Quadripartite Select Committee Written Evidence

Memorandum from the UK Working Group on Arms[3]

  In recent years the UK Government has taken a strong lead on arms export controls at national, regional and international levels. As well as overhauling the national export control regime, the Government was instrumental in establishing the EU Code of Conduct on Arms Exports (EU Code), the world's first regional politically-binding agreement to control the transfer of conventional arms. In the last year, the Foreign and Commonwealth Office has been actively promoting a legally-binding global Arms Trade Treaty (ATT) to control international arms transfers. This is now a Government Manifesto commitment. Nevertheless, there are still transfers of defence equipment and technology originating or being organised from the UK which are reaching unstable states or embargoed countries, on occasion with the active support of the Government. [4]This briefing identifies some of the existing weaknesses in export controls that need to be addressed if the Government is to prevent arms being channelled to those who would use them to undermine human rights, peace and security, or hinder development.

  The UK Working Group on Arms (UKWG) has also submitted a more detailed briefing on the resources of the ECO. Whilst controversial discussions on the future privatisation of the ECO appear to have been dropped for the time being, significant staff cuts are continuing. The Government must ensure staffing levels in the ECO are sufficient to maintain a high-quality service, and must maintain all the functions of the ECO within the public sector.

  We hope the QSC [Quadripartite Select Committee] will consider the issues raised herein when setting its priorities for the new Parliament.


    —  Licensed production agreements should contain specific re-export clauses to prevent the export of goods produced under license to countries of concern. If the production company then wished to export to a destination not specified in the original licensed production deal, it would have to seek prior approval from the UK government.

    —  The Government should honour its 2001 Manifesto commitment and introduce full extraterritorial controls on arms brokering and trafficking. At a minimum, this level of control should be extended to apply to small arms, light weapons and ammunition.

    —  Sufficient resources should be made available to ensure that all potential breaches of the Export Control Act and the pursuant secondary legislation are investigated robustly.

    —  The Government should implement a system to allow clear and effective monitoring of the end-use of UK arms exports, and work towards developing an EU-wide system of delivery verification and end-use monitoring.

    —  A drive towards greater open licensing should not take place due to resource and capacity pressures within the DTI. If the use of these licences is increasing, more resources must be given to compliance and enforcement teams to monitor and scrutinise exports made under these licences.

    —  Publicly available information on UK arms export licences should be extended to include greater detail on quantities licensed for export, and on the intended end-use and end-users of controlled goods and technology.

    —  The Government and QSC should negotiate a limited trial of prior parliamentary scrutiny of selected export licence applications.

    —  The embargo on China should be retained.

    —  The Government should support efforts by external observers, including the QSC and UKWG, to engage in sustained and iterative consultations on the development of elaborative guidelines for the EU Code criteria.

    —  All relevant departments of the UK Government must work actively together to promote an ATT.


  There is an increasing trend for UK companies to be involved in arms production in other countries. This involvement can take several forms, for example: co-production and joint venture deals in which final assembly takes place elsewhere; the licensed production of arms by companies in overseas countries; or via subsidiary companies, based overseas, but owned by UK parent companies.

  These arrangements tend to be both under-regulated and poorly reported by governments. In the case of overseas-based, UK-owned subsidiaries, it appears that UK controls do not apply at all—even to embargoed destinations. This is despite the fact that they may be owned, or controlled, by a UK-based parent company.

Land systems OMC

  In recent years, UK defence companies have moved into offshore production through acquiring overseas subsidiaries. In 1999, UK defence company Vickers Defence Systems bought South African company Reumech, South Africa's largest military vehicle manufacturer, creating Vickers Defence Systems OMC. In November 2004, the South African company became a subsidiary of UK company BAE Systems, changing its name to Land Systems OMC. BAE Systems holds a 75% share in the South African company. The South African-based company has sold armoured vehicles to nearly 40 countries around the world. The South African Government submissions to the UN Arms Register between 2000 and 2004 identify exports of armoured vehicles, originally manufactured by OMC, to over 20 countries. Exports to some of these destinations would raise serious concerns under the EU Code if exported directly by the UK parent company. OMC vehicles have been supplied to India (for use in Kashmir), the Ivory Coast, Nepal and Uganda. There have been no direct exports of these types of military vehicles from the UK to any of these destinations.

