House of Commons - Trade and Industry

Select Committee on Trade and Industry First Joint Report

5 THE EU CODE OF CONDUCT

83. The European Code of Conduct on Arms Exports forms the basis of the UK's decision-making process for licence applications; the Government publishes consolidated EU and national criteria which explain how it interprets the terms of the Code.

Review of the Code of Conduct: licensed production overseas, brokering, trafficking and intangible technology transfers

84. As we stated in our Report last year, the Code has been subject to a fundamental review, which was drawing to a close as this Report was being written. We noted that the Government's stated priorities for the review were:

licensed production overseas: "the inclusion of text on licensed production to the effect that member states should carefully consider what might happen to the finished products in licensed production agreements in which their exports or technology or components are the raw materials"

arms brokering licence denial notifications: "where a licence to broker strategically controlled goods is denied, […] we want those to be subject to the same process as the export of export equipment currently is, so for example if someone is refused a licence to broker in the United Kingdom and then applies for a similar licence elsewhere, the other country would need to consult us before issuing it";

intangible technology transfers: "the export of military information and designs […] should also be reflected in the common criteria"; and

transparency standards: "We want to raise transparency standards by including in the Code a provision which obliges member states to publish a publicly available report containing information about equipment exported and not just a breakdown of how many licences they issued for each destination".

We commented that these priorities were "sound, if cautious", and noted that only the last was likely to be in any way controversial.[103]

85. When we took evidence from the Foreign Secretary he was confident that the UK's first three objectives would be met. He told us that:

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And added:

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86. We await publication of the revised European Union Code of Conduct on Arms Exports, and welcome the Foreign Secretary's comments that provisions relating to licensed production overseas, arms brokering and intangible technology transfers will be included. We wait to see what impact the revision of the Code will have in practice on strategic export controls across the EU.

Review of the Code of Conduct: transparency and convergence

TRANSPARENCY AS A TOOL FOR CONVERGENCE

87. Transparency across the EU was raised by the Foreign Secretary as a major issue yet to be resolved. He noted its importance in the context of the implementation of the Code, firstly, in terms of sharing of information between member states:

having the Common Criteria in plain text is one thing, but having common enforcement of those criteria is a separate thing […] The advice I have received is that on the whole other countries are assiduous in their application of the Criteria, but there is a difference which is about transparency […] we share information where one or other of us is refusing a licence […] and I think I am right in saying that if one has notice of denial by another country, which sometimes happens, and I then decide nonetheless to agree an export, we pool that information as well, I think. That circumstance is the only one in which at the moment there is effective pooling of information.[

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88. Secondly, about the level of information that member states make publicly available:

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89. We note that an updated version of the Users' Guide to the EU Code was published in December 2004, which further defines and interprets the terms and procedures outlined in the Code. It includes sections on transparency and denial notifications, and best practice guidance.[108]

90. We wait to see how the new version of the Users' Guide, and the final revisions to the Code of Conduct, will affect transparency and the exchange of information between EU member states. We agree with the Foreign Secretary that sharing information in this way is a key tool to develop a convergent approach across the EU.

TRANSPARENCY AND COMPETITIVE ADVANTAGE

91. Transparency was also raised with us in the context of competitive advantage. Good practice can be catching, as noted in a recent SIPRI policy paper:

Transparency becomes acceptable 'if everybody does it', as is demonstrated by the EU Code of Conduct Annual Reports and the UNROCA, since this reduces the potential for competitive disadvantage. This reconfirms that commercial confidentiality and business interests are key and arguably the most important motivations for secrecy. Pioneering efforts make it easier for other governments to follow and may even put pressure on them to do so. This so-called beauty contest has led to a transparency dynamic in the EU, where all countries now submit national data in the framework of the EU Code of Conduct, and most countries also publish national reports, albeit of varying degrees of usefulness.[

109

EGAD agreed that it was time to share UK good practice across the EU, commenting "We would love to see other EU member states producing the same quality of work and reporting that the British Government does."[110]

92. We have already noted the ways in which the UK has developed its reporting of arms exports.[111] There are elements of good practice in other EU countries that could be adopted, as detailed in an Appendix to this Report, for example identifying the type of recipient within the country (as in Denmark and Belgium), and type of equipment and end-use information on refused applications (the Netherlands). Since November 2004 the Netherlands has published detailed monthly online statistics, setting a new standard for timeliness in the EU.[112] We hope that the final stages of the negotiation of the Code of Conduct will include provisions to increase the quality of reporting on arms exports across all member states.

