Quadripartite Select Committee First Report

5  Enforcement

75. Although the Export Control Organisation plays a pivotal role in the licensing of exports, enforcement of export controls is reliant on compliance by industry and enforcement by Government with, if necessary, the full force of the criminal law. We judge that for the system to be working effectively the following requirements need to be met:

a)  all exports that are covered by control need to be subject to an application for an export licence;

b)  the licensing system needs to be efficient and effective;

c)  the Government needs to be proactive in investigating breaches of control to ensure that there is a high probability of interception for contravention; and

d)  penalties for breaches of export control need to act as a deterrent.

In this chapter we examine each of these requirements with the exception of the licensing system, which we have already addressed in chapter 4.

Are all controlled exports covered by export licences?

76. For the system of export controls to work satisfactorily there needs to be assurance that those exporting items on the Military List and dual-use goods subject to control are applying for export licences. As Mr Fuchter from HMRC pointed out, if a significant proportion of exporters are not applying for export licences, the Government's operational approach would need to be reconsidered.[117] We sought evidence about the adequacy of the coverage of the system but were not able to reach a firm conclusion.[118] 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.

How proactive is the investigation of breaches of export control?

77. The UK Working Group on Arms allege that "despite many new cases coming to light since the introduction of the new controls, it would appear that enforcement of these controls remains woefully inadequate".[119] The Director of the Export Control Organisation explained that his organisation did not carry out "detective work on a speculative basis" but assured us that "we will follow up any leads that we are given from any source and, as necessary, pass them on to HMRC to follow up with their enforcement powers".[120] HMRC also assured us they that "look into all intelligence and […] credible allegations".[121]

78. We note the assurances of the Department of Trade and Industry and HMRC that they follow-up and investigate breaches of export control and that many sources for leads will be the security services, which are not open to transparent public scrutiny. We did, however, take evidence concerning allegations of breaches of export control in two relatively public areas: on the Internet; and at an arms fair.


79. In his memorandum to the Committee, Mark Thomas said he found on the Internet:

Army-Technology.com, a website run by SPG Media a UK company, offered introductions to Chinese and Korean arms manufacturers who advertised their stun batons through the Army-Tech[nology.com] website in the UK. […]

In November 2004 the website of UK company TLT International offered stun batons and stun guns for sale. The company is based [in south] London. […] The website included pictures and a short description of the weapons. […][122]

80. When we asked the Minister whether the Export Control Organisation reviews the Internet for contraventions of the export control system, he replied:

The brief answer is that that is not a regular role of the ECO. We do not have a dedicated official looking at that. We recognise the importance of the internet of course. We have a restricted enforcement unit. This is a fortnightly meeting of an interdepartmental committee, chaired by our director, Mr Williams, […] which reviews intelligence relating to procurement attempts and possible breaches of control. One of the actions they may take is to follow up leads by reviewing a company's website.[123] […]

My guess would be that there is no one agency dealing with websites. If we had reason to pursue an inquiry, we would use all available evidence at our disposal. I am not sure it would be sensible to say that we are websites and someone else is not. Customs will use that as part of their policing activities. We work very closely with Customs of course.[124]

81. While part of the job of staff within the Intelligence National Coordination Unit was to carry out regular searches of the Internet for the use of specific terms of interest or concern to HMRC and the Internet was one of the tools that officers working in frontier areas use day-to-day to do their jobs,[125] HMRC told us that they were not responsible for reviewing the Internet for breaches of strategic export controls. They informed us:

that is not the role we have agreed with our partners in the restricted enforcement unit, principally the intelligence agencies. The task that we have agreed is that it is not required of us that we spend our intelligence resource looking on the internet for cases that may be prima facie breaches. That responsibility under the agreements we have with other departments lies through [the Restricted Enforcement Unit] with the intelligence agencies.[126] […] In another area of our responsibilities, endangered species, in fact we do do such things and we have been tracking endangered species appearing for sale, for example, on E-Bay.[127]

82. We are not reassured by the Government's response. It appears that responsibility for proactively policing the Internet, if it rests anywhere, lies with the security services, from whom we have not taken evidence. Nor, until we pointed out the omission,[128] is there a mechanism for the public to report possible breaches of export control to the authorities for investigation. Mark Thomas, a journalist, was able to identify with apparently little effort prima facie evidence of breaches of export control from information posted on the Internet. Subsequently he passed his evidence to HMRC[129] and we understand that warning letters were issued.[130] We commend Mark Thomas. 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.


83. Mark Thomas also supplied us with evidence of potential breaches of export control taking place at, or in connection with, an arms fair. He attended the Defence Systems and Equipment International (DSEi) fair in London in September 2005 where he found:

TAR Ideal Concepts Ltd, an Israeli company, offered electro shock weapons and leg irons whilst exhibiting at the Defence Systems and Equipment International (DSEi) fair in September 2005.

Global Armour, a South African company offered electro shock weapons in their company brochure at the same event.

Imperial Armour, a South African company offered to provide stun weapons and set about negotiating a deal from the fair.[131]

84. We put Mark Thomas' evidence to the Minister and he responded:

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. […] What do we do about this? The [Export Control Organisation] 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.[132]

85. HMRC told us:

First of all, we put a lot of effort into the prior planning, working with DTI colleagues and others and, principally, with the organisers—in the case of DSEi, but also with Farnborough the year before […] to make sure the organisers have the right material and dispatched it to the exhibitors that made abundantly clear what the obligations were on those exhibitors. That took place before DSEi and, obviously, it is very disappointing to then read the allegations which have emerged. The next stage of our activity is to put a lot of control effort in by means of our local control staff, but I have to say our priorities were, firstly, those real weapons themselves - the genuine firearms under the Firearms Act that were on display. That was our top priority—making sure the temporary importation of those was controlled in accordance with the exhibitors' obligations (we put a lot of effort in on that) and, secondly, any exhibitor dealing with missile components. I have to say I think we have learned a lesson from this that the brochures and the other interactive-type materials and screens were not amongst those top two priorities, and I think we have accepted we need to sit down ourselves, also with the DTI, in the event of any future exhibition and see what lessons we have learned and see if we can take a different approach.[133]

86. We commend the Government for working closely with industry and the organisers of arms fairs to ensure that those exhibiting are aware of the UK's export control laws and also for taking prompt action when potential breaches were reported to it. Again, however, a journalist was able to identify with apparently little effort prima facie evidence of breaches of export control at DSEi in 2005 while HMRC, who attended the fair, did not notice the possible potential breaches in the brochures.[134] Subsequently he passed his evidence to HMRC,[135] and we understand that warning letters were issued.[136] Again we commend Mark Thomas. 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.

