House of Commons - Quadripartite Committee

Quadripartite Select Committee Written Evidence

Memorandum from the Government

SECTION A: UPDATES

1. What progress on arms control and proliferation has been made as a result of the UK holding the Presidency of the G8 and EU during 2005? The Committees would be grateful if the Government included and dealt with developments since 2004 in the following areas:

the review of the EU Code of Conduct on Arms Exports and progress in the work of the COARM Working Party;

The revised text of the EU Code of Conduct has been agreed at technical level. It has also been agreed in principle that the revised text should be adopted as a Common Position under Article 18 of the Treaty of European Union. The Council has agreed that it will be adopted at an appropriate juncture. But there is currently no consensus as to when this should be. This Common Position would be legally binding on Member States, who would be obliged to ensure that their domestic legislation conforms with the Common Position. The revised code is due to be known as "Common Rules Governing the Control of Exports of Military Technology and Equipment".

progress towards a common interpretation of the criterion eight (Sustainable Development);

Best Practice guidance for the interpretation of Criterion 8 was agreed at the first UK Presidency COARM meeting, then adopted by the Council. This is now published in the User's Guide.

review of criteria 2 (internal repression) and 7 (re-export), including involvement of NGOs and expected date of publication of the outcome;

COARM under our Chairmanship established a drafting group to take forward work in parallel on formulating Best Practice guidance for both Criterion 2 and Criterion 7. Civil society has been invited to submit views and suggestions as part of the consultation process. It is hoped that this new guidance can be agreed and published at the earliest opportunity.

the toolbox which COARM developed; Has it been used and what were the results?

The final details of the "toolbox" of measures for countries emerging from a EU arms embargo has not yet been finalised by Member States.

international export control regimes;

We used our Presidency to secure the support of EU members for proposals on action that MTCR members can take to counter regional proliferation; and on a strategy to secure the admission into the MTCR of the new EU Member States, including the candidate and acceding countries. We also used our chairmanship of the Technical Experts' Meeting and our role as co-chair of the Information Exchange Meeting to drive forward the MTCR's agenda in line with the EU WMD Action Plan. We are also working with others to strengthen other regimes—Australia Group and Nuclear Suppliers Group (NSG)—and encourage the voluntary adoption of the regimes control lists by non-members. The Wassenaar Arrangement is covered in Question 4.

the proposed international arms trade treaty;

The Government has been actively pursuing the initiative for an international Arms Trade Treaty during the UK's Presidencies of the G8 and of the EU. At Gleneagles in July, Leaders of the G8 agreed that the "development of international standards in arms transfers . . . would be an important step toward tackling the undesirable proliferation of conventional arms". On 3 October European Union Foreign Ministers added the EU's voice to the growing support for an international treaty to establish common standards for the global trade in conventional arms, and called for the start of a formal negotiation process at the United Nations at the earliest opportunity. The Committee may also wish to note that, on 27 November, Commonwealth Heads of Government meeting in Malta added their support to calls for work on such a treaty to commence in the UN. We are now working to generate further support for such a process among international partners in order to build momentum towards our objective of beginning initial discussions in the UN later in 2006.

applications of new EU Member States to join international export control regimes;

As EU Presidency, we spoke strongly in favour for the entry of the new EU Member States, the acceding and candidate countries, to the MTCR. As they have all adopted the same export controls as the EU MS which are already members of the MTCR, these countries would clearly improve its effectiveness. Unfortunately, despite our strong arguments in favour we were not able to secure their entry at the MTCR Plenary in September. We are however continuing to work with EU colleagues in seeking to resolve this situation. We are also working with others to strengthen other regimes—Australia Group and Nuclear Suppliers Group (NSG)—and encourage the voluntary adoption of the regimes control lists by non-members.

Malta, Estonia, Lithuania and Latvia were all admitted as members of the Wassenaar Arrangement on export controls for conventional arms and dual use goods and technologies. Cyprus is the only EU Member State that is not currently a member of the Arrangement.

export of strategic goods and technologies to Libya;

The EU lifted the arms embargo against Libya in October 2004. All relevant export licence applications for Libya are rigorously assessed on a case-by-case basis against the Consolidated EU and National Export Licensing Criteria, taking account of the circumstances prevailing at the time and other relevant announced Government policies.

progress towards a Council Regulation on trade in equipment related to torture and capital punishment;

The EU has adopted EC Regulation No 1236/2005 concerning trade in certain goods that could be used for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment. The Regulation will come into force on 30 July 2006. It bans trade in certain goods designed to restrain or execute human beings and introduces controls on the export of other items that could be used for torture or cruel, inhuman or degrading treatment. The terms of the Regulation will allow the UK to maintain our current prohibition on the export of leg-irons, gang chains, and other items, and represents a strengthening of collective EU export control.

the review of the EU Arms Embargo on China;

The Conclusions of the European Council in December 2004 asked the Luxembourg Presidency to take forward the already well-advanced work to allow for a decision on lift of the Arms Embargo. The Council recalled the importance of the criteria of the Code of Conduct, including the provisions regarding human rights, stability and security in the region and the national security of friendly and allied countries. The European Council underlined that the result of any decision on the Embargo should not be an increase of arms exports from EU Member States to China, either in quantitative or in qualitative terms.

The European Council in June recalled the Council Conclusions of December 2004. The review is on-going. No date has been set for a decision. The political environment remains difficult since the passing by China of the anti-secession law aimed at Taiwan in March. It has also become clear that more needs to be done to consult with other international partners. We have initiated strategic dialogues as part of this process and are working to develop these.

progress on implementation of the EUs "action plan for the implementation of the basic principles for an EU strategy against proliferation of weapons of mass destruction of June 2003; and

The European Council agreed in December 2003 an EU Strategy Against the Proliferation of Weapons of Mass Destruction, drawing on the Basic Principles agreed in June 2003. In the two years since the EU adopted its "Strategy against the Proliferation of weapons of mass destruction", steady progress has been made on implementation. Non-proliferation clauses have been included in a number of agreements with third countries (eg Syria, the 75 African, Caribbean and Pacific ACP countries). An EU report was provided to the United Nations 1540 Committee in addition to those submitted by Member States.

In line with our over-arching Presidency objectives, our focus has been on running an efficient Presidency which helps to increase the effectiveness of EU efforts to counter WMD proliferation. The EU has played a prominent and constructive role in the UNGA First Committee, the NSG Consultative Group and the MTCR Plenary meeting among others. We have initiated and led an internal debate to prepare EU ideas to strengthen the Biological and Toxin Weapons Convention (BTWC) at its Review Conference in 2006.

The EU has provided further financial support to strengthen the IAEA and the OPCW, and hopes to secure similar support by the end of our Presidency to assist the effective implementation of the BTWC. We are drawing up plans with the Council Secretariat and Commission for work with a wide range of third countries to enhance export control measures. We are also working with the Council Secretariat, Commission and Member States to revise the list of priorities for implementation of the EU WMD Strategy ahead of the European Council in December.

progress towards a British waiver from the US ITAR Regulations.