UNDERCUTS

93. We described the EU's denial notification and undercut procedure in detail in our last Report.[113] EU member states circulate through diplomatic channels denials of licences refused in accordance with the Code of Conduct, together with an explanation of why the licence has been refused. Before another member state grants a similar licence, they must consult the denying member state, and give an 'undercut notice', with a detailed explanation of their reasoning, if they decide to go ahead. We were provided with information by the Government on a confidential basis about the five occasions when the UK undercut other EU member states during 2003, and concluded that all were "'grey area' cases of the type about which we might expect member states to disagree."[114]

94. The UK Working Group on Arms expressed considerable concern about this practice:

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95. The future level of undercuts and denial notifications will be an important indicator of how the revisions to the EU Code of Conduct improve consistency of the Code's application across member states. We recommend that our successor Committees return to this issue as soon as possible.

Other issues

LEGAL STATUS OF THE CODE

96. We noted in our Report last year that a body of opinion, including EU member state governments, believed that the Code should be a legal instrument, rather than a non-binding political statement. The UK Government disagreed with that view, because it did not wish to see the Code becoming subject to Qualified Majority Voting and enforceable by the European Court of Justice. We recommended "a compromise", giving the Code the status of a Common Position. That would mean the Code would become a legal instrument, but would be subject to unanimity and non-justiciable. The effect of this decision would be to raise the profile of the Code.[116]

97. The Government confirmed in a supplementary memorandum to us that "The status of the Code has not been discussed in detail by officials for a number of months, but it is expected that the issue will be revisited in Brussels in the near future."[117] We note that the legal status of the EU Code of Conduct on Arms Exports is to be reviewed shortly. We look forward to learning the outcome of this review.

DIFFERING INTERPRETATION BY MEMBER STATES

98. We noted in our last Report some concerns by industry about differences in the interpretation of the Code of Conduct across EU member states, which the Government refuted in detail in its response.[118] We have since received further comments from EGAD, which we have passed to the FCO. The Foreign Secretary noted when he appeared before us that he was "always happy to look at detailed evidence which the industry has got about the regulatory burden on the UK industry in comparison with other European countries."[119] The Government has, accordingly, thoroughly examined the points made by industry and its answers are included in an Appendix to this Report.[120] We recommend that our successor Committees keep under review the application of the Code of Conduct across the EU, with particular reference to any differences in interpretation by member states.

REVIEW OF THE CODE CRITERIA

Criterion 8

99. We noted in our last Report that Criterion 8, which addresses Sustainable Development, was "the least adequately defined of the EU Code Criteria" and recommended that "the Government should seek to reach a mutual understanding with other member states of what the Criterion means in practice, and to refine its definition accordingly in the context of the ongoing review of the EU Code."[121] We were pleased to note the Government's response that "The UK is currently working with EU partners with the aim of reaching a common understanding of how best to employ this Criterion in practice." The UK Working Group on Arms Exports described this as a "welcome initiative."[122]

100. The Foreign Secretary told us that this work was due to be concluded before the end of June 2005.[123] Recent reports in Defense News suggest that the new guidelines will define a set of macro-economic variables, or development indicators, to assess whether the request is justified.[124] The UK Working Group on Arms stated that "We do believe that the guidelines they have produced broadly reflect some of the recommendations we make"[125] but noted that in the end what matters will be how any change affects licensing policy:

126

They added in a supplementary memorandum that the UK Working Group on Arms "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."[127]

101. We look forward to learning of the results of the review of Criterion 8 of the Code of Conduct, and recommend that our successor Committees monitor how the new guidelines for its application affect the issuing of licences across the EU, particularly in the UK.