Land Rovers

  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—this is a serious loophole. 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. [5]

  Military vehicles built to these specifications would be subject to UK licensing controls under ML6a of the UK's Military Control list and it is highly unlikely that the UK Government would have licensed the direct export of these Land Rovers to the Uzbek security forces—it is therefore of concern that the intention of the Government can be so easily undermined by the unregulated use of licensed production arrangements. Military Land Rover Defender vehicles are also produced in Malaysia by Land Rover (Malaysia) Sdn Bhd. A variety of armed and armoured Land Rover defender variants are produced by the Malaysian company, including a special operations vehicle and a missile-launching vehicle. The UKWG is not aware of whether and to where these vehicles have been exported, but concerns over Malaysia's attitude toward arms exports were highlighted in 2004 when the Austrian gun-manufacturer Steyr Mannlicher announced plans for the manufacture of its assault rifles under licence in Malaysia. At the time, the Malaysian Government stated its intention to export Steyr assault rifles to more than 40 countries in Asia, Africa, Europe and the Middle East. [6]

  Improving the regulation of UK companies' efforts to move production offshore is one way of dealing with the challenges of increased globalisation of defence production. Another is to develop multi-lateral legally-binding controls (eg an international Arms Trade Treaty (ATT)), whereby a levelling of the playing field would reduce the value of relocating production in order to ease access to "difficult" markets.

    —  The Government should ensure that British companies wanting to license the production of weapons overseas should first have to apply to the UK Government for a licence.

    —  Licensed production agreements should contain specific re-export clauses to prevent the export of goods produced under license to countries of concern. If the production company then wished to export to a destination not specified in the original licensed production deal, it would have to seek prior approval from the UK Government.

    —  Licensed production agreements should contain specific clauses relating to the duration of the agreement and what happens when the agreement reaches the end of the agreed time period.

    —  The Government should re-examine the export licensing requirements for civilian components that are to be incorporated into military goods (irrespective of final destination).

    —  Overseas subsidiary companies in which a majority shareholding is held by a UK parent or where UK beneficial ownership can be established should be subject to UK export controls. Secondary legislation for embargoed destinations must be modified to apply to all exports from overseas subsidiary companies.

    —  The Government should continue to press for an international Arms Trade Treaty.


  This section should be read in conjunction with the enforcement section, which details additional cases of brokering and trafficking.

  The Government has chosen to assert extra-territorial control on arms brokers only where the brokering activities are in relation to long-range missiles or torture equipment, or to embargoed destinations. The Government has rejected calls from the QSC to introduce full extra-territorial controls on arms brokering, and has failed to fully meet its 2001 Manifesto commitment to control traffickers and brokers wherever they are located.

Imperial defence services

  Imperial Defence Services is a UK defence company specialising in exports of small arms and light weapons. While the company is registered and based in the UK, its website clearly states that it has offices or agents in Bulgaria, Cyprus, Nigeria, Australia, South Africa and Vietnam. [7]Arms deals to most destinations and for most types of conventional arms negotiated or supplied via these offices would not be subject to UK export controls. It would appear that this is not a hypothetical scenario (a claim frequently made in the past by the Government when arguing against extra-territorial controls for small arms brokering): the Ranger H-P pistol, which is an upgraded version of the GP-35 9mm automatic pistol, is listed on the company's website as follows:

    "Produced exclusively for us with the latest production equipment and state of the art CNC machinery . . . the Ranger H-P pistol is the ideal weapon for use in close quarter combat situations as well as being equally suitable for use in connection with normal guard duties and police work . . . The Ranger H-P Pistol can only be obtained from this company, who will either export it to clients from the UK or from Bulgaria when easier for export licensing procedures to certain destinations." [8]

  It is essential that controls on brokering and trafficking are effectively implemented to send a strong signal that the Government is serious in its attempts to curb the illicit arms trade. Continuing resource pressures within the ECO and an apparent reluctance to fully investigate emerging cases would strongly suggest that resources available to police the system are not adequate to the task. It would seem that the only individuals actively monitoring arms brokering activities from UK based companies or citizens are a very small number of researchers and investigative journalists.

    —  The Government should honour its Manifesto commitment and introduce full extraterritorial controls on arms brokering and trafficking. At a minimum, this level of control should be extended to apply to small arms, light weapons and ammunition.

    —  The Government must ensure adequate resources and capacity to monitor, police and enforce controls on trafficking and brokering.


  A clear test of the effectiveness of the new UK export controls is how successfully they are enforced and policed. 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.

  This problem is not confined to the UK. Few arms dealers anywhere in the world have ever been successfully prosecuted for breaches in arms export controls, despite numerous examples and evidence of serious violations of international arms embargoes. The UK now has extraterritorial controls on brokering and trafficking of restricted goods or to embargoed destinations, and there is some evidence that UK companies have been involved in these activities. Yet indications are that none of these cases have been adequately investigated or indeed prosecuted. The wording in the legislation dealing with the trafficking of restricted goods and to embargoed destinations appears comprehensive; it is unclear why there is an apparent reluctance to proceed with these cases. The UKWG is concerned that inadequate resources are being invested in policing and enforcing the export control system.

