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22 Feb 2007 : Column 184WH—continued
Our overseas posts also have standing instructions to report any misuse of UK-supplied equipment. If such information comes to light—whether through the media, NGOs or intelligence reports—it will be taken into account when assessing future licence applications. This issue may also be raised with the relevant authorities in the country in question. I cannot respond to some of the specific points that were raised, but I can say that we recently refused licences for the export of head-up displays to Israel because of concerns that they might be used in the occupied territories.
My hon. Friend the Member for Kingswood also asked about brochures and publicity in a recent arms fair in my constituency. Where prohibited items have been advertised at trade fairs, the Government have taken action with the organisers to remove all such material. Clearly, we have to be vigilant to ensure that that remains the case.
The right hon. Member for Tonbridge and Malling (Sir John Stanley) asked four specific questions, and generously said that he did not expect me to respond today and that I could respond in writing. I accept his generous offer, but I will say that we thought that we had given the Committee details of refused licences. I shall certainly respond to the Committee in writing with more information. His second, third and fourth questions are primarily matters for the Ministry of Defence, but I shall ensure that the Department is aware of his questions and that it responds in due course.
The right hon. Gentleman and others asked about extraterritoriality for trafficking and brokering. The British Government controls UK involvement in the movement of any military goods from one overseas country to another if any part of the trading activity takes place in the UK. Fully extraterritorial trade controls would apply to any UK person anywhere in the world and to any act calculated to promote the supply or delivery from one third country to another of restricted goods only—long-range missiles with a range of 300 km or more and their components and torture goods—and to military equipment to embargoed destinations. Whether those controls should be extended to other types of military equipment, particularly small arms and light weapons, or adapted in other ways are key questions for the forthcoming review. The Government will seriously consider all the evidence that is put before them.
The right hon. Member for Gordon (Malcolm Bruce) asked about Department of Trade and Industry follow-ups on some reports. He knows that HM Revenue and Customs is the primary enforcement body for export controls. The DTI refers to HMRC any evidence presented to it that suggests the breach of a control. Some of the transactions that he spoke of may have taken place before the introduction of the tighter 2004 legislation. However, I have taken a note of the matters that he raised. If he wants to supply any further information, I will be happy to pass it through the system and have the matter considered further.
The right hon. Gentleman also asked about export licensing and sustainable development. As the Chairman of the Select Committee on International Development, he will know that DFID is the lead
Department for advice on sustainable development considerations, as defined in criterion 8 of the consolidated criteria. The criteria require the Government to consider the compatibility of exports with the economic and technical capacity of the end-user country before issuing or refusing a licence. That ensures that sustainable development must be considered in relation to export licence applications.
The ECO will refer licence applications to DFID for assessment against criterion 8, if the destination is on the list of countries for which sustainable development is most likely to be an issue and—with standard individual export licences and standard individual trade control licences—the value of the licence is above a certain threshold that is determined on a country-by-country basis. The destination list is made up of countries that are eligible for concessional loans from the World Bank’s International Development Association and is taken to represent the world’s poorest. The list is kept under constant review to take account of changing circumstances.
The proportion of licences sent to DFID for advice during any particular period depends on the mix of country destinations for which applications were made. During 2005, 1.6 per cent. of SIEL applications and 35 per cent. of open individual export licence applications were referred to DFID for advice.
Malcolm Bruce: I am grateful to the Minister for what he has helpfully just said. Does he accept that there is a certain irony in the fact that it appears that British arms exports to Africa exceed our aid and development budget? Does he think that that suggests that we have the right balance between sustainable development and the arms trade?
Jim Fitzpatrick: The right hon. Gentleman makes a powerful point. I am sure that that situation would be of interest, and probably of concern, to the vast majority of colleagues in all parties. I have tried to articulate the fact that we have protections in place to try to ensure that exports to countries that are assessed as being in most need are suitably examined before export licences are afforded.
Roger Berry: This is a request for information to be given at some future time. The methodology for applying criterion 8 would be of great interest to the Committee. I have raised in the House the fact that France has—some would say surprisingly—a record of rejecting rather more licence applications on the grounds of development criteria than the UK. I believe that the relevant figures are about 30, as opposed to one or two. I have asked the Government for their assessment of the reason for the disparity, given that this information is shared among member states of the EU. Some future assessment of that would be helpful.
