Examination of Witnesses (Questions 100-119)
MALCOLM WICKS
MP, MR GLYN
WILLIAMS, MS
JAYNE CARPENTER
AND MR
DAVID WHITEHOUSE
13 MARCH 2006
Q100 Mr Hamilton: One of the objectives
of HM Customs and Revenue is the following: to strengthen frontier
protection against threats to the security, social and economic
integrity and environment of the United Kingdom in a way that
balances the need to maintain the UK as a competitive location
in which to do business. I am sure you are very familiar with
that. May I ask how cooperation between licensing officers in
the ECO and HM Revenue and Customs is currently structured? Is
there, for example, a liaison unit and, if there is, how many
staff work in it? Are their IT systems linked up?
Malcolm Wicks: Obviously I want
to satisfy myself that the relationships are good but I might
ask Mr Williams to say more about the operation level. I am satisfied
that the ECO is working with HMRC at all the appropriate levels.
The fortnightly meeting I mentioned that Mr Williams chairs is
one which HMRC attend, for example. The ECO has an HMRC liaison
officer who helps gather evidence and witness statements within
our organisation to support HMRC investigations. In a whole range
of ways we work very closely. For example, we provide a round
the clock, 24/7 as they say these days, advisory service to Customs
on the licensability of goods and company checks. I am sure that
at all sorts of levels there are very good relationships but Mr
Williams may wish to add to that as he is closer to the operational
end than I am.
Mr Williams: We have two liaison
officers with different functions. We have regular, bilateral
meetings to discuss both policy and, to some extent, operations.
We provide training. We send our officials to give instruction
on export licensing to Customs at their training sessions. We
have also developed some software tools which will help exporters
and Customs officials to identify controlled goods. There is quite
a lot of liaison.
Q101 Mr Hamilton: Are the IT systems
linked?
Mr Williams: No. When you say
"IT systems" you mean?
Mr Hamilton: I mean the databases.
Mr Williams: No, they are not.
Q102 Mr Hamilton: Do you think they
should be?
Mr Williams: Not necessarily.
They are not part of the licensing process. Their role is deliberately
separate from ours. They do investigations and prosecutions and
we do the licensing. You could argue as a matter of principle
that they should be separate. I am not sure. As a matter of fact,
they are anyway.
Q103 Richard Burden: Could we talk
about the Land Rover Defenders that were used in the Andijan massacre
of May 2005? We have obviously raised this issue before. This
was a case where large amounts of components of Land Rover Defenders
were exported from this country, went to Turkey, were assembled
in Turkey and exported onto Uzbekistan, where those finished products
were used in that massacre. We had a reply from you about that
and we put that reply to the UK Working Group on Arms. Essentially,
the reply was that if components were in flat packs they did not
require an export licence. When we put that to the UK Working
Group on Arms—they gave evidence to us on 31 January—they
made the point with some force that if you have 70% of a vehicle
that can be exported outside of the licensing system that is a
bit of a problem. They also made the point that the Turkish equivalent
of the DESO lists those vehicles as military specification. In
other words, if the finished product had been exported from here
it would have fallen within the definition of ML6A and thus required
an export licence. Do you not think this rather demonstrates that
there is a gap in the system?
Malcolm Wicks: I do not think
the critical issue here is the flat pack. It is not an Ikea test.
It is a rather more serious test than that. My understanding is
that we are talking here about the export of civilian version
chassis of Land Rovers to Turkey. I am assured that Land Rover
do not control the further work done on these or their onward
sale. They are not sold as Land Rovers. Otokar is not a licensed
overseas production facility. It raises the question which I think
is a serious question, which I genuinely welcome the advice of
the Committee on, essentially about where British jurisdiction
starts and ends and what is reasonable in terms of jurisdiction.
We can control the export of militarised vehicles from the UK.
Also, if Land Rover were involved in the onward transfer of military
vehicles from one third country to another, that could be controlled
under our powers, under trafficking and brokering, but this seemed
to be outside of that situation.
Q104 Richard Burden: Would one way
round it be to have more of a catch-all clause on end use than
we have at the moment? Clearly, it is a loophole. Whether it is
an Ikea test or not—
Malcolm Wicks: I only said that
because that was not the issue.
Q105 Richard Burden: 70% of what
was a military vehicle was produced here, exported and ended up
being used in that massacre. One way round that presumably would
be some sort of catch-all clause that could require the export
of components that are designed for a system which has a military
end-use to be licensed. Would that put some discipline on UK companies?
Instead of them saying, "Of course we have no idea what the
end-use will be", it would put some obligation on them to
check what the use of their components is going to be.
