Appendix 13: Further memorandum
from the UK Working Group on Arms
This supplementary memorandum highlights the
UK Working Group's responses to the Foreign Secretary's evidence
session.
INCREASING EFFICIENCY
IN THE
LICENSING PROCESS
Staffing at the Export Control Organisation (ECO)
The UKWG is very concerned at the staffing cutbacks
planned for the ECO. We agree with the Foreign Secretary when
he said that at he did "not believe that there is a level
of staffing which has to be fixed" (Q88), but rather that
staffing levels should be set on the basis of need. However the
decision to make an arbitrary 25% cut in staff at the ECO would
appear to involve exactly the opposite approach, one which is
not at all responsive to need.
In addition, the UKWG understands that in response
to the pressures to become more efficient, the ECO is encouraging
exporters to make more use of open licences, which if true would
call into question the Foreign Secretary's assertion that a reduction
in staff will not lead to greater use of open licences (Q90).
Furthermore, if the Foreign Secretary is concerned that there
have been "hold ups in applications" because officials
are "spending so much time answering [the QSC's] questions"
(Q159), this too would militate against such a swingeing cut in
staff at the ECO.
These proposed cuts in staff come at a time
when the EGO faces an increase in licence applications following
the implementation of the new control orders on brokering and
intangible transfers. The UKWG believes that such a large cut
in staff at the ECO will inevitably lead to less scrutiny of export
licences as well as less transparency and urges the Government
to reverse this decision.
Charging for licences
If financial savings have to be made a far better
approach would be to charge for the licensing services provided
by the ECO. Despite the Foreign Secretary's caution on this point,
he did acknowledge that "there are charges for licences in
many other areas" (Q92). He also noted that if charges were
introduced "the level of the charge relative to the total
value of any arms sale would have to be fairly low" (Q93):
a charge of 0.1% of the value of the licence would go a long way
toward creating a self-financing ECO.
Privatisation
Under no circumstances should the Government
consider privatising any part of the export licensing process.
Any such moves would have huge implications for the accountability
of the system, would be highly likely to give rise to conflicts
of interest, and would send exactly the wrong signal to other
states in the process of improving their own export control regimes,
especially in Europe, where the UK is regarded as playing a leading
role on this issue.
Embargo on China
In his evidence, the Foreign Secretary referred
to the December 2004 statement by the European Council that lifting
the embargo should not result in either a "quantitative nor
qualitative" increase in arms exports to China (Q114). The
US administration and the Congress has made no secret of their
opposition to the lifting of the embargo, and the UK defence industry
has come out firmly against lifting the embargo due to the harm
such a decision could do to its position within the US defence
market and its access to US technology. Against such a background,
it is unclear why the Government appears willing to risk significant
potential cost when it has argued there will be no material `benefit'
from lifting the embargo.
The Foreign Secretary asserted that the EU Code
appears to be a more effective tool than the embargo, however
this is not necessarily supported by the fact that of the 22 now—EU
member states which have published information on their military
exports for 2003, 17 reported that they licensed nothing to China.
This argument has also been undermined by a recent statement by
the French Defence Minister, Michele Alliot-Marie, in support
of increased EU arms sales to China. [67]
The UKWG believes that lifting the EU embargo will inevitably
result in an increase in the volume and lethality of equipment
licensed to China.
The post-embargo "toolbox", currently
under discussion among EU member states and mentioned by the Foreign
Secretary in his evidence (Q114), while welcome, would appear
to be no substitute for the embargo. Information is so far sketchy,
and no provision has been made for outside interests to feed into
this process (be they from parliaments, industry, or NGOs), but
indications are that this will merely be an information-exchange
mechanism, without provision for review or sanction in the event
the licences granted for transfers to China increase. It would
be helpful if the Government could set out in detail what is proposed
for the toolbox, and how this would deal with concerns of an increase
in the transfer of controlled goods from EU member states to China.
The UKWG believes that strict guidelines urgently need to be developed
for the implementation of the criteria of the EU Code of Conduct,
as has been done for criterion eight (see section on EU Code below).
The UK Government should make this a priority for its forthcoming
EU Presidency.
ARMS TRADE
TREATY (ATT)
The UKWG has welcomed the Government's strong
support for an international Arms Trade Treaty (AU), and was further
encouraged by the Foreign Secretary's statement to the QSC that
"we have got to build up support for [an ATT] in the European
Union. We have got to get the United States on board. We have
got to get former CIS countries on board who are major exporters,
one in particular" (Q134). However, the UKWG is concerned
by other statements from the Government, including at the UN Security
Council Open Debate on Small Arms in New York on 17 February—which
refer to this work occurring `in the longer term'. This is a worrying
trend, diverging from Jack Straw's first announcement on the Arms
Trade Treaty which declared that `we will start work soon with
international partners . . .' (emphasis added). The UKWG urges
the Government to maintain its first commitment and become proactive
on these issues now.
