Examination of Witnesses (Questions 40-59)
MR DAVID
HAYES, MR
BRINLEY SALZMANN,
MRS SUSAN
GRIFFITHS AND
MR BARRY
FLETCHER
7 DECEMBER 2006
Q40 Mike Gapes: For good reasons.
Mr Hayes: Yes, for good reasons.
We are not seeking the capability to export weapons of mass destruction
or weapons associated equipment. The relaxation is purely in the
area of handling, detection and identification.
Q41 Mike Gapes: You know as well
as I do that something becomes a weapon when the components of
the weapon are weaponised (when it is put together) but actually
you can have a lot of components which in themselves are not weapons,
they only become a weapon when all the different pieces of the
jigsaw are put together.
Mr Hayes: True.
Q42 Mike Gapes: So we need sometimes
to stop the pieces of the jigsaw being put together by stopping
access to some parts to some people.
Mr Hayes: I would suggest that
is exactly what the licensing system is for. Theoretically allowing
something under the control does not remove the check of the licensing
system.
Mike Gapes: We will wait to see if the
review happens and, if so, what it comes up with.
Q43 John Bercow: You seem to extend
catch-all clauses from their current application to weapons of
mass destruction to items to be used for torture. The question
is the same as I posed to the earlier set of witnesses, namely
that the control that applies currently to WMD merely anticipates
situations in which authorities seek to prevent a transfer of
an unlisted item or to prosecute those responsible for its export
where the clear intention and knowledge can be demonstrated. How
effective, in your judgment, would a catch-all clause drafted
along those lines be in preventing the export of items used for
torture?
Mr Hayes: As someone who regards
DIY as torture in its own right, very effective. Seriously, the
way industry would envisage this operating is very much along
the lines of the existing WMD end-use control. To take the scenario
of the building company used as a front, it is probably very unlikely
that the British exporter would know that that building company
was a front. There is a greater possibility that the intelligence
services might know that that company was a front. We would envisage
a scenario where the Government notifies the exporter—as
is the case within WMD—that it is making a particular export
licensable under the end-use control because it has reason to
believe that the goods are going to be used for the purposes of
torture. At that point the transaction becomes licensable.
Q44 John Bercow: That implies a degree
of supervision that would be expected to take place outwith the
responsibility of the manufacturer. I am not saying that that
would not or does not to a degree already happen, but I just want
to be absolutely clear on the question of responsibility in the
instance which I gave of electric drills and to which reference
is made in your memorandum. What degree of diligence should be
imposed on the manufacturer? Could he legitimately proceed on
the basis of what he is told by the importer? Would he alternatively
be expected himself to make detailed enquiries to check? What
I am concerned about, to put it very simply, is that it is excellent
if the intelligence services intervene and say, "Thou shalt
not because we know it would be used for horrific purposes",
but what if that did not happen?
Mr Hayes: I would see it as operating
at the level of where the exporter knows or has been informed
by a competent authority. There will be a very small percentage
of cases where you could be argued to know. There have been perfectly
open procurement attempts for what may be described as torture
equipment from the security services of various countries. The
exporter there would clearly know that there was a risk that that
equipment was going to be used for torture. In the vast majority
of cases you would be talking about the other situation where
it is a front company, the exporter has no way of knowing and
the only thing that is likely to prevent it is the intervention
of the intelligence services.
Q45 Mike Gapes: Can I take you back
to the question I asked in the earlier session about extra-territoriality?
There seems to be a difference of approach between yourselves
and the Working Group. Your memorandum is quite scathing and you
even say that some observers say that extra-territoriality is
just about feeling good rather than enforcement. Can I put it
to you that this is really very depressing if you feel you cannot
actually enforce these measures? Is that not a rather extreme
view? What is your response to what was said earlier in the previous
session about trying to create some kind of intermediate category
of equipment which is particularly sensitive and getting a control
regime there?
Mr Hayes: I think there are two
separate questions there. Firstly is the question of extra-territoriality
in the broader sense, in principle, and we are of the view that
whether to go down the route of extra-territoriality or not is
a proper agenda item for the scope of the review. We do believe
there are very real enforcement difficulties with extra-territorial
legislation; there are problems with clashes of legislation as
we see with the clashes between our own legislation and the US
extra-territorial provisions. There is the implication that if
the UK imposes its laws extra-territorially then presumably we
are going to assure all other countries, including the US that
we will accept their own extra-territorial jurisdiction. Then
there is the separate question of if the decision is that extra-territoriality
is a valid route down which we should proceed, do we agree with
the creation of another class of items under the extra-territorial
regime, to which the short answer is yes.
