Select Committee on Defence Fourth Report


Transparency: the state of play

18. There are two main categories of export licence for which applications may be made:

There are also Open General Export Licences (OGELs), under which exports may be made without the need for a separate licence application.

19. The Government's Annual Report contains information on SIELs and OIELs by destination country and by category of equipment. It does not contain information on quantity (except for small arms) or on end use, and it contains only very general figures on value, which cannot be interpreted reliably. Two hypothetical examples may help to illustrate what this means:

  • The Annual Report will show that the Government has licensed the export of 1,000 submachine guns to country X
    • but it will not show whether these weapons are for the use of the country's police force, for sale on the high street or for the use of the army of another country entirely, which happens to have a base in country X.
  • The Annual Report will show that the Government has granted an open licence for the export of components for combat aircraft to country Y,
    • but it will not show whether these components are for use only by the Air Force of country Y or by a range of end users, nor whether the components in question are spare tyres, ejector seats or a new targeting system, nor whether there is an upper limit to the quantity of components that may be exported under the licence.

20. In addition to the information in the Annual Report, we have requested supplementary confidential information relating to licensing decisions taken in 2002, including information on all licences issued to a range of countries including China, Indonesia, Iran, Israel, Saudi Arabia and Syria, information on a selection of open licences granted for export to multiple destinations, and information on all SIEL applications refused and revoked during 2002. In general, we have received the information we have requested (but see paragraphs 13-17 and 44-46).

21. The Government has also provided us proactively with confidential information on a range of licensing decisions taken during the first nine months of 2003. This followed the release of limited information on these decisions in response to a parliamentary question, and the publication in a national newspaper of an article drawing conclusions from this information which the Government wished to rebut.[23]


22. The Government's Annual Report has had the same basic format now since the Annual Report for 1999. There will, however, be three additions to the 2003 Annual Report:

  • Information on gifts of military equipment by the Government will be included.[24]
  • Licences granted according to the incorporation additional factors announced by the Foreign Secretary in July 2002 will be identified for the first time, although possibly not for the entire year, "because of the need to set up new arrangements for collecting and collating the relevant information".[25] This will not enable the reader to know the final destination of the finished equipment under construction, but it will at least make clear that the finished equipment is liable to be re-exported. We note that there seems currently to be some confusion within Government as to how incorporation cases are recorded in Annual Reports: in at least one case in the Annual Report for 2002 (ELA 36242), the goods for incorporation were shown under their country of final destination, rather than under the incorporating country.
  • Thirdly, information on Global Project Licences (for equipment produced collaboratively under the Framework Agreement) will appear for the first time. The first Global Project Licence for a project with British involvement was issued on 24 January 2003, for the export of missiles and missile components to the French Government.[26] The Government has raised with partner countries our suggestion that information should be published in future Annual Reports showing that a country is a permitted destination under a Global Project Licence as soon as the Government is aware that agreement has been reached with an end user in that country for supply of equipment produced under such a licence, but no consensus has yet been reached on this proposal among the Framework Agreement states.[27]

23. There will be more substantial additions to published licensing information for 2004, as a result of the coming into force of Orders under the Export Control Act. According to the 2002 Annual Report, "licences granted and refused under the Government's ability to control trade in controlled goods, and in relation to intangible transfers and technical assistance, will be included in future editions".[28] Under this Act, controls will be imposed for the first time on trade which does not involve exports from the United Kingdom. We recommend that the Government should explain in its response to this Report how it intends to publish information on licences which do not involve exports from the United Kingdom, including licences for trade between third countries and licences for the electronic transfer of technology to recipients within the United Kingdom. We further recommend that in the case of trade control licences, the Government should publish both the country of origin and the country of destination.

The case for a wider review

24. There have now been five years of parliamentary scrutiny and five full years of reporting by the Government. Since the Government is anyway faced with the need to make considerable changes to the information it reports in 2003 and 2004, we believe that the time has come for a wider reassessment of the information published by the Government and the information provided to us in confidence. The aim of publishing information should be to enable sensible and topical public debate to take place on the decisions that the Government has reached. Currently, the Government's Annual Reports fail on two counts: the information that they contain is sometimes misleading because it is incomplete; and the information is no longer topical by the time that it is published.

25. There is some information on export licensing decisions which cannot be published because of commercial confidentiality, security or other concerns—although less in our view than the Government sometimes claims. Our ability to examine such information in confidence is important because it ensures that the Government's decisions do not escape scrutiny, and it provides a level of reassurance to the public.

26. We will now consider how the Government should address what is widely regarded as the main gap in what is currently published: information on who is to use the equipment that the Government licences for export, and on conditions attached to its use. We also look at ways in which the Government could provide information in such a way as to make our scrutiny more effective and more timely. Finally, we have some brief comments to make on the availability of information on actual exports.