The Ministry of Defence provided the House of Commons Defence Committee with a memorandum on a UK waiver from the US International Traffic in Arms Regulations on 28 November 2005. A copy is provided for the Committee [not printed].

2. What impact has the war against terrorism had on the export licensing regime?

Government policy remains unchanged. All relevant export licence applications are rigorously assessed on a case-by-case basis against the Consolidated EU and National Export Licensing Criteria, taking account of circumstances prevailing at the time and other relevant announced Government policies.

3. What were the number of small arms and light weapons destroyed in 2004 and 2005 as a result of programmes supported by the UK Government? 92[92] What were the main countries of manufacture of these arms and weapons?

By the end of 2005, programmes funded directly by the UK Government are on track to destroy over 100,000 Small Arms and Light Weapons since 2004. This includes weapons destruction programmes in Bosnia, Belarus, Ukraine, Mozambique and a range of other countries. Some of these projects are just starting and the destruction of weapons over the next two years is expected to increase significantly. We have also supplied weapons destruction equipment to South Africa and Jamaica. In addition we fund UNDP Small Arms work with a focus on weapons destruction. It is not possible to provide a detailed breakdown of the main countries of manufacture of all of these weapons, but indications are that most are former Eastern bloc manufacture.

4. What assessment has the Government made of the effectiveness of the operation of the Wassenaar Agreement in 2005? Are there any improvements which the Government is promoting?

The Plenary meeting of the Wassenaar Arrangement took place on 13-14 December 2005. The Plenary meeting adopted decisions for 2005 based on the work that has taken place during the year. In order to keep pace with advances in technology, market trends and international security developments, such as the threat of terrorist acquisition of military and dual use goods, amendments were made to the control lists. The amendments agreed by the Plenary this year included items of potential interest to terrorists such as jamming equipment and unmanned aerial vehicles. The Plenary also decided to admit South Africa to the Arrangement, the first African State to join the Arrangement, in addition to the five new members who had been admitted earlier in the year. The Government is committed to an Arrangement that is open, global and non-discriminatory. To this end, the admittance of Croatia, Estonia, Latvia, Lithuania, Malta and South Africa in 2005 represents a strengthening of the Arrangement. These States have (and in the case of South Africa, will) now adopt the Initial Elements and all previous Plenary decisions of the Arrangement. Importantly, they will also become party to the exchanges of information within the Arrangement, enhancing transparency.

5. The 2004 Annual Report on Strategic Export Controls states (page 5) that "progress was made on ways to strengthen the [Nuclear Suppliers Group] Guidelines in relation to the transfer of sensitive enrichment and reprocessing equipment". What are the changes and have the guidelines now been strengthened?

The UK, as G8 Presidency, played a leading role in using the G8 to try and leverage changes to the Nuclear Suppliers' Group (NSG) Guidelines. Revised proposals were put forward to establish objective criteria that a state must meet in order to receive transfers of sensitive nuclear technology, together with agreed factors that suppliers should take into account before allowing such transfers to take place. But, because of reservations on the part of a number of key suppliers, attempts to strengthen the guidelines were only partially successful. We remain committed to taking this work forward.

6. What part has the UK played in the Zangger Committee (or NPT Exporters Committee) in 2005? What progress has been made within the Zangger Committee on outreach to non-members? What other outreach has taken place in 2005? What assessment has the Government made of the effectiveness of this work and of additional outreach work that needs to be undertaken?

Dr Fritz Schmidt, the long standing Chairman of the Zangger Committee died in 2005. His death led many participating Governments to question the continuing role of the Zangger Committee. No substantive outreach or other work has been undertaken by the Committee this year. The UK in its role as Acting Chair and Secretary has encouraged participating Governments to find a new Chairman and provide views on the Committee's future role. HMG has however made significant progress in bilateral Outreach. Notable progress on key targets was made with South Africa, Libya and Malaysia. Our work has moved beyond initial (inward and outward) visits towards more focused advice and training. But resources are a significant constraint on work in this area. Coordination with other bilateral and multilateral Outreach programmes therefore remains important. China, (working closely with the EU), India, and Ukraine are our key priorities.

7. On 5 August 2005 the Government informed Mr Gapes, chairman of the Foreign Affairs Committee, that it had amended its controls on the export of nuclear-related technology to, and scientific contacts with, India and Pakistan. As a result of these changes what export licences have been granted and what contacts have been allowed which under the previous policy would not have been allowed? Please supply details. If the export of nuclear-related technology or scientific contacts for civilian purposes were to allow the recipient government to divert resources form civilian to military nuclear development, would the UK Government consent to an export licence?

The amendment to the UKs approach to controls on the export of nuclear related technology and scientific contacts set out in the Government's letter of 5 August 2005 relate to India only. Details can be found at http://www.dti.gov.uk/export.control/notices/2005/notice1305.htm

There has been no change in our policy towards Pakistan.

The policy change in respect of India came into effect on 10 August 2005. Two Export Licences have been granted for items specifically controlled under the Nuclear Suppliers Group, one for a mass spectrometer and the other for pipework; these would not have been issued under our previous policy. To date, we are not aware that any additional scientific contacts have been made. As a nuclear-weapon State Party to the Non-Proliferation Treaty we will continue to uphold our commitment to Article 1 of the Treaty.

8. The Committee would be grateful for information on strategic goods seized by HM Customs and Revenue, in particular: (i) the number of cases since January 2005 that have been referred to specialist investigators, and the type and quantity of goods involved; (ii) details (description, quantity, value and destination country) of goods discovered by Compliance Officers to have been exported, or intended for export, without a valid licence; and (iii) action taken against those responsible for export without a valid licence with information about infringements, the identity of the exporters and any prosecutions relating to breaches of export controls including identifying court references, the name of the judge and court, the identity of the defendant (if disclosable), the nature and details of the charges, the fine imposed, the type and quantity of goods involved and the destination and end-user of the goods.

(i) Since 1 January, HMRC have seized the goods listed in the following table. In order not to prejudice any current investigation, we have only given the number of items seized where an investigation is pending.

No of seizures No of items Description Action

1. 8 Details withheld pending investigation. Under investigation

2. 1 Slipring assembly to Israel. Licence held but not declared. Goods restored.

3. 8 Rocker Arms Further enquiries being made

- 2 Insulator

4. 4 Details withheld pending investigation. Under investigation

5. 1 Ships spares value £1,194 to Pakistan. Restored on payment of £525.

6. 1 Valve value £4,476 to Iran. Restored on payment of £480 and production of licence.

7. 1 Rotor mast seal, value £32,274. Restored on payment of £1059.00 and production of licence.