Q46 Mike Gapes: In looking at those
items do you think one way forward might be to extend the list
of restricted goods because at the moment there are ambiguities.
You talk in your evidence about long range missiles and unmanned
aerial vehicles and you say it is baffling that they are included,
but would it not be easier to then just extend it to all missiles
and Man-Portable Air Defence Systems so that you cover everything?
Or would that be a step too far?
Mr Hayes: It depends on what your
concerns are. Typically if you look at a UAV system or a long
range missile system these are not the sorts of things that are
being irresponsibly brokered around the world and used in third
world countries to cause significant numbers of deaths. They are
already, by virtue of the regimes to which they are subject—including
the MTCR and, in many cases, because of security restrictions—to
a very—
Q47 Mike Gapes: Sorry to interrupt,
are you saying that there are no examples anywhere in the world
where these weapons have not been subject to abuse?
Mr Hayes: I did not say that;
I said "typically".
Q48 Mike Gapes: "Typically"
means perhaps generally but you might have a number of examples
where that is not the case.
Mr Hayes: I am not aware of any.
Q49 Mr Keetch: A MANPAD missile was
used to lock onto an Israeli jet going out of Nairobi.
Mr Hayes: Are talking about MANPADS
or long range missiles?
Q50 Mike Gapes: We are actually talking
about long range ones and UAVs. You said that UAVs might be subject
to some criticism because certainly they have been used in a number
of conflicts.
Mr Hayes: They have, yes.
Mr Salzmann: As far as we are
aware they are not normally the subject of brokering. It is normally
government to government deals rather than a broker bringing it
together.
Mrs Griffiths: There are very,
very tight restrictions on long range missiles. I will give you
an example of our company who make Storm Shadow/SCALP EG, a joint
venture programme in which the UK Government and the French Government
are actively involved. The controls on that are very extreme.
We have to have approval from either government before we can
sell so where we see the restricted goods category on trade controls
coming in for promotion basically we are now in a situation where
we are trying to work as a pan-European company and if we had
somebody who had the expertise who was a UK employee but we had
a potential contract to have our French counterparts sell that
system we would need a licence before we could allow that UK person
to actually participate in that activity. We are tightly controlled
because before the French Government were allowed to sell on that
system, the UK Government would always have to give their approval.
We have found that we have been caught up in some of this legislation
which makes UK people—MBDA UK people—who might have
the expertise with our other partners in France and Italy to actually
be at a disadvantage.
Q51 Mike Gapes: Do you think there
is a possible way forward on the question of controlling the movement
of goods outside the UK but bringing in some kind of register
of all UK nationals who might be involved in brokering?
Mr Salzmann: It would be very
difficult to identify them when you are dealing with the actual
brokers, but with restricted goods and embargo destinations you
are also capturing the ancillary services (insurance services,
re-insurance services, financial services, transportation services
and advertising & promotional services). Trying to catch all
the British expatriates operating anywhere in the world who are
in the advertising sector, for instance, and making them aware
of the fact that they have to beware of being involved in helping
in the advertising of long range missiles or UAVs, for instance,
would be an interesting challenge.
Q52 Mike Gapes: Do you think it is
not possible?
Mr Salzmann: In awareness terms
I cannot think how it can be done, certainly with regard to the
peripheral activities. Also, of course, trying to define what
actually constitutes an act of trafficking and brokering is so
difficult that you will catch not just the traffickers and brokers
but the UK expatriates who work for perfectly legitimate defence
companies overseas, such as UK people working in MBDA in France
or Italy.
Q53 Chairman: Do you think there
is nothing we can do about the situation where a UK citizen brokers
small arms outside of the UK, where no partner transaction takes
place inside the UK, (some would describe small arms then as weapons
of mass destruction in terms of the loss of life)? Are you saying
you cannot imagine a situation where extra-territorial controls
could operate over UK arms brokers in circumstances where they
are operating entirely outside of the UK?