Jim Fitzpatrick: I am happy to take on board my hon. Friend’s request for further information. I note the points that he makes about comparisons with France, and I shall respond to him in due course.
Hon. Members have also raised the important issue of how we enforce export controls. I should like to give further information on that. Effective enforcement starts with the ECO’s compliance team, which has a
rolling programme to visit all companies that hold open licences to check that they are complying with the terms and conditions of those licences. We are currently looking at a number of compliance issues and will report back to the Committee in due course. We will increase the resources put into that function later this year—that matter was raised by the hon. Member for Richmond Park (Susan Kramer) in particular—by redistributing some of the resources that will be saved through the introduction of the SPIRE electronic licensing system.
HMRC has been working over the past 12 months to raise the profile of strategic export controls and to integrate them more effectively into the wider work of the Department. Although HMRC officers are multifunctional—covering a wide range of fiscal controls, as well as many regimes that prohibit or restrict the import and export of goods—strategic export controls are given a high priority in the Department’s overall enforcement work. To that end, the Customs confidential page on the HMRC website has been expanded and now includes information on military equipment, weapons of mass destruction, sanctions and arms embargoes, as well as on firearms and explosives.
HMRC has also established an industry working group with the Export Group for Aerospace and Defence specifically to focus on export control enforcement issues. Following meetings in July 2006 and January 2007, HMRC has agreed to consider a number of points about unlicensed exports, including those specifically relating to the possible misuse of the DTI’s open general export licences. In parallel, the level of Customs checks on dual-use consignments has been increased.
Both to promote its own best practice abroad and to learn from the experience of others, HMRC has had recent contacts with German export control officers from the German customs investigation office, which have led to the initial assessment that its enforcement framework is broadly comparable to the UK’s.
The Revenue and Customs Prosecutions Office has also recently met with Eurojust colleagues and other EU prosecutors. Importantly, HMRC and the RCPO will work closely with the DTI to ensure that they make a full contribution to the 2007 review of export controls. Separately, the RCPO will engage with the Sentencing Guidelines Council to see how best it can influence the discussions on appropriate sentencing guidelines.
The hon. Member for Richmond Park also asked why the EU common position on the control of the export of military technology and equipment has not yet been adopted. The common position defining common rules governing the control of the export of military technology and equipment will update and replace the EU code of conduct and will be legally binding. However, it requires consensus among member states for its adoption and, unfortunately, as she has outlined, member states were still unable to reach consensus at the General Affairs and External Relations Council meeting on 12 December. The Government are keen to see its adoption as soon as possible and will continue to work with partners to try to overcome the objections. Sadly, I cannot guarantee that agreement will come quickly, but I took note when she said that her information is that the Portuguese presidency is interested in raising it—
Susan Kramer: It is not interested.
Jim Fitzpatrick: I take on board that clarification.
The hon. Member for Bournemouth, East raised the prospect of a debate of the whole House on the review’s conclusions. I am happy to communicate that suggestion to my colleagues, including the Leader of the House. Obviously, it would be a matter for the usual channels to consider whether or not such a debate would be appropriate. He also raised the question of arms treaties. He suggested that I ask the Foreign and Commonwealth Office to respond in writing, and I shall do so. I shall also come back to him on the question of searches at the point of export. As I mentioned, customs checks at ports are a matter for HMRC, as the appropriate body. I understand that the Committee will be seeing representatives of HMRC on 1 March, so perhaps it will take up the issue then.
In conclusion, I hope that the Committee will see from the Government’s written responses to its recommendations that all the points that it makes are being carefully considered. The Committee’s scrutiny makes an important contribution to the Government’s ongoing plans for improvements to export controls. That is particularly the case with the forthcoming review of export controls. The Government are grateful to the Committee for its contribution and look forward during the course of the review to a vigorous debate with the Committee, Members and other stakeholders.
Adjourned accordingly at twenty-seven minutes past Five o’clock.
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