8. 8 Aluminium alloy bars value £13,340.00 to Pakistan. Further enquiries being made.

9. 1 Details withheld pending investigation. Under investigation.

10. 15 Protective clothing value £7,251. Goods restored without charge on production of OIEL.

11. 1 Aircraft part value £980 to Jordan. Goods covered by OIEL but declared under an OGEL that did not cover destination. Restored without payment, warning letter issued.

12. 1 Pressure switch (dual-use civil aircraft part subject to UK control only) value £1,500 to Iran German based exporter. Goods seized. Restoration will be considered on production of licence.

13. 6 Motion controllers. Seizure later overturned following appeal against rating on licensablility.

14. 31 Gun sights being sent to Japan for repair. Satisfied goods covered by OGEL. Goods restored to exporter.

15. 8,632 Syntactic foam. Seizure later overturned when shaped foam found not to be on the control list.

16. 2 Single foil manipulator. Awaiting licence decision.

17. 1 Flanged poppet check valves value £4,456 Awaiting licence decision.

18. 43 Printed circuit boards value £3,396.22. Awaiting licence decision.

19. 1 Laser. Ratings advice later overturned and goods returned to exporter.

20. 8 Air intake filter value £101,520. Further enquiries being made.

21. 1 Bolt action rifle and ammunition in passenger's baggage in transit Sweden to Zimbabwe. Seized and returned to Sweden.

22. 1 9mm semi automatic Beretta value £100 + 68 rounds of ammunition and 2 clips value £20 in passenger's baggage in transit to Sierra Leone. To be destroyed.

23. 1 Rifle (unloaded) in transit passenger's baggage. Seized and restored for return to US by Registered Firearms Dealer.

24. 2 Sporting firearms in passenger's baggage in transit Belgium to Harare. Will be restored for return to Belgium.

25. 1 Walther ppk/s pistol 9mm value £70 and cleaning kit in passenger's baggage, being transhipped Switzerland to Tanzania. Released on production of licence for return to Switzerland.

26. 1 Self loading pistol. Being followed up by US Immigration and Customs Enforcement.

42 Ammunition/magazine in transit Accra to Miami.

27. 4 Military firearms in transit to USA. To be released on production of both original and new military orders.

Seizures of Small Arms and Light Weapons

(ii) Of the seizures listed above, the number we judge to fall into the category of SALW are four items under investigation, 31 gun sights, one bolt action rifle and ammunition, one 9MM semi automatic Beretta plus 68 rounds of ammunition and two clips, one rifle (unloaded), sporting firearms, one Walther PPK/S pistol 9MM plus cleaning kit, one Self loading pistol, plus 42 rounds of ammunition including magazine, two M9 Beretta Self Loading Pistols plus four military firearms. Although these were all unlicensed exports, all but the one case under investigation and the one case where an OGEL could have been used, involved passengers in transit rather than UK exporters.

Number of Disruptions

(iii) In addition to the cases mentioned above, HMRC disrupted potential illicit activity in 28 separate incidents. We have previously explained that the number of successful prosecutions gave an incomplete picture of HMRC enforcement activity in strategic export cases, since much disruption activity takes place "behind the scenes". The Government believes that the public interest is better served by stopping illicit exports before goods reach the place of export, rather than by allowing them to reach the port in the hope of adding to HMRC's seizure and prosecution statistics.

Referrals to Specialist Investigators

(iv) Seven cases have been referred to specialist investigators during this period: three from seizures listed above and four from other sources. To release further information in relation to these cases could prejudice any investigation and is therefore exempt from publication under section 30 of the Freedom of Information Act.

Prosecution Action in 2005

(v) Saroosh Homayouni was convicted on 18 February 2005 of 12 specimen counts under section 68(2) of the Customs and Excise Management Act of knowingly exporting aircraft parts to Iran in contravention of an export prohibition or restriction in force. The committee is already aware that he was sentenced to 18 months imprisonment suspended for two years and banned from being a company director for 10 years. Since reporting this information, the courts have made an asset forfeiture order for £69,980, which must be paid by 24 December.

On 10 May 2005 at City of London Magistrates Court a director of Praetorian Associates pleaded guilty to a charge under section 68(2) of the Customs and Excise Management Act of exporting body armour to Pakistan in contravention of an export prohibition or restriction, and fined £2,500.

(vi) The following goods were discovered by DTI Compliance Officers to have been exported without a valid licence.

DTI COMPLIANCE REPORTS TABLE

Goods	Destination	HMRC Action
1 x Control Panel from FEPS Mobile Generator Sets exported for exhibition under OGEL without prior MOD approval.	France	Case with national business manager.
Military aircraft parts.	USA, India and EU destinations	Further information requested.
5 x Sporting shotguns exported after OIEL had expired.	Cyprus	Making further enquiries.
2 x Sporting shotguns of higher calibre than allowed by OIEL.
Military listed Gas Turbine Aero Engine exported under Export After Repair OGEL but unable to meet conditions.	USA	Referred for local action.
Remotely Operated Vehicle, EOD Disruptors, Cyclops RoV; EOD Disruptors and cartridges	France Canada Australia and France.	Referred for local action.
(60+ shipments between February 2003 and May 2005) Dual use flurocarbon seals value $1,056.11	Singapore	Referred for local action.
Exhaust Bellows for Armoured Vehicle.	France	Referred for local action.
Unspecified Goods, two OIEL shipments consigned to destinations not covered by OIELs	Australia Switzerland	Awaiting further information.
Aircraft parts ML10b, value £60,477	France, India, Korea, Niger, South Africa, Sweden, Australia, Belgium, Spain, Finland, Ireland, Japan, Norway, New Zealand, Poland, Portugal, Romania.	Warning letter issued 4 April 2005.
Spare parts value £182 for diesel engines.	Canada	Warning letter issued 13 September 2005.

HMRC Action in this period on DTI Compliance Reports or Voluntary Disclosures prior to 1 January 2005

(vii) A further nine warning letters were sent by HMRC in this period: seven for irregularities found by compliance officers prior to 1 January 2005 and two for irregularities disclosed to HMRC by exporters.

9. In addition, the Committee requests two estimates: (i) the amount of activity and percentage of total work/activity, expressed in person days or similar, which HMCR used for the purposes of planning and budgeting in 2004-05 and 2005-06 to investigate and police the export and transhipment of controlled goods; and (ii) the quantity of small arms and light weapons intended for illegal export seized by HMCR since January 2005.

HM Revenue and Customs' controls on the export of controlled goods are undertaken by front line staff who are multi-functional and are deployed flexibly on the basis of risk assessment and intelligence gathering. They are supported by two central investigation and intelligence teams who provide intelligence to inform computerised profiling, and targeting, and who conduct criminal investigations where appropriate. This deployment allows HMRC to look into all significant allegations and intelligence in relation to breaches of export controls.