Praetorian associates

  To date, one of the only cases to have been investigated and prosecuted is Praetorian Associates, who were fined £2,500 on 10 May 2005 for trying to export five protective vests to Pakistan without having the right documents in place. [9]The company had applied for the necessary documentation but had not received official confirmation prior to shipment.

Arms to Sudan

  In September 2004, a UK newspaper reported that it had obtained documents showing that arms brokers based in the United Kingdom had been involved in negotiations for arms deals to supply £2.25 million worth of arms to Sudan. [10]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.

Arms to Central Africa

  In July 2005, Amnesty International documented the role of three British-based companies involved in the supply of over 240 metric tonnes of arms and ammunition from Albania to Rwanda for onward shipment to armed opposition groups in the eastern DRC. [11]These deliveries were made by UK-based air-company African International Airways and took place during October and November 2002. They included several million rounds of ammunition and at least one shipment contained grenades and rocket launchers. Researchers at Amnesty first formally alerted the UK Government about these deliveries in June 2003, when evidence of the shipments first came to light. Shipping documentation and eyewitness testimony detailing the illicit nature of these shipments were made available. In answers to Parliament, the Government has stated that there was insufficient evidence to take action against these companies. In September 2004, African International Airways were contracted by the Department for International Development to fly international aid to Haiti, despite its role in the illicit transfer of arms to conflict zones in central Africa.

Torture equipment at DSEi

  The brokering and trafficking of torture equipment is clearly prohibited under UK legislation. Yet at this year's DSEi defence exhibition in London, one Israeli company, Tar Ideal, was openly advertising the supply of electro-shock batons and leg-irons in its brochures. The company was only asked to leave the exhibition after the Guardian newspaper and a journalist writing for The New Statesman publicly exposed the company's activities. Given an estimated policing bill for DSEi 2005 of £4 million, [12]it is worrying that the only policing of compliance with UK export controls on torture equipment appears to have been carried out by one investigative journalist.

More torture equipment

  There have in fact been a number of cases involving the advertising and marketing of prohibited goods. As far as the UKWG is aware none of these companies has been investigated or prosecuted. For example, in November 2004, researchers discovered that TLT International, a London based company—registered in the UK—was openly advertising a range of stun guns and stun batons via the company's website. In March 2005, the Guardian newspaper reported that TLT International quoted to researchers posing as arms dealers for the supply of 500 stun batons for use by the Zimbabwean security forces during elections.

  More recently, on 3 October 2005, it was reported in The New Statesman that the web-site Army-Technology.com, run by London-based SPG Media Ltd, was promoting the sale of shock batons from a Chinese company, Huajin Co Ltd. [13]The New Statesman article also detailed how an order for shock batons had been placed, via Army-Technology.com, to Huajin Co on "behalf" of DTI Minister, Malcolm Wicks. [14]It would therefore seem that the Army-technology.com website not only lists products for sale but also facilitates contact between buyers and sellers. It was not until 25 October that the details regarding these restricted goods were removed from the Huajin entry on the Army-technology.com website. It is unclear why this excision took so long and whether government agencies have undertaken any investigation of this case to establish whether there has been a breach of UK export controls.

  It would seem that possibility of prosecution exists for cases involving procedural or clerical errors by companies at least attempting to comply with regulations. However, companies and individuals involved in the supply of restricted goods or arms to embargoed destinations would seem to have little to fear in this regard.

    —  The Government should identify levels of current resources allocated to investigation and enforcement, including budget and staff capacity across the departments responsible for these activities.

    —  Sufficient resources should be made available to ensure that all potential breaches of the Export Control Act and the pursuant secondary legislation are investigated robustly.

    —  The Government should not contract companies that have been involved in the illicit transfer of arms for its humanitarian and development work.


  Little is done to check what happens to arms exports after they have been licensed and left the UK. The Government argues that pre-licensing checks are sufficient to prevent problems of misuse and diversion. This is difficult to evaluate, as current reporting on arms exports does not include information on the identity or even the nationality of the end-user. [15]The QSC has repeatedly called on the Government to include more information on end-use, and to establish a system of delivery verification and monitoring of end-use to ensure that the exported British military equipment is used as the Government intended. [16]

  Arguments against more stringent post-export control have often focused 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".[17] 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.

  It would seem there may be some movement on this issue at the EU level; last year US State Department officials presented information on their Blue Lantern programme to COARM officials. This apparent interest of EU member states is extremely welcome, and the UKWG is hopeful that the UK Government will support the adoption of a similar EU-wide system.

