Examination of Witnesses (Questions 120-139)
THURSDAY 3 APRIL 2003
RT HON
PATRICIA HEWITT
AND MR
GLYN WILLIAMS
Chairman
120. We are not talking about banning the whole
thing, we are talking about regulation, about licensing, with
respect.
(Ms Hewitt) This comes back to the point about extraterritoriality.
As we say in the Home Office guidelines, extraterritoriality should
apply to the most serious offences which are subject to almost
universal international condemnation where everybody would know
that they were committing an offence. Because in many cases it
is quite legitimate and lawful to sell small arms or other military
equipment it simply does not meet that definition, whereas selling
torture equipment or selling military equipment to an embargoed
destination quite clearly does meet those criteria.
Mr Hamilton
121 And yet we know that small arms are responsible
for more deaths, especially in Africa, than any other sort of
weapon and bribery clearly is not responsible for the deaths of
so many innocent people.
(Ms Hewitt) Bribery and broader corruption has a quite
appalling effect in Africa and is responsible for a very large
part of the poverty in Africa. Small arms have an appalling effect
in those regional conflicts. The way we can deal with that, and
as I said we are not, I am glad to say, major manufacturers or
exporters of small arms, is working with the international community,
in some cases through adding to the list of embargoed destinations,
in which case small arms to those destinations is caught by our
full extraterritorial control, in other cases by intervening to
prevent the conflict in which small arms and other equipment are
doing such appalling damage. Of course, that is precisely what
we did in Sierra Leone.
122. Can I move on to the question of Sanctions
Orders. Is it proposed to make Sanctions Orders for destinations
subject to UK national, as opposed to international, embargo,
for example places like Iran?
(Ms Hewitt) Yes, yes we are. Sorry, I just want to
double-check that. Yes, the answer is both international and national
embargoes.
123. So why are UK persons operating from abroad
expected to be aware of UK national embargoes, but not of UK national
laws on arms transfers?
(Ms Hewitt) I think it is perfectly reasonable that
where we have a national embargo on a destination which is not
itself subject to an international embargo, that is something
that we publicise pretty extensively. We would say we are going
to stop trading military equipment to that destination and in
that situation we would want to have full extraterritoriality.
It is when you move into the area of military equipment to non-embargoed
destinations, which will sometimes be completely legitimate and
lawful, and sometimes not, that we think we simply cannot go for
full extraterritoriality for all the reasons that I have tried
to set out already.
Mr Jones
124. Can I just follow up the point you made
about arms brokering in extraterritorial areas. You said that
you had obviously looked at some other international comparisons
where they have got similar laws and they are impractical. Have
you actually done any assessment, if we are to understand this,
as to what it would cost in terms of the government trying to
enforce a rule that you do not feel is actually enforceable?
(Ms Hewitt) We have not begun to work out in detail
what it would cost, how many more staff we would need and all
the rest of it, assuming we were actually going to try and enforce
it. The reason why I do not think we would need to go down that
path is because we have already done a partial regulatory impact
assessment for what we are proposing. There are concerns, as I
think the Committee will be aware, from industry that because
the new controls cover every aspect of legitimate defence and
military business we have under-estimated the costs: the complexity
of record-keeping and all the rest of it. That is one reason,
of course, why we are consulting both on the Orders and on the
regulatory impact assessment. What is crystal clear is that if
you were to go for full extraterritoriality of everything then
the costs would escalate very, very fast indeed.
Mr Lansley
125. Secretary of State, it seems as though
you began by saying that the reason you were not going to seek
to extend extraterritorial activity was because of problems with
enforcement but in response to questions it seems that what you
are saying is that there is an objection in principle to trying
to extend UK extraterritorial jurisdiction over activities that
are legal in other countries. The curiosity is that in response
to my colleague, Mr Hamilton, there seemed to be a number of categories
of activities which you are proposing to extend UK extraterritorial
jurisdiction on, for example in relation to a national arms embargo
that was mentioned or in relation to, for example, oversized handcuffs
in the United States, and there may be a range of other things
where you are looking to extend UK extraterritorial jurisdiction
but in the country in question it is a legitimate activity. Which
is it? Do you have a point of principle which is where there is
international agreement where it is clearly illegal on an international
basis in the country in question then we will try to enforce it
on UK citizens as well, or are you proposing to say there are
a set of UK criteria of what we regard as acceptable or otherwise
and we will seek to enforce that regardless of national jurisdiction?
