House of Commons - Foreign Affairs

Select Committee on Foreign Affairs Second Joint Report

6 FORMAT OF ANNUAL REPORTS ON STRATEGIC EXPORT CONTROLS

165. The Government's Annual Reports on Strategic Export Controls have been widely recognised as among the most informative and transparent in the world.[191] Nevertheless, we would not wish complacency to prevent future Annual Reports from being improved further. In this particular area, informativeness and transparency are less developed than they might be at the international level.

166. Furthermore, Sibylle Bauer, who has conducted research on transparency in export controls across the EU, has questioned the claim that the British Annual Reports on Strategic Export Controls are superior to those of other EU countries. In her view, "with regard to a number of elements of arms export policy, other countries' annual reports are more transparent. In fact, at least one element of best practice can be found in most EU countries' reports".[192] Belgium and Denmark give information about end users in broad categories. The Netherlands publishes the detail of denial notifications made under the EU Code of Conduct, specifying "the intended destination (e.g. Pakistan), the recipient within the country (e.g. the Pakistani airforce), the end-use (if not identical with the recipient), a detailed description of the equipment (e.g. 'turbojet engine for training aircraft, adjusted for military use', WA ML 10), the reason(s) for the denial based on the Code criteria (e.g. criteria 4+6), and date and number of the denial notification within the EU information exchange (e.g. NL/8 of 19 June 1998)".[193] Where a licence has been refused, Germany identifies not only both the intended destination and the type of military equipment involved, as in the United Kingdom, but also the consolidated criteria under which licences have been refused to particular countries. Other countries provide other information, none of which is published by the British Government.[194]

167. Much of this information would be of great interest. It is hard to see how the Government could have principled objections to publishing this information, given that other EU countries do so already. In the past, the Government has implied that it is prevented from publishing information on individual denial notifications by operative provision 4 of the EU Code of Conduct.[195] Given the German and Dutch practice, however, this would seem no longer to be the case. We recommend that the Government should explain in its response to this Report why it does not publish information on individual denial notifications under the EU Code of Conduct to the same level of transparency as the Netherlands.

168. Many of the Government's past arguments against including more information in the Annual Reports have related either to commercial confidentiality or to implications for the size of the Reports. We have some understanding for both of these concerns, although with the development of electronic media, size is less of a consideration. We would not want information contained in the Annual Reports to give an unfair advantage to overseas competitors of British business. However, as Ms Bauer points out, while "most EU governments use similar arguments to justify the confidentiality of certain aspects of arms export policy: commercial confidentiality, foreign policy considerations, legal and constitutional provisions, and the recipient countries' national security … this results in the disclosure of different aspects of information".[196]

169. There are two areas in particular—over and above those that we have touched on already in this Report—in which the provision of further information would not only increase the transparency of the Annual Reports, but also avoid some of the false impressions which are given by the partial information published at present. These two areas are: information on the end users of licences, and better information on the value of exports.

Information on end use

170. The case for publishing information on end users is that it is often only in the context of this information that the Government's decisions can be properly assessed. For example, opinion as to whether the Government would be right to allow the export of military equipment to a particular country might depend on whether the end user is an international peacekeeping force, a national army, a local police force implicated in human rights abuses or a firearms dealer of dubious provenance.

171. The main barrier to providing information on the end users of licences appears to be commercial confidentiality. The Government has told us that "information on specific end users is commercially confidential".[197] We are not convinced that the publication of information on specific end users would in fact compromise the commercial prospects of British business, particularly given the buyer-driven nature of the international defence market. Companies might be concerned if the Government proposed to publish detailed specifications of the equipment intended for export or agreements as to exact price. In some cases, the sale of Hawk to India for example, there are no grounds for claiming that information about the end user is commercially confidential—it is widely known that the deal is being promoted and who the end user is. In most other cases, it is unlikely that publication of the identity of an end user would be to a company's commercial disadvantage. It may be that in some cases, there are good reasons for not publishing the identity of end users. We would appreciate reassurance, however, that these reasons are neither overstated nor used as an excuse for failing to publish information that would do no harm to companies and would be of public interest. We recommend that the Government should explain in its response to this Report in what circumstances it believes that the publication of the identity of end users of export licences would be to the commercial disadvantage of the exporter.

172. The Government has itself published or authorised us to publish end-user details in a small number of licensing decisions, particularly where it has licensed the export of goods to countries under embargo, usually for the use of non-governmental organisations or peace-keeping forces, and it wants to make clear that no embargo has been broken by doing so. Information in the 2001 Annual Report on licences to Afghanistan and information provided to us on licences granted to Somalia and Sudan are cases in point.[198] The publication of this information in the Annual Reports would be useful to the Government as well as to the reader, because the basic information which the Reports normally include on licences might without supporting information cast the Government's decisions in an unfavourable light. We recommend that the Government consider providing more information in future Annual Reports where this could help to explain licensing decisions which might otherwise give rise to the suspicion that they had been improperly granted.

173. An alternative to publishing the identity of specific end users would be to give information on end users by category—to indicate whether a licence had been granted for end use by, for example, armed forces, police, industry or private use. This would presumably overcome most of the Government's concerns about commercial confidentiality. According to Ms Bauer, Belgium and Denmark already publish such information.[199] She also notes in the context of incorporation cases that "the categorisation of recipients practised in Belgium and Denmark would permit further scrutiny of equipment exported to industry abroad, and therefore possibly subject to re-export once integrated into the final product".[200]

174. When the Quadripartite Committee in the previous Parliament recommended that the Government should publish end-user information, the Government responded by stating that it was "not aware of any other Government which routinely publishes details of end-users".[201] This is evidently no longer the case. We recommend that the Government should consider publishing information on end users of licences by broad category.

Information on value of exports

175. Information on the value of exports currently contained in the Annual Reports is less useful than it might be.[202] This is because the customs tariff codes used to compile the statistics do not match the classifications of goods subject to strategic export controls.[203] It is therefore impossible to make any meaningful comparison between the information on strategic goods licensed for export and the information on the value of military exports. In July 2000, the Government agreed with our predecessor Committees that "greater co-ordination between the EC Tariff (the Combined Nomenclature) and ratings of military goods for export licensing purposes would be desirable in order to simplify the collation and cross-referencing of information".[204] But we are not clear what progress, if any, has been made since then. We recommend that the Government should consider again how it might provide information on the value of military exports which comes closer to providing a comprehensive measure of all exports of licensable goods.

191 Ev 2, Qq 3-4 Back

192 Ev 45 Back

193 Ev 45-46 Back

194 Ev 46 Back

195 HC (1999-2000) 225, para 54; Ev 20 Back

196 Ev 46 Back

197 2001 Annual Report, p 16; Ev 34 Back

198 2001 Annual Report, p 16; Ev 25, 24 Back

199 Ev 46 Back

200 Ev 47 Back

201 Cm 4799, p 12 Back

202 2001 Annual Report, pp 369-370 Back