Follow-up Information
RECOMMENDATION C:
PARLIAMENTARY SCRUTINY
OF SECONDARY
LEGISLATION
A list of the 1939 Act Orders laid before the
House would be helpful
The Secretary of State announced on 16 December
1999 that "we have considered the Committee's recommendation
on this matter and concluded that, pending the introduction of
new primary legislation which will provide for Parliamentary scrutiny
of secondary legislation on strategic export controls, as proposed
in the Strategic Export Controls White Paper, any further Orders
made under the Import, Export and Customs Powers (Defence) Act
1939 will be laid before both Houses of Parliament".
The following Export of Goods (Control) Order
amendments were made after that announcement and have been laid
before the House:
— The Export of Goods (Control) (Amendment
No. 6) Order 1999—S.I. 1999 No. 3411;
— The Export of Goods (Control) (Amendment)
Order 2000—S.I. 2000 No. 109;
— The Export of Goods (Control) (Amendment
No. 2) Order 2000—S.I. 2000 No. 1239;
— The Export of Goods (Control) (Amendment
No. 3) Order 2000—S.I. 2000 No. 1396;
— The Export of Goods (Control) (Amendment
No. 4) Order 2000—S.I. 2000 No. 2140;
— The Export of Goods (Control) (Amendment
No. 5) Order 2000—S.I. 2000 No. 2264;
— The Export of Goods (Control) (Amendment
No. 6) Order 2000—S.I. 2000 No. 2618.
RECOMMENDATION J:
INTANGIBLES
It would be of assistance to have an account of
developments over the past two years in the EU dual-use regime,
including any extension of its scope
The Government is continuing with its review
of the proposals in the White Paper on strategic export controls,
including proposals relating to controls on the transfer of technology
by intangible means. Since the Government responded to the Committee's
recommendations on this issue, the EU has reached agreement on
new controls on dual-use items, which includes transfers that
take place electronically (see below for further details). Clearly
in implementing new national legislation on export controls that
will apply to military items, it will be necessary to take into
account the controls that now apply to dual-use items, as it will
be essential to ensure that a consistent approach is maintained
to both. The EU also agreed a Joint Action to control technical
assistance for weapons of mass destruction, which will require
implementation by means of new primary legislation.
The new EC Regulation (EC) 1334/2000 on the
control of exports of dual-use items and technology was adopted
by the Council of Ministers on 22 June and published in the Official
Journal of the European Communities on 30 June 2000. It came into
force on 28 September 2000.
There are four key elements to the new Regulation
which will have an impact on exporters:
— introducing a Community General Export
Authorisation;
— introducing a military end-use control;
— bringing under control certain transfers
of technology by electronic means;
— changes to licensing requirements
for intra-community trade.
The final text of the Regulation reflects the
extensive discussions that have taken place between Member States
and the Commission. All Member States supported revising the Regulation
to apply to exports of dual-use technology by electronic means,
on the grounds that without such an extension, the increasing
use of e-mail and fax in particular, was undermining the efficacy
of export controls on dual-use technology. The Government made
clear in the White Paper on Strategic Export Controls that it
supported in principle an extension of controls on dual-use exports
consistent with the proposals set out in the White Paper. The
responses to the White Paper largely recognised the strength of
the argument that where a particular document needs an export
licence when exported on paper, it should also need a licence
when exported, for example, by e-mail, though concerns about the
practicalities of controls on such means of communication, particularly
for multinational businesses and those engaged in regular collaboration
with overseas partners was expressed. Greater concern was expressed
in the responses to the White Paper about the implications of
introducing controls on oral communications. The Government took
account of these concerns in discussion on the application of
the Regulation to exports of technology by means of telephone
conversations. And the Government believes the best way to deal
with the practical concerns of industry about the need to communicate
with other parts of their company or partners abroad is through
the use, where consistent with the Government's export control
objectives, of open licensing.
The text of the Regulation was the subject of
a number of Explanatory Memoranda and a Regulatory Impact Assessment
which were cleared by the scrutiny Committees of both Houses before
adoption by the European Council of Ministers on 22 June.