Other criteria

102. The UK Working Group on Arms recommended in its memorandum that "the Government should now use its Presidency to set in train a process to carry out similar elaboration [to that of Criterion 8] for the other seven criteria."[128] It repeated this call in oral evidence, particularly in relation to Criterion 2, which deals with human rights.[129] We have already noted that the current Code of Conduct review is likely to change the wording of Criterion 2, adding a more specific reference on humanitarian law.[130] We think that there is merit in Saferworld's suggestion, particularly in the context of the possible lifting of the EU arms embargo on China, which we discuss later in this Report.

103. When asked whether he would support a review of Criterion 2, the Foreign Secretary told us that "It depends on the resources available that we have to pursue it and whether we can get a consensus to start looking at it, but I am happy to think about it."[131] We recommend that the Government uses its Presidency of the EU to initiate a review of Criterion 2 of the EU Code of Conduct on Arms Exports, along similar lines to that conducted of Criterion 8 of the Code.

ACCESSION STATES

104. Extending the provisions of the EU Code to those countries which joined the EU on 1 May 2004, and those which are due to join in the next few years, is a considerable task. We commented in last year's Report that "We hope that the acceding states have been able to rise to the challenge of effectively controlling strategic exports in accordance with the EU Code of Conduct. But it would hardly be surprising if some of them struggled to do so."[132]

105. We noted last year that the Foreign Secretary himself gave a cautious response when asked whether the controls of the "new ten" were adequate.[133] He repeated that concern when giving evidence to us this year, commenting "Am I personally satisfied? I am not sure is the answer" but added that "The process is a very, very rigorous one."[134] He noted:

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106. We welcome the fact that the UK has been involved in outreach work with new and prospective member states,[136] and that progress has been made with their membership of international export control regimes. Lithuania, Malta and Estonia were accepted as Participating Governments during the Nuclear Suppliers Group Plenary in May 2004; Bulgaria was admitted to the Missile Technology Control Regime in 2004[137] (applications by other new EU members are pending); and Estonian, Latvian, Lithuanian, Maltese and Slovenian applications for the Australia Group were accepted at the Plenary in June 2004.[138] The Australia Group now includes 39 participating states and the European Commission.[139]

107. Slovenia was admitted to the Wassenaar Arrangement at the December 2004 Plenary (the first admission of a new member since the founding of the Arrangement).[140] Applications of the other newly acceded EU member states (Cyprus, Estonia, Latvia, Lithuania and Malta) and candidate country Croatia are still pending and are being considered on a case-by-case basis.

108. At the same time, we note the criticism made in a recent Saferworld report, which stated that "officials from the new members themselves have suggested that the level of support from the 'old 15' was disappointing." We hope that lessons will be learned for those countries preparing to join the EU at the moment, in particular, Bulgaria and Romania, both of which, as Saferworld put it, "still have very real problems relating to the development and enforcement of effective arms export control policy and practice."[141] The UK Working Group on Arms added that "it is […] 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."[142]

109. We urge the UK Government to use its Presidency of the EU to ensure that there is a focus on the importance of sharing best practice on enforcement of the EU Code of Conduct on Arms Exports, and export control more broadly, across all member and accession states, and potential future members. It is important that older EU member states continue to give newer states assistance to build robust systems if the integrity of EU export controls is to be maintained.

THE "TOOLBOX"

110. We were told by the Foreign Office that work is currently underway to ensure a consistent approach by EU member states to countries coming out of embargo. This has become known as the "toolbox". Edward Oakden, Director, Defence and Strategic Threats, FCO, described the initiative as follows:

one wants to avoid a situation where you go from very tight control under an embargo to any sort of lurch, so we are negotiating in the EU a so-called "toolbox" which would essentially set in hand this series of procedures which would involve both consultation and three-monthly mutual notification about export procedures and what each country has done over the previous three months[

143

111. We welcome the development of an EU-wide system to manage the transition for states coming out of arms embargo controls.

112. The UK Working Group on Arms, while welcoming the development of the "toolbox", criticised the fact that "no provision has been made for outside interests to feed into this process (be they from parliaments, industry or NGOs)."[144] We hope that more will be done in future to engage wider stakeholders in this and similar projects.

