House of Commons - Defence - Appendices to the Minutes of Evidence

Select Committee on Defence Appendices to the Minutes of Evidence

APPENDIX 6

COMMITTEES ON STRATEGIC EXPORT CONTROLS

Memorandum from the Foreign and Commonwealth Office; Department of Trade and Industry; Ministry of Defence and Department for International Development in response to questions from the Quadripartite Committee relating to the Annual Report for 2000 on Strategic Export Controls

SECTION A: FURTHER DETAILS RELATING TO INDIVIDUAL LICENCES AND COUNTRIES

The Committees seek further information on the following licences, revocations amendments and refusals of licences set out in the annual report on strategic exports for 2000, on general policy questions relating to individual destination countries, and on developments in certain cases since the end of 2000.

1. AFGHANISTAN

Who were the intended recipients of the items covered by the two SIELs granted?

Peter Hain informed the House of Commons on 18 July 2000 (Official Report, columns 145W) and 20 November 2000 (Official Report, columns 31W) of the Government's decision to issue two Standard Individual Export Licences for the export of military listed de-mining equipment, to aid de-mining clearance activities in Afghanistan. These export licences were granted for humanitarian purposes. The intended recipients were OMAR International (a-UN funded NGO) and the HALO Trust.

2. ANGOLA
(a) Who were the intended recipients of the components for a military bridge, military trailers and military utility vehicles?

See confidential annex[19]

(b) What was the reason for the revocation of/amendment to the OIEL listed?

See confidential annex*

3. CHINA
(a) Can you set out in full the terms of the current national criteria for interpretation of the EU arms embargo, indicating any changes made since it was last published?

The UK's national interpretation of the EU Arms Embargo on China was set out in a written response by the late Derek Fatchett MP to a parliamentary question on 3 June 1998. There have been no subsequent changes.

The UK interprets the ban to include:

— Lethal weapons such as machine guns, large calibre weapons, bombs, torpedoes, rockets and missiles;

— Specially designed components of the above and ammunition;

— Military aircraft and helicopters, vessels of war, armoured fighting vehicles and other such weapons platforms; and

— Any equipment which might be used for internal repression.

In addition, all defence exports to China are assessed on a case by case basis against the Consolidated EU and national arms export licensing criteria.

(b) Is there any evidence available to the Government that other EU Member States have exported equipment which the UK would not have, or has not, licensed for export, or vice versa?

Yes. Each Member State is required to determine its own national interpretation of the EU Arms Embargo on China. As these national interpretations differ slightly, it is therefore always possible that a piece of equipment might be caught by one Member State's national interpretation, but not by another's. However, all licence applications are considered in addition against the EU Code of Conduct (in the case of the UK, the Consolidated Criteria). Under the EU Code of Conduct, before any Member State issues a licence for a transaction essentially identical to one previously denied by another Member State, it will first consult the Member State which issued the denial. Although Member States are not obliged to refuse licence applications for transactions essentially identical to those previously denied by another Member State, the intention of this consultation procedure is to promote a more coordinated approach to export control across the EU.

As the Committee is aware, we have investigated the possibility of agreeing a common interpretation of the Embargo, but have concluded that this is not possible at present. However, we remain satisfied that the present arrangements are effective in controlling defence exports to China and that there is no substance to the suggestion that some Member States are relaxing their interpretations of the embargo.

(c) Could you provide further details of the equipment covered by all military list SIELs for China and the reasons for the refusal of three SIELs on end use grounds?

See confidential annex[20]

(d) What were the reasons for the amendment of the OIEL?

See confidential annex*

4. COLOMBIA

Who were the intended recipients of the smoke hand grenades and stun grenades?

See confidential annex*

5. CONGO, DEMOCRATIC REPUBLIC OF

How was the SIEL granted reconciled with the EU arms embargo?

In response to a parliamentary question of 11 July 2000, official report, column 477, Peter Hain announced, "Following consultations with this Department and the Ministry of Defence, the Department of Trade and Industry issued an export licence for an ex-military Bedford 4x4 truck for use by the Catholic Relief Service in Kinshasa. This will provide the Catholic Relief Service with the means to deliver urgent humanitarian assistance. We are satisfied that the truck will not be used for military purposes. This decision is consistent with and does not affect the Government's continued support for the EU Common Position on arms exports to the Democratic Republic of the Congo".

The arms embargo on the Democratic Republic of Congo was imposed through an EU declaration on 7 April 1993, and not a CFSP Common Position. In the example cited, although the equipment exported was military listed it was clearly destined for humanitarian use. Supporting documents confirmed that the equipment (a Bedford truck) was to be used by the Catholic Relief Service to deliver staple food supplies and infant food to projects located in and around Kinshasa. The UK therefore interpreted the export as falling outside the scope of the embargo.

6. EGYPT

Could you provide further details of the destination and purpose of the ballistic test equipment and human pathogen licensed for export?