End-use information

27. End-use information is key to real transparency and scrutiny. Without this information it is usually impossible to determine whether a licence has been properly granted.

28. End-use information is at least as important for OIELs as for SIELs. As we discuss below,[29] some open licences are more restrictive than others, and this will largely determine whether a decision is of potential concern or not. An open licence for the export of an unlimited quantity of armoured vehicles to any end user in a country will be of more potential concern than an open licence for a limited quantity of these vehicles to a specified end user, such as a press association or an international organisation, under specified conditions. Failure to provide the stated end use in such cases can give the impression that a very wide-ranging licence has been granted.


29. The fact that licensing decisions are classified by destination, rather than by recipient, is a common source of misunderstanding. It causes particular confusion in the Government's Annual Reports, when a licence for export to country A is for use by someone (often the Armed Forces) from country B. An example occurred last year, when an open licence was granted for the export of a very wide range of goods to countries such as Tajikistan and Uzbekistan, but which were in fact for the United States Government, for use in support of US military operations overseas.[30]

30. Another example in the Annual Report for 2002 concerns an apparently wide-ranging open licence for export to 42 different countries, including Angola, Ivory Coast and Paraguay, for equipment including components and technology for: submarines, torpedoes, naval mines, aircraft carriers, heavy machine guns, combat aircraft, combat helicopters, anti-ship missiles, surface to air missiles, small calibre artillery, combat helicopters, mortars, and general purpose machine guns.[31]

31. It is hardly surprising, given the description in the Annual Report, that NGOs have voiced concern that the Government has been prepared to allow the apparently unlimited export of wide-ranging offensive equipment to a swathe of unlikely destinations. Saferworld has specifically expressed concern about this licence:

    It may be that many of these countries have little interest in a large proportion of the equipment on this licence, which raises questions about why they should be included in the first place. Conversely, if they are in the market for most of the items listed, this would raise other, but no less important questions, with regard to their suitability in light of various of the Consolidated Criteria. In either case, Saferworld has serious doubts about the wisdom of including these countries as permitted destinations under this licence.[32]

32. What Saferworld does not know, and cannot know, is that this licence is for a single end user for collection from a number of different countries, for a much more restricted range of equipment than is apparent from the Annual Report, with end-use conditions attached including on how the equipment must be stored prior to collection. We know this only because of information provided to us in confidence by the Government. We conclude that it is unfortunate that the format of the Annual Report makes a licence for a single end user based in a variety of countries look as if it is much more wide-ranging than in fact it is.

33. Another possibility which is not currently obvious from the Annual Report is that the ultimate end user of equipment may not be in the destination country shown, particularly where this country has a defence manufacturing industry. We have previously discussed the issue of 'incorporation' at length.[33] But it is worth being aware that this is an issue which does not only apply to destinations in Western Europe and North America. Equipment licensed for export to Israel or South Korea, for example, may be for eventual end use in another country entirely. As the Defence Manufacturers' Association (DMA) has pointed out:

    Given that Israel has a significant, and dynamically active, indigenous Defence Industry, and that most licence applications are for components - it is not clear what % of these sales are intended for use by the Israelis and what might be incorporated into equipments for export from Israel to other nations (including the UK!).[34]

34. This may make the application of less concern (if the end user is a NATO ally) or of more concern (if the end user is a country to which the British Government would not normally allow the export of such equipment) than if the end user were in the country named in the Annual Report. In future Annual Reports, such licences will be identified, although the ultimate destination will not be.[35]

35. As explained above, 'open' licences can be more or less open. Saferworld has expressed concern about a licence granted to Indonesia "for equipment including armoured all wheel drive vehicles".[36] Had this licence been for the export of an unlimited quantity of armoured vehicles to the Indonesian Government—the most obvious assumption—this concern might have been warranted. However, in response to a parliamentary question, the Government has revealed that the OIEL in fact authorised the export of no more than three armoured all wheel drive vehicles to provide protection for BBC correspondents in Indonesia.[37] The fact that the Government was, in the Foreign Secretary's words, "about to be pilloried" for this licensing decision is hardly surprising, given that the information that it publishes does not distinguish between equipment for foreign governments and equipment for broadcasting organisations.[38]


36. The Government has not ruled out the possibility of publishing limited end-use information, broken down between Government and non-Government.[39] This would be a start, but it would not clarify many of the more recent examples in which information in an Annual Report has lent itself to misleading or worrying interpretations. For example, the Government's suggestion would lead, in the case of a licence for the US Armed Forces operating in Uzbekistan, to the country of destination being identified as Uzbekistan, but to the end user being shown merely as 'Government', which would continue to give the misleading impression that the end user was the Government of Uzbekistan.

