Conclusions and recommendations
1. We
conclude that much has been achieved in the area of strategic
export control, but there is still a great deal to do. Drawing
on the work of our predecessor Committees and our own experience
since the start of this Parliament we intend to make a contribution
to the review of the legislation which the Government has announced
will take place in 2007. We conclude that this will be a good
opportunity to take stock of progress since the Scott Inquiry
and the enactment of the Export Control Act 2002. It will also
be an opportunity to examine the effectiveness of the legislation
and whether changes need to be made to meet the challenge of increased
globalisation of the defence industry, the fast pace of technological
developments and the threat from terrorists. (Paragraph 5)
2. We conclude that
the Government recognises the need to respond to our questions
in a timely manner. (Paragraph 9)
3. In the light of
this year's evidence sessions, we conclude that it is necessary
for us to take evidence directly from the Export Control Organisation
and the Revenue and Customs departments. We intend to repeat this
practice next year. (Paragraph 10)
4. We have concluded
that our approach now should be to send written questions to the
Government once we have reviewed each quarterly report on strategic
export controls and to raise specific issues as they arise. It
is our intention that this arrangement will spread the work and
prevent a bottleneck of questions concentrated after the publication
of the annual report on strategic export controls. As a consequence
of the general election in 2005 and the time it took to establish
the Quadripartite Committee in 2005-06 the arrangement has not
yet fully bedded down but we expect it to be fully developed in
2006-07. (Paragraph 11)
5. While we recognise
that, exceptionally, the ministerial reshuffle in May 2006 delayed
some replies to our written questions this year, we recommend
that, to assist our work, the Government agree to reply fully—other
than in exceptional circumstances—to our letters on the
quarterly reports within six weeks. We are confident that such
an arrangement will allow the Government and us to plan work and
to avoid past misunderstandings and difficulties. (Paragraph 12)
6. We recommend that
the Government dispense with the use of the "In Confidence"
designation when responding to our questions on strategic exports
and that it provide a detailed statement, not a general restatement
of the criteria, of the application of government security classifications
to correspondence on strategic export controls and that it also
explain its reasons for changing the classification on the letters
concerning exports to Iraq. (Paragraph 15)
7. Building on the
useful oral evidence session with the Minister of State at the
Department of Trade and Industry we conclude that we should visit
the Export Control Organisation in 2006-07, to see it in operation.
(Paragraph 16)
8. To assist the
Government's review of export control legislation scheduled for
2007, we conclude that we should carry out, and have completed,
a review of the operation of the legislation in time for it to
be taken into account by the Government's own review. To assist
our examination of the export control legislation, we recommend
that the Government produce and publish its terms of reference
for its review of the legislation by October 2006. (Paragraph
17)
9. We conclude that
in 2006-07 we should carry out a review of export controls taking
the form of post-legislative scrutiny of the Export Control Act
2002 and the secondary legislation made under the Act. (Paragraph
18)
10. We conclude that
a prior scrutiny model for certain sensitive (or precedent-setting)
arms export decisions—along the lines suggested by the UK
Working Group, on a trial basis for transfers to countries under
or recently under embargo—should be developed. (Paragraph
21)
11. Because of the
constraint of time we have not considered in detail the contentions
concerning the accuracy of the MoD's 2003 memorandum refuting
allegations that bribes had been paid by the Defence Sales Organisation
and we conclude that we should consider the issue further next
session. (Paragraph 24)
12. We recommend that
the printed version of the annual report on strategic export controls
and the CD-ROM containing the accompanying detailed information
be published simultaneously, ideally in the future the CD-ROM
be enclosed with the annual report. (Paragraph 26)
13. We recommend the
Government evaluate the production and maintenance of a fully
searchable and regularly updated database of all licensable decisions
with a search facility that would allow the user to sort licences
by country and by goods. (Paragraph 28)
14. We recommend that,
to assist the reader, the data on future CD-ROMs be consolidated
into a single document covering the whole year. (Paragraph 29)
15. From our own examination
and use of the 2004 Annual Report we conclude that the effect
of the switch to quarterly reporting and the production of a CD-ROM
to accompany the annual report left the printed annual report,
as produced for 2004, largely redundant and on its own to be of
little value to the informed reader. (Paragraph 30)
16. We conclude that
the Human Rights Annual Report and its objectives provide an exemplary
model for improvement to future annual reports on strategic export
controls. We recommend that the Government take the Human Rights
Annual Report as a model for making improvements to the content
of future annual reports on strategic export controls. (Paragraph
33)
17. We recommend that
future annual reports on strategic export controls set out in
a consistent and systematic manner the resources made available
by the Government to implement and enforce strategic export controls
and details of enforcement actions. (Paragraph 34)
18. At the time that
we are considering this Report the 2005 Annual Report on Strategic
Export Controls has not been published. We therefore reiterate
here the points which we have made to the Government as well as
drawing on the UK Working Group on Arms' evidence.