(Ms Hewitt) As I have tried to indicate, I think this
is a matter both of principle and of practical enforcement. As
far as the principle is concerned, this is about where it is right
to apply extraterritorial controls. The Home Office guidance talks
about serious offences subject to general international condemnation
where the offender could reasonably be expected to know that was
an offence. There will always be some boundary problems here but
it seems to me that in the case of a national embargo, although
by definition that is not an international embargo, it is quite
legitimate for us to say that for a UK citizen anywhere to breach
a UK embargo is a serious offence and one to which extraterritoriality
should apply. I think it would be a bit odd to have a national
embargo and a system of extraterritorial controls and not to marry
those two things together. That is something that we can explore
further in consultation but I feel quite comfortable with putting
the boundary there rather than saying it is only in the case of
European and international embargoes.
Ann Clwyd
126. Not all EU countries apply the same controls
on equipment regarded by the UK as torture equipment. Yet transfers
involving all such equipment will be subject to extraterritorial
jurisdiction, despite a lack of international consensus. Tell
me, why does the Government believe that a British citizen in
the United States trading in oversized handcuffs should require
a licence to do so, but another British citizen in South Africa,
for example, trading in small arms should not?
(Ms Hewitt) I think, as I said earlier, there is right
across the world condemnation of torture and of trade in torture
equipment. There is then the problem of defining exactly what
you mean by torture equipment. We take a view on oversized handcuffs
that we would not want them to be used for the purpose of leg
irons, we regard that as an unacceptable practice, certainly when
we look at export controls for oversized handcuffs or export licences
we look very closely at whether there is a risk they would be
used for the purpose of leg irons. I accept in the United States
they take a different view of these matters and we will continue
to enforce our view of those oversized handcuffs. As far as small
arms go, and the broker in South Africa you were referring to,
it comes back to the earlier point I was making, that trade in
small arms and, more broadly, any other military equipment is
sometimes hugely damaging, wrong, and to be condemned. Certainly
in the case of the use of small arms in many of those African
conflicts that will be the case. In other cases it is perfectly
legitimate, and if it concerned an export directive from the United
Kingdom we would licence it. You cannot draw a boundary round
it, as you can with torture equipment, and say, "In our view
this is always wrong", because it is not, and that is not
the view we take.
127. Who defines what is torture equipment?
(Ms Hewitt) For the purposes of our controls we will
define it, Parliament will define it because it will be set out
in our orders and our guidelines.
128. Are you then confident that the extra territorial
controls on transfer of long-range missiles and torture equipment
and transfers to embargoed destinations will be workable? Do you
think you will be able to achieve extradition and gather sufficient
evidence to prosecute for offences committed overseas?
(Ms Hewitt) I think it is going to be tough, it comes
back to the point I was making earlier, the scope of the new act
and the new orders is very large indeed. Of course where the offence
is committed wholly or mainly abroad it is going to be more difficult
to get the evidence. We may well come up against problems of extradition
and we will do our best with that. Part of what we are doing by
working with other governments, working with the NGOs, is building
more of a consensus on this to try and strengthen our hand when
it comes to enforcing these new controls. In some cases our own
embassies and high commissions will be able to get the information
that they need, in other cases we will be very dependent on NGOs
or on law enforcement authorities in other countries. We will
need to build that co-operation and share information in order
to be able to make this work in the way that you and I want it
to work.