87. One measure we suggested to HMRC was that they require all exhibitors to submit all brochures to the organisers of fairs to ensure that they did not breach UK law.[137] In a supplementary memorandum HMRC said:

We can confirm that there was no requirement for exhibitors to submit brochures in advance for inspection, either by organisers or by officials. […]

On powers, neither DTI nor HMRC have powers to compel exhibitors to submit brochures and similar material for inspection. HMRC do have powers to require exhibitors to produce for inspection any temporarily imported firearms. Our current advice is that it would be difficult to frame legislation that did not create a regulatory burden on all organisers and exhibitors, going beyond arms.

We believe that the way forward is to build on the current approach whereby HMG work with the organisers to:

  • Improve the clarity and communication of information to exhibitors of their obligations in respect of this legislation—for example, providing clear examples of what is not permitted;
  • secure voluntary compliance with submitting brochures in advance and backed with selective scrutiny;
  • underpin these arrangements in the contracts between organisers and exhibitors.

We will pursue these and other possible solutions with DTI ECO and others. At this stage we should point out that we do not envisage any change in our priorities for action at these events, with controlling weapons remaining our top priority and then missile components. And we should perhaps sound a cautionary note that, whilst we accept the need to tackle potential trafficking and brokering, we will do so on the basis of risk. Finally on this point to underline that our approach is fully coordinated with DTI ECO, whose technical assessment staff would be approached for a ruling on the control status of any goods appearing in brochures or other material.[138]


88. In assessing how proactively the export system is policed we return to the question of end-use information, upon which our predecessors have commented and made recommendations.[139] We have in our questions on specific export licensing decisions asked and been given the names of the intended recipients of licensed exports; and we have also asked what checking the Government carries out to ensure that the exported goods are not diverted to those for whom the Government would not grant a licence or used for a purpose which breaches the EU Code on Arms Exports. We asked the Minister of State at the Foreign and Commonwealth Office, Dr Kim Howells MP, for examples of monitoring of end-use that has led to any kind of change of approach (in the context of exports to Israel) and he replied:

The key thing is the risk assessment beforehand, that is the major point. In that risk assessment we have to be looking at what happens on the ground, so we will take that intelligence as part of our overall assessment exercise of any application that is made.[140]

89. The Government expanded on its approach in its letter of 19 April 2006 to the Committee:

HMG does not use end-use monitoring to check on exports of concern. HMG does not licence goods where we have concerns about their use.

If despite careful consideration of the licence application, concerns later arise over use of a UK export (from observation by Post, media or non-governmental organisations) these will be thoroughly investigated and appropriate action taken, including the revoking of licences issued. Such concerns will also be taken into account fully when future export licence applications are considered.[141]

90. HMRC informed us that they "are made aware of end-users of concern" and their profiling system includes profiles on suspect end-users.[142] If, however, the paperwork was in order and an export was lawful there was little they could do. Mark Fuchter explained:

I am aware of cases where we have been challenged over our role in terms of end-users, where export consignments have ended up being transhipped from the declared end-user to another state, where they have been used in conflicts, but if everything is in order and lawful—if all the processes in place are legal—then we can take no enforcement action but what we can do, of course, is feed back in the intelligence, although I think in the cases of which I am aware intelligence agencies would be perfectly well aware.[143]

91. Some of the Government's comments were made in response to questions about exports to Israel (to which we return at paragraph 156 below) but are, we believe, of general application. We have concerns about the adequacy of the Government's approach, which eschews detailed end-use monitoring for a risk assessment carried out during consideration of the application for a licence. We consider that there is scope for both approaches and that there are advantages in carrying out checks to establish what happens to arms exports after they have been licensed and left the UK. Not least it would test the Government's assumption that pre-licensing checks, including the risk assessment, are sufficient to prevent problems of misuse and diversion. 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.

92. The UK Working Group on Arms put forward a more ambitious programme for end-use monitoring:

Arguments against more stringent post-export control have often focussed on the difficulties and impracticalities of monitoring the end-use of all exports. In addition, it has also been noted that were the UK to operate such a system on its own, buyers would source their needs from elsewhere, while the introduction of a similar system across the EU could not work as smaller members lack extensive diplomatic presence and thus would seldom be able to meet their obligations.

While a system of end-use monitoring would require the Government to include as part of the export licence the right to monitor end-use, clearly not all exports would be followed up. The system should be organised so that monitoring is carried out only when there are specific concerns that the goods or technology in question are not being used according to the terms of the licence. The US has end-use monitoring systems of this type in place: the State Department Blue Lantern programme and the Department of Defence Golden Sentry programme operate on the principle that where a particular transfer trips a number of 'red flags', checks are carried out. In 2004, the State Department performed 530 Blue Lantern checks, with 93 'unfavourable determinations'. A similar system should be introduced across the EU, with the inability of smaller states to identify possible problems and to then undertake monitoring being dealt with through the pooling of information sources and in-country diplomatic resources.[144]

93. We consider that there is much to commend the UK Working Group on Arms' proposal for an EU wide system of end-use monitoring drawn broadly along the same lines as the United States' systems. 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.