10. On 15 April 1999 the Government made a statement supporting the moratorium on the import, export and manufacture of light weapons adopted by the Economic Community of West African States. The moratorium applied to the import, export and manufacture of pistols, rifles, submachine guns, carbines, machine guns, anti-tank missiles, mortars and howitzers up to a calibre of 85mm and ammunition and spare parts for the above. The Government said that it would take the provisions of the moratorium and ECOWAS's Code of Conduct fully into account when assessing relevant export licence applications, would brief participating states to the Wassenaar Arrangement on the moratorium and that the UK was also financially supporting the moratorium. What is the Government's assessment of the effectiveness of the moratorium, both as it applies to British companies and internationally? How much support has the Government given to support the moratorium? What steps has the Government taken to test the effectiveness of the moratorium? Have there been any breaches of the moratorium?

The ECOWAS Moratorium on the Import, Export and Manufacture of Small Arms and Light Weapons was an innovative and positive instrument when introduced. Responsible exporting countries such as the UK took the Moratorium very seriously. However, over time weaknesses in the full region-wide implementation, enforcement and co-ordination of the Moratorium have become apparent. We understand there may have been breaches of the Moratorium and this and other issues has led the international community recently to plan to convert the ECOWAS Moratorium into a legally binding regional ECOWAS Convention by the end of 2005, with a view to an operational West African contribution to the 2006 review conference on the United Nations Programme of Action.

The UK initially gave direct financial support and has funded a workshop on the regional operation at which effectiveness was discussed. We continue to support the regional mechanism via the EU and UNDP. We also support the UNDP ECOWAS Small Arms Programme (ECOSAP) directly through our contributions to both the EC and UNDP's thematic trust fund on crisis prevention and recovery. The ECOSAP programme should help build the capacity of both the ECOWAS Secretariat and West African governments to implement the moratorium/convention and to take other steps to reduce small arms proliferation in the region.

11. What assessment has the Government made of the effectiveness of the controls on "trafficking and brokering" of long-range missiles and torture equipment and goods to embargoed destinations? On what basis would the Government be prepared to extend the items subject to these controls?

The Government has said that, consistent with regulatory best practice, it will review the controls three years after their coming into force, ie during 2007. We are gradually accumulating experience of their operation and it would be premature therefore to contemplate their extension or amendment. At this stage, the Government is satisfied that the controls are working broadly as intended and have been manageable for both industry and Government.

SECTION B: SPECIFIC LICENSING DECISIONS

The Committees need to see sufficient information about the Government's licensing decisions to come to a reasonable understanding of why the Government has granted or refused a licence in any particular case. This should include an intelligible description of the goods, an indication of their value, the identity of the end user, and the stated end use of the goods.

Where the Committees have requested information on a single licence application, it is open to the Government to provide information on other licence applications to the same country as well, if the Government would like to do so. A possible alternative to the past practice of laboriously compiling this information for the Committees might be to provide the Committees in confidence with the relevant case documentation, such as application forms and end-user undertakings.

The Responses to 12-15 are provided to the Committee in Confidence. [not attached or included]

12. All revocations made in 2004 and 2005.

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13. Incorporation SIELs issued during the second, third and fourth quarters of 2004 and the first two quarters of 2005 for the following destinations (countries which have not aligned themselves with the principles of the EU Code of Conduct). Please also provide a description of the finished equipment in which the exports were intended for incorporation, and on the eventual end users of this finished equipment, where this is known, and on any end-use conditions attached to the export or use of the finished equipment.

(a) Australia,

(b) Brazil,

(c) China,

(d) Chile,

(e) India,

(f) Indonesia,

(g) Iraq,

(h) Israel,

(i) Japan,

(j) Malaysia,

(k) Pakistan,

(l) Russia,

(m) South Korea,

(n) Singapore,

(o) South Africa,

(p) Switzerland,

(q) Taiwan,

(r) Turkey,

(s) UAE,

(t) USA,

(u) Venezuela.

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14. The Committees would be grateful for more information on the following licences issued during 2004. All are SIELs, except where stated otherwise.

(v) Australia: handcuffs (two licences April-June).

(w) Belarus: all licences (including OIELs).

(x) Congo (DRC): submachine guns (five licences April-June).

(y) Cyprus: sniper rifles (20) plus the licences relating to components and maintenance (July-September).

(z) Egypt: handcuffs (April-June).

(aa) Hong Kong SAR: handcuffs (January-March), (July-September) and (October-December); deuterium compounds (April-June); heavy machine guns (10) (April-June).

(bb) India: vacuum pumps (April-June and July-September); non ferrous alloys (six licences January-March) (10 licences (April-June) (three licences July-September) (four licences October-December).

(cc) Indonesia: metal alloy in cylindrical forms (January-March, April-June, July-September).

(dd) Nepal: all licences granted.

(ee) Philippines: handcuffs (April-June).

(ff) Saudi Arabia: heavy machine guns (220) and tear gas/riot control agents (October-December).

(gg) Singapore: OIEL No: seven gun silencers, components for gun silencers (April-June).

(hh) Sri Lanka: heavy machine guns and maintenance equipment and heavy machine guns (13) (July-September and October-December).

(ii) Syria: armoured all wheel drive vehicles (January-March); OIEL No two for armoured all wheel drive vehicles (July-September); OIEL No 1 for armoured all wheel drive vehicles (October-December).

(jj) Turkey: OIEL No six armoured all wheel drive vehicles (July-September).

(kk) Turkmenistan: OIEL No one armoured all wheel drive vehicles (April-June).

(ll) UAE: OIEL No nine general purpose machine guns, heavy machine guns (April-June); OIEL No 12 armoured all wheel drive vehicles (October-December).

(mm) Uzbekistan: armoured personnel carriers (January-March); OIEL No one armoured all wheel drive vehicles (April-June).

15. The Committees would be grateful for more information on the value of the goods and technology and the end use of the items covered by the following trade control licences issued during 2004:

(nn) Democratic Republic of Congo to Zimbabwe—standard individual trade control licence (October-December).

(oo) Kenya to Iran—standard individual trade control licence (October-December).

(p) Bulgaria to UAE—six open individual trade control licences (July-September).

(qq) Romania to Qatar and UAE—six open individual trade control licences (July-September).

(rr) Serbia and Montenegro to Qatar and UAE—six open individual trade control licences (July September).

(ss) Turkey to DRC, CAR, Israel, Sierra Leone and Syria—five open individual trade control licences (July-September).

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16. It appears that the bulk of individual trade control licences issued in 2004 were issued between July and September 2004. Is this the case and, if it was, what, in the Government's view, was the reason?

