Appendix 5: Memorandum from Oxfam
INTRODUCTION
Oxfam is very pleased to offer its views on
the Government's recent response to the QSC Report into proposals
for secondary legislation under the Export Control Act.
The need for the UK to take on a leadership role
1. We fully support the Government's view
that the most effective way of regulating the arms trade is through
multilateral agreements. In this respect we strongly welcome the
UK's work in a variety of fora, including; the European Union,
the Lancaster House process, the Wassennaar arrangement, the OSCE,
and through the UN system. But there is a clear weakness in agreements
that are only politically-binding and a risk that pushing for
consensus will only bring a lowest common denominator result.
Thus we urge the Government to be more vocal in its support for
a legally binding international Arms Trade Treaty, based on existing
principles of international humanitarian law.
2. Any multilateral arms export control
agreements on arms transfer issues will require robust and comprehensive
national implementation, monitoring and enforcement. In our view,
the Export Control Act and its accompanying secondary legislation
should provide such a vehicle. It is therefore extremely disappointing
that the Government has chosen not to introduce full extraterritorial
controls on brokers and traffickers.
The need for extra-territorial controls on trafficking
and brokering
3. Oxfam believes that the Government's
failure to honor its 2001 Manifesto commitment to regulate brokers
and traffickers "wherever they are located" will leave
open a serious loophole that will serve to perpetuate armed conflict,
human rights violations and poverty around the globe. As the world's
second largest arms exporting nation, the UK has an obligation
to have some of the world's toughest export controls. By failing
to close this loophole in its current arms export control regime,
UK companies and individuals will continue to profit from the
misery of others.
4. We do not accept the Government's confidence
that its new proposals will stop most of the circumstances in
which arms are transferred to areas of conflict or rogue states.
To apply extraterritorial controls for brokering in conventional
weapons only to destinations subject to arms embargos does not
reflect the realities of the modern illicit arms trade. Unscrupulous
arms dealers are well aware of the legislation and national controls
that exist and are highly skilled at plying weaknesses in regulations,
exploiting loopholes and hiding the true destination of their
supplies.
5. A recent case reported in the UK press
puts sharp focus to our concerns. In last month's Sunday Times,
an investigative journalist, posing as a security officer for
a Private Military Company, managed to broker an offer for the
supply of Surface to Air missiles—a devastating weapon in
the hands of terrorists and rogue forces—from two companies,
one based in the UK, the other in Slovakia. The deal was put together
from a hotel in Spain and the stated destination was highly sensitive
but not subject to a formal arms embargo. The journalist made
no attempt to hide his dubious credentials and had in his possession
a forged "blank" End-User Certificate which was faxed
to both companies and on the basis of this document the offer
was made.
6. Under the Secondary Legislation, arranging
the deal from overseas would clearly bypass UK controls, but in
our view this is precisely the kind of brokered arms deal that
the Government would wish to stop from taking place. Clearly neither
the journalist nor the Slovakian company making the offer for
the missiles would be covered by the legislation, but it is also
possible that the UK company would also evade controls. Current
exclusions relating to marketing and promotion activity could
have enabled the UK company to broker the deal as long as the
licensable part of the deal (ie the formal paperwork associated
with obtaining an export license) was conducted outside the UK.
We believe that it is fairly standard practice for a broker to
have good personal contacts with the exporting government and
companies in the countries from which they wish to purchase arms
and conduct business in these countries on a regular basis. From
now on, all the broker will have to do to evade export controls
is to conduct licensable activity from his hotel or office in
these countries and we predict that this is exactly what will
happen in the future.
7. It should be noted that no UK broker
or transportation agent has yet been prosecuted for breaches of
UN arms embargoes despite several documented cases involving UK
companies or citizens in recent years. The lack of an adequate
licensing, enforcement, monitoring and registering arrangements
has made it far too difficult for prosecution agencies to prove
that a UK company or individual was knowingly involved in an embargo
breaking operation.
8. Case history over recent years has shown
us that brokering is done through a variety of methods, including
the use of diversion routes, offshore operating offices, false
or misleading paperwork, using a labyrinth of companies or exploiting
the vagaries of differing national jurisdictions. Very few embargo-busting
operations therefore involve a direct and obvious transaction
between the licensing country and the embargoed destination.
9. By failing to introduce comprehensive
controls on all brokering activity there will be ambiguities and
difficulties involved in defining precisely what is legal and
what is not within the export control system. As a result Oxfam
believes that there will be little prospect in bringing these
companies and individuals to account for their activities.
The need to address transporters
10. Oxfam also believes that the Government
has failed to take account of the role that transporters play
in the delivery of arms to conflict zones. In the last five years,
Oxfam has reported at least 10 UK transportation companies involved
in arms deliveries that have contributed to tremendous human suffering
in Africa and elsewhere. Regulation of air transport is currently
one of the weakest links in the arm supply chain and yet the industry
often plays a critical role in the clandestine delivery of arms.
It should be noted that in January 2000 the Government named Victor
Bout in Parliament as an "odious" key international
arms dealer responsible for supplying arms to the world's worst
conflict zones and urging greater national and international action
to curb his activities. Victor Bout's pivotal role on the supply
of arms is through the many transportation companies he controls.
It is ironic that at the time the UK lobbied the United Arab Emirates
to better regulate Bout's transportation businesses operating
out of Sharja, when current controls over transporters operating
in the UK have been expressly excluded from the secondary legislation.
Oxfam believes that measures in place to regulate transporters
are wholly ineffective and has little confidence that the new
legislation will make any significant impact in curbing the activity
of British transportation agents involved in the supply of arms
to conflict zones.
The real costs involved
11. The Government has argued that if full
extraterritorial controls were applied to brokers and transporters
that undue burden would be placed on the licensing system and
would be likely to criminalise legitimate business by UK defence
companies overseas. In May this year, as part of the submission
of the UK Working Group on Arms, we wrote that it must be "possible
for the Government to frame a law which is sufficiently intelligent
to strike a sensible balance between the interests of legitimate
brokers and the requirement to control less scrupulous individuals".
12. For example, compare the relatively
meager costs that would be needed to improve capacity within the
export control regime to the operating costs for the Defence Export
Services Organisation (DESO)—the main Government agency
for arms export promotion—which since 1998 has cost an average
of £13 million per year to run. It is also worth noting that
in the last four years the US, UK and France earned more income
from arms exports to Africa, Asia, the Middle East and Latin America
than they provided in aid.
13. In our view, these implementation costs
must also be weighed against the enormous costs that are associated
with the impact of unregulated arms transfers to conflict and
human rights crisis zones. These costs include the destruction
of lives and livelihoods, emergency humanitarian response, international
peacekeeping operations (possibly involving the use of UK troops),
IDP's and refugees and post conflict reconstruction.
Review
14. Due to the serious concerns outlined
above, it is clearly inadequate to wait for three years for a
review of the Government's secondary legislation. We urge the
Government to undertake the review within one year and utilize
the opportunity to amend or modify the legislation to fully and
completely control traffickers, brokers and transportation agents
within the scope of UK export controls.
November 2003
| 
