Quadripartite Select Committee Minutes of Evidence

Examination of Witnesses (Questions 100-119)


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

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