Export Control Bill

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The Chairman: I shall now put the question.

Mr. Key: On a point of order, Mr. Benton. Can we be quite clear; are we voting on the amendment or on leave to withdraw it?


The Chairman: The Committee is voting on the amendment. It takes only one member of the Committee to object to the withdrawal of an amendment, and it then has to remain on the Floor. I am now putting the question on amendment No.7.

Question put, That the amendment be made:--

The Committee divided: Ayes 4, Noes 10.

Division No. 5]

Cable, Dr. Vincent
Hendry, Mr. Charles
Key, Mr. Robert
Liddell-Grainger, Mr. Ian

Baird, Vera
Griffiths, Nigel
Jones, Mr. Kevan
Joyce, Mr. Eric
Laxton, Mr. Bob
Marris, Rob
Pearson, Mr. Ian
Savidge, Mr. Malcolm
Starkey, Dr. Phyllis
Tynan, Mr. Bill

Question accordingly negatived

Nigel Griffiths: I beg to move amendment No. 65, in page 7, line 14, leave out `6(1) or'.

The Committee will remember that when we discussed clauses 6 and 7 I mentioned the need for this small consequential amendment. Now that the Committee has agreed to the deletion of clause 6, I hope that it will have no difficulty in agreeing to the deletion of a reference to a subsection of a clause that no longer exists.

Amendment agreed to.

Clause 12, as amended, ordered to stand part of the Bill.

Clauses 13 and 14 ordered to stand part of the Bill.

Clause 15

Short title, etc

Dr. Cable: I beg to move amendment No. 26, in page 8, line 22, after `overseas territory', insert

    `no more than 40 days after this Act is granted Royal Assent'.

Several of the amendments proposed concern issues of substance, and I would not necessarily expect the Government to agree with them. However, this point is technical and is in the spirit of the legislation. It arises from an anomaly that is created by the status of the Isle of Man. We have a customs union agreement with the Isle of Man, so trade flows freely and we cannot exercise export controls over products exported from the mainland to the Isle of Man. However, for historical reasons, the Isle of Man has its own export licensing regime. One can immediately see the potential for anomalies to arise.

The Government would normally deal with such anomalies by bringing in an Order in Council to make the provisions of a Bill of this kind binding upon territories like the Isle of Man and we would expect them to do that. However, the process might be slow or the Government might be forgetful, so the potential exists for a substantial time lag between legislation being enacted here and its becoming operational in the Isle of Man. That is not a theoretical problem. It is a very practical one, which was revealed in an extremely embarrassing episode that took place during a previous Parliament. Hon. Members may remember the appalling events that took place in Rwanda. The popular view of the Rwandan genocide was that it was a very low-tech operation, on an appalling scale, in which enormous numbers of people were butchered with machetes. It was not fully understood at the time that the authority of the Rwandan Government was upheld by more sophisticated weaponry. That was how they controlled the country.

Some of that sophisticated weaponry originated with arms brokers, some of whom were based in this country. In one case a company called Miltec, registered in the Isle of Man, was involved in the transshipment of weapons via what was then called the Democratic Republic of Congo. That was not subject to UN arms embargoes, so it was a conduit for armaments. There is little doubt that, entirely unintentionally, this country became indirectly complicit in the Rwandan Government's activities.

To be fair to the Government of the time, that fact was recognised as extremely embarrassing, and they instituted an inquiry into the matter. An exchange that summarises the outcome of those discussions took place on 21 January 1997, when the present Deputy Speaker, the right hon. Member for Saffron Walden (Sir A. Haselhurst), put a written question to the then Mr. Malcolm Rifkind about how the problem had arisen and what lessons could be learned from it. I shall not quote the whole answer, which is quite extended, but the key points made by Mr. Rifkind, which relate to my amendment, were that the UN arms embargo with respect to Rwanda was not implemented in the Crown dependency and that there was also a delay in its implementation in the dependent territories. The time lag was crucial in providing an opportunity for the brokers to operate.