See confidential annex[21]

7. ETHIOPIA

What were the reasons for the refusals of the two SIELs?

See confidential annex*

8. FIJI

Who were the intended recipients of items under the SIEL and what was the reason for the refusal of another SIEL?

See confidential annex*

9. HONG KONG

Does the EU embargo on China continue to exclude the Hong Kong Special Administrative Region? Would any of the licences granted have been inconsistent with it?

Following the transfer of sovereignty over Hong Kong to China on 1 July 1997, we conducted a detailed review of the applicability to the Hong Kong Special Administrative Region (HKSAR) of the European Union arms embargo against China. In view of the HKSAR's autonomy from mainland China in customs, trade and economic matters and its well-established strategic trade control system, we concluded that its access to a broad range of strategic commodities from the UK for civil end-use should be preserved. [HC 225, 14 January 1998]

As for the export of strategic goods for military end-use, we concluded that, in order to fulfil our obligations under the EU embargo, goods which we would not approve for export to the Chinese armed forces in mainland China should not be permitted for export for military end-use in the HKSAR.

We look at all licence applications for defence exports to Hong Kong on a case by case basis against the Consolidated EU and National Arms Export Licensing Criteria. Some of the items licensed for export to Hong Kong would have been inconsistent with the UK's national interpretation of the EU Arms Embargo on China, as set out in a written response by the late Derek Fatchett MP to a parliamentary question on 3 June 1998. However, we continue to believe that Hong Kong's import and export controls meet the highest standards and that there is minimal risk of diversion to mainland China. We retain full confidence in Hong Kong's independent strategic trade controls.

10. INDIA
(a) Why were 62 SIELs refused and one revoked on end use grounds?

See confidential annex*

(b) What were the grounds of refusal for the other SIELs?

See confidential annex*

(d) How does the Government interpret the need to preserve regional stability in assessing applications for licences for exports to India? Have there been any changes in the application of these criteria since 31 December 2000?

The text of criterion 4 ("preservation of regional security and stability") of the Consolidated EU and national arms export licensing criteria sets out in detail the factors to be taken into account when assessing the risk of the intended recipient using the proposed export aggressively against another country or to assert by force a territorial claim. The Government takes all these factors fully into account when scrutinising export licence applications for India against this criterion.

We continue to assess all export licence applications to India on a case by case basis against the Consolidated EU and national arms export licensing criteria, taking careful account in each case of the nature of the equipment and the proposed end-use and end-user. There has been no change to this policy—nor to its application—since 31 December 2000.

In addition, Tony Lloyd's statement of 10 October 1998 (HC 688) imposes restrictions on the issuing of licences to Pakistan and India for nuclear-related exports. Those listed on the Nuclear Suppliers Group Dual-Use list will be denied to nuclear and nuclear-related end-users in India and Pakistan, as will all other goods to these end-users which could contribute to nuclear programmes.

Peter Hain announced a clarification of this statement on 3 July 2000 (3W) in relation to equipment which would not normally require an export licence but is deemed licensable under the WMD end-use controls and where the initial concerns about WMD end-use are not subsequently substantiated.

(e) Has there been any increase in the flow of applications relating to exports to India in recent months?

The number of Standard Individual Export Licence applications for India received by the Export Control Organisation in the last six months is as follows:

Month	No. of SIEL applications received	No. of OIEL Applications (circulated by DTI to Other Government Departments)
August	117	1
September	119	1
October	134	8
November	118	1
December	64	1
January	187	0

11. INDONESIA
(a) What were the grounds for refusal of the two SIELs?

See confidential annex[22]

(b) Following the expiry of the EU Common Position on Indonesia in respect of its effects on exports, what continuing consideration is given to the risk that equipment might be used for internal repression?

When the EU Common Position on Indonesia expired in January 2000, HMG reverted to assessing all export licence applications for Indonesia on a case-by-case basis originally against the EU Code of Conduct on Arms Exports and our national arms export licensing criteria. Since 26 October 2000, we have considered all ELAs for Indonesia against the Consolidated EU and national arms export licensing criteria, announced by Peter Hain.

Potential use of equipment for internal repression continues to be one of our main concerns. In making a decision on an export licence application, HMG looks closely at the current situation in Indonesia, particularly in areas of internal conflict. If we have any concerns over potential misuse, or previous misuse of similar equipment, by the stated end-user, we consult the Embassy in Jakarta. A decision will be made only when sufficient information has been obtained to make a reasonable judgement on the risk of use for internal repression. Ministers are consulted on any sensitive applications.

12. IRAN
(a) Can you provide further details of the refusal of 12 SIELs on end-use grounds?

See confidential annex*

(b) What was the ground of refusal of the OIEL?

See confidential annex*

13. ISRAEL
(a) What was the intended use of the toxin approved for export?

See confidential annex*

(b) Why was the military list SIEL refused?

See confidential annex*

(d) Why was one OIEL refused and two others amended or revoked?

