have effective end user monitoring otherwise the system falls into disrepute and that is not going to help anybody".[187] There may be no need for legislation. We would however welcome assurance that the Bill's provisions for secondary legislation on the system of administrative controls are broad enough to be able to cover the introduction of a more systematic form of end-user certification.

174  para.5.2.1 Back

175  HC 225, Ev, Q.82 Back

176  ibid, Ev, pp 19-20, para 4 Back

177  ibid Back

178  HC 225, para 51 Back

179  HC 467, Q 110 Back

180  HC 467, Q 111 Back

181   1999 Annual Report on Strategic Export Controls, pp 6-7 Back

182  Page 6, para 17 Back

183   Qq 27ff; Ev, p 3, paras11-13 Back

184   Q 226, 242 etc; see eg Qq 35-6  Back

185   Qq 235ff Back

186   Qq 185-6 Back

187  Qq 226, 242 Back

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