    —  The Government should publish more information in its report on strategic export controls on end-use and end-users.

    —  The Government should implement a system to allow clear and effective monitoring of the end-use of UK arms exports, and work towards developing an EU-wide system of delivery verification and end-use monitoring.


  It is clear that the use of open licensing is increasing, as stated by the Government in their written response to the QSC this year: "We have always encouraged exporters to use open licenses where possible, as this reduces the burden on them as well as us." [18]Furthermore, in the Annual Report on Strategic Export Controls 2004, it is stated that "as from November 2004, the ECO has, on a case-by-case basis, with the consent of other Government Departments, been able to issue some OIELs [Open Individual Export Licences] for five years, and in certain circumstances, for longer periods"[19] (up from two or three years-depending on the type of equipment-to five years). From January to September 2004, five OIELs were issued with a validity period of five years. During October to December 2004, the "transition" period for this policy change, 40 out of 143 OIELs were for five years, while for the first nine months of 2005, 259 out of 381 OIELs were issued for five years or more (68%).[20] The reference in the Annual Report suggests that such extensions would be very much the exception. The UKWG is concerned that they have in fact become the rule.

  It is of concern that this shift by the Government may be undermining the licensing process. Open licences allow for a lower level of scrutiny and transparency than Standard Individual Export Licences, and while the UKWG understands the rationale behind their use (ie to allow for limited resources to be targeted more effectively), we are concerned that convenience could here become the enemy of responsible practice.

  The fact that open licences (both Open Individual and Open General types) typically allow multiple deliveries, place no limits on value or quantity, and do not specify end-use or end-user, create particular concerns against a number of the Consolidated Criteria. For example, the transfer of large quantities of arms and military equipment under OIELs could adversely affect regional or internal stability in situations where there are tensions or conflict. The use of OIELs can also be problematic in terms of diversion, where unscrupulous end-users may continue to import arms and equipment beyond their needs in order to re-export them to a third party. Additionally, the absence of upper limits on values of equipment exported under OIELs could undermine sustainable development in very poor countries.

  Exports under OIELs may also be relevant with regard to the human rights criterion. For example, in 2004 the UK Government authorised OIELs for the export of armoured all-wheel-drive vehicles to Algeria, Morocco, Pakistan, Syria, Saudi Arabia and Turkey—countries where armed forces and police have committed persistent human rights violations. Members of the UKWG would be concerned about the export of armoured vehicles to these states in any event, but to place no limits on the scale of such exports is doubly concerning.

  In transparency terms, moreover, because neither quantities nor values of equipment exported under open licences are recorded in the Annual and Quarterly Reports, there is no way of Parliament or the public knowing the volume or value of exports that have taken place under OIELs, thereby preventing an objective assessment of the impact of particular licenses and consequently of Government arms export policy. At the very least, the Government should revise the system of open licensing to stipulate maximum quantities and values, and these should be reported upon in the Annual and Quarterly Reports. For Open General licenses (OGELS), the lack of transparency is even more marked. At present the national reports contain no data on the type of equipment, value or volume of goods being exported under any OGELs, nor whether these items are destined for "incorporation" and re-export.

  The UKWG is concerned that the encouragement to exporters to use open licences, and the extension of the period of licence validity, may be another manifestation of the broader issue of under-resourcing the licensing and enforcement of export controls in the UK. Once again, we urge the Government to treat this issue with the seriousness it deserves and the resources it requires.

    —  The Government must significantly improve its reporting of goods exported under open licences, including more detailed information on quantities, values, end-use and end-user information and whether the goods are intended for "incorporation".

    —  A drive towards greater open licensing should not take place due to resource and capacity pressures within the DTI. If the use of these licences is increasing, more resources must be given to compliance and enforcement teams to monitor and scrutinise exports made under these licences.


  Last year the Government introduced a significant improvement to its strategic export reporting regime with the introduction of quarterly reporting. Licensing data is now provided electronically in a more timely manner (the most recent quarterly report, for the period July-September 2005, was published on 5 January 2006) and a report summarising this information is published annually in hard-copy and on CD.

  While these developments have been welcome, for the moment the Government has failed to take advantage of all the opportunities afforded by modern electronic data-management tools. Rather than making available online discrete pdf-based copies of three-month chunks of licensing data (as is currently the case), far preferable would be to maintain a fully searchable, periodically-updated database of all licensable decisions. At present, historical analysis of licensing electronic practice to an individual destination country is a laborious task. Even worse would be analysis of licensing decisions with regard to a particular military list category or equipment type. Effective transparency involves more than provision of data; it also requires that information should be made available in formats which suit the users' needs.