See confidential annex*

(e) What further steps have been taken during 2000 and since to establish that military equipment exported from the UK to Israel has not been used against civilians?

The Committee published in its March 2001 Report (HC 212) the text of a Memorandum submitted by the Government to the Committee on 22 January 2001 about export licensing policy towards Israel. This explained the steps that the Government was taking to establish that military equipment exported from the UK to Israel had not been used against civilians.

We continue to be concerned about the excessive use of force against Palestinians resulting in injury and loss of life. We are keeping the situation under close review. We still have received no firm evidence that equipment manufactured in the UK and licensed for export by this Government has been used by Israeli forces against civilians in the Occupied Territories during the recent and continuing violence. We would be concerned if such evidence came to light. It is true, however, as stated in the Memorandum in January 2001, that many UK exports have been components or pieces of technology embedded in other systems and therefore not very visible.

We continue to scrutinise all applications for export licences to Israel carefully against the Consolidated EU and national export licensing criteria. Since the outbreak of the violence in the Occupied Territories in September 2000 we have taken account of Israeli military tactics in our licensing decisions. We have not issued any licences for equipment or for components of equipment which, at the time of assessment in line with the Consolidated Criteria, had been used aggressively against Palestinian targets.

(f) How does the Government interpret the need to preserve regional stability in assessing applications for licences for exports to Israel? Have there been any changes in the application of these criteria since 31 December 2000?

The text of criterion four ("preservation of regional peace, security and stability") of the Consolidated EU and national arms export licensing criteria sets out in detail the factors to be taken into account when assessing the risk of the intended recipient using the proposed export aggressively against another country or to assert by force a territorial claim. The Government takes these factors fully into account when scrutinising export licence applications for Israel against this criterion.

We continue to assess all export licence applications to Israel on a case by case basis against the Consolidated EU and national arms export licensing criteria, taking careful account in each case of the nature of the equipment and the proposed end-use and end-user. There has been no change to this policy since 31 December 2000. But since the outbreak of the violence in the Occupied Territories in September 2000, we have taken account of Israeli military tactics in our licensing decisions. We have not issued any licences for equipment or for components of equipment which, at the time of assessment in line with the consolidated criteria, had been used aggressively against Palestinian targets.

14. JORDAN

What steps has the Government taken to satisfy itself that small arms licensed for export to Jordan are not diverted?

The Government regularly seeks additional details of proposed end-users, including via its posts abroad, to help with its assessment at the licensing stage. In addition, the Government remains committed to carrying out end-use monitoring where this will genuinely add value to our efforts to minimise the risk of misuse and diversion.

In the specific case of Jordan, we regularly seek clarification of details given in the end-user declaration from the end-user, via our Embassy in Amman. On occasions, we have sought specific assurances from the end-user about the end-use of the equipment.

15. LEBANON
(a) Who were the intended recipients of the military list items licensed for export to Lebanon?

See confidential annex[23]

(b) How does the Government interpret the need to preserve regional stability in assessing applications for licences for exports to Lebanon? Have there been any changes in the application of these criteria since 31 December 2000?

The text of criterion four ("preservation of regional peace, security and stability") of the Consolidated EU and national arms export licensing criteria sets out in detail the factors to be taken into account when assessing the risk of the intended recipient using the proposed export aggressively against another country or to assert by force a territorial claim. The Government takes all these factors fully into account when scrutinising export licence applications for Lebanon against this criterion.

We receive very few export licence applications for Lebanon. The vast majority are for non-contentious items, such as de-mining equipment (which we actively support and fund); sporting guns and ammunition; and chemicals for the pharmaceutical industry.

We continue to assess all export licence applications to Lebanon on a case by case basis against the Consolidated EU and national arms export licensing criteria, taking careful account in each case of the nature of the equipment and the proposed end-use and end-user. There has been no change to this policy—nor to its application—since 31 December 2000.

16. MALAYSIA

What steps has the Government taken to satisfy itself that arms licensed for export to Malaysia are not diverted?

In the specific case of Malaysia, our High Commission in Kuala Lumpur has provided us with an assessment of end-users when we have had concerns that equipment could be diverted.

17. PAKISTAN
(a) Why were 15 SIELs refused on end-use grounds?

See confidential annex[24]

(b) What were the grounds of refusal for the other SIELs?

See confidential annex*

(d) How does the Government interpret the need to preserve regional stability in assessing applications for licences for exports to Pakistan? Have there been any changes in the application of these criteria since 31 December 2000?

The text of criterion four ("preservation of regional peace, security and stability") of the Consolidated EU and national arms export licensing criteria sets out in detail the factors to be taken into account when assessing the risk of the intended recipient using the proposed export aggressively against another country or to assert by force a territorial claim. The Government takes all these factors fully into account when scrutinising export licence applications for Pakistan against this criterion.