37. When we have previously recommended that the Government should "consider publishing information on end users of licences by broad category", the Government has replied that it "remains concerned that there are still significant confidentiality issues arising from the publication of end user information by broad category, and that the examples highlighted by the Committee (i.e. Police and Armed Forces) do not negate these concerns".[40] We suspect, however, that the Government's concerns about "significant confidentiality issues" arising from publishing such information may be overstated, and the evidence that we have received supports this suspicion.

38. It is unsurprising that in their evidence to us, NGOs have consistently called for greater transparency, identifying it as a "key issue".[41] As things currently stand, NGOs are often in the position of not being able to substantiate their concerns about exports. As we were told, "things might be happening, they might not be, but the evidence is not made available".[42]

39. The DMA is a less expected source of support for our argument, but in fact, evidence that we have received from the DMA calls strongly for greater openness in this area:

    The DMA has expressed some strong reservations and frustrations, both publicly and privately, about the limited nature of the end-use related information which is provided in the FCO's Annual Report, and has raised the issue of whether further, additional, detailed information could and should be usefully provided by the Government on end-use matters, without encroaching upon commercial or diplomatic/security sensitivities, which would have the positive effects of achieving greater openness and transparency, and also protecting the British Government and Industry against erroneous claims of irresponsible licensing decisions and commercial activities, respectively … Even taking into account concerns of commercial confidentiality and security, we are sure that in many cases (especially with regard to permanent exports, rather than for temporary licences) more end-use information should be able to be usefully provided than is currently the case. [43]

40. The DMA provides examples of cases in which greater openness would be useful. These are very similar to some of the examples that we have encountered, and discussed above:

    under the UK system, an export of spare parts to a Royal Australian Navy vessel, whilst on a courtesy visit to Indonesia, would appear under the UK system to be an export to Indonesia (the geographical location of the vessel, at the time), rather than Australia (the nationality of the customer)—clearly different levels of contentiousness!

    in the 2000 Annual Report the section on Morocco includes mention of a raft of licences being issued for small arms and light weapons, which could result in the unsighted having extremely dubious opinions of HMG for approving these "exports". In fact, we understand that many, if not all, of these are apparently to be accounted for by the supply of props for the filming of "Black Hawk Down" in Morocco.[44]

41. There are limits to how much end-use information it is appropriate to publish. There are some areas in which the provision of information might threaten commercial confidentiality: for example, when equipment is being exported on a trial basis before a contract has been signed.[45] There is also some end-use information which it would clearly not be appropriate to publish for security reasons, such as precisely where it is intended to use non-conventional weapon detection equipment.[46] Equally, most countries would not be prepared to have the detail of their procurement programmes published by the British Government. But this is not to say that it is impossible to go any further than the Government currently does in what it publishes. Indeed it seems to us (and also apparently to the DMA) that there is room for the publication of substantially more end-use information than is currently the case.

42. The following are a number of ways in which the Government might wish to consider publishing further information on end use:

  • Multiple-destination OIELs could be cross-referenced, to make it clear under each country entry that only one licence is involved. Where such an OIEL is for only one end user, this too could be stated. There may also be circumstances in which the end user is willing to be identified.
  • Where an OIEL is for a limited quantity of equipment, stating that this is the case or even revealing the quantity concerned could help to diffuse potential concern about proliferation.
  • Publishing information by broad category of end user (Local Armed Forces, Local Police, Foreign Government, International Organisation, Private Security Company, Industry, NGO, Media, Private Individual) could help in many cases to allay concern about the appropriateness of particular export decisions.

43. We conclude that it would be in the Government's interest to publish more information on end use, because it would enable public debate on export controls to focus on those licensing decisions which are genuinely debatable, rather than to criticise the Government for decisions which appear highly contentious but which are in fact entirely sound. Given the strong support for greater transparency in this area shown not only by us, and not only by NGOs, but also by representatives of the British defence manufacturing industry, we recommend that that the Government should reassess its position that it cannot "go any further in publishing end-user information".[47]

44. The supplementary information provided to us on licence applications is also often inadequate. It is sometimes impossible to interpret the descriptions we receive of goods licensed for export without some supplementary information on end use. With components in particular, it is often impossible to understand from the licence description alone what the component is, and to know for what main equipment it is intended. This description is often little more than a catalogue number, for which we lack the catalogue. "LINE 18 3120998187239" is a particularly egregious example. Debate based only on the fact that the Government has licensed an unspecified component for export to a country is bound to be misinformed.

