7 CONCLUSION
122. The Government's
proposals for secondary legislation under the Export Control Act
are a welcome if overdue series of measures to set the existing
licensing regime on a permanent statutory footing and to extend
and modernise the strategic export control system.
123. But there is a loophole
in the proposals as they stand. Their central purpose should be
to ensure that those who are involved in the trade in arms can
only do so legally where their activities are sanctioned by the
state. The Government has chosen to regulate British arms traders
and brokers located abroad, but only in an incomplete set of limited
circumstances. The arm of the law should reach out to British
subjects based overseas who are involved in all those aspects
of the arms trade which any civilised nation would regard as reprehensible—including
the proliferation of small arms. We acknowledge that there are
real practical problems in attempting to extend national jurisdiction
over actions carried out abroad. In our view they are worth attempting
to solve. But it makes no sense to try to solve these problems,
as the Government proposes, for oversized handcuffs, but not for
small arms.
124. At the same time,
the proposals risk enmeshing legitimate business in a web of unnecessary
bureaucracy. To avoid this, open licensing should be widely applied,
and record-keeping requirements should rely as much as possible
on information that industry would hold regardless of the Government's
regulations. The Government should ensure that open licences can
easily be suspended or revoked if they are used as cover for reprehensible
activities—and ensure that this fact is widely known.
125. If the Government
is serious about making its legislation as effective as possible
in preventing undesirable proliferation without putting a brake
on legitimate industry, it may have to think outside the box of
conventional export controls. The Government should think again
about whether intangible technology is best controlled at the
moment of export, or at the moment of transfer; and about whether
brokering activities, which may not involve an export at all,
might not be best controlled as in the USA, by licensing the people
who carry out the activities, rather than the activities themselves.
The new regime proposed by the Government looks much like the
existing regime on physical exports, but it will regulate activities
which are not exports and are not like exports. While the consultation
document is a brave attempt to square this circle, perhaps what
is needed is another shape altogether.
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