House of Commons - Defence - First Joint Report

Select Committee on Defence First Joint Report

6 OUTSTANDING ISSUES

The extension of extra-territoriality

149. Under the Export Control Act 2002 and the accompanying secondary legislation, actions by UK persons abroad are only regulated where they relate to trade in long-range missiles and torture equipment, or trade to an embargoed destination. For other trafficking and brokering to fall under the scope of the Act, part of the transaction has to take place in the United Kingdom.

150. We and our predecessor Committees have recommended increasing extra-territorial controls on a number of occasions. In our last Report we concluded that "the Government should reconsider which types of trafficking and brokering activity it subjects to extra-territorial control to identify more accurately those which are of most pressing and genuine concern—in particular those weapons most likely to be used by terrorists or in civil wars". We expressed particular concerns about Man-Portable Air Defence Systems (MANPADS), rocket-propelled grenades and automatic light weapons[193] We had previously commented that the failure to broaden the scope of extra-territorial controls represented "a missed opportunity."[194]

151. The Government rejected that recommendation, referring to the controls already in place through the Export Control Act 2002 where part of the activity takes place in the UK, and through other legislation such as Section 57 of the Terrorism Act 2000. It also noted the importance of multilateral action to control the illicit trade in small arms and light weapons. The response concluded that "The Government, however, is keeping controls on MANPADS under review, along with all other provisions of the new legislation."[195] The Foreign Secretary confirmed when giving evidence to us that it remained his view that "extra-territorial jurisdiction should be applied only to the most sensitive transfers."[196]

152. The UK Working Group on Arms told us in oral evidence that more should be done:

197

Saferworld pointed out in its memorandum that the United States, Belgium, Estonia and Finland operate full extra-territorial controls, with Poland, Germany, France, the Netherlands, Sweden and the UK having some such jurisdiction.[198]

153. EGAD representatives took a much more cautious view. In oral evidence they noted that "one of the inherent dangers of extra-territoriality is the level of complexity and the effect of the law of unintended consequences."[199] They pointed out that long-range missiles and Unmanned Aerial Vehicles (UAVs), which are included in the current controls, are typically only sold to governments.[200]

154. The arms trade has always been adaptable and international. For these reasons we remain in favour of the development of further extra-territorial controls of British citizens trafficking or brokering arms along the lines suggested in our last Report. This is particularly important for goods such as MANPADS, and we note in this context that in December 2004 the Wassenaar Arrangement plenary once again discussed measures to reduce the proliferation of "these dangerous weapons."[201]

155. A recent report by the Prime Minister's Strategy Unit stated:

At present, only a minority of governments have legally-binding regulations to control arms brokers operating in their countries and an even smaller number have legislation that governs the behaviour of their nationals operating in other countries. While this extra-territorial control is desirable in principle, it is costly to enforce effectively.

It concluded that:

202

156. The Committees recommended last year that "the Government should reconsider which types of trafficking and brokering activity it subjects to extra-territorial control to identify more accurately those which are of most pressing and genuine concern—in particular those weapons most likely to be used by terrorists or in civil wars. We recommend that trade in such weapons, including MANPADS, rocket-propelled grenades and automatic light weapons, should be subject to extra-territorial control where they are intended for end use by anyone other than a national government or its agent, and where the country from which the trade is being conducted or from which the export will take place does not itself have adequate trade or export controls consistent with the British Government's policy on arms exports." We make the same recommendation in this Report. We also recommend that the Government should conduct a review of extra-territorial controls along the lines suggested in our last report once the Export Control Act 2002 has been fully in force for a year. Furthermore, we recommend that the conclusions of that review should be published before the end of the year.

The prospects for an International Arms Trade Treaty

157. The campaign for an International Arms Trade Treaty (IATT) was launched by Amnesty International and Oxfam in October 2003. We noted the proposals last year and concluded that they had received "disappointingly little international support."[203] By February 2004 only Brazil, Cambodia, Costa Rica, Finland, Macedonia, Mali and the Netherlands had expressed support for the Treaty in principle. The British Government was somewhat more equivocal, as the Foreign Secretary explained:

204

158. We were pleased to hear the Foreign Secretary giving evidence to us this year with a much more positive tone. He stated that he was "personally […] very committed"[205] to the concept of a Treaty, and added that "There will come a moment when I believe there will be a sufficient international consensus that we can move forward with formal proposals."[206] The proposed treaty, he continued, was important for controlling small arms,[207] but should apply to all arms transfers,[208] drawing on the experience of the EU Code of Conduct.[209]

159. Given that a recent FCO paper has estimated that there are 639 million small arms and light weapons in circulation, the Foreign Secretary's emphasis is sensible.[210] We also endorse his decision to use the Commission for Africa as a forum to build support, given the blight that small arms have caused throughout that continent.[211] The Foreign Secretary emphasised what such a treaty could achieve when giving oral evidence to us:

212

160. In spite of this positive development, a note of caution was sounded by the UK Working Group on Arms:

213

We agree with this assessment.