94. End-use information is key to the regulation of dual-use goods, software and technology. In explaining the detailed operation of strategic controls David Hayes, Head of Export Controls, Rolls-Royce plc, and Chairman of EGAD, compared the application of the controls between items on the Military List and those covered by the dual-use regulations:[145]

There are a lot of defence companies who have very active export control practitioners and there are a few dual-use companies who do, but I think there is a perception that the dual-use controls are to a greater or lesser extent not as well scrutinised and well enforced as the military controls. That is particularly worrying in today's environment where we are told that we are under an increased threat of terrorist attack from things, including weapons of mass destruction, yet most of the goods and technology which will be required to construct a weapon of mass destruction are actually controlled on the dual-use list and not on the military list, so, on the face of it, it would appear that at the moment we are in danger of giving the greatest scrutiny to the area of the least risk in some respects.[146]

95. David Wilson, Export Compliance Manager, EDS Defence Ltd, from EGAD, then commented on the operation of the catch-all controls which apply to dual-use goods and technologies. (The provision[147] requires an export licence for items that are not on the dual-use list if the intended use is or may be related to weapons of mass destruction or military end-use in an embargoed destination and the exporter has been informed by the authorities or is aware of such use.) He said:

The catch-all control, that in itself can be a little problematic to interpret. Catch-all controls apply, as the name implies, to absolutely anything. One aspect of the control which is often misunderstood is that these controls only apply to goods and technology which are not controlled of themselves. The reason for that is because if the item is controlled, then it is subject to licensing and end-use consideration forms part of that licensing process. It is only where the goods are not controlled of themselves that you need to bring in a catch-all to say, 'Well, we want to catch absolutely anything that might be going to a programme for the construction of a weapon of mass destruction, a missile for the delivery of that weapon or to military end-use in an embargoed country', so the catch-all controls only apply to those goods which are not controlled of themselves.[148]

96. The difficulties in regulating dual-use goods were highlighted for us by the "Land Rover/Otokar" case—in this instance on the re-export of goods to a country, Uzbekistan, with a bad human rights record which was subsequently subject to an EU arms embargo. The UK Working Group on Arms outlined the circumstances:

Turkish made Land Rover Defender 110 military vehicles were used by Uzbek troops during the Andijan massacre in May 2005. The vehicles were a gift from the Turkish Government to the Uzbek Government, and it is extremely likely they were produced under licence from the UK by the Turkish company Otokar. Although 70% of the components are exported from the UK in kit form for Turkish assembly into these military vehicles, it seems this production takes place completely outside the UK licensing regime […] The Turkish Government lists the Otokar produced Land Rover 110 military utility vehicles as being fitted with rifle mounts, two-way black-out lighting system and a NATO-type towing hook.[149]

97. We put the case to the Government and the Minister of State at the Department of Trade and Industry, who responded:

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 […] 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.[150]

The Minister then posed a question for us: where should the control of dual-use items end? He observed:

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.[151]

98. We also asked the Government about the effect of the embargo imposed by the EU in November 2005 on Uzbekistan:[152] would it have prevented the exports from the UK? After the evidence sessions the Minister of State at the Department of Trade and Industry clarified the position in a supplementary memorandum:

[The controls] allow us to impose export licence requirements on goods which are not normally licensable, where it is known they are to be used for military purposes in an embargoed destination. Our view, having checked with the European Commission, is that this control can be applied in circumstances where the goods are passing via a third country and are further developed there before reaching the embargoed destination; provided their ultimate destination and end user are known at the time of their export from the UK. The EC Commission has indicated it shares this view. Thus, in future these provisions could be used to control exports of non-military Land Rover parts (for example) to Turkey if it is known that those parts will be incorporated into military vehicles and delivered to an embargoed destination for a military end-use. In the case of Uzbekistan vehicles, the controls would not have applied because at the time Uzbekistan was not subject to an embargo and also because, as far as we know, it was not envisaged at the time of export from the UK that the Otokar goods would be transferred to Uzbekistan.[153]

In written evidence Oxfam GB pointed out that there "appears to be a close working relationship between Otokar and Land Rover for the manufacture, promotion and export of military vehicles"[154] and we passed this evidence to the Government and the Minister commented:

I am grateful to the Committee for providing us after the hearing with evidence from Oxfam about the nature of the commercial relationship between Land Rover and Otokar. I have asked Land Rover for their comments on this. To the extent that there may be a working relationship between the two entities, this is only relevant to current export controls insofar as Land Rover could thereby be deemed to participate in 'an act calculated to promote' supply or delivery of military goods from a third country to an embargoed destination.[155]

99. We take some comfort from the Government's advice that the imposition of the EU arms embargo on Uzbekistan might have brought the exports in the Land Rover/Otokar case within UK export controls. For the controls to apply it appears that the UK exporter needs to have knowledge about the end-use of the goods at the point they enter the contract to supply the goods. It appears therefore that the fact that the goods which left the UK were not on the Military List or militarised does not preclude them falling within export control.

100. The Uzbekistan case highlights difficulties where dual-use goods are exported from the UK, incorporated or transformed into equipment which can be used for a military or police purpose and then re-exported. Before this matter can be examined in greater detail we consider that the volume and extent of these exports need to be established. 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.

101. Finally, we comment on the position of the Turkish authorities. We also asked the Minister of State at the Foreign and Commonwealth Office about the position after the embargo had been imposed. Before the clarification from the Minister of State at the Department of Trade and Industry, he told us that "the export of civilian vehicles, converted by a Turkish company, using its own technology and without UK involvement is a matter for Turkish export controls".[156]

102. We deal with licensed production overseas in more detail at chapter 7.


103. The role of HM Revenue and Customs (HMRC) and the Revenue and Customs Prosecution Office is to investigate, prevent and prosecute breaches of export control. As we have noted, we are the first Quadripartite Committee to take evidence directly from the Revenue and Customs departments, and we found the oral evidence session valuable.

104. EGAD expressed concern that HMRC's primary focus was on raising revenue for the Government rather than controlling strategic exports.[157] We put this point to them and they said that "the merger into HM Revenue and Customs will not deplete the effort and activity we give to this work area".[158]

105. We found some evidence that the control of strategic exports had not been fully integrated into the general work of HMRC. For example, HM Customs runs "Customs Confidential", which encourages members of the public to report suspicious activities, which the website lists as including everything from importation of drugs to Aggregates Levy fraud. When we examined the lists we found that illegal arms exports were not mentioned. Mark Fuchter, Head of the Publications and Restrictions Policy Group, HMRC, thanked us for pointing out the deficiency and assured us that that "is something I am trying to get put right and I have started those steps already".[159] It is incongruous to us that, while HMRC, rightly, places importance on gathering intelligence,[160] it has no mechanism in place to allow the public to supply information about possible illegal arms' trading. 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.