We continue to assess all export licence applications to Pakistan on a case by case basis against the Consolidated EU and national arms export licensing criteria, taking careful account in each case of the nature of the equipment and the proposed end-use and end-user. There has been no change to this policy—nor to its application—since 31 December 2000.

In addition, Tony Lloyd's statement of 10 October 1998 (HC 688) imposes restrictions on the issuing of licences to Pakistan and India for items listed on the Nuclear Suppliers Group Dual-Use list. Items on the list will be denied to nuclear and nuclear-related end-users in India and Pakistan, as will all other goods to these end-users which could contribute to nuclear programmes.

Peter Hain announced a clarification of this statement on 3 July 2000 (3 W) in relation to equipment which would not normally require an export licence but is deemed licensable under the WMD end-use controls and where initial concerns about WMD end-use are not substantiated.

18. PARAGUAY
(a) Who was the intended recipient of 100 submachine guns?

See confidential annex*

(b) What steps has the Government taken to satisfy itself that small arms licensed for export to Paraguay are not diverted?

The risk of diversion is carefully considered with every small arms export licence application for Paraguay. Our Embassy in Asuncion is asked on each occasion for an assessment of the risk of diversion and, if necessary, to check the bona fides of the proposed end-user locally. We would not approve a licence for any export where we believed there was an unacceptable risk that the arms might be diverted.

19. SINGAPORE
(a) Who were the intended recipients of the large numbers of small arms licensed for export to Singapore?

See confidential annex[25]

(b) What steps has the Government taken to satisfy itself that small arms licensed for export to Singapore are not diverted?

In the specific case of Singapore, Post often carry out end-user checks when a licence application is being considered. In the case of these large shipments of small arms, it was confirmed that the large numbers were due to introduction by the Singaporean police force of new standard equipment across the force. This entailed replacement of existing stock.

20. SRI LANKA
(a) Who was the intended recipient of the 75 submachine guns?

See confidential annex*

(b) What consideration does the Government give to whether arms exported to Sri Lanka may prolong existing armed conflicts and tensions?

We believe the Sri Lankan government is committed to a negotiated settlement to resolve the ethnic conflict. We do not believe the export of defence equipment, licensed on a case-by-case basis against the consolidated criteria, would prolong or aggravate the ethnic conflict in Sri Lanka. We believe the Sri Lankan government are committed to finding a negotiated settlement. The Norwegian-facilitation efforts have been reinvigorated since the United National Party (UNP) won parliamentary elections in December. On 22 February the Norwegians announced that the Sri Lankan government and the Liberation Tigers of Tamil Ealam (LTTE) had signed an agreement on the cessation of hostilities. The agreement, which paves the way for further steps towards negotiations, outlines: (a) the modalities of the ceasefire (including cessation of all offensive military operations); (b) measures to restore normalcy for all Sri Lankans (end to hostile acts against civilians, unimpeded flow of non-military goods, opening roads and railway lines, gradual easing of fishing restrictions); and (c) plans for a small international monitoring mission (led by Norway). The Sri Lankan government has also referred to the possibility of deproscribing the LTTE in Sri Lanka to enable peace talks to take place.

The democratically elected Sri Lankan government have a legitimate right for defence equipment to fight terrorists, as long as they act within international law, including UNSCR 1373, and in accordance with international human rights standards.

21. SUDAN

What was the intended use of the toxic chemical precursor for which a licence was refused?

See confidential annex*

22. SYRIA

Why was a SIEL refused on grounds of end use?

See confidential annex*

23. TANZANIA

Could you give further details of the purpose for which the equipment licensed under OIEL No 2 was intended? To what other destinations does it apply?

See confidential annex*

24. UGANDA
(a) What were the grounds of refusal of the two SIELs?

See confidential annex[26]

(b) What were the grounds for the revocation or amendment of the three OIELs?

See confidential annex*

25. UKRAINE

Who was the intended recipient of the grenade launchers? What steps were taken to ensure there was no risk of diversion?

See confidential annex*

26. UAE

Why was a SIEL refused on grounds of end use?

See confidential annex*

27. ZAMBIA
(a) Who was the intended recipient of the 400 submachine guns?

See confidential annex*

(b) What consideration is given to the risk that equipment exported to Zambia might be used for internal repression?

The risk of equipment being used for internal repression is assessed carefully when we consider export licence applications for Zambia. The High Commission in Lusaka carefully monitors the internal situation. We also study Amnesty International and other relevant human rights reports.

28. ZIMBABWE
(a) How does the SIEL for components for military training aircraft relate to the OIEL for the same type of equipment which was the subject of criticism in the Quadripartite Committees' report on the 1999 annual report?

See confidential annex*

(b) Does that OIEL remain in effect? To which destinations does it apply?

The OIEL remains in effect and covers Chile, France, Germany, Oman, India, Peru, South Korea, Spain, Sweden, Switzerland, UAE, USA and Venezuela. Zimbabwe was removed as a permitted destination on this OIEL in February 2000, following the Prime Minister's statement on export licensing policy towards countries intervening in the conflict in the DRC.

