Examination of Witnesses (Questions 60-79)
THURSDAY 3 APRIL 2003
MR ANDY
MCLEAN
AND MS
JULIA SAUNDERS
Mr Howarth
60. Can I just ask to what extent do you think
this a problem? Can you give us some examples of where you think
the law is being flouted, flagrantly or otherwise? I seem to recall
I took this Bill through Committee and it was quite difficult
to nail down any precise examples. (Mr McLean) Perhaps
I could give you an example of one which has come to light in
recent weeks, which is the case of a British arms broker who has
entered into negotiations to supply weapons from an Eastern European
country to a country neighbouring Iraq. It is fairly clear from
the negotiations that it is apparent that some of these weapons
might end up in Iraq. Yet the way in which the correspondence
is very carefully worded and, obviously, the way in which arms
brokers make their position very clear is they are aware of the
international regulatory framework and they are at pains to ensure
that they do not step outside the law. We all know that at the
moment one of the main ways in which brokers and other arms dealers
ship weapons to embargoed destinations is by sending them via
neighbouring countries to avoid detection. We strongly believe
that by only enforcing extra-territorial controls on British brokers
who are sending weapons to embargoed destinations, we would actually
not be meeting the Government's objectives because it would run
the risk of brokers being able to ship weapons via neighbouring
countries. If we had an extra-territorial licencing system, if
the governments saw that there was an application to broker an
arms deal to a neighbouring country, to Iraq, to the Yemen, to
anywhere, presumably, in the current environment, they would look
at it very carefully and at least one would think would reject
the licence. However, if you do not have a licence system, the
broker can simply do it without any sanction from the Government
whatsoever.
61. If there were a register like, as some of
us have suggested, in the United States, have you any idea how
many people might appear on that register? What sort of numbers
are we talking about? (Ms Saunders) The American system
defines brokers differently from what is proposed here, so it
is possible that the numbers may not correlate. Since making our
submission we have had an update from the American official who
looks after this list, and it is currently standing at about 250
individuals, but I must stress they do not use the same definition. (Mr
McLean) Of course, presumably for the UK, being a much smaller
country and a smaller defence industry, one would expect that
number to be lower.
Chairman: Thank you.
Rachel Squire
62. Can I pick you up on the Open General Trade
Licence and the fact that the Government proposes to make an Open
General Trade Licence which would permit all transfers to and
from a list of approved countries with exceptions such as torture
equipment, landmines and so on, and the approved countries would
include the EU, USA, Canada and others. I understand that your
Working Group is opposed to the scope of the proposed Open General
Trade Licence, and you would like to see the list of excluded
destinations expanded and to exclude some including the US and
only include EU countries, for instance. Can you explain to us
that where a country has strong export controls, as the US does,
and it is an ally of ours, why you believe that an open licence
is an inappropriate form of control on British involvement in
trade between that country and a third country? (Mr McLean)
Yes, certainly. Obviously, it is important we all recognise the
extraordinarily comprehensive range of the Open General Trade
Licences that are being proposed here. In a meeting the other
day somebody referred to these open licences as "the gold
card in arms dealing" and I think that is a very accurate
description. I think in our analysis this gold card under the
new proposals would be too widely given. The reason for that is
that basically under the proposals it would allow trade in military
equipment from the countries you mentioned to any destination
other than those which are explicitly proscribed. Now, this is
a far wider commitment than any country has for direct arms exports.
I think the principle that we would subscribe to is that the controls
on brokered arms deals should be of an equivalent nature to those
for direct exports from the UK. Of course, the direct exports
from the UK have the graded system of standard individual licences,
open individual licences and open general licences. This relation
with the scheme is not being proposed for these brokered arms
deals. We are concerned that the list of countries where weapons
could be sent is far too wide and would include destinations such
as Algeria, Columbia, Indonesia, Israel, the Philippines and Turkey.
There would, therefore, be no controls on exports to those destinations
from the countries you mention, and also some of the countries
do not have exactly parallel export control systems to the UK.
You mention the US, which does not have a criterion requiring
them to judge the impact of arms exports on sustainable development,
therefore, could we be sure that they would be imposing in all
cases the same controls as we would ourselves?
63. So just going on from that point, your concern
about the US is its export control policy rather than the actual
standards of US export controls? (Mr McLean) We agree
that the export control system as a whole is very rigorous and
we are often drawing examples from it to present to you. I think
in terms of some specific licensing deals, we might have a question
about them, and also with respect to the developments which give
sustainable development concerns and those licence figures. So
that we just basically believe in this case that the Open General
Trade Licence will be too broad. It could be that you could create
some other form of more broader licensing system just on a simple
case by case basis, but the Open General Trade Licence is too
broad.
64. Do you think it would be appropriate to
make any effort to influence the US policy in respect of sustainable
development? (Mr McLean) Yes, I think that is vital.
One of the things which the Working Group has consistently proposed
is increasing co-ordination and harmonisation of EU and US export
control policy. I think that has been a common statement of principle
and we would like to see that moving further to include a consideration
such as sustainable development.
65. Good. Do you think that would be more appropriate
than trying to ask British traders to fulfill the criteria of
two different licensing systems? (Mr McLean) I do not
think that the two are exclusive. Obviously, we should be working
with the US and other allies to ensure that they have similar
export controls to ourselves, but in the absence of effectively
similar controls we should not be providing arms brokers with
Open General Trade Licences.
Rachel Squire: Thank you.