106. EGAD expressed concern about the level of staffing at ports.[161] In response to these points HMRC told us:

The vast majority of our staff are actually multi-functional. Multi-functional means that they might work in one discrete area, for example, cargo examination, but they will undertake cargo examinations for a multitude of reasons, a multitude of risks, it could be drugs, tobacco or whatever but […] if we add up across all the various activities in Revenue and Customs that contribute to our role in strategic export controls, it is something between, say, 60 and 100 full-time equivalent staff in any one year, but it will fluctuate.[162]

They explained that this core group could be expanded rapidly if the circumstances required:

Although that is the core group that specialise in strategic exports, because of the nature and the way in which we pull our workforce together, we can actually deploy much higher numbers at very short notice and indeed recently we have been redeploying people to stem the threat of Avian Flu and at a moment's notice we were able to redeploy over 200 officers. The reason why we set our workforce in a flexible mobile context is to enable us to be as agile as possible.[163]

107. In his evidence to us Mark Thomas drew attention to the Regulatory Impact Assessment that accompanied the legislative changes in 2002 "calculating the extra costs that the new regulations on export control would bring to Customs; they estimated it would be approximately between £200,000 and £300,000 and there were no additional IT or training costs envisaged".[164] We put this point to HMRC. Mark Fuchter responded: "it was based on an assessment which […] was made in the mid nineties […] that we would need up to five extra specialist investigators with all the various on-costs, so I think that was the basis of the figure."[165] He confirmed that this estimate had turned out to be accurate and "that in the two years that the controls have been in place we have been able to deal with the work that has arisen within the existing resource allocation, so we have not increased our baselines by the amount originally envisaged in the [regulatory impact assessment], we have not needed to".[166]

108. We are grateful that after previous refusals[167] HMRC have now provided figures for the staff employed on enforcing strategic export controls. 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 make no assessment in this Report on the current level of staffing which HMRC have deployed to enforce the controls on strategic exports other than to comment that 60 to 100 full-time equivalent staff on strategic export controls appears to be a small complement.[168] We take some comfort from HMRC's assurance that that this level of staffing can be expanded rapidly if required. 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.


109. When EGAD provided evidence on the detailed operation of the export control system they set out their experience of the examination of freight by HMRC at Felixstowe. David Wilson, Export Compliance Manager, EDS Defence Limited, from EGAD said:

How many containers go through Felixstowe in a day? Fifty thousand, something of that sort? How many do Customs actually open? One? Usually, in my experience, that is because the police have gone down there because somebody's tracker has tracked a car to a container at Felixstowe and they open the container and there are four or five stolen cars in it. There are not many Customs officials at Felixstowe, a big container port.[169]

In a memorandum EGAD described a case where a company exporting items which appeared to be subject to export control had never been stopped in 20 years:

One of the most extreme cases was one we came across back in early-2004 involving a company heavily involved in the export of Chemical, Biological, Radiological & Nuclear (CBRN) protective clothing, which had been in business for over 20 years, and never applied for a single export licence (entirely through ignorance), and also never had any shipments stopped! How many more, similar cases are there out there?[170]

In their memorandum EGAD believed the operation of the current system:

puts the non-compliant at a commercial advantage over the compliant, who bear the costs of compliance and put the resources and efforts into being compliant. The current system, and the seemingly ad hoc and uncoordinated way in which HMRC officers around the country seem to implement the regulations are: undermining the role and authority of export control compliance managers within companies with their colleagues in other disciplines/departments; undermining the procedures that compliance staff are trying to put into place; wrecking the credibility of compliance staff and the regulations with their other colleagues elsewhere; and giving other staff the innate perception that export controls are just a farce. This is not in anyone's interests.[171]

110. We asked HMRC to describe arrangements at Felixstowe. Mark Fuchter explained "something in the order of 250 staff [are] based at Felixstowe […] across a number of disciplines"[172] and that 8,000 containers a day went through the port, 3,500 of these for export,[173] and:

It is fair to say the numbers of physical examinations are small, it is probably averaging something between one and two a day, but I would want to emphasise that running in the background of course is our automated processing export processing system and at any one time there are something in the order of 60 of our profiles against which all those containers, all those consignments, will have been screened, so all 3,500 are screened against export profiles. [174] […] It means that none of them obviously contain any goods which should generate an export licence, if so the machine will have identified that consignment and it will go for either a documentary check or physical check.[175]

Kevin Franklin, Director, Frontiers Customer Unit, HMRC, added:

We use an automated system for Customs' declarations which will have profiles attached to it, but we also check licences in local offices, we have a whole range of target checks that are made by our detection workforce which are based on the intelligence that we receive from colleagues in other government departments and we also run a number of assurance visits by our compliance officers at traders' premises, so there are a number of things that we do to create an important framework which enable us to cover as many of the bases as we are able to.[176]

Mark Fuchter conceded that if a company deliberately evaded export control the profiling would not show that up. But he made the point:

that our approach to this is based on intelligence and risk profiling. If someone opts to export goods completely outside the export system, then with the sheer volume of exports going through all the ports of the UK, we are not randomly searching cargo which is cleared as being low risk according to the export declaration to look for what may or may not be happening with the exception of some of our other teams looking for other risks such as missing trader intercommunity fraud, so in this area we do not do that because we are driven very much by intelligence. [177]

111. We have concerns that the level of random checks by HMRC is so low that it is providing a gap on the control of strategic export controls. Our concern focuses on:

a)  the exporter who inadvertently, but persistently, exports dual-use goods in breach of strategic export controls; and, the more difficult case; and

b)  the exporter with no track record with the security services who decides on one occasion deliberately to evade the controls.

We cannot see that these two categories of exports are likely to be caught by either profiling or the security services. We welcome Mark Fuchter's response that he would like to explore EGAD's concerns with them.[178] 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.

112. There appear to us to be several approaches that could be used to deal with the inadvertent export of dual-use goods. These range from, on the Government' side, the investment of staff and resources in market analysis and surveillance, to, on the industry side, an industrial export control association. Such an association exits in Sweden, where it provides internal compliance training, organises seminars and publishes a newsletter, and it could also be linked to trade or sectoral industrial associations which could identify potential exporters. More information about the Swedish export control association, Sveriges Exportkontrollförening, is set out at Annex 3. 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.