a) We recommend that the section that was section
I of the 2004 Annual Report, which provides an overview of policy,
be expanded to assist the informed reader to:
i. include an assessment of the effectiveness
of arms control policy and enforcement during the year covered
by the report, including a review of risks and of areas where
improvements are required;
ii. provide an analysis of trends in, and volumes
and values of, strategic exports;
iii. identify areas where the Government has
concerns about the supply of arms and the adequacy of its controls;
iv. set out changes in policy since the last
annual report; and
v. provide a detailed overview of outreach and
assistance to overseas countries.
b) We recommend that the "country by destination"
section of future annual reports provide, for each country, a
summary of export policy with tables containing total figures
for arms exports and licence applications as follows:
i. a statement on the general arms transfer control
approach or policy toward the recipient state, along with any
policy changes that have occurred over the year;
ii. a table providing the total number of applications
and value of Standard Individual Export Licences (SIELs) for the
previous year and a breakdown by quarter for the current year;
and
iii. summary information on the types of transfer
authorised during the reporting period and an explanation of how
these reflect the Government's stated commitments. (Paragraph
35)
19. We conclude that
information on the administrative resources and staff employed
to enforce export controls and for outreach in the UK and overseas,
which straddles several departments, should be consolidated and
presented in future annual reports. We recommend that this information
be set out either as a separate chapter in the report or in a
revised and expanded version of section II of the current report.
(Paragraph 36)
20. We recommend that
the Government review the presentation of summary data currently
set out in section II of the annual report and that the summary
data be set out consistently in tables with commentaries analysing
the trends to be drawn—or, if necessary, explaining those
not to be drawn—from the figures. We recommend the section
also include:
a) tables showing, for the current year and previous
year, the number of applications received, applications processed,
the number of compliance checks (including visits to companies)
carried out and appeals received;
b) the refusals information currently set out
separately in electronic format, plus summary data for the previous
year; and
c) details of enforcement action (disruptions,
prosecutions, compounding and warning letters, which are explained
in chapter 5) with total figures for the current year and previous
year. (Paragraph 39)
21. We accept that
it is undesirable to increase the burdens on industry to gather
data on exports but we consider that the information may be available
from other sources. We recommend that the Government investigate
whether data could be obtained from a function of the internal
compliance programme software, which companies routinely use,
in order to minimise the time required to collect and transmit
the data. (Paragraph 40)
22. We recommend that
the Government review how to improve its reporting of goods exported
under open licences, including more detailed and more accurate
information on quantities, values, end-use and end-user information
and whether the goods are intended for "incorporation".
(Paragraph 42)
23. We have several
concerns about strategic export controls to and from the Channel
Islands and the Isle of Man. First, there is a disparity in status:
the Isle of Man is subject to the Export Control Act 2002 but
the Channel Islands are not. Second, the 2004 Annual Report contains
on page 72 an Open Individual Export Licence to the Isle of Man.
We assume that this was issued by the Export Control Organisation
in error. Third, we are not aware that the bailiwicks in the Channel
Islands produce annual reports on strategic export controls. We
recommend that the Government clarify that future UK annual reports
on strategic export controls cover both the UK and the Isle of
Man and require the bailiwicks in the Channel Islands to produce
their own annual reports or annex them to the UK report. The reports
covering the Channel Islands should explain the criteria against
which applications for licences are considered and provide identical
data to that provided in the UK annual and quarterly reports.
(Paragraph 47)
24. We recommend that,
on the request of the Quadripartite Committee for explanation
of a decision to grant a licence and therefore, by implication,
that the export licence meets the European Code of Conduct on
Arms Exports and National Export Licensing Criteria, the Government
provide a short resume—under a security classification,
if necessary—of the considerations which informed its decision.