The Rt Hon Robin Cook MP announced on 12 May 2000 the Government's decision to remove Zimbabwe as a permitted destination from all extant Open Individual Export Licences for goods and technology on the Military List and from those for dual-use equipment. No OIELs were issued for Zimbabwe between that date and the end of 2000.

(d) Have there been any changes in the interpretation of the criteria applying to decisions on applications for export licences to Zimbabwe since 31 December 2000?

No. The arms embargo imposed in May 2000 remains in place.

SECTION B: GENERAL QUESTIONS RELATING TO INFORMATION IN THE 2000 ANNUAL REPORT

29. REFUSALS AND REVOCATIONS
(a) Could you list the proposed destinations to which the refusals and revocations listed in Table 1 on page 15 of the report relate, for each category?

See confidential annex*

(b) How many applications were considered by DfID in the year 2000, and on how many did it raise objections on sustainable development grounds?

Based on criteria agreed with DTI, in the year 2000 DfID considered and provided advice on 717 SIEL applications and 220 OIEL applications. DfID retains the right to ask to scrutinise any other export licence application as well. Views expressed by DfID or any individual Department involved in the licensing process fall under the description of "internal discussion and advice" the disclosure of which would in this case harm the frankness and candour of internal discussion. The information is therefore being withheld on the basis of Exemption 2 of Part II of the Code of Practice on Access to Government information.

30. APPEALS

Could you provide further details of the 15 appeals refused and the two appeals upheld during the year in question? Was the UN consulted on any?

See confidential annex[27]

31. CHANGES IN CONTROLS

Could you describe the reasons in each case for the changes noted as having been made to the lists in Appendices A and B of the report?

The military list shown in Appendix A was amended twice during 2000.

The Export of Goods (Control) (Amendment No. 2) Order 2000 made changes to the following entries:

ML3	to reflect changed text agreed under the Wassenaar Arrangement (International export control arrangement for conventional weapons);
ML4	as above;
ML7	as above. Also the opportunity was taken to clarify the text to make clear that mixtures were included;
ML8	to reflect changed text agreed under the Wassenaar Arrangement;
ML13	as above;
ML17	as above;
ML21	as above
PL5014 as a consequence of the change made to ML13;
PL5021 as a consequence of the change made to ML3;
PL5033 as a consequence to the change made to ML17.
The Export of Goods (Control) (Amendment No. 5) Order 2000 made changes to the following entries:
PL5001 extended national controls to cover individual cuffs of handcuffs to close a hypothetical loophole, as stated in a letter by Robin Cook to the Chairman of the FAC of 2 February 2000.
PL5031 extending controls to include all types of all wheel drive vehicles capable of off road use, with certain exceptions, to bring UK control text into line with that of the EU common military list.

The Dual-use goods categories and sub-categories shown in Appendix B were amended once in 2000.

Council Decision 2000/243/CFSP added the following sub-category:

9C: Materials—added following restructuring of the Missile Technology Control Regime (MTCR) list (International non-proliferation Regime).

SECTION C: FORMAT OF THE REPORT

The Government has indicated that it will not be changing the format of the report for at least another year, although some small changes were in fact made between the 1999 and 2000 reports. The Committees seek information on prospective changes that should by now be under review.

32. SIX-NATION FRAMEWORK AGREEMENT
(a) Will Global Project Licences under the Six-Nation Framework Agreement be listed as a separate category in future reports?

A similar level of reporting and transparency as currently applied to strategic export licences in the Annual Reports will be accorded to Global Project Licences (GPLs), but it has yet to be decided in what format these will be listed.

(b) Will the list of permitted export destinations under the Six-Nation Framework Agreement in relation to each project be published? Will it be possible to trace the export of UK equipment through other partners in specific projects?

Lists of Permitted Export Destinations agreed by the Framework Agreement partners for any particular programme will be classified as commercial-in-confidence, and as such will not be published. However, UK export licensing decisions on GPLs or applications covering proposed exports to non-letter of intent nations from the UK will be reported in the Annual Reports.

As is currently the case with all other licensing decisions, there will be no specific mechanism to trace the export of UK equipment through other Partners in specific projects. The Government will assess all GPL applications against the Consolidated Criteria, in the same way as all other licence applications. However, in the future, the re-export of any component or system of UK origin provided under Global Project Licence arrangements to a non-letter of intent nation will be considered only after permitted export destinations have been agreed between the participating Partner States, and will not only rely on end-user assurances. Since all framework Agreement partners are members of the EU, all applications for licences to re-export such equipment will be assessed on a case-by-case basis against the EU Code of Conduct.

33. IMPORTS

Is there any consideration being given to including in the annual report, or in a separate report, details of the UK's imports of military equipment?