  There were no significant improvements to the quality of information provided during the year. Ongoing concerns of the QSC and NGOs are still prevalent. Most significant among these is the lack of precise information on the intended end-use and end-user, [21]and on the quantities of items licenced for export. [22]Without this information, the ability of external observers to determine whether the Government is meeting its commitments is extremely limited.

  The shift to quarterly reporting creates an opportunity for fresh thinking on the content of the annual report. As mentioned above, the latest annual report (covering licensing decisions and arms exports for 2004) was largely a summary of the data from the four relevant quarterly reports. This was available in both hard-copy and CD formats, with the CD version including some additional information, eg on brokering licences (which, although running to 820 pages, was extremely un-user-friendly and largely defied sensible analysis). Instead of following the same or a similar format in the next annual report, the Government should seek to complement, rather than summarise, the information available in the quarterly reports.

  Some of the areas into which the annual report could usefully be expanded include:

Elaborating selected country-specific policies and developments thereof

  Criticism regarding UK strategic export practice typically focuses on a limited number of licences to a limited range of destinations. But it is in no-one's interest that the Government is subject to criticism for arms transfer licensing decisions that, if more information were publicly available, would not be regarded as problematic. As one way of avoiding spurious objections to the Government's decisions, it might therefore prove useful for the annual report to include a brief narrative explanation of the Government's export licensing practice for certain destinations either where this has been subject to criticism or where the Government anticipates that criticism may be forthcoming. Such a narrative could include:

    —    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;

    —    summary information on the types of transfer authorised during the reporting period and an explanation of how these reflect the Government's stated commitments.

  In order to identify which destinations should be subject to this approach, certain key questions could be considered, including:

    —    is the country subject to an embargo?

    —    does the country feature as problematic in the UK Government's Annual Report on Human Rights?

    —    has the country been subject of special COARM[23] licensing-policy discussions?

    —    has an unusual proportion of licensing applications been referred to Ministers for an opinion?

    —    has there been a significant shift in relevant in-country circumstances during the year?

    —    are there occasions where the published information creates a misleading impression of UK policy and/or practice as the end-user is not the armed forces in the destination country (eg supplying internationally-sanctioned peace-support operations in a conflict zone, or providing media organisations with protective clothing)? [24]

ECO compliance visits

  Open licences typically allow multiple shipments to multiple destinations with no limitations placed on quantities of arms transferred, and the Government is keen to see more use made of these licences (see "Use of Open Licences", above). To date, no information is publicly available about deliveries made against open licences, and indeed the Government does not collect such data. However the Government does require exporters and traders to keep records of their use of open licences, and the ECO is charged with making periodic compliance visits to ensure that the terms of licences are being complied with.

  The UKWG maintains its long-held position that these records should be communicated to the licensing authorities and should then be published as part of the UK reporting regime. In addition, the UKWG believes that the Government should seek to boost confidence in the open licensing system by publishing information on the compliance process in the annual report. Information should be published on, for example:

    —    the overall cost of the compliance process;

    —    the number of compliance visits carried out, and the number of exporters and traders examined;

    —    the number of compliance visits which revealed problems;

    —    summary information on the nature of those problems;

    —    details regarding the remedial measures instituted in order to bring the non-compliant exporter or trader back into compliance;

    —    a record of the impact of earlier remedial measures upon the exporters or traders subject thereto.

Enforcement issues

  As is discussed above, the UKWG is concerned that the Government is not doing all it could to pursue cases of potential breaches of the Export Control Act 2002 and other related activities (eg investigations into corrupt practices in connection with arms deals). Successful prosecutions under the Act are published on the ECO website, and there have on occasions been announcements that investigations have been initiated, however very little other information is volunteered.

  If the Government is to effectively discourage and prevent illicit arms and dual-use exports, and maintain the confidence of Parliament and the electorate in the export control system, it must be clear that where there is reason to suspect illegal activity, the Government will investigate thoroughly and prosecute offenders wherever possible. The UKWG therefore recommends that the annual report should include a section on enforcement, including details of:

    —    the number and substance of investigations initiated during the reporting period;

    —    the number and substance of investigations ongoing;

    —    the results of completed investigations, be they decisions not to prosecute, or successful or unsuccessful prosecutions.

  It is understood that there may be issues of disclosure in cases which are sub judice, however for each case the Government should publish as much detail as possible.

Licensed production

  The Government continues to argue against the UKWG position that the UK should tighten its licensing regime for the establishing of arms production facilities in other countries, insisting that the current arrangement is sufficient. The basis for the Government's confidence is unclear, as there is no systematic recording of the number or nature of production facilities set up under licence from UK companies.