China: the EU embargo

113. We described the background of the EU's China Embargo in our last Report.[145] A Declaration in June 1989 imposed an "embargo on trade in arms with China", but individual member states have interpreted this in different ways.[146] As at February 2004, British Government policy was "to support a review of the embargo", but the Foreign Secretary told us that he had "not come to any final view on the merits of lifting it."[147]

RECENT DEVELOPMENTS

114. The Brussels European Council meeting in December 2004 marked a change in the collective European position on the embargo. The conclusions stated:

In this context, the EU Council reaffirmed the political will to continue to work towards lifting the arms embargo. It invited the next Presidency to finalise the well-advanced work in order to allow for a decision. It underlined that the result of any decision should not be an increase of arms exports from EU member states to China, neither in quantitative nor qualitative terms. In this regard the European Council recalled the importance of the criteria of the Code of Conduct on arms exports, in particular criteria regarding human rights, stability and security in the region and the national security of friendly and allied countries. [

148

The Foreign Secretary told us that he supported that decision[149] and that the embargo was likely to be lifted during the Luxembourg Presidency of the EU, which would be before the end of June 2005.[150]

WHAT DOES THE EMBARGO MEAN?

115. The UK is the only member state to have published its interpretation of the embargo. It covers "lethal weapons such as machine guns, large calibre weapons, bombs, torpedoes, rockets and missiles; specially designed components of the above, and ammunition; military aircraft and helicopters, vessels of war, armoured fighting vehicles and other such weapons platforms; and any equipment which is likely to be used for internal repression."[151]

116. The fact that other EU members have not published their own policies on the embargo is a cause of deep concern. It has also led to a certain amount of confusion on the intentions of the EU collectively and of individual EU countries in enforcing and implementing the embargo, not least in the debates in the United States of America. We commented in our last Report that "current uncertainty about what the embargo means, and inconsistencies in its application across the EU appear to be having a negative effect on industry" and raised the case of a British company, Oxley Developments Company Ltd., which had been refused a licence application for the export of night vision equipment to the Chinese armed forces. They claimed that French, German and Belgian companies had exported similar equipment.[152] The Government commented in its response to our Report that it did "not consider that British industry is at a disadvantage compared with companies in other member states regarding strategic exports to China."[153]

117. Similar points to the Oxley case were raised this year by Pyser-GSI Ltd. Its application for the export of night vision equipment to China was refused. In a recent debate in the House of Commons on the issue, it was noted that a French company had entered into a licensed production agreement with a Chinese firm to make a very similar product.[154]

118. The Foreign Secretary commented that there was a lack of consistency across the EU:

155

119. In a recent debate in the House of Lords, the Foreign Office Minister Baroness Symons of Vernham Dean pointed out that most refusals of arms exports to China were made not because of the embargo, but because of the Code of Conduct:[156]

I repeat that I understand the concerns about this matter, because the use of the word "embargo" implies that there is an absolute ban at the moment and that we would move from an absolute ban to a much freer market. The refusals for the export of items on the military list are, more often than not—not always—already made under the EU code.

120. Taking all these factors into account, we observed last year that "The real problem with the embargo on China is its vagueness. It is more difficult to enforce legally than other EU arms embargoes because it is open to varied interpretation. As we discuss below, it creates uncertainty for business. And it makes the embargo difficult to justify."[157]

WOULD LIFTING THE EMBARGO INCREASE THE LEVEL OF EU ARMS EXPORTS TO CHINA?

121. The Foreign Secretary drew our attention to that part of the Council conclusion which stated that "the result of any decision should not be an increase of arms exports from the EU member states to China, neither in quantitative nor qualitative terms". We heard different views on whether this was a realistic objective.

122. The Foreign Secretary was confident that little would slip through the EU Code net that would have been caught by the embargo. He told us:

it transpires that most of the applications for arms exports to China which have been refused in recent years have been refused under the EU Code of Conduct and not under the embargo which is narrow in its scope and, moreover, most of the refusals under the embargo would have fallen to be refused under the Code of Conduct in any event. As far as the latter is concerned, I think I am right in saying that for the UK there were only two refusals under the embargo, and those were not particularly significant, which would not have been refused under the Code of Conduct.[

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He added that the lifting of the embargo should be linked to a strengthening of the EU Code.[159] We received details of these two cases from the Government.