Mr. Rifkind and the Government of the time established an interdepartmental Committee to analyse the problem, and it concluded that there had been a lack of consistency in implementing embargoes in the UK, its dependent territories and the Crown dependencies. That Committee, which reported at the end of 1996, recommended specifically:

    ``All future binding UN arms embargoes should be applied promptly in the UK and in Crown dependencies and the dependent territories, in accordance with HMG's international obligations.'' —[Official Report, 21 January 1997; Vol. 288, c. 537.]

My amendment is intended simply to give force and urgency to that recommendation, which was not controversial. Everyone accepted that it was an entirely sensible reaction to the Miltec scandal. We have suggested that a 40-day limit should be put on bringing forward the Order in Council that would make the legislation effective in the Isle of Man. The period could be 30 or 50 days; it is the spirit of the amendment that I want the Government to understand.

Rob Marris (Wolverhampton, South-West): I have every sympathy with the spirit of the amendment. However, it has the potential to do the reverse of what the hon. Member for Twickenham (Dr. Cable) wants. If the 40-day deadline were missed, Her Majesty would not be able, by Order in Council, to extend the provisions.

Mr. Key: I entirely understand the reason for the amendment. It is important to probe the Government's thinking on the matter. I recall well the episode that the hon. Member for Twickenham described. There were enough blushes throughout Government to ensure that lessons were learned. Of course the hon. Member for Wolverhampton, South-West (Rob Marris) is right on the technical point about the amendment's having the reverse effect to the one intended.

I hope that the Minister can convince us that lessons have indeed been learned, not only in Whitehall but in the Isle of Man which, after all, has an ancient Parliament. Its parliamentarians are astute and I have no doubt that they would not want the Isle of Man to get into the same predicament again. I hope for the Minister's reassurance, but I am glad that the hon. Member for Twickenham raised the issue.

Nigel Griffiths: I, too, am glad that the issue has been raised, and I am grateful to the hon. Member for Twickenham for doing so. My hon. Friend the Member for Wolverhampton, South-West is right in his interpretation of the Bill, in that the effect of the amendment would be to risk preventing clause 15(5) being exercised after 40 days past Royal Assent.

That is the technical reason for our rejection of the amendment. Let me seek to persuade the hon. Member for Twickenham that he should withdraw it on principle. We have received firm and detailed assurances from the Isle of Man authorities that they will be giving full effect, through Manx legislation, to all the controls made in or under the Bill, including the new controls to be imposed on arms trafficking and brokering in terms of transfers and technical assistance. That is in accordance with the 1979 Customs and Excise agreement that governs the customs union between the United Kingdom and the Isle of Man and which obliges the Isle of Man to maintain export controls parallel to those operating in the UK.

The Miltec case was mentioned and I believe that, following that case, procedures were tightened for the imposition of embargoes in the Isle of Man. In respect of the other territories, we have no reason to believe that any of them will be unable to implement similar controls by means of their own legislation. The inclusion of a permissive extent provision at clause 15(5) is therefore essentially a precautionary measure. I hope that, in the light of that explanation, the hon. Gentleman feels able to withdraw the amendment.

Dr. Cable: I accept that the amendment could be counterproductive, and I would not want that. If the Government have been in contact with the Manx authorities and have had firm assurances from them that they will close this loophole, that seems perfectly adequate. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

New Clause 1

End-use monitoring

    `(1) The Secretary of State shall by order require that, for any activities in relation to which controls are capable of being imposed by an order under section 1, 2, 4 or 5, provision shall be made for follow-up monitoring of the use made of the goods exported, the technology transferred, the technical assistance provided or the goods traded.

    (2) In this section ``follow-up monitoring'' means the undertaking of activities designed to verify that the use to which the goods, technology or technical assistance are put, and the identity of the end-users of the goods, technology or technical assistance, are consistent with the obligations stipulated in the relevant licence or end-use documentation.

    (3) The ``activities'' referred to in subsection (2) may include but not be limited to physical inspection of the designated goods or technology within the territory of the state or the jurisdiction of the end-user stipulated in the relevant licence or end-use documentation.'.—[Dr. Cable.]