RECOMMENDATION R:
ELECTRONIC TRANSFER
A note on ELATE would be helpful, addressing in
particular—
(i) the extent to which applications and/or
supporting material are being made by diskette or on-line;
(ii) the latest situation on transmission
between department by secure intranet;
(iii) the latest situation on transmission
of information on licences granted to HM Customs & Excise
DTI introduced the ELATE licensing system in
March 1999. This gave exporters the opportunity to submit applications
on disk. At present, the disks are accompanied by a paper signature
sheet, and paper supporting information, including end-user undertakings
and technical specifications.
The take-up of the disk option quickly reached
80 per cent, and at present over 90 per cent of applications are
received on disk, the remainder using the paper application form.
Licence application information is also sent
by DTI to FCO, MOD and other advisory departments on disk, again
with paper copies of supporting material. Responses from advisory
departments are sent to DTI by fax.
Building on the success of the ELATE system,
the Electronic Licensing via the Internet System (ELVIS) initiative
aims to enable exporters to send in licence applications, including
appropriate supporting documentation, over the Internet by 2002
so as further to improve the efficiency of the licensing process.
Over the next year or so, DTI also plans to
make greater use of electronic communications for exchanging licensing
information with advisory departments in line with increasing
availability of the government secure intranet in those departments.
At present, DTI sends information on new or
amended open general licences and open individual export licences
to HM Customs & Excise in paper form. HMC&E do not currently
have any centralised process for holding and using information
in standard individual export licences. Once a paper licence is
presented in support of an export, a Customs official can telephone
ECO if it is necessary to check any points arising.
As part of the New Export System project, led
by HM Customs & Excise, to enable paperfree export processing,
DTI is planning to start transmitting licence information electronically
to the Customs Handling Import Export Freight (CHIEF) system in
the second half of 2001. HMC&E plan to start rolling out the
new system in July 2001.
Annual Reports for 1997 and 1998 on Strategic
Export Controls, Fourth Report of 1999-2000, HC 225: Government
Response, Cm 4799
1. In April 1999 four Committees met to
consider the Government's Annual Report for 1997 on Strategic
Export Controls. They heard oral evidence in June 1999 from the
principal NGOs concerned, and from the Foreign Secretary in November
1999, coinciding with the publication of the 1998 Annual Report.
Following further written evidence, the Committees reported in
February 2000.
2. The Committees' Report covered a range
of topics, including the nature and means of parliamentary scrutiny,
policy issues such as controls on brokering and licensed production
overseas, exports to Indonesia, the EU Code of Conduct, and the
format and content of the Government's Annual Report.
3. The Government's Reply was received in
July 2000. A number of the Committees' recommendations and conclusions
were noted, with a view to announcement of decisions in the context
of new export control legislation to be published later. A number
of others were accepted, including several proposals for additional
information to be provided in the next Annual Report. The Government
resisted other recommendations for changes in the Annual Report,
and repeated its previously expressed position on licences for
Indonesia.
Strategic Export Controls: Further Report and
Parliamentary Prior Scrutiny, Eleventh Report of 1999-2000, HC
467: Government Response, Cm 4872
1. The four Committees heard oral evidence
from the Minister of State in May 2000, and decided to report
to the House on the matters raised, principally the licensing
of aircraft spares for Zimbabwe and the handling of licence applications
for Pakistan, as well as the issue of prior parliamentary scrutiny,
following a visit to Washington DC in late May 2000 by one Member
from each Committee. The Committees also reported on the application
of the EU arms embargo on China, a matter originally raised in
their study of the Government's Annual Report for 1998, and took
the opportunity to respond to several points raised in the Government's
Reply to their earlier Report.
2. The Report concluded that there had been
"an error of judgement" in relation to the grant of
certain licences for Zimbabwe, and that the episode revealed "a
disturbing degree of muddle and confusion": and that there
had been, whatever the formal state of affairs, an informal moratorium
on licences to Pakistan. It recommended the introduction of a
system of prior scrutiny of arms export licences by a parliamentary
committee.
3. The Government's Reply was published
in December 2000. It rejected the proposal for prior parliamentary
scrutiny. It also rejected the Committees' criticisms over the
grant of licences for Zimbabwe, and repeated its previous denials
of their having been a moratorium on licences for Pakistan. The
Reply broadly accepted the Committees' conclusions on the embargo
on China and drew attention to the September 2000 announcement
of the proposed introduction of controls on arms brokering and
trafficking.
4. Both the Fourth and Eleventh Reports,
and related Replies, were debated on 14 December 2000 in Westminster
Hall.
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