  The UKWG believes that the Government has an obligation to provide detailed information on all existing and new licensed production agreements involving a UK licensor where:

    (a)  the transfer of licensable equipment or technology is required to establish or maintain the production facility or to manufacture the goods produced therefrom;

    (b)  the finished product would require a licence if it were exported from the UK.

  The UKWG therefore recommends that the annual report should include a section on licensed production facilities, with the published information to include, for each licensing agreement:

    —    the licensee country;

    —    the year the arrangement was agreed;

    —    the period for which the arrangement is to be in force (and the "termination" date);

    —    the finished product(s) to be produced at the facility;

    —    agreed production limits (if any);

    —    production during the reporting period and cumulatively;

    —    the nature of any agreements on exports of the goods produced under licence, and information on quantities and destinations of actual exports.

  A welcome by-product of this would be the opportunity to better understand the efficacy of the current UK system in this area, and thereby to better evaluate whether changes to the existing practices are necessary.

  It is the understanding of the UKWG that the Government is considering a substantial reworking of the annual report so as to give it more added value. It is to be hoped that the Government will consult with interested parties, including the Quadripartite Committee and other interested parties (such as the UKWG) as part of that consideration. A reformulation of the annual report to include the points discussed above would improve public understanding of the implementation of the UK arms transfer control regime and would help to deal with a number of transparency shortcomings identified on numerous occasions by the UKWG.

    —  Publicly available information on UK arms export licences should be extended to include greater detail on quantities licensed for export, and on the intended end-use and end-users of controlled goods and technology.

    —  A fully searchable, periodically-updated database of all licensing decisions should be created and maintained.

    —  The annual report should complement, rather than summarise, the information available in the quarterly reports and could usefully be expanded to include:

    (a)  an explanation of the Government's export licensing practice for certain destinations;

    (b)  exporters' and traders' records of their use of open licences;

    (c)  information on the ECO compliance process;

    (d)  reports on investigation and enforcement activities, including details of ongoing and completed investigations and a list of all companies and individuals found to be in breach of the export control system;

    (e)  detailed information on all existing and new licensed production agreements.


  While the UK system of parliamentary oversight of UK arms exports is relatively sophisticated compared to most EU partners, its efficacy is weakened by the fact that it is entirely retrospective. The QSC has long argued for a system of prior parliamentary scrutiny, however the Government has so far insisted "that prior scrutiny of export licence applications raises unacceptable constitutional, legal and practical difficulties".[25] However, the QSC in the previous parliament was not persuaded of this and continued to argue for prior notification. To resolve this impasse, a system of prior scrutiny could be developed on a trial basis for a specified time in a limited number of cases, for example where the Government acts as a principal in a transfer (eg where the UK makes a gift of military equipment) or where the recipient is of particular concern (eg for transfers to countries under or recently under embargo), with the process to be reviewed at the end of the trial period.

  In the previous Parliament, the QSC argued that in the event of prior parliamentary scrutiny, it would have an advisory role only. The UKWG endorses this approach, as in addition to potential constitutional confusion any kind of co-decision might create, decision-making powers would compromise the Committee's current independent oversight role.

    —  The Government and QSC should negotiate a limited trial of prior parliamentary scrutiny of selected export licence applications.


  In late 2003 EU member states began the first review of the EU Code since it was initially agreed in 1998. This process of review continued throughout 2004, and was largely completed by early 2005. An important outcome of the review process has been a decision to transform the revised EU Code into a Common Position, thus effectively granting it legal status.

  In 2004 EU states also looked afresh at the EU arms embargo on China (established in 1989). By early 2005 it seemed the embargo would probably be lifted, but under pressure from the US and following an increase in security tensions between China and Taiwan, [26]most member states have decided that it is somewhat premature to lift the embargo. Not all states agree.

  While these two processes are clearly separate, unfortunately they have become entwined, which is preventing formal agreement on important new measures for strengthening the EU Code. At least one member state is refusing to sign-off the new EU Code until the question of the embargo is resolved to its satisfaction. As a result, agreement on the new Common Position has been stalled for over half a year.

  As part of the process of trying to reconcile the opposing views on the issue, officials have also developed a "post-embargo toolbox", ie a set of extra measures to be applied to states recently under embargo. This was a welcome development, as the toolbox would assist in strengthening and harmonising EU export controls to a set of particularly sensitive destinations. These measures were to have included additional information-sharing requirements on licences issued for transfers to the post-embargoed state. However negotiations of this new instrument have also stalled over the issue of lifting the China embargo.

  So despite officials having agreed a new EU Code text early in 2005, and having largely agreed the terms of the post-embargo toolbox, at the political level these important developments in strengthening the EU export control regime have been held hostage to embargo discussions, which have themselves stalled.