(Paragraph 50)
25. We conclude that
the work of the Export Control Organisation is so sensitive and
critical to ensuring that strategic exports are effectively regulated
in the UK that the Export Control Organisation must remain within
the public sector under government control. We recommend that
the Government endorse this conclusion. (Paragraph 53)
26. We conclude that
the staff in the Export Control Organisation and other government
departments responsible for processing export licences should
be congratulated on their achievements during a period of retrenchment
which, we expect, was unsettling and potentially distracting.
(Paragraph 55)
27. We are concerned
that the published median figure of 15 days for the time taken
to determine Standard Individual Export Licences for the final
quarter (October-December) of 2005 was inaccurate; the correct
figure was 13 days. An error of 15% in a key figure which does
not appear to have been noticed until we queried it is not acceptable.
We conclude that it casts doubt not only on the Export Control
Organisation's systems for recording information but also whether
senior management review such data. Furthermore, we conclude,
if there is a substantial increase in median times taken to determine
applications in 2006, even to a level within the 20 day target,
that would be strong evidence of a deteriorating service by the
organisation in immediate need of remedy. We conclude that we
should continue to monitor the efficiency and effectiveness of
the Export Control Organisation's service to industry. (Paragraph
56)
28. If it is the case
that the Export Control Organisation is operating at the limit
of its capacity—and given the recent cutbacks we would expect
this to be the case—we recommend that the Government give
an assurance that additional resources will be found by the Government
to deal with any unplanned pressures—for example, an increase
in applications for licences. (Paragraph 57)
29. We drew the following
conclusions from our exchanges with the Government about the statistics
on applications for licences received:
a) they underline the points we have made at
chapter 3 on the shortcomings of the presentation of the statistical
data about export licences;
b) the reduction in the number of Standard Individual
Export Licences since 2002 appears to have assisted the Export
Control Organisation to attain its targets; and
c) the upward trend in Open Individual Export
Licences may not have been as strong as we anticipated last year
and we shall review the figures again next year. (Paragraph 59)
30. We conclude that
freezing open licences at their current levels and at their inconsistent
maximum terms risks directing maximum scrutiny at exports which
pose far from the maximum risk to the UK's policies on arms exports.
We therefore conclude that a moderate change in the balance between
open and standard licences and a change to a consistent maximum
duration for all Open Individual Export Licences—for example,
three years—is acceptable provided the Government can address,
and assure us, on three issues. First, that there will be no softening
of the criteria applied to consideration of applications for Open
Individual Export Licences. Secondly, the Government provides
assurance that companies are subject to rigorous internal compliance
requirements and to regular audits to verify their implementation.
Thirdly, the Government will address the lack of transparency
in the reporting of open licences in the annual and quarterly
reports on strategic export controls. (Paragraph 60)
31. Having taken a
decision to keep the Export Control Organisation in the public
sector we conclude that there is now a duty on the Government
to provide adequate resources for its development and that it
would be unacceptable to attempt to muddle through with minimal
investment. As a first step we recommend that the Government set
out the IT functionality that the Export Control Organisation
needs and the investment required to deliver these functions with
a clear plan for provision and implementation of the new information
technology systems. We request a detailed briefing from the Department
on its plans for information technology in the Export Control
Organisation. (Paragraph 62)
32. We recommend that
the Government ensure that the proposed upgrade to the information
system in the Export Control Organisation meets the current best
practice of EU countries and expected changes in requirements
for the publication of data in annual reports. (Paragraph 63)
33. We recommend that
the Export Control Organisation address and rectify the problems
which EGAD has identified with the new Goods Checker. The problem
with the Goods Checker also underlined to us that outreach to
industry must make clear that the Goods Checker is one of many
components of a company's comprehensive internal compliance programme
and cannot on its own provide the necessary assurance to a company
that it is complying with strategic export controls. (Paragraph
64)
34. We conclude that
integration of the Export Control Organisation's and HM Revenue
and Customs' electronic systems, and in particular commodity codes,
would strengthen strategic export controls. We recommend that
the Government produce a plan to link up licensing and customs
processing electronically, to standardise commodity codes and
to allow HMRC to access the licensing database and expertise.
