| Previous Section | Index | Home Page |
New Clause 2
Exercise of licensing power under control orders
'(1) In deciding how to exercise a licensing power under a control order in connection with controls imposed by virtue of paragraph 4, 4A, 4B or 4C of the Schedule, regard shall be had, among other things, to any potential consequences of the activities being controlled that are of a kind mentioned in the Table in paragraph 4D of the Schedule.
(2) Otherwise, nothing in paragraph 4, 4A, 4B or 4C of the Schedule limits—
(a) the reasons which may justify a decision to grant or refuse a licence or to exercise any other licensing power under a control order in any particular way; or
(b) the matters to which regard may be had in the exercise of any licensing power under a control order.'.—[Nigel Griffiths.]
Brought up, and read the First time.
Nigel Griffiths: I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker (Sir Michael Lord): With this it will be convenient to discuss the following:
New clause 3—Licence revocation and end-use controls—
'(1) The Secretary of State may revoke, suspend or amend any licence issued under any of the powers conferred by this Act where any of the parties referred to in the relevant licence fail to honour their export licence obligations.
(2) The Secretary of State shall revoke any licence issued under any of the powers conferred by this Act where the execution of the licence:
(a) results in any of the consequences referred to in the Table in paragraph 4 of the Schedule, or
(b) results in consequences which contravene any of the consolidated criteria relating to export licensing decisions announced to Parliament by the Secretary of State on 26th October 2000.
(3) For the purpose of sub-section 1 "export licence obligations" will include, but not be limited to, end-use undertakings stipulated in the relevant licence or end-use documentation.
(4) Upon the revocation of a licence, all future exports of goods, transfers of technology, provision of technical assistance or trade in controlled goods authorised by or relating to the licence shall be cancelled.
(5) The Secretary of State may by order make provision for follow-up monitoring of the use made of goods exported, technology transferred, technical assistance provided or goods traded, in order
New clause 4—Prior parliamentary scrutiny—
' As part of the licence application process required by an order under section 1, 2, 4 or 5, the Secretary of State may take advice from a Parliamentary Select Committee.'.
New clause 6—Prior parliamentary scrutiny—
' The Secretary of State may consult with any Select Committee of the House of Commons or the House of Lords before a determination regarding an application for a licence required by an order under section 1, 2, 4 or 5 is completed.'.
New clause 7—Revocation of licences—
'(1) Any licence or Community Licence granted under this Act, or having effect as if so granted, may be amended, suspended or revoked by the Secretary of State at any time and in such circumstances and on such terms as she thinks fit by serving notice to that effect on the holder of the licence or Community Licence.
(2) For the purpose of this clause "such circumstances" and "such terms" will include, but not be limited to, breaches of the end-use undertakings stipulated in the relevant licence or end-use documentation.
(3) With immediate effect from the date of revocation,—
(a) any further exports of goods, transfers of technology, provision of technical assistance or trade in controlled goods authorised by the licence, and
(b) the provision of further equipment, technology, training, transport or technical, promotional, or financial assistance in support of goods, technology or technical assistance already supplied under the relevant licence shall be cancelled.'.
Nigel Griffiths: New clause 2 is a Government new clause, and I shall explain why it is necessary. I shall also explain why I consider that new clauses 3, 4, 6 and 7 should be withdrawn.
New clause 2 follows as a consequential amendment to the group of amendments relating to new clause 1. In effect, it replicates the second half of the current clause 3 relating to the reasons that may be taken into account in decision making on export licences. I urge hon. Members to accept it.
New clauses 3 and 7 deal with licence revocation and end-use controls. Both would give the Secretary of State the power to revoke, suspend or amend any licence issued under the Bill. They also allow revocation where obligations under end-use undertakings were not honoured, and require the Secretary of State to revoke the licence if its execution had any of the consequences listed in the table of the schedule or contravened the consolidated criteria.
4 pm
New Clause 3 would allow the Secretary of State to make provision by order for end-use monitoring of any exports under the licence; new clause 7 to cancel the provision of various goods or services in support of any goods, technology or technical assistance already supplied under a licence with effect from revocation. The new clauses are unnecessary, because the Government already have powers to revoke, suspend and amend export licences. Those powers will be carried forward in the new Bill.
It might be helpful if I explained the present position, and the position under the new Bill. Under the Import, Export and Customs Powers (Defence) Act 1939,
the Secretary of State has power to revoke, suspend or amend any form of licence, whether open or individual. Those powers apply to licences themselves. Details of revocations are included in the annual reports on strategic export controls. Revocation might take place when there is clear evidence that an undertaking given by the end user is likely to be broken because the situation in the recipient country changes significantly after a licence is issued. Revocation might also apply when new information comes to light after a licence has been issued that would have led to the refusal of an application.If we had reliable evidence of a past breach of an end-use undertaking or the risk of diversion in relation to a specific destination, those factors would certainly be taken into consideration in the assessment of any future licence applications involving that end-user destination.
As for the new Bill, the dummy orders with which we provided the Committee contain revocation, suspension and amendment provisions. The dummy orders on the export of goods, the transfer of technology and the provision of technical assistance—all of which are mentioned in the new clause—provide for the revocation of licences in article 10(5) on page 10. The dummy order on trade in controlled goods provides for revocation under article 5(2)on page 4. The example we have provided of a dummy order giving effect to an embargo includes revocation in article 4(2) on page 2.
The circumstances in which revocation would be considered are the same under the Bill as in existing legislation. The power of revocation, suspension and amendment follows the well-established precedent established in the 1939 Act, in which related secondary legislation also contained the revocation provisions. As for the Exports of Goods (Control) Order 1994, a copy of which we supplied to the Committee before the recess, article 7(1) mentioned the revocation control. Decisions to revoke licences are made by the Secretary of State on a case-by-case basis, in the light of all the relevant information.
As I have said, if there were reliable evidence that an end-use undertaking was about to be breached, revocation would be considered. If new information came to light that would have led to a refusal against the consolidated criteria, revocation would be considered. If circumstances changed significantly in the end-use destination, revocation would be considered.
Revocation is of course a serious step, with significant consequences for the exporter as well as the UK's reputation as a supplier. All such decisions to revoke need to be assessed carefully. Revoking a licence will prevent the export of any as yet unexported items covered by the licence. What the consequences would be for other non-licensable items related to items exported under the licence would be a matter for the relevant contract, which is of course a legal and commercial matter between the exporter and the customer, rather than the licence. Rather than imposing an obligation to revoke licences in the event of any of the consequences listed in the table of the schedule, or contravention of the consolidated criteria, we should take those factors into account at the licensing stage. We already do that.
Failure to take the relevant factors into account in either case would open the decision to possible successful legal challenge. Imposing an obligation to revoke licences in certain circumstances would also impose an obligation on
the Government to carry out end-use monitoring of every export. The Government do not believe that the end-use monitoring issue needs to be addressed in new primary legislation. Of course, it is important that arms exported from the UK should not be misused or diverted to any undesirable end-users. Although it is difficult to see what the measure could practically do to minimise the risk of that happening, the Government have already shown that they are ready and able to monitor the end use of defence exports in circumstances where that can make a genuine contribution to our efforts to prevent diversion or misuse and, as I have explained already, we possess the power of revocation.
| Next Section
| Index | Home Page |