At present HMG is not considering including details of UK imports of military equipment in our Annual Reports on Strategic Export Controls.

34. WITHDRAWALS

Is there any consideration being given to including in reports details of licence applications withdrawn?

At present HMG is not considering including details of licence applications withdrawn in our Annual Reports on Strategic Export Controls.

35. EXPORT CONTROL ACT

Will the changes to the licensing regime required by the coming into effect of the Export Control Act (particularly in relation to intangible transfers, technical assistance and trade in controlled goods) be reflected in the first relevant annual report?

Yes. Clause 9 of the Export Control Bill, currently before the House of Lords, provides for the Secretary of State to lay a report before Parliament each year on the operation of the order-making powers contained in the Bill. Future annual reports on strategic exports will therefore include information about licences issued under the new powers contained in the Bill as well as about export licences.

36. EU CODE OF CONDUCT
(a) Are the proposals to harmonise reporting by member states under the EU Code of Conduct likely to have an impact on the format of the report?

We do not foresee any need to change the format of our Annual Reports as a result of harmonisation of national reporting under the EU Code of Conduct. Since our reports are the most detailed produced by any EU Member State, greater harmonisation is likely to require other Member States to move closer to UK practices in reporting, rather than requiring the UK to change our reporting practices. We are continuing to press our EU Partners to match our standards of transparency in their own national reports on strategic export controls.

(b) Will the detailed information about "denials" set out on page 339 of the report (Appendix E) be included in future reports?

The Government already records the ratings of export licence applications refused in the country-specific information in our annual reports on strategic export controls. The Government remains willing to continue sharing with the Quadripartite Committee, on a confidential basis, more detailed information about UK refusals of licence applications. We already share such information on a confidential basis with EU Partners and other governments to help coordinate export control policies and to disseminate information about undesirable end-users. However, we do not intend to include such detailed information about licence refusals in future annual reports. We believe there is a real risk that such a move would alert less scrupulous suppliers to the existence of market opportunities with undesirable end-users. Publishing full details of our licence refusals and the reasoning behind them also risks seriously damaging our bilateral relations with the countries concerned. And, where the reasons for the refusal decision related to concerns about diversion, open publication of the details of the refusal could signal that a diversionary procurement route had been detected, thus encouraging the establishment of new routes.

SECTION D: ADMINISTRATION

37. Which of the two applications for OIELs and 16 for SIELs outstanding for more than 18 months as at 15 October 2001, listed in the restricted Annex to the letter to the Clerk of 16 October, have now been resolved?

The two applications for OIELs outstanding for more than 18 months as of 15 October have now been finalised. Of the 16 SIELs outstanding for more than 18 months as of 15 October, two have now been finalised. Details of these are in the confidential annex.

38. What targets (in percentage terms) were set for the aspects of performance listed on page 297 of the report for 2001?

There has been no change in 2001 to the Government's commitment to exporters which is set out in a Service and Performance Code. Where, as in almost all cases, it is necessary for a SIEL application to be circulated to Other Government Departments the aim is to provide a response to 70 per cent of cases with 20 working days. The Government remains committed to achieving this target.

39. Has the 30-day target for appeals been reviewed?

The Government is continuing to look at the appeals target in detail in the context of the overall process, and hopes to reach a conclusion soon on whether a revised target would be appropriate.

40. Would it be possible to provide further information relating to these performance indicators—for example the percentages of applications processed within 20, 30, 40 etc days?

The Government's Annual Reports on Strategic Export Controls already incorporate details of the Export Control Organisation's performance in processing licence applications. This data includes the percentage of applications processed within the target time of 20 working days as well as a breakdown of the performance of the main Government departments involved in the export licensing process. The Government notes the Quadripartite Committee's suggestion and will review whether the section of the Annual Report on licensing performance could be expanded.

41. What steps have the FCO, MoD and DfID taken to improve their turnaround of appeals?

Appeals by their very nature often involve the most complex licensing cases. Appeal cases also need to be comprehensively reviewed by senior officials independent of the original decision in all relevant advisory departments. This means that appeal decisions can take time to finalise. Nevertheless, HMG is committed to improving its performance in this area.

FCO

The FCO has improved the guidance provided to the relevant departments on the handling of appeals, so that the procedures are clearer and departments can process appeals more quickly. Improvements in IT, including more use of e-mail, should also help, for example by enabling more efficient chasing up of overdue appeals and quickly resolving enquiries on specific cases.

MoD

As the MoD process involves a number of advisers, this is a complex and time-consuming process. The MoD has set up a revised monitoring system that tracks more closely the appeals process within the Department and as a result MoD's appeal procedures have improved.

DfID

By agreement with DTI, DfID only consider and provide advice on export licence applications meeting certain criteria. This has meant that DfID have only advised on a small number of appeals and so have not been required to revise their system in consideration of appeals.