113. We asked HMRC about the enforcement of export control on the transfer of information and technologies by, for example, e-mail. EGAD had raised concerns about the application and enforcement of the strategic export controls to these so-called "intangibles". David Hayes from EGAD explained:

some of the subjects which are being taught in academic institutions can border on areas which are now subject to export control, so, for example, providing someone with technical assistance inside the UK for any relevant use which encompasses weapons of mass destruction, detection systems for weapons of mass destruction, that sort of area of technology, if we wanted to provide that sort of technical assistance to anyone even inside the UK, knowing that that information was going to be used outside of the EU, then that is a licensable activity.[179]

Brinley Salzmann from EGAD added:

There is a considerable lack of awareness within academia and […] in many quarters a lack of willingness because it is a completely different culture, whereas if you go along to a company and explain to them export controls, once you have got their attention and persuaded them that yes, they are subject to export controls, then they want to understand how to deal with it. I have had feedback myself and personal experience of people in academia who say, 'No, this is infringing my freedom of speech. I am not going to burden myself with trying to deal with these regulations', so there is a totally different culture there.[180]

114. When we raised these matters with HMRC we were concerned to be told that "since these controls came in, we have received no allegations about intangible transfers, and no intelligence. It is, obviously, an untested area".[181] Mark Fuchter added:

I am aware of the issues around universities. Those do not involve HMRC, but I think one of the questions I would need to ask the industry representatives who have spoken to this Committee is that they may be able to help us, and maybe it is perfectly fair that we might prompt the intelligence agencies, through the Restricted Enforcement Unit, to be looking in a different direction.[182]

In a supplementary memorandum HMRC added:

The regulatory system is based mainly on open licensing coupled with record-keeping requirements and exporters' own controls on their intellectual property. As intangible exports and brokering offshore supplies do not involve the movement of goods passing through customs controls we advised policy departments that there was no regulatory role that we could fulfil in relation to the new controls. This was accepted.

From the information and intelligence available to us, and from breaches so far we do not believe that there are shortcomings in the system. We hold periodic liaison meetings with DTI ECO and we would expect to discuss any emerging issues at that forum. So far breaches have been relatively minor and straightforward and dealt with by visits, disruption and warning letters.[183]

115. 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.

Do the penalties for breaches of export control act as a deterrent?

116. In their joint memorandum HMRC and the Revenue and Customs Prosecution Office supplied the following table setting out the number of successful prosecutions since 2000.[184]
Financial year Goods Destination Person or company concerned Penalty
2000-01 Five-ton crane, a 12-ton heat furnace and a quantity of Aluminium PakistanAbu Bakr Siddiqui 12 months suspended
2003-04 AluminiumPakistan David Lee Nicklin of AM Castle & Co Ltd £1,000 fine (strict liability offence)
2004-05 Aircraft partsIran Saroosh Homayouni18 months imprisonment suspended for 2 years; banned from being company director for 10 years; asset forfeiture order for £69,980.
Body Armour PakistanPraetorian Associates £2,500 fine
2005-06 Body ArmourKuwait, Iraq, Saudi Arabia Vestguard UK Ltd£10,000 fine

117. When they gave evidence to us we expressed concern to the Revenue and Customs Prosecution Office about the small number of prosecutions and we asked whether the successful prosecutions that had been achieved acted as a deterrent. David Green, Director of the Revenue and Customs Prosecution Office, replied:

the number of prosecutions […] does not reflect either the effort or the success behind this for this reason. You have heard that work in this area is intelligence led by HMRC and the forum for dealing with that information is the strategic goods co-ordination committee and at any one time they will be considering—they meet every six weeks, that is RCPO which chair it and people from HMRC—at any one time they will be considering cases which should be resolved by disruption, cases where intelligence is being assessed with a view to turning it into evidence and cases put to RCPO with a view to prosecution. To give you an example it last met in April and some 15 cases covering all three of those categories were under consideration. In addition the DTI inform us that the robust fines in the last two cases on that chart have had a valuable deterrent effect throughout the trade. Further, it is right to say that, depending on the circumstances, other options other than prosecution are actively pursued, such as education, warning visits, disruption, compounding, seizing and detaining goods pending payment of a fee. So my point is this that the number of prosecutions does not represent either the effort or the success going into it.[185]

118. We take some reassurance from Mr Green's comments and that from a base of no prosecutions in either 2001-02 or 2002-03 there were four over 2003-04 to 2005-06 and that the level of financial penalty imposed by the courts is increasing. We agree with EGAD that "more public information is needed to be made available by HMG to demonstrate that HMRC is undertaking its enforcement role seriously and proactively".[186] We consider it would provide an additional deterrent to those intent on breaching strategic export controls if some of the alternatives to prosecution which the Revenue and Customs departments employ—the issue of warning letters and compounding—were to be publicised. Mark Fuchter explained that it would be made clear to a person in receipt of a warning letter "that their behaviour may have breached relevant legislation […] and that by doing so they may have rendered themselves liable to prosecution, but that reviewing the whole circumstances we have decided to take no further action".[187] On compounding, the Revenue and Customs departments explained that they had powers under section 152 of Customs and Excise Management Act 1979 to compound offences, that is to accept a monetary amount in lieu of pursuing criminal proceedings. Compound penalties can only be issued where there is evidence to a criminal standard that an offence has been committed.[188] 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.

119. We asked HMRC whether there was a systematic exchange of information with Customs and prosecutors in other EU countries and they replied:

there are such European organisations as Eurojust and Europol and certainly they provide for the dissemination and exchange of such information and we also have very good liaison, certainly on the prosecution side, with our colleagues within the European Union.[189]

We note that, according to the German arms export report for 2003, 26 investigations concluded against a total of 42 individuals (including 5 against unknown). Of these, 4 resulted in convictions: two separate cases with suspended sentences of two years imprisonment, one investigation resulting in 7 convictions (between 4 and 6 months imprisonment or fines between €6,000 and €14,850); and one sentence of 2 years and 10 months imprisonment. In 2003, 21 investigations against 22 individuals were ongoing. The experience of the German authorities' approach appears to result in more prosecutions than that of HMRC.[190] We recommend that HMRC examine how other EU countries' experience in prosecuting export control breaches be exchanged and built upon more systematically.