Mr Salzmann: Certainly in the
meetings we have had with the NGOs when we have been discussing
the creation of this third category, we have been looking at what
might be possible and we can see the political dynamic which means
that something should be done to try to do it but, for instance,
the issue of registration would not actually make things any easier
because at the moment you would have to try to prove that a person
has been involved in facilitating a deal. In future, if you had
a registration system, you would have to prove that they were
not registered and they were trying to facilitate the deal. You
still have to prove the involvement in the deal.
Q54 Linda Gilroy: Before my time
on the Committee when the secondary legislation was being drafted
business expressed grave concerns about the impact of the new
export control regime on business and warned that they could be
disastrous. There were phrases used like, "phrased far too
vaguely and loosely"; the industry was unhappy about "relying
on a pragmatic and commonsense approach by Government"; the
burden of record keeping was a concern, particularly for intangible
transfers and brokering; it was felt that it would undermine trade
fairs held in the UK and might catch all those who are unfamiliar
with it. Why were businesses predictions so wide of the mark?
You are saying in your memorandum that very many of the industry's
previously stated direst fears and predictions had not in fact
arisen.
Mr Hayes: They were not actually
wide of the mark. In fact industry's predictions were accurate
and it shows the value of the consultation which took place at
the time. Because of the very pragmatic approaches by both DTI
and industry in relation to the use of open licensing and particularly
the use of record keeping those burdens have been reduced to a
manageable level. There was a very heavy training burden which
was carried by industry and we had a very narrow window which
was barely manageable in which to implement it. There has been
a significant financial cost. The actual burden in terms of operating
the system has been significantly reduced by the approaches of
functional record keeping and the use of open licensing.
Mr Salzmann: Praise where praise
is due, I think the very constructive dialogue which has taken
place between industry and the Export Control Organisation to
address the issues and to make sure that the regulations were
enforceable and practical has been enormously beneficial for both
parties.
Mr Hayes: There are still areas
of uncertainty in relation to the trade controls and in some areas
in relation to CBRN but those issues too are being worked through
in working groups between industry and the Export Control Organisation.
Q55 Linda Gilroy: Nevertheless, the
fears were expressed in fairly strong terms and surely some of
what you have just described should have been predictable; there
would have been some pragmatism.
Mr Hayes: It was not predictable
at the time. Certainly the functional record keeping approach
was not predictable until the time that the then Secretary of
State, Patricia Hewitt, came into the House and revealed it.
Q56 Linda Gilroy: In retrospect would
you have used the same language again?
Mr Hayes: At that time, in those
circumstances, yes.
Mr Fletcher: I think they were
justified in doing so. They were looking at the possible worse
scenario and I think they then warned government they had to talk
very seriously with industry to find solutions, as they always
have done in the past. The same thing happened over the introduction
for the control of military technology when there were the same
fears which were quite founded. It could have been disastrous
if every single person exporting a piece of military technology
to, let us say, the States was going to require an export licence
and the DTI came up with the open general export licence for military
technology. The same thing happened here, they had the starting
point of assuming the worst.
Q57 Linda Gilroy: Perhaps looking
forward you might not assume the worst in future in discussions
on review and extension so we would not expect to see that kind
of language again.
Mr Salzmann: I think we all hope
not.
Q58 Mr Keetch: What if the Government
were to say in its 2007 review that it is going to tighten controls
on licensed production overseas? What would you say to that?
Mr Hayes: If that becomes the
law then that becomes the law. If you are asking me what the view
of that is at the moment, then the view at the moment is that
licensed production overseas is already controlled by virtue of
the controls over the initial export of the technology.
Q59 Mr Keetch: When you have examples
like the Land Rover which we all know about, can you not see when
instances like that happen that there is a very genuine call for
people to say, "Hang on, it isn't working". If you can
have a military vehicle that I think was 70% from Britain and
then used to do what it was doing, surely that is a glaring example
where you do need to tighten licensed production overseas.
Mr Hayes: I think I take exception
with the description of it being a military vehicle because clearly
it is not, otherwise it would have been caught under the military
list controls.
Chairman: Let us be quite clear here.
The 70% to which Paul Keetch is referring is the 70% that was
not military, it was the flat pack exported from the UK that goes
to make a military vehicle that ends up being used in a way that
a direct export licence would certainly not have been granted.
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