Timeframe Number of SITCLs issued Number of OITCLs issued

May-June 2004 16 8

July-September 2004 29 28

October-December 2004 24 4

January-March 2005 17 2

April-June 2005 27 2

The number of applications received by the Government will fluctuate depending on market demand and activity. In fact, however, the numbers of SITCLs issued in 2004 and 2005 has been relatively steady. The overall volume of OITCLs has also been consistent over the two years. The higher number in the July-September 2004 period can probably be explained by the initial surge following the coming into force of the main Trade Order in May 2004 as traders put in place licensing cover for the first time. This period also covered the licences issued for the Farnborough International Airshow, held in July 2004.

17. Has the Government carried out any investigations into claims that Land Rovers or components of Land Rovers, which are armour-plated and can be fitted with machine-gun hatches, were exported under licence to Turkey, where they were assembled and from where they ended up at the disposal of the Uzbek authorities to be used to suppress popular demonstrations this year? If it has, what were the results of the Government's investigations?

The Government understands this question to relate to allegations made in the media in mid-2005 that military specification Land Rovers were used by the authorities in Andizhan, and that these vehicles were made in Turkey under licence from the UK company Land Rover and contained UK components.

We understand that Land Rover sells flat-pack civilian Land Rover Defenders to the Turkish company in question, which then assembles and rebadges them for onward sale under its own name, using its own products and components, and according to designs for which that company holds the intellectual property rights. It is the Government's understanding that these are not Land Rover approved products and it is therefore inaccurate to describe the company concerned as an overseas production facility for Land Rover.

Under the EC Dual-Use Regulation, Council Regulation (EC) No. 1334/2000, the UK has no power to control the export of civilian specification Land Rovers. To the extent that the buyer in Turkey converts the civilian vehicles using his own technology and without UK involvement, this is a matter for the Turkish authorities as regards any export from there.

It is the Government's understanding that the vehicles in question were supplied by the Turkish company in question to the Turkish government who then gifted them to the Uzbek government. Furthermore, although this has not been independently verified, the vehicles photographed in Andijan appear to be non-military unarmoured vehicles, which would not therefore have been subject to export controls in any scenario.

Were Land Rover to export components or technology of military specification there, this would require a UK export licence. In addition, the Government controls the electronic transfer of dual-use technology, and since 2004 also military technology, overseas, and the overseas trade in military equipment where any part of the activity takes place in the UK (unless the goods being traded are "Restricted Goods" or are for an Embargoed Destination, in which case full extraterritorial controls apply).

18. Since January 2003 what has been the value of strategic exports, subject to licensing controls, to Uzbekistan? In this period what assistance has the Government, including UKTI trade services, given to encourage exports of goods subject to licence to Uzbekistan? Since May 2005 what investigations has the Government made of the alleged use by the Uzbek authorities of goods and technology subject to licence (including components exported from the UK to a third country) to suppress popular demonstrations in Andijan and other cities? As a result of these developments has the Government changed its policy on the licensing of strategic exports to Uzbekistan or has it changed its view on the applicability of criterion 2 (risk of use for internal repression) to exports to Uzbekistan?

The 2003 Annual Report states that no exports of military equipment were made to Uzbekistan in that year, while the 2004 Annual Report states military equipment to a value of £100,000 was exported to Uzbekistan in that year (the table of the value of exports does not identify those countries with goods identified with a value of less than £0.01 million).

A full range of commercial services was previously available to UK companies wishing to export to Uzbekistan from commercial staff located in the British Embassy in Tashkent. These services were withdrawn in April 2005. However, political support and lobbying by HM Ambassador in Tashkent, in support of UK companies' interests, remains available.

HMG takes its commitments to human rights very seriously. Respect for Human Rights is an integral part of HMG's export control policy. Indeed, Criterion 2 is specifically concerned with human rights and provides that HMG "will not issue an export licence if there is a clear risk that the proposed export might be used for internal repression".

All applications are assessed on a case by case basis against the consolidated EU and National Arms Export Licensing Criteria and other announced policies in light of the circumstances prevailing at the time of the application.

Summaries of the goods licensed for export to Uzbekistan are contained in the Quarterly Reports on Strategic Export Controls, published on the DTI/ECO and FCO websites. All licences were issued following assessment that they were consistent with the Consolidated Criteria.

On 14 November 2005 EU sanctions against Uzbekistan came into force. These measures include an arms embargo and a ban on exports of equipment that may be used for internal repression. Following the events in Andijan, all existing licences for arms exports to Uzbekistan were reviewed by HMG, but none were revoked.

As from 2 December 2005, Uzbekistan was added to the list of excluded destinations in Schedule 2 to the following licences:

— Open General Trade Control Licence (OGTCL).

— OGEL: Access Overseas to Technology for Military Goods: Individual Use Only.

— OGEL: Historic Military Goods.

— OGEL: Military Goods For Demonstration to Governments.

— OGEL: Military Goods: Export for Repair/Replacement under Warranty.

— OGEL: Military Goods: UK Forces Deployed in Non-Embargoed Destinations.

http://www2.dti.gov.uk/export.control/notices/2005/notice2005.htm

19. Dealer to dealer OIEL: How old does a gun have to be before it is described as "vintage"?

The term "vintage gun" relates to guns manufactured prior to 1897 (this date was identified following a risk analysis by MOD; it is the year in which something approaching an "automatic" action was added to a UK rifle).

20. Where the dealer to dealer OIEL provides for the export of rifles, are there any restrictions on the types of rifles that can be exported? Does the licence, for example, cover assault rifles?

Dealer-to-Dealer OIELs authorise the export of firearms and related ammunition between registered UK firearms dealers and registered firearms dealers in EU Member States.

A Dealer-to-Dealer OIEL does not, however, permit the export of:

— Sniper rifles and specially designed components therefore;

— any weapons that have been designed or modified for military use and specially designed components therefore;

— silencers and specially designed components therefore;

— more than one sight per exported weapons or any weapons sights that contain any form of electronic enhancement (whether or not exported with a weapon);

— ammunition with penetrating, explosive or incendiary projectiles, and the projectiles for such ammunition;

— pistols and revolver ammunition with expanding projectiles and projectiles for such ammunition;

— CS (ortho-chlorobenzylmalononitrile) ammunition; or

— weapons described in Category B, item 6 for non-civilian use.

Assault rifles therefore are not permitted for export under the Dealer-to-Dealer OIEL as they are designed for military use, and they are likely to have fully automatic firing capabilities.

SECTION C: EXPORT CONTROL ORGANISATION

The Quadripartite Committee is inviting the Minister of State with responsibility for the Export Control Organisation to give evidence in January. In order to prepare for the evidence session and as part of its task in scrutinising strategic export controls the Committee would be grateful for information on the following matters.

21. Please supply the Committee with a short summary explaining the structure of the Export Control Organisation, how it operates and setting out its targets for 2005-06 and 2006-07.