120. We asked the Revenue and Customs Prosecution Office about the Homayouni/Multicore case in 2004-05 which resulted in Mr Homayouni receiving an 18 months' prison sentence suspended for two years and a ban from being a company director for ten years, and he also received on order for seizure of assets for £69,980. According to press reports, Multicore was a front company for Iran's air force and had been engaged in systematic efforts to procure and smuggle components for the Iranian military, including parts for Hawk missiles and Hercules transport aircraft as well as F-14, F-4 and F-5 fighter jets.[191] David Richardson from the Revenue and Customs Prosecution Office, who had some responsibility for the case, told us:

We prosecuted […] a component of the case and one of the features of these cases is that they straddle a number of jurisdictions. The evidence that we have available to us will be limited to a number of the physical items that are being exported. We will not necessarily be able to prosecute the entirety of an international picture, we can only prosecute the bit that we have evidence for in the UK and I think it is important to remember, first of all, that this was the first time that we had a confiscation order being used in export control cases and the feedback we get in other arenas is that the one thing that the criminals really fear is having their money taken away from them and that really does have a big impact and, of course, in any prosecution where somebody is convicted or pleads guilty, the court will hear mitigation about their personal circumstances and the circumstances of the offence and they will set a penalty, or the judge will impose a penalty, taking into account all of those circumstances. In terms of how that case was dealt with, we put the case as fully as it could be put in the UK, the court had all the factors to take into account on sentencing.[192]

He added:

I think it is fair to say that the export controls arena is a difficult one in the sense that it pulls together all the features that make prosecutions difficult in terms of overseas' evidence, in terms of sensitive destinations that are being dealt with, but we are confident that we have the expertise and the people who can make the progress that we need to in that area.[193]

121. Bernadette Peers from EGAD commented:

In the case of Multicore he received a suspended sentence of two years and a £70,000 fine and, if he had not paid that by Christmas Eve, his suspended sentence would be extended by a further 18 months; so if he did not commit anything else he is still free to walk around—it is a suspended sentence. In effect, he made numerous attempts to export military parts to, I believe, Iran and he got a suspended sentence. That goes beyond just Customs; that goes beyond educating a court and a judge about how serious export control can be. It does cost lives, and I think people forget that.[194]

122. We accept that the Revenue and Customs departments' efficiency should not be measured exclusively on the number of prosecutions and we do not want to disparage in any way the work that obviously was put in to secure the successful prosecution in the Homayouni/Multicore case or the securing of the first order for the seizure of assets. Nevertheless, we share Ms Peers' concerns and cannot see that such a penalty will act as a strong deterrent to others, especially a multi-national arms smuggling organisation with substantial resources. In our view the case highlighted two issues which we examine below: the difficulties in assembling evidence; and the level of penalty imposed by the courts.


123. The first issue is the assembling of evidence. In their written memorandum HMRC and the Revenue and Customs Prosecution Office explained the difficulties they faced in securing sufficient evidence upon which to mount a prosecution:

124. In his oral evidence, David Green explained that the Revenue and Customs departments "do have some extra powers under the Serious Organised Crime and Police Act power to compel answering questions, power to produce documents for instance and others relating to people giving evidence who have been involved in crime, giving evidence for the prosecution and we intend to make full use of those powers".[196] 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.


125. The second issue is the level of penalties. EGAD pointed out that under the Export Control Act 2002 the maximum penalty the courts can impose is an unlimited fine and up to ten years in prison but "it is very rarely, if ever, exercised".[197] Mr Green observed that sentencing was a matter for the courts.[198] In their written memorandum the Revenue and Customs departments echoed EGAD's point, "historically, Courts have not imposed particularly severe sentences, even in relation to goods intended for WMD programmes. A cocaine smuggler would get far harsher treatment".[199] Given the risks from weapons of mass destruction we consider this disparity wholly unjustified. Mr Green suggested that in time as the courts gain experience the position may change:

it is difficult for a court to put it in context and you have made the point there are relatively few prosecutions under these heads for reasons I have indicated and it may be that the courts have a great deal more experience of, for instance, smuggled drugs than they do of this sort of offence.[200]

126. We consider that Mr Green may be correct in his analysis but the risk from breaches of strategic export controls is immediate and that stronger penalties imposed would increase the deterrent. We recommend that the Sentencing Guidelines Council conduct a review of the guidelines on sentences for breaches of export control as a priority.


127. Mark Thomas provided us with details of a case where he alleged a breach of the Export Control Act 2002 had taken place:

Ashok Leyland, which is a subsidiary of the Hinduja Group, part of Land Rover Leyland International Holdings—which is a UK company—advertised on their website in February 2005 that they had just secured a contract to provide military vehicles for the Sudanese Defence Ministry, for knock-down kit military vehicles that would be assembled in a plant near Khartoum. That appeared on their website, it was announced at IDEX, which is an arms fair, it appeared in Jane's Defence Weekly and was reported in a whole plethora of Indian newspapers. Because of the fact that there are four UK residents or nationals on the board of Ashok Leyland, the Indian company, that would therefore put them in the frame legally if they had anything to do with that deal for Ashok Leyland, the Indian company, to provide trucks for Sudan, an embargoed destination. I spoke to the BBC about that and was given the go-ahead to start investigating it, we approached the company posing as potential buyers, we spoke to people who are involved in the Hinduja Group—Anders Spare and Dheeraj Hinduja—both of whom intimated that they were aware of the deal and were involved in the deal. This would therefore put them within the scope of the law.[201]

Mark Thomas considered that the case raised several questions, in particular, the reasons HMRC were unaware of the publicly available material relevant to this case and the legal position of UK subsidiaries overseas. He told us:

The only reason that Ashok Leyland could be investigated and this matter brought up was because British nationals or residents were involved on the board of Ashok Leyland, the Indian company. That subsidiaries are exempted as separate legal entities from the action and divorced from the parent companies I think is a major problem and one that needs to be addressed. When you previously asked what would the difficulties be in this, the US managed to do this; the US, I believe, actually have control over a subsidiary company, they require licences from the subsidiary company and if they do not get those licences there are fines on the parent as well as the subsidiary. If the US can do this and not impair their industry, then I see no reason why the UK cannot.[202]

128. We put the case to the Revenue and Customs Prosecution Office but it was unable to comment on the case. David Green said:

under section 40 of the Commissioners of Revenue and Customs Act [2005] I am unable to discuss cases either under consideration or which have been rejected. All I would say in relation to that particular case is that it does provide a very good example of journalistic endeavour and some anecdotal evidence and some anecdotal material failing to translate into evidence.[203]