Sir John Stanley
66. In your paper, on page 3, under the heading
Extra-territoriality, you say this: "Under the draft secondary
legislation the Government does not intend to introduce controls
on all UK brokers wherever they are located, despite this being
promised in its election manifesto in 2001. Instead the Government
has opted to pursue only torture equipment, embargo breaking and
long-range missiles." Now, first of all, can you clarify
for me how you have arrived at that policy conclusion as far as
the Government is concerned? Am I right in thinking that your
basis for saying that rests on the draft statutory instrument
in Annex G in the schedule to that Annex? I am afraid it is unnumbered
in the text, but it comes immediately after G7. When you say the
Government is covering torture equipment, am I right in thinking
you are referring therefore to the draft paragraph 1 under the
heading Certain Security and Para-Military Police Equipment? Is
that correct? (Ms Saunders) Yes.
67. Thank you. Obviously, the next paragraph,
Certain Missiles, is the basis you are saying long-range missiles,
and the Government is there saying: "Missiles capable of
a range of 300 kilometres or more." Then, secondly, in terms
of embargo breaking, I assume you are referring there to the next
draft statutory instrument at Annex H? (Ms Saunders)
Yes.
68. Thank you. Then in your paper you go on
to say, and I quote, continuing: "This comes at a time when
other European countries introducing controls are doing so with
full extra-territorial powers. Finland and Poland have introduced
controls". I am just going to stop the quotation there. Are
you saying to the Committee that as far as you are aware both
Finland and Poland have introduced full brokering controls on
an extra-territorial basis applying to all forms of military equipment?
Is that what you are telling the Committee? (Ms Saunders)
Yes. The details of what they define under their military list
may differ from ours.
69. Basically, you are saying that they are
applying their extra-territorial controls, those two countries,
to all forms of military equipment, in broad terms anyway? (Ms
Saunders) Yes.
70. Right. Thank you. Then going on to the remainder
of that sentence you say, I quote: ". . . and they are under
consideration in Belgium and France." (Ms Saunders)
Yes.
71. As far as those two countries are concerned,
when you are saying they are under consideration, are you saying
to us that there is a clear Government commitment to extra-territoriality
in relation to all military equipment in both Belgium and France? (Ms
Saunders) I think the situation differs. To get the details,
I will have to go back and send you fuller information if you
want exact details, but I understand in Belgium it is a Senate
amendment, so it has come from their Senate. In France, do you
know? (Mr McLean) I think it is also a parliamentary
proposal. If it would help, we could provide the Committee with
a note summarising the practice in each country.
Chairman: I think on each of the items that
Sir John has identified it would be very helpful if we could have
precisely what it is they are doing. That would be helpful to
the Committee.
Sir John Stanley
72. Thank you very much. One country you do
not mention which we have taken a close interest in, not least
in the intensive work that this Committee did in the last Parliament
and has continued in this Parliament on the issue of parliamentary
scrutiny, is in the practices and procedures in the United States.
Indeed, some of us in the last Parliament went specifically to
the United States to look at their whole arms export control system.
As we all know, the United States is far and away the biggest
arms exporter worldwide. Have you got any information for us as
to whether the United States Government has any provisions in
the area of extending statutory controls on an extraterritorial
basis in relation to brokering so that its own rigorous arms export
control policy is not subverted by extraterritoriality? (Mr
McLean) They probably have the most comprehensive system.
The US system controls US arms brokers and US citizens wherever
they are located in the world.
73. Why did you not refer to that in your paper?
Was there some reason? (Mr McLean) I think that would
have been an oversight. It is something that we have referred
to in previous correspondence with the Committee. That is a prior
existing legislative commitment and the ones we referred to in
the brief are new ones, we have just referred to the most contemporaneous
ones.
Sir John Stanley: Perhaps in the further paper
we could also have the particular views on the latest position
in the United States so far as legislation on extraterritoriality
is concerned.
Chairman
74. That would be helpful. (Ms Saunders)
There is mention of the US system briefly on page six.
Sir John Stanley: Thank you. If you have got
anything further you want to add on the US, if you could put that
in your further paper.
Chairman
75. If I might say now, before I forget to say
it, as quickly as possible please because we want to respond to
the Government's consultation document within a reasonable period
of time. (Mr McLean) Of course.
Chairman: Thank you for that.
Mr Olner
76. Perhaps UKWG can tell the Committee why
should British transportation agents involved in the transport
of military equipment be subject to regulation? (Ms Saunders)
When you look at the cases that have come to light through investigations,
such as the UN investigations into those breaking embargoes or
into the exploitation of natural resources in the DRC, the Democratic
Republic of the Congo, you find that it is very often transportation
companies that are taking arms—UK transportation companies—into
conflict zones or by diversion breaking embargoes rather than
British brokers. If you want to control the problem of arms going
into conflict zones in an unregulated fashion then transporters
are an obvious place to apply government pressure.
77. How big is the problem? (Ms Saunders)
Andy, would you like to talk about that? (Mr McLean)
We recently had a meeting with a British air freight operator
who estimated that in terms of air transportation from British
agents the numbers we are talking about are fairly small. He estimated
that there are probably about 20 British air transportation agents
operating around the world and between 14 and 16 of those would
be operating in Africa, so we are not talking large numbers.
78. How many of those would be doing it "legitimately",
not clandestine, quite straightforward, they offer their services
and they are accepted? (Mr McLean) I think one of the
problems at the moment is that it is an unregulated area. If you
take a look at the legal definition of what is legitimate then
unless they are supplying weapons to a country under a UN arms
embargo then everything is legitimate.
79. Just to give the Committee a feel of it,
have you any idea how many companies we are talking about? (Mr
McLean) In terms of British air transportation agents, the
figures we were given by this individual were there are about
20 in operation internationally and about 14 to 16 of those would
be operating in Africa.
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