Examination of Witnesses (Questions 80
- 81)
WEDNESDAY 15 DECEMBER 2004
MR DAVID
HAYES, MR
TIM OTTER,
MR MICHAEL
BELL CB AND
MR BRINLEY
SALZMANN
Q80 Sir John Stanley: Can I put it
to you the other way round. Would you as responsible law-abiding
companies want to get into a position whereby you got involved
in an offshore arms deal which would inevitably be picked up by
the media, and no doubt by this Committee—I hope—and
would involve you in a hugely bad reputational position?
Mr Salzmann: No, but of course
it is very difficult to try to define in legal terms what constitutes
an act of trafficking and brokering. It is a bit like a few years
ago an American judge commented in a court, "I can't define
`pornography', but I know it when I see it!" (Supreme Court
Justice Potter Stewart (1964)). We all know what it is we want
to try to control or curtail—the supply of Bulgarian Kalashnikovs
to Sudan or whatever—but it is very difficult to define
that in legal terms without sweeping up a whole raft of other
commercial activities which are the norm within supply chain relationships.
Mr Otter: I think what you are
saying could be done if there were a different model in place,
and one of the things we have put in our written submission is
that rather than wait for the period when the DTI come along and
say that is when we start reviewing, that this Committee, industry
and the NGOs sit down together and work out what it is we want
to do so that at that point we can enact the legislation that
we think is right rather than waiting for that period to transpire,
then go through it, so that is another year or two years before
you get to a new system. I think that has to be an option and
a way forward. Everybody should sit down now, work out what it
is we really want to do, and then do it, and it depends on a different
model of licensing. It depends perhaps on the way the Germans
and French do it which is they license you to carry out a deal
with that country and unless they tell you to stop, you can continue.
I think that has to be the way forward and it would also help
deal with the issues of shortage of staff and goodness knows what
else.
Mr Hayes: I think one of the inherent
dangers of extra-territoriality is the level of complexity and
the effect of the law of unintended consequences. Mr Otter is
an expert on the law of unintended consequences because a lot
of his activities have been swept up by the new controls which
perhaps were not intended to be. Turning specifically to the question
of extra-territoriality, not within the context of trade controls
but within the context of technical assistance and transfers of
technology, the Government set out to render the transfer of software
or technology by a UK person subject to control where this was
intended for use outside the EC. In the main Order the Export
of Goods, Transfer of Technology and Provision of Technical Assistance
(Control) Order, they actually use the word "transfer"
in relation to extra-territorial activity and then define the
transfer as an act taking place within the United Kingdom. So
therefore it is arguable that the extra-territorial provision
they intended to put in place there is not actually effective.
That illustrates the complexity that we are dealing with.
Mr Bell: Assuming that the extra-territorial
controls are effective, it seems, as I think the NGOs mention,
particularly odd that they are applied to long-range missiles
and UAVs which are only sold to governments.
Q81 Sir John Stanley: That is what
I said.
Mr Bell: With the support indeed
of our own Government. The only effect of that is greatly to complicate
the life of our friends in MBDA and increasingly us in BAE Systems
as we go into the UAV business, and to inadvertently criminalise
Brits working on programmes which are covered by restricted goods
controls in third countries. This does seem to be a strange way
to go on.
Chairman: Thank you, gentlemen. Sir John
got the right answer to the last question there. We are very grateful
indeed, as always, for your presence, and indeed for your written
evidence. You have offered to respond to some specific questions
we have raised. If we have any further ones we will get back to
you. But thank you again for your attendance this morning; it
is greatly appreciated.
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