Tasks

ECO's core functions are:

— processing export licence applications made under the Export Control Act 2002, ratings requests, and Customs pagers requests;

— maintaining the domestic legislative framework including OGELs;

— participating in export control policy-making in the UK and in international fora, eg the international regimes and the EU;

— carrying out exporter awareness and compliance functions;

— participating in HMG's counter-proliferation machinery;

— contributing to international outreach programmes;

— maintaining the export licence denials databases;

— compiling data for the Annual Report;

— responding to Parliamentary and media inquiries; and

— maintaining its databases and website.

Objectives

ECO's key objectives are to run the export licensing regime effectively (ie licensing decisions accurately reflect Government policy, exporters aware and compliant) and efficiently (applications are processed promptly, good information available to users). This twin aim of promoting export control policy objectives and providing a good service to exporters is reflected in the joint export licensing community Mission Statement "promoting global security through strategic export controls, facilitating responsible exports".

Strategy

DTI's overall vision is "creating the conditions for business success and helping the UK respond to the challenge of globalisation". ECO contributes to this in the following ways:

— providing a prompt and reliable service to exporters;

— promoting global security will create the conditions for global economic prosperity which is in the interests of UK plc;

— an effective domestic and international regulatory framework for strategic exports will promote confidence in the legitimacy of defence and dual-use exports, which is in the UK's commercial interest;

— a secure control regime in the UK will make it easier for UK suppliers to obtain the sensitive foreign technologies they need; and

— collaboration with overseas export licensing authorities, e.g. through the EU and the Framework Agreement, will facilitate multinational commercial projects, thus helping the UK respond to the challenge of globalisation.

More specifically, ECO's recent strategy has been to promote efficiency through joined-up working with OGDs via the Jewel project and a closer relationship with exporter representatives; and to make the framework of controls as effective and transparent as possible through the changes introduced by the Export Control Act. The strategy has been successful in delivering improved performance against efficiency targets (exceeded in 2003 and 2004, on target in 2005), together with a continuing high level of effectiveness (no serious mistakes and an extended scope of control).

In addition to improving the quality of its outputs, ECO has also been focussing on its inputs, in order to be able to reduce its headcount in line with efficiency review targets. Its strategy for improving efficiency is to streamline business processes wherever possible (consistent with risk); to improve the skills and deployability of its staff through enhanced training; and to improve the quality of applications from exporters, and to reduce nugatory inquiries, by providing better guidance and training for exporters; to improve information management within ECO so as to be able to better identify and target exporters in need of assistance, tailor licence products to suit exporters' needs, understand better the factors affecting performance so we can deploy resources accordingly and ensure we are not duplicating effort.

Targets

ECO has a range of performance targets. These are incorporated into the DTI Business Plan, specifically into objective delivery plan 12, on Nuclear Safety and Security and Export Control. ECO owns sub-objective 1, which is to process export licence applications promptly and accurately. The sub-objective entry including the targets are set out below:

(a) Timeliness: performance against the following key targets:

— HMG to process 70% of SIEL applications in 20 days, and 95% in 60 days;

— HMG to process 60% of OIEL applications in 60 days;

— DTI to respond to 90% of ratings requests within 10 days for non-circulated requests and 20 days for circulated ones;

— HMG to complete 60% of appeals within 20 days and 95% within 60 days; and

— long outstanding cases not to exceed 30>3 months old, 6>6 months and 1>9 months, measured as average per month over the quarter.

(b) Accuracy:

— (Category One) No incorrect licensing or rating decision having consequences which materially breach the Consolidated Criteria (eg contribute to WMD programme, increase regional conflict) or our international commitments;

— (Category Two) An error rate of not more than 0.5% in processing licences or ratings which lead to incomplete analysis of a case prior to a decision being reached or which degrade our reputation or cause political embarrassment, while not leading to a material breach of the Consolidated Criteria.

Targets for future years have not yet been fixed but are unlikely to change substantially.

22. Please supply the Committee with a table setting out for the Export Control Organisation for each year from 2002-03 to 2007-08

(tt) the number of staff in post (full time equivalents);

Year Average staff in post

2002-03 146

2003-04 156

2004-05 142

Actual 117

The headcount target is 115 by April 2006. ECO currently has plans to reduce headcount by a further 10 posts as SPIRE is fully implemented (ie through to 2007-08), though this may need to be adjusted in the light of new work on controls of exports of radioactive sources.

(uu) the number of casual/temporary staff;

Year Average no temps

2002-03 20

2003-04 19

2004-05 17
Actual 4

(vv) the number of staff carrying out outreach;

There is one full-time ECO post dedicated to UK industry outreach and another full-time post which supports that role. Two staff support the website and telephone helpline. The compliance officers (7) also raise awareness of UK export controls during their compliance visits.

(ww) the number of compliance checks, including visits to companies, carried out each year;

Year Number of compliance visits

2003 569

2004 592

2005 (to end October) 490

(xx) the number of licences received and processed, broken down into type of licence (SIEL. OIEL, etc);

Year Number of applications received

SIELs OIELs SITCLs OITCLs

2002 10,390 635 0 0

2003 9,166 652 0 0

2004 9,048 806 131 80

2005 (as at 23/11/05) 8,319 600 128 37

(yy)
the maximum length of time for which each category of licence could/can be granted in each year to 2005-06 and how many were granted for the maximum; and

Type of licence General length of validity

Standard Individual Export Licences (SIELs) (permanent) 2 years

SIELs (temporary) 1 year

Standard Individual Trade Control Licences (SITCLs) 2 years

Open Individual Export Licences (OIELs) (inc media and dealer-to-dealer type) 5 years

Continental Shelf OIELs 5 years

Open Individual Trade Control Licences (OITCLs) 2 years

Global Project Licences (GPLs) No standard length of validity; usually reflect life of the project

Standard Individual Transhipment Licences (SITLs) 2 years

Open General Export Licences (OGELs) No fixed period of validity; can be revised as necessary

(zz) the number of appeals received and average length of time to determine?

Number of Appeals Average Time Taken to Finalise

2002 101 195 days

2003 93 170 days

2004 55 76 days

2005 (up to 17.11.2005) 45 27 days

23. Following the Gershon Review what savings has the Export Control Organisation to make? What savings have been made to date and where did they come from? What savings have still to be made?

Please refer to the response provided for Q22(a) for headcount savings and targets.

There have been changes in staff numbers in all sections of the Organisation except Compliance; targets are not section specific.

24. Has the Export Control Organisation a business plan for the next 2-3 years? If it does, please supply a copy? Unless covered in the business plan, would the Export Control Organisation deal with the following questions.

See also answer to Q22.

(aaa) Is it planned to outsource any part of the work of the Export Control Organisation?

Outsourcing is not currently under consideration

(bbb) What is the policy of the Export Control Organisation on charging for any part of its services? Has the Export Control Organisation any plans to begin charging for any of its services?

ECO charges for the training services it runs for exporters. It does not charge for licences and has no plans to do so at present.

