Summary
This Report comments upon and suggests improvements to the regulatory system to be imposed under the Export Control Act 2002. In January 2003 the Government launched a three-month consultation on its proposals for this system. Early in April, as the consultation period was drawing to a close, we took evidence on these proposals from industry, from NGOs and from the Government.
On the whole, the Government's proposals are welcome if overdue. However, both industry and NGOs have voiced concerns. Industry fears that they will impose an unacceptable burden on British business, and that they could impede the provision of technical assistance to the armed forces. NGOs believe that the proposals need to be more far-reaching if they are to be effective. Not all of the concerns are justified or in proportion, but we identify a number of areas in which the Government's current proposals could be both more visionary and less bureaucratic.
The legislation needs to be targeted effectively towards deterring the irresponsible proliferation of military equipment. British citizens and companies who contribute to this should not be able to escape justice by operating from abroad. At the same time, the competitive position of legitimate British business should not be inhibited by excessive bureaucracy. However, the Government's current proposals for a limited extension of extra-territorial jurisdiction are an inadequate halfway house solution, and its proposals for record keeping have uncertain but potentially burdensome implications for British business. Both these areas—and a number of others—need further thought.
The Government's proposals also extend the traditional model for controlling physical exports to other activities, such as electronic communications and brokering. We suggest that a more flexible template might be appropriate to control activities which are neither physical nor exports. This flexibility may help the new licensing regime to deter proliferators without also deterring more responsible exporters.
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