123. Brinley Salzmann of EGAD took a similar view, commenting:

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In EGAD's opinion the embargo was "political symbolism."[161]

124. The UK Working Group on Arms, however, was clear in its judgement that the embargo was important:

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And that its removal would increase the level of arms exports:

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An EU diplomat was quoted in the Financial Times stating that "It is difficult to say that we will lift the embargo but not increase sales."[164]

125. However the Council's test is to be measured, assessing the 'quantity' and 'quality' level of exports to China across the EU will require an unprecedented level of transparency between member states and co-ordination at EU level. We have already discussed the "toolbox" which is to be introduced for countries coming out of embargo. This will be a major test for an untried mechanism and there will, inevitably, be a great deal of subjectivity involved.

126. It is possible that lifting the EU embargo would have disproportionate effects on the defence exports and defence industries of different EU countries. It has been suggested that whereas companies based in other member states would benefit disproportionately from gaining increased sales to China, UK based companies would be less likely to benefit from such sales.[165] Indeed, they are likely to be adversely affected by a change of policy as a result of sanctions and restrictions on their access to the far larger and more profitable US market which could result from a hostile US response.

127. The European Council has stated that if the EU arms embargo to China is lifted, this should not result in either a qualitative or quantitative increase in arms exports to China. Close attention will have to be paid to this test, which is highly complex and subjective. We therefore recommend that before the embargo is lifted the Council should spell out how the assessment will be made. We would welcome in particular clarification on whether this means that there should be no increase in arms exports to China at all or no increase as a result of the lifting of the embargo, as these are very different tests.

WHAT MESSAGE WOULD REMOVING THE EMBARGO SEND?

128. Even if it could be proved in advance that the lifting of the embargo would not increase arms sales, there are arguments against it. The UK Working Group on Arms expressed concerns about the message that would be sent to China on its human rights record:

Amnesty has seen no substantial improvement in the human rights situation in China and we would really pose the questions to the EU: What signal does this send to human rights defenders who are imprisoned for their activities in China? What leverage does the EU then maintain, if any, over China if it gives up the arms embargo in terms of human rights?[

166

We came to a similar conclusion last year, stating that "once an embargo has been imposed, a strong case needs to be made for lifting it, because of the political message that it sends."[167]

WHAT WIDER IMPLICATIONS WOULD IT HAVE?

129. Much of the press coverage about the European Council's change of heart has centred on the possible implications for relations with the United States of America. There are clearly grave concerns in Washington about the course the European Council is proposing to take. After a meeting with President Chirac on 22 February 2005, President Bush is reported to have said that "There is deep concern in our country that a transfer of weapons would be a transfer of technology to China, which would change the balance of relations between China and Taiwan."[168]

130. The House of Representatives expressed its view in a Resolution on 2 February 2005 adopted by 411 votes to 3:

"The House of Representatives:

reaffirms the United States arms embargo on the People's Republic of China and related findings and statements of policy set forth in title IX of the Foreign Relations Authorization Act, Fiscal Years 1990 and 1991 (Public Law 101-246);
finds that policies by the United States and other countries which promote the development of democracy in the People's Republic of China, and not the development of Chinese military capabilities, will help assure a stable, peaceful, and prosperous Asia and Pacific region;
deplores the recent increase in arms sales by member states of the European Union (EU) to the People's Republic of China and the European Council's decision to finalize work toward lifting its arms embargo on China, actions that place European security policy in direct conflict with United States security interests and with the security interests of United States friends and allies in the Asia and Pacific region;
declares that such a development in European security policy is inherently inconsistent with the concept of mutual security interests that lies at the heart of United States laws for transatlantic defense cooperation at both the governmental and industrial levels and would necessitate limitations and constraints in these relationships that would be unwelcome on both sides of the Atlantic;
requests the President in his forthcoming meetings with European leaders to urge that they reconsider this unwise course of action and, instead, work expeditiously to close any gaps in the European Union's arms embargo on the People's Republic of China, in the national export control systems of EU member states, and in the EU's Code of Conduct on Arms Exports in order to prevent any future sale of arms or related technology to China; and
requests the President to inform Congress of the outcome of his discussions with European leaders on this subject and to keep Congress fully and currently informed of all developments in this regard."