SECTION E: POLICY

42. OIELS AND SIELS

Has there been any change in the Government's view of the appropriate use of OIELs as opposed to SIELs? What are the key criteria for suggesting that an OIEL would be more appropriately submitted as an application for a SIEL (or vice versa).

There has been no change in the Government's view of the appropriate use of Open Individual Export Licences (OIELs) as opposed to Standard Individual Export Licences (SIELs). The Government has made it clear that OIELs will only be granted for exporters with a proven track record of applications for SIELs and/or where the particular nature of their business makes the application of SIELs inappropriate. The Government will also take into account the resources available to monitor the use of OIELs, the nature and destination of the items concerned and whether the exporter can comply with the requirements of an OIEL. Companies must maintain records (including consignee undertakings) of all exports made under their OIEL(s) for a minimum of three years (four in the case of Military list goods). DTI Compliance Officers visit OIEL holders on a regular basis and inspect their records to check that these licences are being used properly.

The key question that the Government has to ask when it receives an application for an OIEL is whether this type of application allows the Government to make a proper assessment, against the Consolidated EU and national export licensing criteria, of the exports proposed under the licence. If the Government requires more visibility of the proposed exports, it will ask the company to submit a SIEL application instead, either for all the countries on the OIEL application, or just specific countries of concern. A SIEL application allows the Government to see the proposed quantity of goods and the identity of the proposed end-user, as well as to examine an end-user certificate.

All applications are treated on a case-by-case basis. However, OIELs are not normally used for the export of main equipment such as aircraft and tanks but are particularly appropriate for companies wishing to export spare parts, for example in support of main equipment previously supplied from the UK. In such circumstances, spare parts are often needed at short notice and companies can respond more quickly and flexibly if they have an OIEL.

OIELs are flexible instruments and the Government can place conditions on their use. For example, the UK Government may be content to allow exports to the Government in a certain country, but not to private end-users in that country. In this case, the Government will place a "Government end-use only" condition on the OIEL. If necessary, exports under the OIEL can be restricted to single end-users only, eg the Navy. Alternatively, conditions can place restrictions on the quantity of equipment that can be exported under the OIEL.

If circumstances deteriorate in a country or region, the Government can remove certain countries from the coverage of relevant OIELs or place restrictions on the use of those OIEL for certain countries (eg exports to Government end-users only)

43. TRANS-EU TRANSPARENCY

Have there been any steps taken since the end of 2000 to improve transparency across the EU (see the Quadripartite Report of March 2001, paragraphs 9 and 11).

The statistical annex to the latest Annual Review of the EU Code of Conduct, published on 11 December 2001, showed a modest increase in transparency, providing a breakdown by geographical region of numbers of licences issued, value of licences issued, and value of actual exports by each Member State. We are continuing to press for more transparency in these reports, which we hope will eventually provide country-by-country details of EU Member States' licensing decisions, combined with national reports published by all EU Member States that match our standards of transparency.

44. UN CONFERENCE ON SMALL ARMS

What was the outcome of the UN Conference on small arms held in July 2001? With which nations was there most difficulty in securing agreement to a common position? What further initiatives are planned?

The Government worked actively before and during the UN Conference for a positive outcome. Given the complexity and sensitivity of the issues, the adoption of a Programme of Action that sets out national, regional and global initiatives to stem the flow of Small Arms to the developing world was a major achievement. The Programme of Action commits states politically to put in place export control mechanisms, as well as measures to ensure the traceability of small arms, to control arms brokers and to destroy surplus weapons. It encourages regional moratoria on the manufacture and transfer of Small Arms and legally binding regional agreements to eradicate the illicit trade in them. The first biennial follow-up meeting will be in 2003 with a Review Conference in 2006.

The Programme of Action does not address all key issues in the Small Arms debate but it does formalise and globalise the need and means for action to combat the destabilising accumulations and uncontrolled spread of Small Arms, the primary instruments of death and injury in conflicts and criminal acts worldwide. We, our EU Partners and others were unable to persuade the United States, for example, to agree to the inclusion of civilian possession in the Programme of Action. The US, however, has since acknowledged strong mutual interest with the EU in working towards universal implementation of the Programme of Action.

The Government is continuing to disburse the £19.5 million it announced at the UN Conference that it would contribute to efforts to curb Small Arms proliferation. We also plan to be closely involved in the UN Panel on weapons marking and tracing set up under the new Small Arms resolution at the 56th Session of the UN General Assembly, which the UK co-sponsored. We and our EU Partners have also given support to the important French/Swiss initiative on marking and tracing. The Government will continue to work for full implementation of the OSCE Document on Small Arms and to give political and financial support to regional mechanisms, particularly in Africa.

45. SUSTAINABLE DEVELOPMENT
(a) Recognising that a licence may be refused for a combination of reasons, has the sustainable development criterion ever been the primary reason for the refusal of a licence application?

No.

(b) To what extent does "information from relevant sources such as the United Nations Development Programme, World Bank, EWF and Organisation for Economic Cooperation and Development" feed into the decision-making process, as Criterion 8 of the consolidated criteria requires?

