Examination of Witnesses (Questions 160-179)
MALCOLM WICKS
MP, MR GLYN
WILLIAMS, MS
JAYNE CARPENTER
AND MR
DAVID WHITEHOUSE
13 MARCH 2006
Q160 Sir John Stanley: How are we
picking up electronic devices that could be used as triggers for
explosions?
Malcolm Wicks: Technically I do
not know the answer to that.
Mr Williams: When you say "picking
up"?
Q161 Sir John Stanley: Catching them
in the control system.
Mr Williams: There are certain
trigger devices which are controlled. I am not expert enough to
tell you now what they are and where they are on the control list.
We would have to give you a written answer on that.
Sir John Stanley: If you would, please.
Malcolm Wicks: I imagine it is
a difficult area because presumably a lot of rather innocuous
things could be used as trigger devices.
Q162 Sir John Stanley: It is an important
area and that is why I am asking the question. It is a crucial
area.
Malcolm Wicks: I am not technical
either, but it is a question of what you then have to stop, I
guess, but let us look at that. If we can write to the Committee,
Mr Chairman, on that we will probably have something useful to
say.
Q163 Chairman: Yes, we would be grateful.
Malcolm Wicks: Can I just go back
to the earlier question because recently there has been a development
on Iranian end-users of concern. The purpose of a list is to alert
UK exporters to end-users that we are concerned about in Iran.
That is an example of how, when there is a concern, we disseminate
that concern to appropriate companies.
Q164 Judy Mallaber: When representatives
of the industry gave evidence to us in January they cited a very
worrying case which highlights a very difficult problem which
is hard to resolve which we would like to explore with you. Their
case was about a car dealership which had a very large order from
a country, to which they did not normally export, for certain
components, and the company was puzzled by the order so they checked
up on it and it turned out that the reason was that the components
were ideally useable in low-grade, low-cost missile systems. We
understand that the order did not go ahead. That company was clearly
very on the ball. What was alarming was that, without any knowledge
of, or intention to breach, the Export Control Act, that could
easily have gone through. How do you reach sections of British
industry which have never regarded themselves as defence manufacturers
and who could unwittingly supply components for military systems?
I realise that is a very difficult issue and I wonder how you
tackle that?
Malcolm Wicks: Obviously we know
about this case, so again if I could ask Mr Williams to answer
that point?
Mr Williams: We have within the
EU Dual-Use Regulation the so-called `catch all' control, end-use
control, which allows us to make something licensable which is
not otherwise licensable where it may be going into a WMD programme.
I am not familiar with the specifics of the car parts case, but
there is a frequent problem which is that proliferators, having
been denied access to controlled goods because of the export licensing
rules, will seek goods which are slightly less sophisticated and
which are not normally controlled; things like machine tools which
have three axis instead of five axis. In a way that is a good
thing because they are having to procure sub-optimal goods. We
essentially use intelligence which is our source of information
about these things and then we will target awareness accordingly.
It is not sensible to target the whole of the UK car dealers for
the sake of one case, but if we heard about something like that
then we would home in on it.
Q165 Judy Mallaber: You clearly have
the powers to deal with it, but does it not just show the weaknesses
of the system? Are you just dependent on somebody fairly on the
ball picking it up within the industry?
Malcolm Wicks: As I said earlier,
we have to act on intelligence but, put the other way, how difficult
would it be—you are talking about car parts, which are fairly
common—to make sure that every car part going to country
X does not end up two stops later in country Z. There is an issue
about proportionality here, is there not? The only safe way to
do it would be to ban all exports from the country more or less.
At the end of the day, Mr Berry, there will be—when I say
anecdotal evidence, I do not mean that pejoratively—I mean
important evidence where things do not go right and things get
through or are exhibited at exhibitions. The more general issue
is whether we have got any overall worrying evidence from intelligence,
customs stops, what has been found or not found in Libya and Iraq,
what we know about AQ Khan, all of that to suggest that our system
at the moment is not doing a reasonably good job. That is one
of the judgments we need to bear on this and weigh it against
the important specifics that inevitably are brought to us and
brought to a committee like your own.
Q166 Judy Mallaber: More generally,
the representatives gave us an estimate of how they saw the size
of the problem because of the Act and they said that some years
ago the DTI estimated in the region of 35% of UK companies who
should be applying for export licences were not.
Malcolm Wicks: Who gave that estimate?
Q167 Judy Mallaber: This was the
representatives of the industry at the January meeting, EGAD.
They said that your estimate was 35% of UK companies should be
applying. That was some years ago and I am not sure exactly when.
Does that sound like a plausible figure still?
Malcolm Wicks: First of all, through
you, Mr Chairman, it is not our estimate. We believe, but I am
not sure that we are absolutely certain, that it is an ex-ECO
staff member—we think we know who—who estimated that
it is 35% of UK customers. I am advised that he did work for ECO
about 15 years ago.