129. HMRC were, however, able to describe in general terms the process by which allegations of the breaches are considered. Mark Fuchter explained:

If I can give the Committee an assurance […] what HMRC does do […] is that we look into all intelligence and all allegations, we say all credible allegations, but take it from me it is all allegations involving sensitive goods and sensitive destinations. They will be subjected to a test […] laid out in the memorandum that our intelligence and investigation specialists will firstly assess if there is evidence of an offence and if there is evidence of an offence we will adopt that as an investigation, that will be taken on as a formal criminal investigation and move through hopefully, if sufficient evidence is available. It will be discussed en route by the strategic goods co-ordination committee and it will hopefully move through to prosecution. So I can give you an assurance that all such allegations involving sensitive goods and sensitive destinations are considered in that way, if that is helpful.[204]

Mr Green added:

Equally can I emphasize we can only proceed where there is evidence or solid evidence such as we can put before a court.[205]

130. HMRC explained that, where they did not have their own officers in place at a port, they were dependent on intelligence for picking up a trafficker or broker contravening UK export control. They were solely dependent on intelligence for picking up particular individuals who might be trying to get goods out by, for example, light aircraft or fishing vessels.[206] Mark Fuchter explained how intelligence gathering worked:

Given that the whole process is driven by intelligence, our assessment is that the manpower we have is adequate for the purpose. We have a number of regulatory profiles on the system and we do regulatory checks, all of which are fed back to our intelligence staff. The intelligence […] is a cycle, a cycle through the Restricted Enforcement Unit; it is added to, we give feedback to the REU, we get action by the REU. I am conscious I am painting a very intelligence-dependent picture, but that is why. People such as middle men who will act in such a way are not going to make themselves known (rather similar to major drugs operators), and it is only through intelligence and understanding the results of our previous activities that we will be able to make an impact.[207]

131. We cannot comment on the details of the Ashok Leyland case. That said, we consider that the case touches on general issues which concern us. First, despite publicity surrounding the proposed transaction, HMRC do not appear to have become aware of the transaction until it was drawn to their attention as a result of Mark Thomas' investigations. If this is the case, it repeats a pattern we have detected with the policing of the Internet and arms fairs, where the agencies of government do not actively look for breaches of strategic export controls in the media. As was the case with the Internet (see paragraph 82) we were told that this is a process driven by intelligence. We have not received—or sought—evidence during the inquiry about the resources which are devoted to gathering intelligence on trafficking and brokering and this is an area we may pursue in future reports. At this stage it would assist us if the Government provided some preliminary information. 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. The second concern is assembling sufficient evidence to mount a prosecution, which we consider below.

132. We asked HMRC whether there had been any prosecutions for breaches of the controls on trafficking and brokering. Mark Fuchter told us that one case was being pursued:

There is one case that we have adopted and is being processed, is going through the system, but it is at the stage when I think it has not formally been reported to [Revenue and Customs Prosecution Office], but we expect to be reporting it to RCPO with a view to prosecution. I should add that that case is going to be taken forward under the WMD trafficking and brokering, but the case was started as a trafficking and brokering inquiry and I think we will probably be proposing offences under the Anti-Terrorism, Crime and Security Act. It is a trafficking and brokering case, and it is the only one that has got as far as that so far in the two years that the controls have been in place. In the meantime, we have received a number of allegations and referrals of trafficking and brokering activity and, again, each one of those we have pursued in the way that I have described earlier.[208]

Mark Fuchter was unable to give us any indication as to the timescale within which a prosecution may be started. He said that "there are particular challenges over the evidence".[209] Although the individuals concerned were not in custody, he said that "the operation has been thoroughly disrupted".[210]

133. We await developments on the case to which HMRC referred. We note that there may be challenges over the evidence and this may be an issue we return to in future reports. The case HMRC told us about concerned weapons of mass destruction and that, if a prosecution is pursued, it may be for offences under the Anti-Terrorism, Crime and Security Act 2001, rather than the Export Control Act 2002. It would be precipitate to draw any conclusions from a case where no prosecution has commenced but the review of the legislation may be in a better position to consider lessons from the case. 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.


134. In 2003 the EU agreed a Common Position on Brokering,[211] which includes requirements for a register of brokers and the establishment of adequate sanctions to ensure that controls are effectively enforced. 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.

135. We have considered the benefits and form of registration of brokers. In their written memorandum the UK Working Group on Arms drew attention to a case where a British broker had allegedly supplied arms to Sudan in breach of the embargo:

In September 2004, a UK newspaper reported that it had obtained documents showing that arms brokers based the United Kingdom had been involved in negotiations for arms deals to supply £2.25 million worth of arms to Sudan.[212] Sudan has been subject to an EU arms embargo since 1994. The documents, which have been seen by Amnesty International and other researchers, were made available to the Government. These included a series of End-Use Certificates (EUCs) which were all dated and stamped after March 2004 (the new controls on Trafficking and Brokering entered into force on 3 March 2004). One of the EUCs, issued on 25 May 2004, authorised the UK company Endeavour Resources UK Ltd to negotiate for the supply of 12 BM21 Grad 122mm Multiple Rocket Launchers, 50 T72 Main Battle Tanks (and spare engines), 50 BMP2 Armoured Personnel Carriers, 50 BTR80 Armoured Fighting Vehicles, 30 M46 130mm field guns, as well as aircraft and pistols. In answers to parliamentary questions, despite the existence of such strong evidence of these documents, the Government has stated that it believes there is insufficient evidence to investigate that matter further.[213]

136. We considered the question—and difficulties—of obtaining evidence from overseas earlier in this chapter. We note that there are also particular problems in assembling evidence where no goods pass through the United Kingdom and which comes from the security services or foreign governments. 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.

137. We make further recommendations about trafficking and brokering and about the overseas of subsidiaries of UK companies in chapter 7.