(Paragraph 65)
35. We conclude that
outreach to UK industry is critical to the operation and control
of strategic exports and we recommend that the outreach programme
be expanded significantly. (Paragraph 69)
36. We recommend that:
a) the Government expand the programme of overseas
outreach led by the Foreign and Commonwealth Office and supported
by HM Revenue and Customs and the Department of Trade and Industry;
b) review the staff and resources provided for
overseas outreach; and
c) subject to the outcome of any review of the
EU pilot programme, press for a full EU programme of outreach.
In addition, to ensure that provision is made for
staff and resources for outreach to overseas countries, we recommend
that this work be recognised as falling within the core tasks
of licensing and enforcement officers and that budgets and resources
are provided for this purpose, and set out in the annual report
on strategic export controls. (Paragraph 74)
37. We recommend that
the Government carry out research to establish the volume and
categories of the goods falling within definitions on the Military
List and in the dual-use regulations but which are being exported
in breach of export controls without licences. In addition, we
recommend that the Government produce an analysis of the reasons
that these goods are exported in breach of export control. We
recommend that the results of the research and the analysis are
published. We conclude that these estimates and analysis are critical
to inform the review of the legislation in 2007. (Paragraph 76)
38. We conclude that
the Government's response to the challenge of the Internet as
an arms emporium is too passive and fails to take account of the
role it now plays in promoting and facilitating commerce and exports
across the world. We recommend:
a) that the Government produce a strategy for
policing and monitoring potential breaches of export control by
companies using the Internet to advertise and facilitate transactions;
b) that responsibility for policing the Internet
be allocated to an agency; and
c) that members of the public are encouraged
to report potential breaches of export control on line using the
Internet. (Paragraph 82)
39. We conclude that,
as is the case with other industries, within the defence industry
there are contractors who, either through ignorance or deliberate
intent, breach the rules on strategic exports and that the authorities
need to seek out these breaches and the perpetrators. We recommend
that, as well as providing guidance and attending arms fairs,
the Government actively seeks out breaches of export controls
at arms fairs. (Paragraph 86)
40. We recommend that
the Government establish a pilot programme of end-use monitoring
focusing on cases where it has identified some degree of risk—though
not sufficient to withhold the issue of a licence—when considering
an application for an export licence and to report the outcome
of the exercise in 2007. (Paragraph 91)
41. We recommend that
the Government draw up a proposal for an EU wide system of end-use
monitoring and that it canvass the proposal with other governments
in Europe. (Paragraph 93)
42. We recommend that
the Government commission research to establish the extent to
which dual-use goods not subject to control are exported from
the UK and are then incorporated into equipment which had it been
exported from the UK would have been subject to export control.
We recommend that the results of the research and the Government's
analysis of the results are published. We further recommend that
the work is completed in time to inform the review of the legislation
in 2007. (Paragraph 100)
43. HM Revenue and
Customs assured us that the failure to include arms exports on
the "Customs Confidential" website was an oversight
and that it was not symptomatic of its general approach to strategic
export controls. We welcome this assurance and conclude that we
should review this matter again next year. (Paragraph 105)
44. We note HMRC's
confirmation that the estimate that five additional staff were
needed to implement the legislative changes which came into operation
in 2004 has proved to be correct. It raises the question: how
significant a change the Export Control Act 2002—and the
secondary changes enacted under it—made to the enforcement
of strategic export controls? We recommend that those reviewing
the controls in 2007 address this issue. We conclude that staffing
levels in HMRC are a matter we should continue to review and that,
if we return to the question of staffing, it is useful to have
established "base-lines" for staffing levels against
which future requirements and changes can be measured. (Paragraph
108)
45. We recommend that
HMRC inform us of the outcome of their discussions on EGAD's concerns
about exporters of dual-use goods who are unaware of the requirements
of the Export Control Act 2002. We recommend that HMRC review
the effectiveness of their policy on checks to target the exporter
who inadvertently but persistently exports dual-use goods in breach
of the 2002 Act. (Paragraph 111)
46. We recommend that
the Government review the resources that it provides for market
analysis and surveillance of dual-use goods and that it explores
with EGAD and interested parties the establishment of an industrial
export control association in the UK. (Paragraph 112)
47. We are concerned
to discover that no agency of government appears to be enforcing
the intangible transfer of technical information (so-called intangible
technology transfers, ITT) which may be in breach of strategic
export controls. We recommend that the Government include the
review of the operation of the controls on ITT as part of their
review of the operation of export control legislation in 2007.