Criterion 8 requires the Government to take into account, in the light of information from relevant sources such as United Nations Development Programme, World Bank, IMF and Organisation for Economic Cooperation and Developments reports, whether the proposed export would seriously undermine the economy or seriously hamper the sustainable development of the recipient country.

The Department for International Development (DFID) has lead responsibility for providing advice on Criterion 8.

In doing so they will draw on a number of relevant sources. These sources may include information from the IMF Government Financial Statistics Yearbook, IMF Country Reports and Surveys, IMF/World Bank Annual Progress Reports on the Poverty Reduction Growth Facility and where appropriate, completion point documents from the Highly Indebted Poor Countries Initiative. Information in the IMFs periodic publication, Recent Economic Developments and the World Bank's World Development Indicators may also feed into the decision-making process. OECD statistics, data and country summaries may also be drawn on in assessments on Criterion 8 grounds.

(c) Does the sustainable development criterion allow the cumulative effect of arms exports to be taken into account, or must licence applications be considered on a case-by-case basis?

The Consolidated EU and national arms export licensing criteria set out the issues to be taken into account in reaching licensing decisions. Decisions on individual applications are considered under the criteria on a case-by-case basis. The cumulative effects of the purchase of arms by recipient countries may well be a relevant consideration in the assessment of a licence application under Criterion 8. Criterion 8 requires the Government to take into account whether the proposed export would seriously undermine the economy or seriously hamper the sustainable development of the recipient country, and to consider in this context (inter alia) the recipient country's relative levels of military and social expenditure, taking into account also any EU bilateral aid, and its public finances, balance of payments, external debt, economic and social development and any IMF—or World Bank-sponsored economic reform programme.

(d) Has a licence yet been granted for the export of an air traffic control system to Tanzania, which was the subject of considerable public controversy at the end of last year?

See confidential annex[28]

What weight was given to sustainable development considerations in making this decision?

The Government has made clear that in taking decisions on export licence applications, we fully take into account whether any proposed arms export would seriously undermine the economy or seriously hamper sustainable development of the recipient country, as defined in Criterion 8 of the Consolidated EU and national arms export licensing criteria.

46. THE INTERNATIONAL COALITION AGAINST TERRORISM
(a) What is the Government's current policy on exports of military equipment to Afghanistan?

We assess all export licence applications to Afghanistan on a case-by-case basis against the Consolidated EU and national arms export licensing criteria. Under UNSCR 1390 (2002) States are required, inter alia, to prevent the direct or indirect supply, sale and transfer of arms and related material, from their territories or by their nationals, to Usama bin Laden, members of the Al-Qaida organisation and the Taliban and other individuals, groups, undertakings and entities associated with them. Unlike the arms embargo imposed by UNSCR 1333 (2000), the 1390 embargo does not apply specifically to the territory of Afghanistan. The United Kingdom has legislated to implement the 1390 embargo in the United Kingdom and the Overseas Territories (in the Al-Qa'ida and Taliban (United Nations Measures) Order 2002, SI 2002/111, and the Al-Qa'ida and Taliban (United Nations Measures) (Overseas Territories) Order 2002, SI 2002/112). The EU has not yet had the opportunity to amend the arms embargo corresponding to the UNSCR(1333) imposed by Common Position 96/746/CFSP of 17 December 1996 as amended by 2001/771/CFSP of 5 November 2001. We expect it to be brought into line with UNSCR 1390 in the near future (it usually takes the EU a number of weeks to catch up with UN resolutions). But in the meantime, technically, the EU embargo continues to apply to any areas of Afghanistan under the control of the Taliban.

(b) Did the Government alter its policy on exports of military equipment to Pakistan in the light of UNSCR 1373?

As the Secretary of State made clear in his reply to a written PQ on 13 December (HC 975W attached at Annex A), the Government did not need to alter its arms export control policy in order to be compliant with UNSCR 1373. Export licence applications to all countries, including Pakistan, continue to be considered on a case-by-case basis against the consolidated EU and national arms export licensing criteria. The UK continues to operate additional restrictions on the supply to Pakistan and India of nuclear-related items, as set out in statements to the House by Tony Lloyd on 10 October 1998 (HC 688) and by Peter Hain on 3 July 2000 (3W).

(c) How has the Government's policy on exports to India and Pakistan altered in the light of the recent escalation of tension in the region?

The Government's policy on exports to India and Pakistan has not needed to change as a result of the recent escalation of tension in the region, as all applications continue to be assessed on a case by case basis against the Consolidated EU and National Arms Export Licensing Criteria. The UK continues to operate additional restrictions on the supply to Pakistan and India of nuclear-related items, as set out in statements to the House by Tony Lloyd on 10 October 1998 (HC 688) and by Peter Hain on 3 July 2000 (3W).

26 February 2002

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