117   Q 366 Back

118   See Qq 32 (Mr Hayes), 157, 168 and 194. Back

119   Ev 88 Back

120   Q 95 (Mr Williams) Back

121   Q 390 (Mr Fuchter) Back

122   Ev 112  Back

123   Q 94 Back

124   Q 97 Back

125   Ev 153, para 3 Back

126   Q 397 Back

127   Q 398. See also Q 401 and Ev 153, para 3. Back

128   See below, para 105. Back

129   Ev 112 Back

130   HM Revenue and Customs indicated that it was their policy in this type of case to issue a warning letter (Q 426 (Mr Fuchter)). Back

131   Ev 112 Back

132   Q 114 Back

133   Q 430 Back

134   Qq 431-33 Back

135   Ev 112 Back

136   HM Revenue and Customs indicated that it was their policy in this type of case to issue a warning letter (Q 426 (Mr Fuchter)). Back

137   Q 435 Back

138   Ev 153, para 2 Back

139   For example, HC (2004-05) 145, paras 31-7  Back

140   Q 279 Back

141   Ev 157 Back

142   Q 420 Back

143   Q 423 Back

144   Ev 88 Back

145   The EU Dual-Use Regulation is part of European law and is directly applicable in all EU countries. The EU introduced legislation for the control of exports of dual-use items and technology in 2000. The first EC Dual-Use Regulation was published in that year. Council Regulation (EC) No 1334/2000 (OJ L159, 30/6/2000), Council Regulation (EC) No 2432/20001 amending and updating Regulation (EC) NO 1334/2000 (OJ L338 20/12/2001, p1), Council Regulation (EC) No 394/2006 (OJ L73, 13/03/2006, p1) is the latest version of the control lists and Council Joint Action 2000/401/CFSP (OJ L159, 30/6/2000).  Back

146   Q 195 Back

147   The end-use of "catch-all" control is set out in Articles 4.1 and 4.2 of the EC Dual-Use Goods Regulation, and in Regulation 4(2)(b) and (c) of the EU Dual-Use Regulation. Back

148   Q 195 Back

149   Ev 88 Back

150   Q 103 Back

151   Q 105 Back

152   The European Union adopted Council Common Position 2005/792/CFSP (O.J.L299.16.11.2005.p72) on Uzbekistan on 14 November 2005. The powers came into force on 26 November. The full range of measures are as follows:

A ban on the sale, supply, transfer or export of arms and related materiel to Uzbekistan, from EU Member States' territory, by their nationals, or using their flagged vessels and aircraft;

A ban on the sale, supply, transfer or export of listed equipment which might be used for internal repression to Uzbekistan;

A ban on the provision of technical assistance, brokering services and other services to any person, entity or body in, or for use in Uzbekistan for

(i) military activities and to the provision, manufacture, maintenance and use of arms and related materiel,

(ii) equipment which might be used for internal repression;

A ban on the provision of financing or financial assistance to any person, entity or body, in or for use in Uzbekistan for

(i) military activities including the sale, supply, transfer or export of arms and related materiel,

(ii) the provision of related technical assistance, brokering services and other services,

(iii) equipment which might be used for internal repression.

A travel ban (with certain defined exemptions) against named individuals. Back

153   Ev 143 Back

154   Ev 102  Back

155   Ev 143  Back

156   Q 258 Back

157   Qq 200, 241 (Mr Wilson). See also Ev 80. Back

158   Q 370 Back

159   Q 371 Back

160   Q 387 Back

161   Q 224 (Mr Wilson) Back

162   Q 340 Back

163   Q 345 Back

164   Q 63 (Mr Thomas) Back

165   Q 346 Back

166   Q 349 Back

167   HC Deb, 14 October 2005, cols 634-325W Back

168   HM Revenue and Customs projected level of fulltime equivalent staff in post for 1 April is 90,034 (HC Deb, 5 June 2006, col 181W) Back

169   Q 224 (Mr Wilson)  Back

170   Ev 80 Back

171   IbidBack

172   Q 366 Back

173   Q 358 Back

174   Q 361 Back

175   Q 362 Back

176   Q 365 (Mr Franklin) Back

177   Q 364 Back

178   Q 368 EGAD's concerns are set in more detail at Ev 80. Back

179   Q 201 (Mr Hayes) Back

180   Q 201 (Mr Salzmann). See also Ev 80. Back

181   Q 440; In its memorandum to the Committee (Ev 126, para 27) the Government said: "ECO has published guidance tailored to their situation; has met with universities on request; they are represented on the Advisory Committee; and our seminars have been attended by some academics. It is important to stress however that the controls on technology transfers do not apply in any different way to universities than to exporters. In fact it is relatively unlikely that the controls will come into play in respect of student tuition in the UK as the exemption for technology in the public domain will usually apply. ECO has not so far invoked the controls contained in Articles 8 and 9 of the Export of Goods, Transfer of Technology & Provision of Technical Assistance (Control) Order to prevent/approve the transfer of WMD technology to students/researchers in the UK, where it might be transferred outside the EU."  Back

182   Q 442 Back

183   Ev 153, para 1 Back

184   Ev 144, para 44. In addition, the Government supplied a list of goods seized, disruptions and other action take by HMRC at Ev 126, para 8. Back

185   Q 373 Back

186   Ev 80  Back

187   Q 426 HM Revenue and Customs indicated that they issue about 50 warning letters a year (Q 427). Back

188   Ev 144, para 25 Back

189   Q 386  Back

190   Ev 164  Back

191   "Customs raids to hit arms smuggling network", The Financial Times, 11 July 2003, p 10  Back

192   Q 376 Back

193   Q 377 Back

194   Q 228 Back

195   Ev 144, para 47 Back

196   Q 383 Back

197   Q 233 (Mr Salzmann) Back

198   Q 378 Back

199   Ev 144, para 49 Back

200   Q 381 Back

201   Q 63 Back

202   IbidBack

203   Q 389 Back

204   Q 390 (Mr Fuchter) Back

205   Q 390 (Mr Green) Back

206   Q 410 Back

207   Q 414 Back

208   Q 402 Back

209   Q 405 (Mr Fuchter). See also Ev 153, para 5.1. Back

210   Qq 406-09 Back

211   Council Common position on the control of arms brokering, Document 2003/468/CFSP, 23 June 2003 - http://ec.europa.eu/comm/external_relations/cfsp/sanctions/468.pdf  Back

212   "Briton supplies arms to Sudan", Sunday Times, 5 September 2004 and "Sudan Arming the perpetrators of grave abuses in Darfur", Amnesty International Report, November 2004 Back

213   Ev 88 Back

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