Malcolm Wicks: I ask a rhetorical
question: where would this end? I am interested in this because—I
am not a technical expert by any means—there must be a whole
range of components that societies and economies like our own
export that could in the wrong hands be quite important in developing
weapons or whatever it might be. I am genuinely interested in
trying to get this one right without, on the other hand, over-reaching
ourselves in terms of our jurisdiction. I imagine that people
could come to the Committee with a whole range of proposals which
they might argue, on ethical principle, should not be exported.
Richard Burden: Would it not be reasonable
to expect companies, perhaps monitored by yourselves, to take
reasonable steps to establish the end use of what they are exporting?
This is a major company and a large part of their business is
exporting military equipment and who knows? Those particular vehicles
may end up in a catalogue somewhere later, showing them as being
military vehicles.
Q106 Chairman: We have had evidence
from Oxfam that suggests there is a pretty close working relationship
between Otokar and Land Rover for the manufacture, promotion and
export of military vehicles. You raise the point: how close is
the relationship? Forgive me for mentioning websites again but
I am informed that on Otokar's website we are told, "Otokar
manufactures Land Rover Defenders model 4x4 tactical vehicles
under Land Rover licence in parallel with customer needs"
with photographs of vehicles on display at the DSEi[1]
arms fair and photographs from catalogues. If we let your department
have the evidence that Oxfam have submitted to us that seems to
demonstrate a close relationship here, would you not feel that
in that case the ECO ought to be asking questions of Land Rover
as to what the end-use of its exports might be, particularly if
the military vehicles have indeed been used to abuse human rights
elsewhere?
Malcolm Wicks: I am open minded
about that. We have discussed this before the hearing. I discussed
it before I knew I was coming to this hearing because it is obviously
a matter of very real concern. Although it is not for me to suggest
how the Committee might deliberate on this issue, some of the
wider principles about where our jurisdiction starts and ends,
which is a difficult question, are ones I would welcome the advice
of the Committee on. It is a difficult one which we need to grapple
with to get all of this right.
Q107 Richard Burden: I appreciate
that and I am sure we will follow that up. One point that was
put to us when we questioned the UK Working Group on Arms on 31
January was the fact that since November 2005 Uzbekistan has been
the subject of an EU ban on the sale, supply, transfer or export
of arms and related materials of all types. That includes weapons,
ammunition, military vehicles, equipment and so on and spare parts.
Do you think, if those Land Rover Defenders had left the UK for
Turkey after November or the bits had left the UK for Turkey after
November 2005, an export licence would have been required?
Malcolm Wicks: The difficulty
here is that the components we are talking about, the chassis,
were being exported to Turkey, not to Uzbekistan.
Mr Williams: You are referring
to the military end-use control in the EU dual-use regulation
which says that you can control non-listed civilian dual-use goods
if you know they are going to an embargoed destination and will
be put to military use, a fairly rarely used control. We have
looked at this. It is a bit of a moot point but the way that control
is worded in the EU regulation it has to go directly to the embargoed
destination. In this case, it was going to Turkey. At the time,
I think Land Rover had no idea that the Defenders or whatever
the Defenders were turned into were going to find their way to
Uzbekistan so it may be academic anyway.
Q108 Richard Burden: Could you let
us have a note about the point you made about them going directly
to the embargoed destination, because that is a new one on me.
Mr Williams: Yes.
Q109 Mike Gapes: You have been referring
to EU controls. Turkey is a NATO country. Do not NATO countries
have their own internal regulations about what they should do?
When you reply to my colleague, perhaps you could also comment
on the fact that, although Turkey is not in the EU and therefore
not subject to EU controls in that sense, it might as a NATO state
have some obligation to its NATO partners about what it does.
Malcolm Wicks: If we can help
you with that, we will.
Q110 Mr Hoyle: What would have happened
if Uzbekistan had ordered civilian Land Rovers? I understand you
can get gun clips for those who go out in the countryside to shoot.
Could those have been exported direct to Uzbekistan as a civilian
Land Rover does not seem to be any use? My understanding would
be yes. What can we do to stop that in the future if that is the
case?
Mr Williams: The military end-use
control I have just mentioned might come into play if we knew
that the Land Rovers were for a military end-use in Uzbekistan.
Q111 Mr Hoyle: But were bought for
civilian use?
Mr Williams: No, because they
are civilian goods. I think I am right in saying we did try something
like this when there was an embargo on the former Yugoslavia.
There was a national control on civilian four wheel drive vehicles
which had above a certain ground clearance, which we made licensable
in the 1990s. I am told that was not a particularly successful
experiment because it got us into all sorts of issues about controlling
very routine exports.
Q112 Mr Hoyle: I think you would
agree that it is a great worry that you can buy any four wheel
drive, a Toyota or whatever, that can be used for the same use.
If the only adaptation is a hook or a couple of hooks to hook
the gun on, all these can be military vehicles and I understand
there is nothing to stop it.