In particular, the G8 is a key opportunity to
work on these themes. The G8 countries account for 90% of all
arms exported and it is thus incumbent upon them to ensure the
highest level of responsibility in arms exports and ensure that
arms transfers are in line with existing obligations under international
law. With Canada, France, Japan and Germany all in support of
strong multilateral arms controls, it is not unreasonable to expect
a strong statement from the G8 on international export controls.
The UKWG urges the Government to make international arms export
controls a priority during its Presidencies of the EU and G8 this
year, to ensure Peter Spiegel and John Thornhill, "France
fuels China arms row," The Financial Times, 16 February
2005, that the question of international arms transfers is on
the EU agenda for the UN 2005 Small Arms Biennial Meeting of States,
and to work for a declaration of international principles governing
arms transfers based on international law at the UN Small Arms
Review Conference in 2006.
For an ATT to succeed, support and indeed leadership
for it must come not only from `Northern' states, but also from
the `South'. We would therefore urge the Government to ensure
that its outreach on the AU prioritises building interest and
capacity to take a lead on this issue among developing countries.
TRANSPORTATION
The Government has been highly critical of arms
trafficking into conflict zones, and indeed the Foreign Secretary
in his evidence expressed the hope that one benefit of an AU would
be a "much more intensive focus on the unofficial criminal
arms dealers who make millions and millions of dollars trading
in arms across Africa" (Q136). In this context it is therefore
of considerable concern that the Government has on a number of
occasions over the last year contracted the services of transportation
companies with a reputation for involvement in unwelcome arms
transfers.
For example, in response to the recent Tsunami
DfID used an Avient Air DC 10 to fly its first relief flight from
Gatwick, despite Avient Air's own admission that it had supplied
arms to both the DRC and Zimbabwe between 1999-2002. Avient Air
had previously been named by the UN Panel of Experts reporting
on mineral exploitation and arms trafficking in 2001 as being
responsible for organising bombing raids into the eastern DRC
in 1999 and 2000 and for related arms brokering and logistics
supply deals with both the Zimbabwean Government and the Kabila
regime in the DRC. [68]
In December 2004 it was also reported that DfID had contracted
a Moldovan arms trafficking company for relief flights in 2003
and that following a report in the Evening Standard in August
2004 DfID suspended contracts with another company that had been
implicated in supplying arms to Liberia. [69]
It is essential that the Government establish
systems for contracting international transportation services
that do not compromise its declared stand on the necessity to
prevent irresponsible arms transfers.
EU CODE OF
CONDUCT ON
ARMS SALES
Elaboration of EU Code criteria
With the completion of the elaboration of criterion
8 expected during the Luxembourg Presidency, there is a clear
opportunity for the UK Government to initiate a similar process
during its Presidency for at least one other of the criteria.
The UKWG would also encourage the Government to pursue a commitment
from the European Council that such a process will then be repeated
for all of the criteria. In addition, we would recommend that
a formal consultation process be established whereby external
actors will be given the chance to participate in the process.
Criterion 8
In response to questioning on the UK's own criterion
8 guidelines, in which the point was made that the current language
of "seriously undermine or hamper" (emphasis added)
sets the bar for licence refusals too high, the Foreign Secretary
defended this language by stating that "countries are entitled
to have defence forces" (Q149). The UKWG is not challenging
the right of states to have defence forces, however it is unclear
how this is relevant to the principle that arms purchases should
not undermine development. We maintain our position that the current
language consigns sustainable development to be the poor relation
of the EU Code criteria, and that the language should therefore
be revised with "seriously" deleted.
In addition, we would welcome a statement from
the Government explaining the implications for the UK's national
guidelines on criterion 8 once the EU's elaborative guidelines
have been agreed.
Information-sharing
It has long been the argument of the UKWG that
EU member states should further develop the information-exchange
mechanisms mandated under the EU Code. It was therefore telling
that in his evidence the Foreign Secretary suggested that information
on "undercutting" (ie where one state issues an export
licence for an "essentially identical transaction" already
refused by another member state) was circulated among the 23 member
states. While the two states involved in the consultation can
advise the others if they so choose, there is currently no obligation
to do so. The EU Presidency would be the ideal opportunity for
the UK to advocate the mandatory circulation of details of consultations.
If unable to achieve consensus, the UK could send positive signals
in this direction by committing publicly to always be willing
to consent to circulation, and by encouraging other member states
to do the same.
The question of denial notifications for potential
transfers which take place outside the licensing system, for example
some government-to-government transfers, gifts etc., is also in
need of clarification (Q143). At the moment, if the Government
were to consider such a deal, but then reject it, this would not
be communicated to EU partners. So were another member state to
receive a request to approve an essentially identical transaction,
they would have no knowledge of the earlier decision and may hence
unwittingly undercut. It would seem this is unlikely to be the
intent of the EU Code denial notification system; the UKWG would
therefore urge the UK Government to address this oversight during
its Presidency.