(Paragraph 115)
48. We recommend that
the Government publish details of the amounts paid in compounding
for breaches of strategic export controls, with details of those
who have agreed to pay. We recommend the information be published
in the quarterly reports on strategic export controls. We intend
to examine further the question of warning letters in future reports.
(Paragraph 118)
49. We recommend that
HMRC examine how other EU countries' experience in prosecuting
export control breaches be exchanged and built upon more systematically.
(Paragraph 119)
50. We recommend that
the review in 2007 examine whether the evidential tests and requirements
in the export control legislation are impeding the prosecution
of breaches of the controls on strategic exports and whether the
Revenue and Customs departments need greater powers to compel
questions to be answered and documents produced when investigating
alleged breaches of strategic export controls. (Paragraph 124)
51. We recommend that
the Sentencing Guidelines Council conduct a review of the guidelines
on sentences for breaches of export control as a priority. (Paragraph
126)
52. We recommend that
the Government explain, in general terms, the resources devoted
to gathering intelligence and how intelligence is sought and reviewed
in trafficking and brokering cases. (Paragraph 131)
53. On trafficking
and brokering, there are two issues which we conclude that the
review of legislation in 2007 should address:
a) whether the Export Control Act 2002 provides
an adequate vehicle for prosecution of trafficking and brokering
breaches of export control; and
b) whether there is a reasonable prospect of
obtaining evidence in trafficking and brokering cases to mount
a prosecution. (Paragraph 133)
54. We recommend that
the Government in their reply to this Report give details of the
steps that have been taken to implement the EU Common Position
on Brokering. (Paragraph 134)
55. To address the
problem of producing evidence in brokering cases, we conclude
that there is a case for greater regulation of brokers operating
in the UK requiring all arms brokers to be registered, for registration
to be dependent upon a broker meeting defined standards and requirements
and that, where a person who is not registered carries out any
brokering activity, he or she should be guilty of a criminal offence.
We recommend that the Government bring forward a proposal to require
the registration of arms brokers. (Paragraph 136)
56. We conclude that
the revisions to the EU Code on Arms Exports as described by the
Minister are welcome and we congratulate the Government for its
part in securing the changes to the Code. We conclude that the
revisions should strengthen the Code and should ensure greater
consistency, responsibility and transparency in the exports of
arms across the EU. It is therefore all the more frustrating that
the implementation of the revised Code has been blocked by certain
EU member states. We appreciate that there is little that the
Government can do other than work with other states to achieve
the consensus within the EU necessary to allow the implementation
of the new measures. We express the hope that during 2006 the
revisions will be implemented. (Paragraph 141)
57. We conclude that
the recommendations produced by the peer review on the implementation
of EU Council Regulation 1334/2000 have identified a number of
areas which need to be addressed urgently. Specifically, Regulation
1334/2000 needs to be amended to comply with UN Security Council
Resolution 1540 of 2004 in respect of transit and brokering controls
for weapons of mass destruction and to improve information exchange
among EU countries about dual-use licences issued. We shall monitor
progress on the implementation of the review's recommendations.
(Paragraph 144)
58. We recommend that
the Government report the outcome of any measures relating to
undercuts that it proposed during its Presidency of the EU in
order to increase transparency and coherence. We recommend that
the Government publish the total number of UK undercuts along
with a summary of the issues in future annual reports on strategic
export controls. (Paragraph 145)
59. Given the Government's
assessment of human rights in Saudi Arabia, we recommend that
all applications from Saudi Arabia should be considered more carefully.