  It may be that the new EU Code and the post-embargo toolbox are agreed in the very near future. However, the way in which practical advances in EU export controls have been held hostage by political skirmishes is unedifying. It suggests disarray within the EU and undermines EU leadership in this area in other fora. The Government should endeavour to ensure this is not repeated.

    —  The embargo on China should be retained.

    —  The Government must use its good offices to expedite agreement on the revised EU Code and on the "post-embargo toolbox."

    —  The Government must demonstrate firm leadership in insisting that unrelated political disagreements do not in future disrupt EU export control initiatives.


  Following on from the agreement and publication of elaborative guidelines for criterion 8 (on sustainable development) [27]of the EU Code, Member States have now started a similar process for criteria 2 (human rights and international humanitarian law) and 7 (diversion). The development of these guidelines is effectively a recognition that the current criteria of the EU Code do not provide a sufficient basis for states to harmonise their practice, and as such are extremely welcome.

  It is therefore disappointing that in essence the new guidelines for criterion 8 do very little to reduce the scope for differing interpretations of export licence applications. Indeed, any suggestion that the guidelines might seek to constrain decision-making at the national level is explicitly countered within the Users' Guide. For example, it is stated that while the guidelines "are intended to share best practice in the interpretation of Criterion 8 . . . Member States are fully entitled to apply their own interpretations." [28]

  Although there was some initial input from outside observers into the elaboration process for criterion 8, substantive interactions between civil society and officials ceased at this point. Given the weakness of the final outcome, this would seem to have been a missed opportunity. It is to be hoped that when criteria 2 and 7 are being elaborated, interested observers should be given the opportunity to respond to drafts produced by COARM as well as to make initial submissions, and thus contribute as constructively as possible. Not only does criteria elaboration potentially hold the key to clarity and harmonisation of export control decision-making within the EU, this process is unique among regional or international export control regimes. It is thus likely to form a template for practice elsewhere.

    —  The Government should support efforts by external observers, including the QSC and UKWG, to engage in sustained and iterative consultations on the development of elaborative guidelines for the EU Code criteria.


  The Foreign Secretary has shown admirable leadership in the area of international arms transfer control. In the last year, he has been actively supporting the drive for an international ATT and the Government has committed to start negotiations on an ATT "no later than 2006".[29] Considerable momentum has built up for international arms transfer controls. The number of states that have given their explicit support for an ATT is now 43. EU Member States have issued a statement of support for the ATT. Many more have given a more general endorsement of the need for international transfer controls. However, beyond these rhetorical flourishes limited concrete progress has been made. The Gleneagles Communique« from last year's G8 summit failed to include reference to an ATT, [30]while the dropping of any reference to disarmament and non-proliferation at the UN Millennium Review Summit in September 2005 was a bitter disappointment. Furthermore, it is not clear that the Foreign Secretary's enthusiasm for an ATT extends across Whitehall. In light of the setbacks so far and given that a number of important states are less sympathetic to an ATT, it is crucial that this project is embraced as a priority by all relevant UK Government departments.

  At the same time, within the context of the UN small arms process, the Government has been leading the Transfer Control Initiative (TCI), which seeks to identify areas of common ground shared by states from the various regions on transfer controls. There are concerns that any guidelines produced under the auspices of the TCI will not match the global principles that NGOs believe should form the basis of an ATT. Nevertheless, it is encouraging that the UK Government is willing to take up the challenge to develop international standards to govern small arms transfers and to push for agreement at the UN Small Arms Review Conference in June-July 2006. Support for such an outcome would appear widespread, although a number of key states have still to be won over.

  Keeping the TCI and the ATT separate is a difficult but important task: confusion on the part of other states could have negative consequences for the outcome of the UN Review Conference. States that might accept a political agreement on small arms transfers (TCI) may be less inclined to agree to such an outcome at this stage if they are confusing this with a legal obligation to control the transfer of all arms (ATT).

  It seems the Government will be concentrating most of its attention on the TCI in the run-up to the UN Small Arms Review Conference, at which point it will increase its work on an ATT. Were the Government to become discouraged by the difficulties involved in working toward the eventual adoption of a binding instrument and withdraw or scale back its support for an ATT, this could have disastrous consequences for the whole process. It is therefore incumbent upon the Government to stay committed to and develop effective strategies in support of an ATT, notwithstanding the difficulties that inevitably lie ahead.

    —  All relevant departments of the UK Government must work actively together to promote an ATT.

    —  The Government should continue to pursue agreement on effective international small arms transfer controls via the UN small arms process, keeping in mind the broader goal of a meaningful legally-binding treaty for the control of transfers of all conventional arms.