Candidate Countries
The Foreign Secretary also spoke of the future
accession states, such as Bulgaria and Romania, who have agreed
to the 32 chapters of the acquis and whose membership of
the EU is therefore conditional on the European Commission deciding
that these states have met the legal conditions set out by the
acquis (Q111). However, the EU Code, as a political declaration,
falls outside the acquis and therefore the export control
performance of the Candidate Countries need have no impact on
their prospects for EU membership. It is therefore essential that
the EU establish a timetabled framework for ensuring that the
export control performance of Candidates will be up to EU standards
by the date of membership, and that a process is established whereby
failure to comply has negative consequences.
TRANSPARENCY
The UKWG warmly welcomes the Foreign Secretary's
assertion that "transparency across Europe is absolutely
essential if there is to be a consistent standard in the application
of the EU Common Criteria" (Q98). However this should not
be at the cost of greater transparency within the UK. The Foreign
Secretary argued that to increase transparency in the UK "would
be to compromise, to damage the necessary commercial interests
or commercial confidentiality of the [defence] industry"
(Q106). It is worth noting, however, that arguments similar to
this have been heard for many years, indeed even before the UK
had any public reporting on strategic export controls. The UKWG
believes that the increases in transparency in the UK and EU in
recent years have done nothing to damage the UK defence industry
but have enabled a more informed debate on export licensing. Further
improvements that are urgently needed to enhance effective scrutiny
would not damage commercial confidentiality.
Upgrading software and improvements on end-use
information
The UKWG has been encouraged by the progress
of recent years in terms of the Government's willingness to publish
more information about end-users, but frustrated by the argument
that this is currently impossible due to IT and resource constraints
(Q101). It would be helpful if the Government could set out precisely
how much more data it is prepared to make available, and when
it proposes to next upgrade its software so as to allow this to
happen. Upgrading would appear to be a matter of urgency for a
number of reasons. The UKWG understands that the software packages
used by the different relevant departments to the export licensing
process are unable to "talk" easily to each other. Moreover,
more responsive and flexible IT would in all likelihood be of
great benefit in reducing officials' workload in making information
available to the QSC. Care should be taken to ensure that the
next generation of software is flexible enough to enable further
changes to be made without requiring wholesale reconfiguration.
A RISK-BASED
SYSTEM OF
EXPORT CONTROL
In his closing remarks to the QSC, the Foreign
Secretary asserted that, "A criticism of me is more likely
to be that I have erred on the side of granting a licence rather
than refusing it where . . . the judgement is very finely balanced"
(Q161). The UKWG believes that for such a sensitive issue as export
control, and given that the UK system is based on the calculation
of risk rather than proof, it is incumbent upon the Government
to apply the precautionary principle. In such cases, we would
therefore expect the Government to err on the side of refusal.
An important example of the need for this approach is shown by
the recent UK suspension of military aid to Nepal because of the
dissolution of government by the King. The UKWG has long urged
restraint in exports of UK arms to Nepal precisely because of
the unstable political situation and the risk that the weapons
will fuel the internal conflict. It is alarming that significant
quantities of UK weapons continued to flow to Nepal right up until
the coup.
UK RECORD ON
UNDERCUTTING
A number of statements have been made in evidence
to the QSC on the UK's record on undercutting relative to its
EU partners, with representatives of the defence industry suggesting
that the system works to the disadvantage of UK companies. [70]
Unfortunately, while the number of consultations
is reported upon, very little evidence is available on how many
undercuts are taking place and by whom. Indeed the only public-domain
information of which the UKWG is aware on this subject was provided
during the evidence presented to the QSC by the Foreign Secretary
and his officials during February 2004. However, analysis of even
this paltry amount of information throws up interesting results.
The Foreign Secretary stated that the UK Government
"consulted other Member States 20 times last year and we
undercut them five times" (Q23, February 2004). Based on
these figures, 25% of consultations undertaken by the UK in 2003
resulted in an undercut. It was also estimated that across the
whole EU there were about 15 undercuts in 2003 (Q22, February
2004), while the EU Consolidated Report stated there were 100
consultations across the EU during the same period. If the estimate
presented during last year's evidence is correct, then on average
15% of all consultations across the EU resulted in an undercut,
compared to the UK's rate of 25%. This would tend to indicate
that, contrary to industry concerns, UK defence companies are
more likely to benefit from current arrangements than to suffer.
The UKWG urges the QSC to investigate the significant number of
undercuts by the UK.
February 2005
67 Peter Spiegel and John Thornhill, "France
fuels China arms row," The Financial Times, 16 February
2005. Back
68
The aircraft was filmed loading relief goods for TV news (see
also http://www.airliners.net/search/photo.search?cnsearch=47907/157&distinct
entry=true). Back
69
"See `UK Aid Flights linked to arms dealer', Sunday Times,
26 December 2004 http://timesonline.co.uk/article/0.,2087-1415628
1,00.html, and `Sudan aid flown on gun running planes' Evening
Standard 25 August 2004 http://www.thisislondon.co. uk/news/articles/12775278?source=Evening%20Standard. Back
70
See, for example, the QSC Evidence session with defence industry,
21 April 2004, Q141. Back
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