(ccc) Has the Export Control Organisation any plans, or is it examining any proposals, to relocate its staff or work?

There are no current plans to relocate the ECO or to review its location.

25. What IT projects have been completed in 2004-05 and 2005-06 and what projects are currently underway or planned? What were the planned costs of the projects completed and what were their outturn costs? What savings were/are anticipated by the projects and what have been achieved?

ECO has carried out/is carrying out the following small-scale IT projects, total cost approximately £157,000.

Title Description

Export Community Intranet Establish an intranet presence on GSI to enable interested Govt Departments to share information. Project at early investigation stage.

Case Tracker Case tracking system developed for Licensing Unit and Technical Assessment Unit, based in Warp. Completed 2004

XP Upgrade Departmental roll out of XP to desktops, required changes to Access Databases including the Elate front end

Elate Upgrades Package of Elate changes completed 2004

Logo amendment to all application Word Templates 60 plus word documents across Warp/Elate/Ollie/ECO. This will bring them in line with branding and make some changes to text and improve the way that the user details are collected. Project complete November 2005

F Secure Virus Checker Annual upgrade all XNP PCs and servers to new version of software and update virus reference library

Licensing Systems Servers Configuration and test of new production server to support Elate, Held and Warp. Server live with effect from 1 July 2005

Resilience for Licensing Systems Servers Purchased leading up to our accommodation moves in July 2005 to provide resilience and continuing back up to the main production servers. Work is continuing on this project

Replacement of 34 old Standalones with XP machines Upgrade of PCs which were beyond useful life. Project completed December 2005

IS Strategy and Systems Audit Audit of current XNP systems and production of an IS Strategy incorporating SPIRE. Audit delivered May 2005

Ollie Ollie system upgrade package, 2005

Elate Upgrade for DfID Upgrade version of Elate to Access 2003 to enable it to function on their new systems

In addition, ECO is currently reviewing proposals to replace its main licensing databases in order to remove paper files as far as possible from the licensing process, to get better reporting and workflow facilities and better connectivity with other Government Departments in the licensing process. Eventually we hope to offer application-tracking facilities for exporters and electronic licences that will be sent direct to HM Revenue & Customs. Detailed user requirements are being prepared with a view to phased delivery in 2006-07 and beyond. This depends on the satisfactory conclusion of commercial negotiations and development of a viable business case.

ECO has also been developing software tools to be available on the Internet to help exporters. The first one is called "Goods Checker" which enables exporters to identify whether goods are subject to control, and in which category of the Control Lists. This facility is currently being tested and should be available to exporters in early 2006. We are planning to introduce a second tool called "OGEL checker" to help exporters to identify appropriate OGELs for any given export.

26. What outreach does the Export Control Organisation currently carry out? How does the Export Control Organisation measure the effectiveness of this work? What advice does the Export Control Organisation give to exporters about the regulation of dual use items?

The ECO arranges on average four seminars a month for exporters at various locations in the UK. These include beginners, intermediate and advanced seminars. An explanation of what dual-use goods are, and how export controls apply to them, is included in both the beginner and intermediate export control seminars. There is, in addition, usually a workshop each month to help exporters to apply for licences over the Internet, and another seminar, focused on a particular topic, which will vary. Customised seminars are also given, or presentations made, to a range of companies, trade organisations and groups, on request.

The ECO website contains comprehensive information about the UK's strategic export control regime.

The ECO has also produced a DVD containing detailed information on UK export controls in a modular format. Since May 2004, when the DVD was produced, approximately 1400 copies have been distributed.

We maintain a telephone helpline (020 7215 8070).

Compliance officers will also give advice during their visits.

We have an advisory committee which meets twice a year and which contains representatives of the major trade associations whose members are affected by export controls.

All the above activities apply to both military and dual-use goods.

It is difficult to quantify the effectiveness of a broad range of qualitative outreach work. The feedback from seminars is very positive and demand is high. The ultimate test however, is whether the Government is meeting its efficiency and effectiveness targets; its performance against these targets has been excellent since 2003.

27. In respect to the extension of the controls on transfers related to WMD on 1 May 2004 the Government told the Quadripartite Committee that the Export Control Organisation had maintained a close dialogue with the sectors of industry most affected in order to deal with any problems and queries quickly (Cm 6638, p 7). What problems arose and how and when were they resolved? What outreach has the Export Control Organisation done with universities and similar institutions to explain the operation of the control regime to their activities and transfer of technology? What measures have the Export Control Organisation used to establish whether these bodies understand and are complying with the system? Where knowledge and technology has been transferred overseas what monitoring has the Export Control Organisation done of the uses to which it has been put? What results do the monitoring show?

As the Committee is aware, ECO has published guidance on its website on all aspects of the new/enhanced controls, specifically tailoring the FAQ sections to reflect the issues raised by stakeholders.

Other outreach measures such as those described in the answer to Q26, have allowed for the early identification and resolution of uncertainties, and have also provided the fora through which the Government has been able to confirm the level of understanding and compliance of those affected by the controls.

The main issues raised with ECO have been to do with the application of the new WMD end-use controls, principally in respect of transfers of technology relating to NBC detection equipment to the UK MOD/Armed Forces and others. Most of such transfers were in any case controlled but the new controls potentially apply to transfers in the UK, where the technology may be used outside the EU, and also to technical assistance provided to a place outside the EU. ECO clarified the circumstances in which a licence is actually required, which is generally much less often than some exporters had believed. Where a licence was required and existing OGELs such as the Defence Contracts one were not applicable, we have issued OIELs. We have also responded to more general industry concerns about transfers to UK Armed Forces by introducing two new open general licences covering transfers to UK forces abroad in embargoed and non-embargoed destinations.

Regarding the academic community, 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.

As regards end-use monitoring, ECO is not in a position to carry out systematic post-export monitoring checks which in any event we do not believe to be a reliable method of control. A full end-use risk assessment is carried out at the pre-export stage.

28. In 2004 1,353 SIEL applications were rated as no licence required out of 9,116 applications received (para 2.2 of the Annual Report). How does this figure compare with previous years? What were the main reasons that 15% of applications made were not required? Does the Export Control Organisation regard this level of fruitless applications as acceptable?

In 2003, 10,012 applications were received of which 1,381 were rated as no licence required. In 2002, 10,744 of which 1,182 were rated as no licence required (NLR).

A certain level of NLR ratings is inevitable and not a sign of wasted effort. For example a ratings decision is not always straightforward and will depend on the application of the controls to a given case. We prefer exporters to contact us if in doubt and this is a sign of good awareness of their obligations. Also, an exporter may apply for a licence believing, or having been advised by ECO, that a licence may be needed on WMD end-use grounds. After assessment of the application, ECO may find that there are in fact no WMD end-use concerns and the goods will be rated as NLR. In addition some exporters exporting to sensitive destinations like to obtain an "NLR letter" from ECO to avoid any delays at the port of exit.