Malcolm Wicks: There has been
at least one issue recently that I can think of where—I
will not mention the country—there was an embargo but it
suffered some natural disaster. It could have been the tsunami.
There was a need for relief operations. Occasionally, one has
to make judgments. There are always risks.
Q113 Chairman: No one doubts that
judgments have been made. It is about asking the right questions,
when somebody applies for an export licence—what is the
end-use going to be?—and being reassured that what you are
told is (a) correct and (b) that the end-use is acceptable. There
is a second issue about the fact that the Land Rovers that have
been transformed into military vehicles, topped up, where there
are newspaper photographs of Land Rover military vehicles being
used against civilians wherever it might happen to be, questions
might be asked, might they not, about whether the UK exports Land
Rovers to a Third country for this purpose? I am just a bit surprised
that Land Rover has not been interrogated a bit more carefully
about the end-use of their exports from the UK. Am I being unreasonable?
Malcolm Wicks: I can see why you
ask the question but my understanding is that what they have said
to us is that they are exporting the chassis to Turkey and there
their responsibility ends. You are raising a wider question about
ethical responsibilities and I have said I will reflect on what
you have said. I do not want to overburden the Committee in terms
of its deliberations but I am sure you could make a scenario whereby
certain perfectly innocent IT software goes from this country
to a perfectly reasonable country. I am not an expert on software
but none of us could be quite certain that it would not be used
for wrong purposes. Where does this end?
Chairman: It is the job of the ECO to
evaluate these problems and to make the right decisions. Therefore,
we are interrogating the ECO about how well it appears to be preventing
UK produced products being used to abuse human rights overseas.
We will send you the Land Rover details that have been supplied
to the Committee and maybe that will throw more light onto it.
We can always check the websites.
Q114 Judy Mallaber: We received evidence
at our last session that alleged that exhibitors at an arms fair
may have contravened the Export Control Act. What does the ECO
do to ensure that those organising, exhibiting and attending arms
fairs keep within the law?
Malcolm Wicks: I was very distressed
to hear about that because it is clearly wrong that that was being
exhibited. As soon as the authorities heard about it, it was closed
down. The position here is that since the beginning of this, May
2004, it has been illegal for any person here in the UK or any
UK person anywhere in the world to do any act calculated to promote
the supply or delivery of restricted goods, including torture
goods and long range missiles, from one Third country to another
Third country. That is the principle. As you said, there were
one or two exhibits there and, as soon as they were discovered—I
think Mr Thomas was at the forefront in this—they were closed
down. What do we do about this? The ECO issues guidance on exhibition
activities which is published on the exhibition organisers' websites.
The ECO liaised with the exhibition organisers on a bulletin sent
to all exhibitors prior to the exhibition, which included information
about relevant UK controls, including our trade controls, and
the exhibition organisers held a pre briefing for exhibitors immediately
prior to the exhibition in order to make those exhibitors further
aware of control requirements. We also maintained a presence at
the exhibition to answer queries and raise awareness and so on.
HMRC officials were also present at the exhibition. You could
say to me, "Yes, but at the back of the brochure", I
am advised, wherever it was—I do not think it was right
at the front—"there was this advertisement." That
is distressing and it was stopped as soon as we heard about it.
Q115 Judy Mallaber: Do the officials
go round the stalls to see what is on offer?
Malcolm Wicks: Yes, I think they
do. Whether they can look at every page of every brochure is another
matter.
Q116 Judy Mallaber: If the organisers,
as we were told, were shown brochures by one of the companies
at the DSEi fair and the brochures included electroshock weapons
and leg irons, the organisers should have said to that company
that that was something they could not exhibit at the trade fair.
Is that right?
Malcolm Wicks: That is right.
Q117 Judy Mallaber: What responsibility
is on the organiser of the trade fair if they were shown the brochures
in advance?
Mr Williams: In respect of the
export control regulations, I do not think there is an impact
on them. The organisers did work very closely with us and put
information on the entrance ticket, for example. I think DSEi
had a contract with the exhibitors and it was part of the contract
that no exhibitor should breach its export control obligations.
That is how they were able to close down these stalls immediately
they were discovered.
Q118 Judy Mallaber: We were told
that Imperial Armour was at the fair starting to negotiate deals
about providing stun weapons. Is that something you would know
was happening? Would it be clear to Imperial Armour that they
were not meant to be doing that?
Malcolm Wicks: That should not
have happened.
Mr Williams: They would need a
trade licence to do that.
Q119 Chairman: Yes, they would. Given
that this illegal activity, you admit, took place how many prosecutions
have there been?
Mr Williams: That is a matter
for HM Revenue and Customs. There has been none, as you know,
in respect of that trade fair. It is up to HMRC to investigate
whatever took place.
1 Defence Systems and Equipment International Exhibition Back
| 