131. The Foreign Secretary observed that:

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132. Both defence industry representatives and NGOs noted that trade relations with the US could be worsened by the EU's decision. EGAD told us that:

170

The UK Working Group on Arms noted:

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133. The Foreign Secretary told us that he was working to reassure the Americans:

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Latest press reports have referred to further work underway between the EU and US to define conditions for the lifting of the embargo,[173] and a threat by the Head of the Senate's Foreign Relations Committee to stop sales of military technology to Europe altogether if the embargo is lifted.[174]

134. Deep concerns were expressed to Members during the visits of the Defence and Foreign Affairs Select Committees to Washington earlier this month by senior US Senators and Senior Members of the US administration about the implications of lifting the arms embargo on China. Although we found a lack of detailed knowledge of the facts of the present position and the relative ineffectiveness of the current embargo, we were made aware of the strong symbolic significance of the embargo and strongly held US views about the implications of lifting it. Specific concerns were expressed about the dangers of transferring the most sophisticated military technologies to China, the implications for the military balance in the region and the security of Taiwan. This concern over Taiwan has been further heightened by the passing of China's anti-secession law promulgated on 14 March 2005.[175]

135. We comment further on current US policy and in particular the ITAR waiver issue later in this Report.[176]

CONCLUSION

136. We recommended last year that "in current circumstances the Government should resist calls to lift the arms embargo on China",[177] particularly in view of China's poor human rights record. We added that "the Government should encourage its EU partners to seek a clearer joint understanding of the purpose and scope of the embargo on China: not in order to lift it, but in order to define it more rigorously and more effectively."[178]

137. Since we published our last Report, there have been some developments in China's membership of key arms control organisations. It has become a Participating Government in the Nuclear Suppliers Group, and discussions are ongoing with the Missile Technology Control Regime and the Wassenaar Arrangement.[179]

138. However, China's human rights record is still assessed as poor. The FCO's 2004 Human Right Report states:

180

139. Although we believe that the embargo is an imperfect tool, there are risks associated with its removal. It is possible that there could be major EU-US trade repercussions from an EU arms 'export drive' to China, or that EU member states enhance China's military capability in a worrying way, or that the Chinese Government uses arms exported from the EU for internal repression. The prospect of the UK securing the ITAR waiver might be severely jeopardised. Those risks must be mitigated by member states taking the Council's 'no qualitative or quantitative increase' pledge extremely seriously. As we have already observed, however, this pledge is in itself imperfect. In view of the importance of this issue for future transatlantic relations we recommend that absolute assurances are given by the European Union and each member state, that there will be no qualitative or quantitative increase in arms exports to China as a result of lifting the arms embargo and that sensitive technologies will not be transferred to China as a result of this change of policy. If such assurances cannot be obtained we recommend that the Government opposes lifting the arms embargo and any other change of EU policy with regard to arms sales to China.

140. Whether or not the embargo is lifted we expect our successor Committees to monitor the UK's arms exports to China carefully. In order to do this, they will require full information on refusals, appeals, incorporation SIELs and OIELs and type of end user for licences granted, on a quarterly basis. We also recommend that the Government puts pressure on the Chinese Government during the negotiations to pledge its support for the proposed International Arms Trade Treaty.

The EU embargo on arms sales to Libya

141. The EU embargo on arms sales to Libya was lifted at the EU General Affairs and External Relations Council (GAERC) on 11 October 2004. Some reservations had been expressed by NGOs about that decision, particularly given Libya's reputation as a hub for arms sales to other parts of Africa.[181] EGAD noted that special attention would have to be paid to those concerns when issuing licences:

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We note that the "toolbox" for countries coming out of embargo was not ready for Libya last October, but we hope that it will be applied to that country in an appropriate way as soon as it is ready.

Other developments in the EU

CONTROLLING EQUIPMENT USED IN TORTURE AND CAPITAL PUNISHMENT

142. We noted last year that the agreement of a Council Regulation on trade in equipment related to torture and capital punishment was overdue, and that a draft was being considered. At that time, we expressed concerns about the proposal that the Commission should have a decision-making role on certain export licence applications.[183] At the time that this Report was agreed, the draft had been amended and improved, and final agreement was pending. We were told by the FCO that the Regulation "should be adopted later this year."[184]

143. In a further submission to us, the Government stated that:[185]

"There is, at present, some debate in the EU about the composition of the Annexes [to the proposed Regulation]. Annex II lists items whose export will be banned by the Regulation. Annex III lists items that will be licensable. The UK has been attempting to persuade other Member States to accept the same strict control on these goods that the Government applies at a national level. This is proving difficult, as a number of Member States do not currently control the export of some of the items in Annex III (particularly handcuffs). Therefore, to enable us to keep our national ban on the export of shackles, leg irons, and gang chains, the UK has asked that Member States be able to apply stricter controls at a national level. This proposal is currently under discussion, and we have made it clear that the UK cannot accept the composition of the Annexes without the inclusion of this provision."