We agree however that we should seek to minimise the cases where exporters apply unnecessarily, creating extra work for them and ECO. This is why we carry out the outreach activities described elsewhere, including development of the goods checker tool in addition to our ratings advisory service in order to give exporters as much guidance as possible.

29. The Government has told the Committee that the use of OGELs allows it to target its resources on SIEL and OIEL applications by taking out of the system processing of the lowest risk exports to the lowest risk destinations. (Cm 6638 p7) How does the Export Control Organisation assess risk?

Risk assessment relating to OGELs is essentially undertaken in the same way as that for individual licences, ie ECO and relevant advisers from the rest of the licensing community will undertake a risk assessment of the proposed licence, considering the countries and activities involved, and taking account of the conditions and limitations specified for the licence. Should any proposed OGEL be assessed as contravening any of the consolidated EU and National Arms Export Licensing Criteria, the OGEL will not be issued.

30. The Government has told the Committee that companies using OGELs are subject to compliance checks. (Cm 6638 p 7) What are these checks? What happens if a company is found to have breached compliance? How many resulted in enforcement action or changes to licences?

Companies using Open General Export Licences are subject to similar checks to those using Open Individual Export Licences. The company is visited approximately every three years or more often as necessary. A general discussion is first held to get a sense of how the company is affected by export controls, what procedures it has in place to ensure compliance with the controls and with the conditions of the licence(s) it is using, and whether it is in fact complying with the record-keeping requirements in the Order and any specific licence conditions.

Compliance Officers then ask the exporter to show supporting documentation to prove they have complied with all the conditions, and to check the licence covers the goods and destinations involved.

If a company is found to have breached the conditions of licence or to have defective procedures, the company is usually sent a warning letter recommending remedial action and a revisit is undertaken, normally within six months. In the case of more serious breaches, the matter is referred to HMRC (see also Q8).

We have not encountered systematic misunderstanding or breaches of an OGEL which would warrant its amendment or withdrawal. OGELs permit the export of a range of low-risk items to the lowest risk destinations, and are open to all who can comply with the conditions. As such a breach by an individual company would not impact on the licence itself.

ECO is currently discussing compliance procedures in detail with industry representatives in order to respond to concerns about the transparency and consistency of ECO procedures.

31. In responding to the Committee's report on the 2003 Annual Report on Strategic Export Controls the Government raised a number of practical points about the collection of end user information (Cm 6638 p 5). How much information does the Export Control Organisation currently collect about end users and the end use to which controlled exports are put? When will the Export Control Organisation's IT systems allow storage of information about end users? How much would it cost the Export Control Organisation to devise and implement end user definitions and to consult end-users on the release of data? Could the prior approval of the end user be given as part of the contract and as part of the application for an export licence? Are thefts of exported items required to be reported to the Export Control Organisation?

The Government collects from the exporter as much end-use/r information as it considers appropriate to undertake effective risk assessment of an export licence application. This will vary depending on the destination, goods, and potential contentiousness of the application, but at a minimum, the Government requires the exporter to provide an end-user undertaking completed by the end-user of the export, containing their name and details and information on the end-use to which they will put the goods. The Government also collects information about end-users from a number of other sources, for example, intelligence sources, and the Internet.

ECO's databases already contain fields for information on the name of the end-user, but cannot record them by categories of end-user. The Government has, however, previously made clear that it does not believe that categorisation of end-users into broad groups and the subsequent disclosure of this information in this form would be would be meaningful or helpful. It would, however, place more demands on exporters and ECO in devising and applying appropriate definition. Furthermore, consulting with end-users on the release of data would divert resources best devoted to the prompt assessment of export licence applications. We have therefore not undertaken any cost estimate regarding the devising and implementation of end-user definitions and on the consultation with end-users on the release of data.

Prior approval of the end-user for release of his identity is also not practical. We do not think UK exporters should be placed at a disadvantage compared with competitors in terms of placing demands on end-users. Further, we do not think it is a good use of resources to sift those who have approved the release of the information, and record this.

As regards thefts of exported items, there is no obligation for the end-user concerned to report this to ECO as his responsibility essentially ends with the export. The risk of diversion (including theft) of exported goods is considered at the time of application, taking into account relevant intelligence the Government may hold, and reliable information from other sources, for example from the Government's overseas posts. Should information come to light that goods have nonetheless been diverted/stolen, the Government will take this into consideration when assessing any future applications, and, in the case of stolen items, will consider what security measures the end-user has put in place to prevent such thefts. Of course, where appropriate, the Government may revoke the relevant licence(s), for example in the case of goods exported under an OIEL. We may also ask the authorities in the country concerned to investigate.

32. What account does the Export Control Organisation take of the extent to which commission has been paid in assessing export licences? Do those applying for licences supply details of the middlemen used? Where it emerges after a licence has been granted that the exporter or his agent has received or paid excessive commission or bribes, what action will the Export Control Organisation take? Have any licences been revoked on the grounds of bribery?

Bribery and corruption is not specific to export control but rather is a general issue and as such is being tackled through generally applicable wider Government policies. ECO therefore requires information relating only to the potential export in order to carry out its consideration of the application against the consolidated EU and National Arms Export Licensing Criteria. This does, however, include information on consignees and all others party to the application. The use of a middle-man is a specific factor in assessing the risk of diversion of exported goods, particularly in the case of WMD related applications.

SECTION D: OTHER MATTERS

33. In its response to the Committees' report on the Annual Report for 2003 the Government noted "that to date only one UK GPL has been issued; in January 2004 to the French Government (amended in September 2004 to include the governments of Finland and Greece as destinations on this licence)" (Cm 6638, p 4). Neither the Annual Report for 2004 nor the constituent quarterly reports appear to record in an easily identifiable form details of this licence or the changes made in September. Is this licence and the change made in September recorded in the annual or quarterly reports for 2004?

The Government's Cm 6638 response to the Committee contained an error in that the GPL in question was in fact issued in January 2003. It was also an oversight that details of the amendments to the GPL, made in September 2004, were not published in the relevant (3rd) Quarterly Report for 2004. The Government will ensure that information on, including amendments to, GPLs will be published in the same way as OIELs in future Reports.

34. What powers has the government to regulate international arms fairs in the UK? In particular, what powers has the government to control overseas companies' advertisements containing items which could be used to carry out torture or inhuman or degrading treatment?

The ECO issued a guidance note on this subject in June 2004. See http://www.dti.gov.uk/export.control/publications/tradefairnote.pdf. In summary, a trade licence is required for any act calculated to promote the supply or delivery, between third countries outside of the UK, of `Restricted Goods' which include torture equipment. This does therefore impinge on the advertising and promotion of such equipment by foreign exhibitors at trade fairs in the UK.

December 2005

92 UK Strategic Export Controls: Annual Report, Cm 6646, page 4. Back