    Brought up, and read the First time.

Dr. Cable: I beg to move, That the clause be read a Second time.

The two new clauses deal with issues of some substance and importance, which are partly overlapping but remain distinct. One issue is that of the end use of arms and the other is that of overseas production, which I shall deal with later. We all understand the problem of end use—arms can be exported in an entirely proper and appropriate way and in good faith, but the purposes to which they are put are completely unexpected and very damaging. There should be a process to ensure that that is controlled. It is fair to say that the Government's approach shows that they understand the problem. There are mechanisms in place for dealing with end use—I am not suggesting that we are dealing with an entirely blank sheet of paper. There is a mechanism, but the question is whether that mechanism is adequate.

As I understand it, the procedures envisaged by the Government will involve checking with companies that apply for licences that they have received guarantees from importing countries that they will not improperly use equipment and that there is a pre-licensing checking process in place. I would ask whether that is sufficient. The purpose of the new clause is to suggest that a post-licence system for checking that the agreements and guarantees are being honoured and observed is required.

I should like to return to some examples of what has happened in the UK in the past to suggest that this is not an academic issue; there are real, practical problems. At our previous sitting, we discussed the problems that arose as a result of the export of Hawk aircraft to Indonesia. Assurances and guarantees were given by the Indonesian military that the weapons would not be used in East Timor, but it subsequently emerged, and was demonstrated, that they were. A similar problem arose in relation to the contracts with Zimbabwe. It was intended that the aircraft should be used for Zimbabwe's self-defence, but in fact they were used in the Congo.

There is another, more topical example, which shows the elusive nature of the problem of end use. British companies have been involved in the export to Israel, not of final products but of components for attack helicopters and air-to-surface missiles. There is no reason why British companies should not be involved in the supply of equipment to Israel for its self-defence. People have different views on the Arab-Israeli dispute, but that seems to be a reasonable starting point. However, entirely unknown to the Government who authorised the transactions, some of those weapons have been used as the weapons of first choice in the intifada. Buildings have been strafed by the attack helicopters, for example, which was not the original intention of the supply. I use those examples to show how armaments are used for entirely unpredictable purposes. It is not adequate to have assurances at the time that they are being properly used; checks need to be made after the event.

The Government might introduce a somewhat stricter regime. We are not arguing for blanket prohibitions, but for a somewhat stricter regime than is currently proposed. Precedents exist of other countries that operate such a system, which seems to be administratively efficient and effective.

10.15 am

I can cite examples of contrasting cases from two different types of country. Belgium is a marginal supplier of armaments but is involved in a lot of transshipment and brokerage. The Belgians have a system of end-use certificates that require a written guarantee by the importing agency that it will not re-export arms. Three months after the goods have been exported, the Belgian Government monitor the process and require proof of delivery and details of transit and travel plans. That is an ex-post checking system.

Some may regard the process employed in the United States as more credible than that of the Belgians. No one would accuse the United States of being sentimental on arms export matters, but they have every reason to be diligent in ensuring that arms are not misused and do not fall into the wrong hands. They have developed a system similar to that of the Belgians, which appears to be effective. Exporters must submit a non-transfer end-use certificate in the first instance. They are required to comply with United States law and to ensure that their exports are confined to purposes specified in defence agreements and treaties between the United States and recipient countries. They must provide full details about the articles or data being exported and the end use, which extends to states that receive retransferred United States weapons.

The American machinery for implementing this system is called the blue lantern programme. Controversies have arisen in the United States about how diligently and effectively that is implemented. However, it has introduced some 4,000 checks, roughly 10 per cent. of which show unfavourable results—in other words, the United States Government are not satisfied that end-use requirements have been met. Those contracts are then terminated. The United States has a system, then, which at the very least exercises deterrents to ensure that exporters act in compliance with the spirit of the law.

I ask the Government to give careful thought to whether our system could be brought up to the standards of best practice, which those of us who have followed developments in this field would regard as exemplified by the United States.

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