144. Concern has been expressed by NGOs about evidence that material exported from EU countries is being used in inhumane ways. The most recent Amnesty International Report, for example, includes pictures of a US death row prisoner wearing leg cuffs marked 'made in England'.[186]

145. We commented on the licensing of over-sized handcuffs in 2003.[187] While we concluded that "We have no concerns about the majority of the licences granted," we drew attention to two cases. In both instances, we were asked by the Government not to identify the destinations involved. For the first case we stated:

We conclude that it is doubtful whether the Government should have granted a licence for oversized handcuffs in one particular case, given the nature of licence applications which the Government had previously refused. We do, however, accept that in this case a judgement was reached after detailed and proper consideration. We have been asked by the Government not to identify the destination of the cuffs.

In the second case we came to the conclusion that:

oversized handcuffs should not have been licensed during 2001 for export to a particular destination (which we have been asked by the Government not to identify). Basic checks on the end user of this equipment from information easily accessible in the public domain would have revealed concerns about how the oversized cuffs might be used. We therefore conclude that basic checks were not conducted. We regard this as an administrative failure that should be investigated.

146. We strongly endorse the UK Government's position that the controls of the proposed EU Regulation on trade in equipment related to torture and capital punishment should not be weaker than those currently applied by the UK. We still have concerns about the export of oversized handcuffs and recommend that our successor Committees return to this issue in the next Parliament.

THE EU WMD ACTION PLAN

147. The EU Council Secretariat and Commission published their WMD Action Plan in June 2003. We were told by the Foreign Office that "Progress in implementing the strategy and action plan has been good in a number of areas."[188] In particular, the Peer Review process mentioned in our last Report[189] has culminated in recommendations "to further improve EU export systems and thereby enhance member states' capabilities to prevent access by undesirable end users, including terrorists in third countries, to dual use items relevant for WMD purposes:"

ensure transparency and awareness of legislation implementing the EU system
minimise any significant divergence in practices amongst member states
investigate the possibilities for adding controls on transit and transhipment
provide assistance in recognition of dual-use items subject to control
improve exchanges of information on denials, and consider the creation of a data base to exchange sensitive information
agree best practices for the enforcement of controls
improve transparency to facilitate harmonisation of implementation of controls on non listed items (catch-all)
enhance interaction with exporters
agree best practices for controlling intangible transfers of technology.[190]

148. We welcome the publication of recommendations to improve EU export systems following the WMD Action Plan Peer review process. The Foreign Secretary noted when he gave evidence before us that this exercise would feed "into ongoing work in the EU on implementation of the Code of Conduct."[191] A further submission by the Government stated that this programme of work would "be pursued vigorously by Member States and the Commission during 2005 and 2006".[192] We hope that this is achieved as part of the final negotiations on the revised Code.

103 Committees' 2004 Report, para 110 Back

104 Q 137 Back

105 Q 137 Back

106 Q 108 Back

107 Q 145 Back

108 Council of the European Union, 'Users' Guide to the European Union Code of Conduct on Exports of Military Equipment', Council of the European Union document 16133/1/04, rev.1, Brussels, 23 December 2004. Available at http://ue.eu.int/uedocs/cmsUpload/st16133-re01en04.pdf Back

109 SIPRI Policy Paper No. 8, The European Code of Conduct on Arms Exports: Improving the Annual Report, Sibylle Bauer and Mark Bromley, November 2004, page 20 Back

110 Q 70 (Mr Salzmann) Back

111 See paras 24-29. Back

113 Committees' 2004 Report, paras 119-128 Back

114 Committees' 2004 Report, para 125 Back

115 Ev 83 Back