Sir John Stanley
129. Secretary of State, you may have disagreed
on the last one, I feel sure you will agree with me and the rest
of the Committee that there should never be circumstances in which
the lives of British servicemen and service women could be endangered
in a conflict situation by their not being able to obtain expeditiously
equipment they need in a conflict situation. However, in the submission
that the Quadripartite Committee has received from the Defence
Manufacturers Association in the paragraph headed, "Support
for the UK's own armed forces" the Defence Manufacturers
Association say, "The complete lack of any mention throughout
the draft secondary legislation of the complicated issue of Crown
exemption could, if not addressed by the Government, result in
an inability of UK industry to provide the essential expeditious
support needed by our own armed forces and overseas deployments
in the future". The witness that we had from the Defence
Manufacturers Association this morning gave as an illustration
of the difficulties created by the present legislation the facts,
he said to the Committee that he would not have been able to make
the telephone call that his company made to our forces near Basra
this morning, presumably before coming to the Committee, when
advice was being sought from his company on a technical matter
if the present secondary legislation had been in place. Could
you respond to these very, very serious concerns?
(Ms Hewitt) We will look at that very, very closely.
This is part of the value of having all this consultation on all
these orders. Your starting point is absolutely right. One of
the reasons why we value the military and defence industry in
our country is precisely its ability to equip our armed forces
with some of the best military equipment in the world, and that
must remain the case. The Export Control Act itself provides for
a Crown immunity, but it is quite true that in the consultation
document we do not particularly look at MoD contracts as such.
What I would say is that where the MoD, in other words the Crown,
is exporting goods that are already in its possession it would
not need a licence to do so. We will look very carefully at the
point that is being made, that we would not be able to make a
telephone call to Basra, because that is certainly not the intention,
and if that has inadvertently happened in the drafting we will
have to change it. We will need to look at that in a bit more
detail.
130. It would be very helpful to the Committee
if the Secretary of State could give us a response to this absolutely
crucial, potentially life and death area for our servicemen and
women, at least to what is said by the Defence Manufacturers Association
in that paragraph headed "Support for the UK's own armed
forces", if we can have a written response before we come
to consider our report.
(Ms Hewitt) I would be delighted to do that, Sir John.
Mr Hamilton
131. Secretary of State, the Government proposes
to make an Open General Trade Licence which would permit all transfers
to and from a list of approved countries, except, of course, for
torture equipment, land mines, long-range missiles and components
for those missiles. Can I ask you what the rationale is behind
the list of countries which it is proposed should be included
in the Open General Trade Licence? Why is Japan included and yet
Switzerland is not included, even though Switzerland is on the
existing Open General Licence for military technology?
(Ms Hewitt) Obviously all of the European Union countries,
including the new member states, are committed to assessing export
licence applications under the European Code of Conduct and the
common criteria. The non-European Union countries are those that
we believe have robust and long developed export control systems
but basically follow the same core principles. If there are suggestions
that we have not got that list quite right that is something that
we will look at as we respond and reflect upon the consultation.
132. You will probably have to re-examine it
as far as Switzerland is concerned because there seems to be no
rationale behind that at all.
(Mr Williams) I will have to look at Switzerland.
That list is based on the existing Government Open General Licence.
133. You will have a look at it.
(Ms Hewitt) We will have a look at that and any other
comments we get on the list.
134. The Open General Trade Licence as it stands
would not regulate British involvement in the trade of defence
equipment between, for example, the USA and Israel, even though
the USA regularly permits the export of military goods to Israel,
which the British Government would refuse on the grounds they
might be used for internal repression. Do you not risk being accused
of double standards if you fail to regulate British involvement
in arms transfers between overseas countries, which would be refused
if they were exports direct from the United Kingdom?
(Ms Hewitt) We have had a look at this very carefully,
we do need to be able to rely on the export control systems of
other countries that have both robust export control systems in
place and are close allies. It is this Committee that has often
praised the robustness and transparency of the American system
of export controls.
Chairman
135. May I just clarify that, because this has
been referred to on a number of occasions. As I said again last
Thursday in the Westminster Hall debate, the Committee has referred
to the robustness of the American export control system, its effectiveness
in delivering that which the administration seeks to deliver but
we have emphatically pointed out, repeatedly, that we have not
endorsed their policy, because clearly there is a difference between
the policy and the robustness of the system. All we ever said
was that the system was robust. We have never, despite suggestions
to the contrary, I might say, from the Foreign Secretary and other
people, said that the policy is the same because, clearly, as
Mr Hamilton has pointed out, the policy in relation to exports
to Israel is fundamentally different. Forgive me, I do not want
this Committee's views on this matter to be misunderstood and
I hope never again will there be a misunderstanding.