Q168 Chairman: That is what your
current estimate is?
Malcolm Wicks: We do not have
a current estimate.
Q169 Judy Mallaber: Can you make
a guess?
Malcolm Wicks: No.
Q170 Chairman: If there is no current
estimate then I think we ought to move on.
Malcolm Wicks: Mr Chairman, my
current judgment, as I alluded to earlier, is that given what
we know about the general situation in terms of Iraq and Libya
and the things I have mentioned, my judgment is that we are doing
pretty well. Are we perfect? No, we are not. I would be interested
in the Committee's judgment as to how you weigh the anecdotal
and specific cases against the overall picture. That is the issue.
Q171 Judy Mallaber: Your judgment
would not be that this is an endemic problem.
Malcolm Wicks: It is not an endemic
problem. I am agreeing with you that that is my judgment.
Q172 Richard Burden: Given the problems
that you have identified on a couple of occasions now of identifying
exactly what is or what could be a dual-use item, could you tell
me is there written down anywhere any criteria for what should
be included on the list of dual-use items of regulation and, secondly,
who adds items to that list?
Mr Williams: The EU Dual-Use Regulation
has a specific list attached to it—the annex—those
are the goods for which you require a licence in order to be able
to export them. Does that answer your question?
Q173 Richard Burden: How do you actually
get something added to the list and who would do it?
Mr Williams: There are the International
Export Control regimes such as Wassenaar, the Nuclear Suppliers'
Group, the Australia Group and MTCR.[2]
They are the four in which the experts decide to negotiate on
what should be controlled or de-controlled as well and then that
is transposed back into the EU regulation that then takes effect
in UK law for the dual-use. For the UK military we do it directly
ourselves into our military list.
Q174 Richard Burden: Do you think it
works? Are you happy with the way that whole process works?
Mr Williams: Yes. The important
point is that it has to be an international process because obviously
if we are doing one thing and other countries are doing another
it is not going to be very effective. It has got to bring in the
international community. Globalisation is mentioned.
Q175 Richard Burden: I am just saying
whether that process, which seems a bit long and drawn out, works?
Mr Williams: Yes, it is long and
drawn out. There is an annual cycle. The control lists are there
and they exist all the time. They are being added to and subtracted
from annually but the fact that that annual process might be drawn
out I do not think matters. I do not think there are gaps in the
control lists that are causing these difficulties.
Q176 Malcolm Bruce: Is there a danger
with small companies very often who are innovative in their own
area—I am talking about reputable companies not trying to
export illegally—who might not fully appreciate these dangers
where things might go as second or third user? Is there some kind
of promotional campaign you could or should run to alert companies
in that situation that they should seek guidance?
Malcolm Wicks: In general we are
doing a great deal on that. A lot of outreach work, seminars,
DVDs and all the rest of it. That is a very important point because
I am generally aware, but not least from my work with my energy
portfolio, that some of our best and most entrepreneurial companies
in terms of science and technology are often preciously small
and many could be forgiven for not knowing about this particular
legislation. We have got to ensure that they do know about it
because they could be at risk of being hoodwinked into wrong exports.
We do need to reach them and we are doing our best. That is a
very important point.
Q177 Mr Borrow: Following on from
that, in the evidence we have received before there is only one
full-time post at the ECO dedicated to outreach work for the UK
industry and two staff supporting the website and telephone helpline.
Do you think that is sufficient, given the scale of the problem
and the complexities that we have been hearing about?
Mr Williams: There are two members
of staff who work full-time on organising and running the seminars
and training sessions that we do for exporters. We bring in other
staff from around ECO and MoD, FCO, Customs, to support those
activities. It is slightly misleading to home in on the figure
of two, but that is enough for what we do.
Q178 Mr Borrow: Following on from
the gist of my earlier question, which was that if evidence comes
to light as the new system beds down that resources are not adequate
to do the job properly, whether the department would be prepared
to look at representations seriously for improvements of further
resources in this area?
Malcolm Wicks: I have a note here
that since June 2004 a total of well over 1100 individuals from
461 companies have attended various seminars and training courses
run by the ECO. No doubt someone will say that is only X% of all
the companies, but it does show that we are working quite hard
in this area.
Q179 Peter Luff: I have an issue
with this discussion because one of the problems here is, say
you were this car dealer and you did not know and you just exported
them, that is obviously a problem you have to deal with in this
promotional activity. If you had a suspicion at the back of your
mind that there might be an issue, but you were quite strapped
for cash and would not mind an export order, you would be tempted
not to. If you thought you might take a long time to reach a decision
on whether or not there is an issue here, how quickly would you
have turned round that car dealer's enquiry when he made it to
you? If he made a tentative enquiry saying "I think I may
need a licence. What is your advice?" what would be the timescale?
Mr Williams: Our target is to
turn around 70% of such applications within 20 days.
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