(Paragraph 152)
60. We conclude that
transparency in this important area can be improved if the Government
takes two steps. First, as we recommend at paragraph 50, the Government
should, on the request of the Quadripartite Committee for an explanation
of a decision to grant a licence, provide a short resume—under
a security classification, if necessary—of the considerations
which informed its decision. We anticipate making such a request
where it appears to us that an application may not meet the criteria
in the EU Code on Arms Exports. Second, we recommend that in those
exceptional cases where the Government decides to attach weight
to the National Export Licensing Criteria, in order to issue an
export licence, the Government identify the licence in the quarterly
report on strategic export controls and explain the factors that
justify its decision. (Paragraph 153)
61. We welcome the
Government's proposal to provide additional information about
strategic exports to countries of concern in future annual reports
on strategic export controls. We recommend that in responding
to this Report the Government set out the selection criteria for
placing countries on a list of those giving rise to concern. In
our view the starting point should be those countries listed as
"Major countries of concern" in the Human Rights Annual
Report but supplemented with those countries that have received
a denial from the UK government or any EU government because an
export would breach the EU Code on Arms Exports. We recommend
that the Government explain in future annual reports the reasons
for granting licences for exports to countries on the list. Finally,
we conclude that the list may provide a means by which the Government
could improve transparency in the reporting of open licences by
providing detailed information on dual-use exports to countries
of concern. (Paragraph 155)
62. We recommend that
the Government explain the policy—that no weapons, equipment
or components which could be deployed aggressively in the Occupied
Territories will be licensed for export from the UK to Israel—in
its reply to this Report. It would assist us if the Government
gave examples of the equipment to which, in the light of the policy,
it has refused to grant export licences. (Paragraph 158)
63. We recommend that
the Government explain how the teams in Tel Aviv and Jerusalem
who are observing the use to which exported equipment is put carry
out their work and how their work differs from end-use monitoring.
(Paragraph 160)
64. We recommend that
the Government continue to press for the implementation of the
toolbox. (Paragraph 163)
65. As currently envisaged,
we understand, the toolbox will only provide for the exchange
of information about items on the Military List. We recommend
that, in particular if the toolbox were to be applied to China,
effective monitoring of post-embargo licensing decisions across
the EU cover dual-use items as well as those on the Military List.
(Paragraph 164)
66. We consider that
the political will to maintain the arms embargo against China
is weakening within the EU and that rather than lift the embargo
it is being allowed to wither on the vine. We are concerned that
it has become an embargo in a category of its own, increasingly
at odds with the terms and scope of other more recent embargoes.
As a first step we recommend that the UK Government clarify the
status and scope of the embargo on China. (Paragraph 166)
67. We do not downplay
the serious dilemma the Government faces in respect of China:
how far to engage and make concessions to a government seemingly
impervious to calls to respect human rights but which has the
potential to undermine arms control across the world. Nor does
the Government's 2005 Human Rights Annual Report show a country
clearly moving towards the rule of law underpinned by respect
for human rights. We share, however, the serious reservations
of our predecessor Committees about lifting the arms embargo on
China. The embargo may be an imperfect tool and it may be losing
its bite but it has a symbolic value which has worth. It was imposed
because of the gross abuse of human rights carried out by the
Chinese Government in 1989 and we conclude that without clear
evidence that China is prepared to respect human rights and behave
with responsibility on arms exports the embargo must stay. We
recommend that the Government work within the EU to maintain the
arms embargo on the People's Republic of China. We further recommend
that the Government stay in close contact with its US counterparts
on this issue and explain US sensitivities to its EU partners,
as part of its broader efforts to strengthen trans-Atlantic ties
and to ensure the embargo stays effective. (Paragraph 169)
68. Having handled
some of the items and examined photographs of the others we conclude
that thumb cuffs, wall cuffs and sting sticks can have no function
other than to be used as instruments of torture or to inflict
cruel, inhuman or degrading treatment or punishment. In our view
the case for banning these items immediately is overwhelming.
Indeed, given these items can be purchased via the Internet the
change is overdue. We therefore recommend that thumb cuffs, wall
cuffs and sting sticks be added as soon as possible to the list
of items which cannot be transferred or brokered from the UK or
trafficked by British citizens anywhere in the world. (Paragraph
173)
69. We conclude that
the introduction of EU Regulation No. 1236/2005 prohibiting trade
across the EU in items of torture is a significant and welcome
development. We are, however, disappointed that the commendable
lead which the Government has taken in banning the trade in items
of torture since 1997 will, with the commencement of the Regulation,
be frozen and the only scope for adding to the list is via the
EU. We recommend that the Government explain why it did not obtain
a derogation which will allow it to add to the UK's banned list
and that the Government press the EU to add sting sticks to the
controlled list as soon as possible. (Paragraph 176)
70. We recommend that
the Government bring forward a proposal for a torture equipment
end-use control to apply to items capable of "dual use"
as instruments of torture or to inflict cruel, inhuman or degrading
treatment or punishment as well as for benign purposes and seek
an amendment to the EU Regulation No. 1236/2005 to give effect
to the proposal. (Paragraph 178)
71. We invite the
Government to respond to the findings in the US Government report
that China and Russia have breached undertakings and guidelines
on missile proliferation and recommend that the Government explain
what action it took during its Presidencies and subsequently to
remedy these breaches. (Paragraph 179)
72. We conclude that
the Government has used its Presidencies of the G8 and EU to achieve
solid progress in a number of areas. We are disappointed that
there were no significant breakthroughs but this was not the Government's
fault; we recognise that progress at the international level in
export controls takes time. (Paragraph 180)
73. We endorse the
Working Group's assessment of the former Foreign Secretary and
wish to put on record our appreciation of the part Mr Straw played
in promoting the International Arms Trade Treaty. (Paragraph 182)
74. We conclude that
the Government has been successful in promoting and helping to
build up momentum for an International Arms Trade Treaty and we
give it credit for that. We recommend that the Government build
on the impetus that has been achieved and give top priority to
achieving a treaty under the auspicious of the UN as a matter
of urgency. (Paragraph 183)
75. We conclude that
the International Arms Trade Treaty must:
a) be founded on the existing principles of international
humanitarian and human rights law, if it is to achieve the objective
of setting clear standards for the transfer of arms;
b) cover the trade in all conventional arms,
including dual-use goods and technologies; and
c) include an effective and transparent mechanism
for monitoring and enforcement, if decisions to authorise the
transfer of arms are to be taken by national governments.