45. End-use information, on the other hand, tells us not only that the equipment in question is for spare parts on a vehicle transmission system, but also the type of vehicle involved and further information about the user of the equipment. Similarly, the numerous descriptions of items we have seen such as "PART NUMBER AC66886, SERIAL NO'S TS031 & UF038" tell us next to nothing, whereas the knowledge that the equipment is to support a particular aircraft within a named national airforce is much more useful in reaching a judgement as to whether the export should or should not have been allowed.

46. Where we requested information on OIELs for 2002 we asked to be given the identity of end users, where these were specified; and details of any other conditions affecting the use of the licence. However, we did not receive this information, except in a small number of cases on which we asked the Government for further clarification. Information on end use should not be particularly difficult to supply. We have received end-use information on SIELs issued in 2003 which appears to be drawn directly from applicants' documentation. We recommend that future supplementary information provided to us on licence decisions should include information on end use where this is requested, as without this information we cannot properly assess the Government's licensing decisions.

Actual exports

47. We have previously recommended the provision of more information on actual exports. The very basic information provided on the value of exports is not directly comparable with the categories of goods which the Government controls. We regret the fact that it has not been possible to reach agreement within the EU on changing Tariff Codes to enable a greater level of transparency in the information provided on the value of strategic exports, and we hope that the Government will take any opportunities that arise to press for such changes in the future. We welcome the Government's commitment to exploring how it can improve the data available on the value of defence exports.[48]

48. The Action Plan for the Implementation of the Basic Principles for an EU Strategy against Proliferation of Weapons of Mass Destruction[49] proposes a joint effort by member states and the Commission to establish equivalence between EC customs classification and the lists of controlled dual-use items. We recommend that the Government should take a leading role in promoting this initiative.

Improving parliamentary scrutiny

49. It is now a number of years since a system of prior parliamentary scrutiny of export licence applications was first proposed. We continue to support a system of prior scrutiny of the most sensitive export licence applications, because it would allow us to feed into the licensing process at a point which would be most effective. We believe that the arguments which the Government has raised against such a system have been shown in previous Reports to be misplaced.

50. When we took evidence from the Foreign Secretary in February, he did not hold out any hopes that the Government had changed its position on prior scrutiny, but he did suggest that the Government was considering "ways of enhancing retrospective scrutiny".[50]

51. We do not believe that retrospective scrutiny is an adequate substitute for prior scrutiny—but it is what we have, and it is not without its benefits, as the last five years of our joint inquiries have shown. We believe that there are a number of ways in which its effectiveness could be usefully enhanced:

  • Information on licence applications is currently only made available long after the decisions on those applications have been taken. Information on decisions taken in January 2002 appeared in an Annual Report published in July 2003, some 19 months later. Providing information on licensing decisions more swiftly after they have been made would mean that the public and the Committee would have a chance to consider more topical decisions and policies than is currently the case.
  • More detailed supplementary information on licence applications could be provided to the Committee in confidence as a matter of routine. This would save the Government from much of the effort of having to carry out a separate exercise to compile this information once a year. It would also enable the Committee to distinguish genuinely debatable licensing decisions from decisions which might appear of concern from published information alone.

52. We recommend that the Government should help us to improve our retrospective scrutiny of export licence applications by publishing more timely licensing information than is currently the case, and by making it a systematic part of the administration of export controls to provide us in confidence with further information on these licensing decisions, including information on end use. We do not regard this as a substitute for a system of prior scrutiny, but it would be an improvement on the current situation.

21   2002 Annual Report, p 10 Back

22   2002 Annual Report, p 11 Back

23   Appendix 12 (DTI) Back

24   Government response to the Second Joint Report from the Committees, Session 2002-03,Cm 5943, p 10 Back

25   Appendix 13, q 51 Back

26   Appendix 13, q 52 Back

27   Appendix 11, Section N Back

28   2002 Annual Report, p 3 Back

29   See paras 29-35. Back

30   HC (2002-03) 474, paras 41-42 Back

31   2002 Annual Report, pp 26-27, 233, 323 Back

32   Appendix 16; see also Q 75 (Mr Isbister) Back

33   See HC (2002-03) 474, paras 130-154 Back

34   Appendix 23 (DMA) Back

35   See para 22. Back

36   Appendix 7 Back

37   HC Deb 8 September 2003, c 73W Back

38   Q 48 Back

39   Appendix 11, Section P; Cm 5943, pp 19-20 Back

40   Cm 5943, p 20 Back

41   Q 87 (Mr Isbister) Back

42   Q 96 (Mr Isbister) Back

43   Appendix 23 (DMA) Back

44   Appendix 23 (DMA) Back

45   Q 165 (Mr Otter) Back

46   Q 157 (Mr Otter) Back

47   Appendix 11, Section P Back

48   Appendix 11, Section Q Back

49   Henceforth WMD Action Plan Back

50   Q 66 Back

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