161. The UK Working Group on Arms submitted a further memorandum expressing concern at "other statements from the Government, including at the UN Security Council Open Debate on Small Arms in New York on 17^th February, which refer to this work occurring in the longer term."[214] While we cannot realistically expect an International Arms Trade Treaty to happen immediately, the UK's language and action must keep the pressure on other nations to add their weight to this initiative. This is the start of a long road, and the UK will need to be a vital driving force if the endeavour is to be successful. We urge the UK Government to use its influence as President of the G8 in 2005 to lobby other countries, particularly fellow G8 members, to support the proposed International Arms Trade Treaty.

The ITAR waiver

162. Terms for a United Kingdom waiver from the US International Traffic in Arms Regulations (the so-called 'ITAR waiver') were agreed with the US Administration in May 2003. We noted in our last Report that "such a waiver would permit the transfer without a US export licence of most unclassified defence items, technology, and services to the British Government and qualified companies in the United Kingdom. In the Government's view a waiver 'would make a significant contribution to transatlantic defence industry cooperation and promote Alliance interoperability. At the same time it would ensure that comparable export controls were maintained on US and UK defence items'."[215] We hoped that "reports are accurate that agreement is imminent on a British waiver from the International Trade in Arms Regulations."[216]

163. However, as we were told by the Foreign Office, things did not go to plan: the proposed legislation to bring the waiver into force:

^th

217

A concession was included in the Act (section 1225) giving preferential treatment to the UK and Australia in the licensing process, but EGAD commented that "Nobody quite knows what this means, including the State Department".[218]

164. The Foreign Secretary stated that he was "greatly disappointed" by Congress's decision "particularly given what a close and reliable ally we have been for the United States through thick and thin."[219] He referred to the Congressional Report as "based on a number of clear misunderstandings about the nature of our system"[220] and questioned the assessment of a direct link with the proposal to lift the EU arms embargo to China, commenting that:

221

Notwithstanding those obstacles, the Foreign Secretary assured us that he had not "written it off".[222]

165. EGAD noted that the current situation was very uncertain:

223

166. In its recent report on Defence Procurement, the Defence Committee, one of our constituent Committees, concluded that :

224

We agree. The only way forward we can see is continued diplomacy, but there is no promise of success.

167. We conclude that it is extremely disappointing that the US Congress has for a second time deleted provisions that would enact an ITAR waiver for the UK.

UK Customs

168. The responsibility for preventing the illicit export and transhipment of controlled goods falls to HM Customs. We noted in our last Report that it was surprising how few prosecutions—one—had been brought for breaches of export controls between January 2002 and October 2003. During the same period 13 new cases were adopted by specialist investigators, which we observed "would seem to indicate a large discrepancy between the number of cases investigated and those actually brought to prosecution."[225] This trend has continued,[226] although we note the successful prosecution on 18 February of a man for 12 separate counts of being knowingly concerned in the exportation or attempted exportation of aircraft parts to Iran, via Singapore, in breach of an export prohibition or restriction.[227]

169. At the same time, HM Customs is being reorganised and the number of customs officers reduced, by as much as 15%. Saferworld expressed concern about the potential impact of this on the effectiveness of HM Customs.[228] The Government assured us in a further submission that "the new HM Revenue and Customs Department will continue to place a high priority on strategic export controls and work to ensure that operational effectiveness is maintained".[229] Effective enforcement of the export control regime is needed if all the checks and balances of the export control licensing system are to be of any purpose at all. We hope that the reorganisation of Customs and the Inland Revenue will ensure that the export control system becomes more effective.

Licensed Production Overseas

170. Our Report on the Government's proposals for Secondary Legislation under the Export Control Act 2002 recommended that "within two years of its introduction, the Government should assess the effectiveness of the secondary legislation in regulating licensed production facilities, and that it should take steps to introduce direct controls on such facilities if these prove to be warranted in the light of this assessment."[230]

171. The Government responded that "the effectiveness of the new controls is paramount, and as such [we] will review the operation of the new controls in accordance with legislative best practice as recommended by the Cabinet Office."[231] We repeat our recommendation that the secondary legislation regulating licensed production facilities should be reviewed by May 2006.

193 Committees' 2004 Report, para 224 Back

194 Committees' Secondary Legislation Report, para 48 Back

195 Government Response to the First Joint Report from the Committees, Session 2003-04, Cm 6357, response to recommendations 53 and 54 Back

196 Q 154 Back

197 Q 26 (Mr Sprague) Back

198 Ev 49 Back

199 Q 80 (Mr Hayes) Back

200 Q 80 (Mr Bell) Back

201 www.wassenaar.org/docs/Elements%20for%20Public%20Statement.doc Back

202 Investing in Prevention: A Prime Minister's Strategy Report to the Government; An International Strategy to Manage Risks of Instability and Improve Crisis Response, Strategy Unit, February 2005 Back

203 Committees' 2004 Report, para 176 Back

204 Committees' 2004 Report, para 177 Back