We conclude that the value of a treaty which does
not meet these requirements is open to serious question. Indeed,
a treaty based on the lowest common denominator that not only
fails to meet some of these requirements but also weakens the
export control system in the UK or EU will be of questionable
value. (Paragraph 186)
76. We recommend that
the Government produce the evidence to back up its claim that
the Export Control Act 2002 is stopping the United Kingdom being
used as a base for undesirable arms transfers. We recommend that
the review of the legislation in 2007 examine, and report upon,
the strength of this claim. (Paragraph 191)
77. We recommend that
the Government set out the terms under which the review of the
extra-territorial controls on brokering and trafficking will be
carried out in 2007. More specifically, we recommend that the
Government detail:
a) the criteria it will apply to consideration
of the case for extending the extra-territorial controls on brokering
and trafficking in controlled goods;
b) the weapons that will be included in the review,
in particular, confirm that it will examine the inclusion of MANPADs,
rocket-propelled grenades and light automatic weapons as well
as small arms; and
c) whether the review will consider the need
for registration of brokers.
We conclude that no logical case can be made for
including some controlled goods within the Government's extra-territorial
control on brokering and trafficking whilst excluding others.
We therefore further recommend that all controlled goods should
be included. (Paragraph 195)
78. We also recommend
that the Government detail how it intends to implement the requirements
on brokering and trafficking in UN Security Council Resolution
1540. (Paragraph 196)
79. We recommend that
the Government bring forward proposals for consideration during
the 2007 review of the legislation controls to regulate:
a) British companies proposing to license the
production of weapons overseas; and
b) exports from overseas subsidiary companies
in which a majority shareholding is held by a UK parent or where
UK beneficial ownership can be established. (Paragraph 199)
80. We conclude that
there are grounds for deep concern about the protectionist tendencies
of elements within the US Congress. (Paragraph 203)
81. With the loss
of the ITAR waiver, we conclude that the Government's priorities
should now be to put in place arrangements which will allow the
transfer of goods and technologies from the US to ensure that
not only the Joint Strike Aircraft programme is not impeded but
also to assist those companies that would have benefited from
the transfer of unclassified defence items, technology and services.
We request that the Government explain its policy and approach
to securing the expeditious transfer of goods and technologies
from the US to the UK. (Paragraph 204)
82. We, like our predecessor
Committees, welcome the improvement to the UK's export control
as a result of the legislation passed in 2002 and the secondary
legislation made under the Export Control Act 2002. We conclude
that the review scheduled for 2007 provides a timely opportunity
to take stock, to test our assumptions about the improvements
that have been achieved and to address areas where changes may
be required. We look forward to a full and comprehensive review.
(Paragraph 205)
83. The next year
will be critical for the International Arms Trade Treaty. We conclude
that the Government has shown skill in promoting the treaty and
can take credit for helping to build the momentum that has been
achieved. The treaty offers an important opportunity to prevent
what the Government has described as the irresponsible sales of
conventional arms, which have resulted in the deaths for thousands
across the world. We hope that by our next report we shall be
able to report further significant progress. (Paragraph 206)
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