Select Committee on Defence First Joint Report


2  THE GOVERNMENT'S PROPOSALS

11. The Government's proposals in the consultation paper are complex and legalistic—often, but not always, necessarily so. Before we come to consider the policy and regulatory impact of these proposals, it is worth setting out briefly what the legal effects would be of the orders as currently drafted.

12. The DTI is proposing to introduce two main Orders under the Act—the Export of Goods, Transfer of Technology and Provision of Technical Assistance Order and the Trade in Controlled Goods (Control) Order. These would consolidate existing export control legislation and extend controls to several new areas. The Department has also published in draft an example of the type of order it would introduce in order to enforce an arms embargo against a particular destination: the [Embargoed Destination] (Sanctions) Control Order.

Export of Goods, Transfer of Technology and Provision of Technical Assistance Order

13. This Order introduces export controls into new areas:

It also seeks to consolidate and rationalise existing controls on:

  • the export of military goods and technology in physical form; and
  • the physical export and electronic transfer of dual-use goods and technology.

14. The new provisions under the Order for the electronic transfer of technology and software will extend export controls from physical means to a number of other media, including e-mail, fax, telephone and video-conferencing. Information placed on a company's intranet, or a restricted-access site on the internet, would also be covered by the controls, as would documents stored in the UK which were accessed remotely by an employee overseas. In all these cases, it is the physical location of the recipient of the information that will determine whether a licence is required. The provisions would not cover information in the public domain.

15. The provisions relating to weapons of mass destruction technology and technical assistance apply not only to transfers and assistance provided from the UK, but also to transfers and assistance by any UK person or legal entity anywhere in the world. It would be illegal under the Order for a person to communicate technology by any means without first obtaining a licence if he knows, or has been informed by the Government, that it is or may be intended for use outside the EU in connection with the development of WMD or missiles capable of their delivery. There would be no requirement, however, to make active attempts to check that a proposed recipient does not intend to use information in a WMD programme. Similar provisions would apply to supplying or facilitating WMD-related technical assistance.

Trade in Controlled Goods (Control) Order

16. This Order will introduce new controls on trade in military equipment between overseas countries (including 'trafficking' and 'brokering'). The Order covers not only companies or people trading between overseas countries on their own behalf, but also those negotiating contracts and arranging trade and related activities for a fee. The Order does not, however, control transportation, financial services, insurance or advertising—except where extra-territorial controls apply.

17. Extra-territorial controls (on the activities of United Kingdom persons anywhere in the world) apply to trade to any destination in:

18. For trade in other controlled military and paramilitary equipment, a licence will be required only where any part of the controlled activity takes place in the UK—except for trade to embargoed destinations.

[Embargoed Destination] (Sanctions) Control Order

19. This is an example of an Order to control the export of military goods to a destination subject to an arms embargo. The exact content and provisions of the Order will depend upon the circumstances under which it is introduced. It would cover the supply and delivery of specified equipment and acts calculated to promote this, and will apply both to activities by anyone within the UK and to activities by any UK person or company anywhere in the world.



 
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