Appendix 15: Memorandum from Oxley Developments
Company Ltd
THE CONSOLIDATED
AND NATIONAL
ARMS EXPORT
LICENSING CRITERIA
We wish to bring to the attention of your committee
certain information that gives us concern as to the overall commitment
by other EU companies in their regard for the above criteria.
Oxley is an SME of some 240 employees, based
in the North West at Ulverston. We are regarded as a company that
develops and produces high quality products and systems within
defence, government and industrial markets, about 80% of our product
being exported either directly or indirectly. We are well aware
of the arms export licensing controls and continue to apply the
highest standards of responsibility when applying for export licences.
Our submission to your committee, which is attached,
contains detailed information that appears to show that a French
competitor company has been allowed to win a prototype/development
contract for an identical system that was refused us by our licensing
authorities under criterion 4 of the above EU code.
THE CONSOLIDATED
EU AND NATIONAL
ARMS EXPORT
LICENSING CRITERIA
SUBMISSION TO
QUADRIPARTITE COMMITTEE
Oxley Developments Company Ltd applied for an
export licence to satisfy a contract to supply the Chinese armed
forces (Army Air Wing) with a cockpit and aircraft exterior lighting
system, for use with NVG (Night Vision Goggles) equipped aircraft.
In this case the Z-9 utility/communications helicopter (a Dauphin
helicopter, built under licence from Eurocopter in France). The
application was refused under criterion 4 of the Consolidated
EU and National Arms Export Licensing Criteria at the end of 2002.
Early in 2003 we appealed against this decision, the appeal was
turned down under the same criteria. The company accepted the
decision.
The competition for this contract had included
a French company, *** who produce a system identical in function.
Our agents in China subsequently informed us that the Chinese
government had signed a contract with *** for prototype/development
systems prior to a contract for the first tranche of some 50 aircraft
of a total of 350. Our estimate of the total French contract value
was in the region of £2.5/3 million sterling for the 50 aircraft;
£20 million total.
The company informed the Export Control Policy
section at the Foreign Office and were advised that the FCO had
given notice to EU governments, that our licence had been refused
but that they had not received information from the French government
that *** had been awarded a licence to export their system. The
French government subsequently advised the FCO that no licence
had been issued to *** but they would pursue the matter. We were
asked by the FCO to provide as much information as possible. Through
our agents, in China, we were able to supply the name of the Chinese
company engaged in the retro-fit, the serial number of the aircraft
and the date of completion and test flight, including a report
from the test pilot. Although the Export Control Policy Unit is
pursuing this matter, we felt it necessary to bring it to the
attention of the committee.
As a result of the information gathering exercise,
by our agents, we were also informed that *** a German company
had recently exported a "spectroradiometer", an instrument
for measuring night vision lighting components. Oxley had been
approached by Nanhang Electronics for this and other instruments
but declined owing to the end use nature of the order and the
fact that that we had been refused a licence. We were also advised
that *** a Belgium company, had a technology transfer agreement
with a Chinese electronics company for NVG systems, and that ***
a French company had exported a small quantity of SuperGen tubes,
for incorporating into NVG systems.
Exports are a major part of business and competition
is an everyday fact of life in the commercial world, but it must
be fair. The EU has agreed a policy on EU wide Export Control
Criteria which companies within the EU should have to abide by
and governments should police more effectively. We would ask the
committee to look into this using the above as an example and
see if greater transparency can be brought to bear within the
EU code.
February 2004
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