(Ms Hewitt) Let me say I do not think I in any sense
misunderstood the Committee's position, I was simply going to
say what I think is the case, the Committee has praised the robustness
of the American system, indeed I think you just used that very
phrase. I was going on to make the point that you have just made
that the decisions in certain cases are not the same, they will
make a different decision in some cases from the decisions that
we would make. I do not think we can try and catch absolutely
everything or impose our own policy on every other country. The
other point that I would make, of course, is that traders operating
out of countries where we have put in an open general licence
will still be subject to those countries' export controls. There
may be a few situations, Mr Hamilton has rightly identified one,
where that country's export control system would license an export
that we would not ourselves license but that is not the generality
of cases.
Mr Hamilton
136. And yet, for example, I understand, we
would not license the export of ejector seats to Israel?
(Ms Hewitt) We consider every application on a case-by-case
basis in very strict conformity with the consolidated criteria.
I would not want to try and give you an answer on a hypothetical
case but we would look at it in line with those criteria, including
of course the risk of use of the equipment for repression or in
situations that would exacerbate regional conflict.
Ann Clwyd
137. One of the things, Secretary of State,
we did admire in the American system was prior parliamentary scrutiny,
which is a subject that this Committee has been very robust on,
as you know, and I think we rather regret that we have not been
able to question you in detail on your objections to that system,
but I would put it to you that in the absence of case-by-case
licensing and the absence of prior parliamentary scrutiny, the
proposed system of open licensing is unduly permissive.
(Ms Hewitt) On the issue of prior parliamentary scrutiny,
of course this is an issue, I am afraid, on which the Government
and the Committee will simply have to agree to disagree. We have
spelt out our position and our reasons for it in several different
responses to the Committee's reports.
138. We will continue to come back on it also.
(Ms Hewitt) We can continue to discuss it, but I fear,
at the moment anyway, we are likely to continue to disagree on
it. When it comes more generally to the issue of open general
licensing, again we have taken the view because the new trafficking
and brokering controls go so wide and would catch almost every
activity of every perfectly legitimate aerospace and defence company
in our country, it would be quite impossible to try and run the
whole thing on a system of individual licences and the whole system
would grind to a halt and therefore using a system of open general
licences, specifying what is permitted, specifying the record-keeping
that is needed seems to us to be the sensible way forward on that,
but it is something we have specifically invited views on.
Rachel Squire
139. Secretary of State, can I just pick up
again on this issue of trafficking and brokering and how we are
concerned that overseas subsidiaries could be used as a semi-official
means of conducting trade which would not be approved of if it
were taking place in the United Kingdom. On subsidiaries the consultation
paper makes it clear that a British company would not require
a trading licence for the activities of an overseas subsidiary.
The UK Working Group on Arms is concerned that UK brokers will
potentially be able to avoid UK export controls by setting up
an overseas subsidiary and conducting any business they do not
want scrutinised in a country with less exacting licensing requirements.
What measures can you take to ensure that overseas subsidiaries
are not used as a way of avoiding the new trade controls?
(Ms Hewitt) You are absolutely right that if the subsidiary
is not directly controlled by a parent company in the United Kingdom
then it would not be covered by these new controls. I know that
there have been concerns about it. There will be situations where
the relationship between the parent company and the subsidiary
is such that it would nonetheless be covered. If, for instance,
the parent company puts a customer in touch with its subsidiary
abroad but the parent company itself directly benefits from that
introduction then that would be caught. In other words, if the
parent company stands to profit directly from the deal that is
being done with the subsidiary then our controls would apply because
they would apply through the parent company, as it were, to the
subsidiary but if the subsidiary company is entering into a deal
that is wholly abroad and does not directly return a profit to
the parent company then it would not be caught and this really
comes back to the discussion about extra-territoriality. That
seems to us to be both the legal position and the right approach
to take to that extraterritoriality.
|