January 2006

3   For the purpose of this briefing, the UK Working Group on Arms comprises Amnesty UK, BASIC, Christian Aid, Oxfam GB, International Alert and Saferworld. Back

4   For example, it was recently announced that the Defence Secretary John Reid has concluded a reported £10 billion sale of the Typhoon Eurofighter aircraft to Saudi Arabia ("Saudi fighter jet deal boosts BAE," Financial Times, 22 December 2005). Back

5   See, for example, the website of the Undersecretariat for Defence Industries, Turkey, http://www.ssm.gov.tr. Back

6   "Malaysia set to become leading small arms maker," Associated Press, 13 April 2004. Back

7   Imperial Defence Services Limited website, http://www.imperialdefence.co.uk/defence<au0,0> <xuequipment.htm. Back

8   Ibid, emphasis added. Back

9   Export Control Organisation website, http://www.dti.gov.uk/export.control/applying/praetorianassocscustomsfine.htm. Back

10   "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

11   "Democratic Republic of Congo: arming the east" Amnesty International Report, July 2005 http://web.amnesty.org/library/Index/ENGAFR620062005?open&of=ENG-COD. Back

12   Jimmy Burns and James Boxell, "Met chief aims to recoup cost of policing international arms fair", Financial Times, 30 September 2005. Back

13   Army-technology.com website, http://www.army-technology.com/contractors/ammunition/huajin/form.html. Back

14   Excerpt from The New Statesman, 3 October 2005: "To illustrate the availability of electro-shock equipment at DSEi, I took the liberty of making an inquiry on behalf of Malcolm Wicks, minister at the Department of Trade and Industry. Under his name, I visited the website Army Technology (owned by SPG Media), an industry `community site' which provides information on arms manufacturers and an introductory service over the internet. Wicks will be pleased to know that Army Technology has forwarded his request for information on stun-gun prices to Huajin, a Chinese company whose electro-shock weapons are shown on the UK-run site. So good luck with the stun baton deal, Mr Wicks!" Back

15   UK reporting is disaggregated based on the final intended destination of the equipment or technology, not on the nationality of the recipient, so, for example, a licence granted for a transfer of equipment to an Australian naval vessel in Indonesian territorial waters will appear in the Indonesia entry of the national report. Back

16   In recent years, the UK Government has licensed military equipment to inter alia Angola, Colombia, Indonesia, Iraq, Israel, Jordan, Pakistan, Philippines Saudi Arabia, Syria, South Africa and the United Arab Emirates-all states that have reputations as conduits of arms to other irresponsible parties. Back

17   "End-Use Monitoring of Defence Articles, FY 2004", US State Department Directorate on Defence Trade Controls, https://www.pmdtc.org/docs/End-Use-FY2004.pdf. Back

18   Response by the UK Government, "HMG's Annual Report for 2003, Licensing Policy and Parliamentary Scrutiny," Cm 6638, Point 17, July 2005, http://www.fco.gov.uk/Files/KFile/051005Govt%20Response%20Command%20Paper.pdf. Back

19   "United Kingdom Strategic Export Controls Annual Report 2004," Cm 6646, p 10, July 2005, http://www.fco.gov.uk/Files/kfile/Annual%20Report%20on%20Strategic%20Export%20Controls%202004.pdf. Back

20   Malcolm Bruce, Parliamentary Question No 2005/2535, answered by Malcolm Wicks, DTI, 9 January 2006. Back

21   In a very limited number of cases the Government may give out some additional information, eg equipment intended for humanitarian use, but these are rare exceptions. Back

22   The only information given on quantities licensed for transfer is with regard to complete small arms. Back

23   EU Council Working Group on Arms Exports. Back

24   The UK system of reporting identifies the location of the intended recipient, not the destination. Back

25   "Strategic Export Controls: HMG's Annual Report for 2003," QSC, Point 21, p 10. March 2005 http://www.publications.parliament.uk/pa/cm200405/cmselect/cmdfence/145/145.pdf. Back

26   "China passes Anti-Secession Law," The Age, March 14 2005, http://www.theage.com.au/news/National/China-passes-antiseccession-law/2005/03/14/1110649109007.html. Back

27   "User's Guide to the EU Code of Conduct on Arms Exports", The Council of the European Union, PESC 853, COARM 43, 14 October 2005, pp 22-30, http://register.consilium.eu.int/pdf/en/05/st13/st13296.en05.pdf. Back

28   Ibid, para 3.1.1, p 22. Back

29   Our Common Interest: Report of the Commission for Africa, March 2005, Back

30   The Gleneagles Communique«, July 2005, http://www.fco.gov.uk/Files/kfile/PostG8-Gleneagles-Communique,0.pdf. Back

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