| 1. | We conclude that the Export Control Act 2002 has provided a sound legislative basis for controlling and regulating the UK's strategic exports but with gaps and shortcomings. The challenge of increased globalisation of the defence industry, the fast pace of technological development, changing proliferation patterns and procurement methods for weapons of mass destruction (WMD) programmes and the threat from terrorists suggest to us that the 2002 Act may not surpass the record of its predecessor, the Import, Export and Customs Powers (Defence) Act 1939, to remain on the statute book for over 60 years without extensive amendment. We expect the current legislation will need to be reviewed, and possibly amended, regularly. (Paragraph 6)
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| 2. | We recommend that the Government agree to reply fully—other than in exceptional circumstances—within six weeks to our letters on decisions to grant or withhold export licences. (Paragraph 9)
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| 3. | We recommend that the Government carry out a government-wide assessment of the effectiveness of the export control legislation since 2004 and that the assessment encompass all the agencies with responsibility for the monitoring and enforcement of export controls. (Paragraph 29)
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| 4. | We recommend that the Government in responding to this report produce detailed evidence to demonstrate the effectiveness of export controls. (Paragraph 31)
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| 5. | We found no evidence to reach a conclusion that the balance between the requirements for the affirmative and the negative resolution procedures in the Export Control Act 2002 need to be re-examined or altered. (Paragraph 34)
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| 6. | We recommend that any secondary legislation to implement conclusions arising from the Government's review of export controls be shown in draft to our Committees. (Paragraph 35)
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| 7. | We recommend that the Government give an undertaking to consult interested parties—the defence manufacturers, the non-governmental organisations and our Committees—before deciding to make significant changes to the guidance on strategic export controls. (Paragraph 39)
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| 8. | On the basis of the evidence supplied to us we conclude that the secondary legislation is intelligible to those to whom it applies. We recommend, however, that the Government clarify in guidance the distinction between applied and basic research scientific projects and that it defines the "public domain" in greater detail. (Paragraph 43)
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| 9. | The absence of successful challenges in the courts is not conclusive proof that the legislation is working satisfactorily but we conclude that it provides an indication that the legislation is accepted by exporters and interested parties. Once the case that is currently before the courts is concluded, we recommend that the Government supply us with a note describing the case and the lessons, if any, that it has for the operation of the legislation. (Paragraph 44)
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| 10. | We recommend that the Government continue to provide notice and adequate explanation of any changes proposed to the secondary legislation. (Paragraph 45)
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| 11. | We recommend that at the end of the review process the Government set out in its conclusions to the Review the reasons for the small number of applications for trade control licences from British citizens overseas. (Paragraph 59)
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| 12. | Where a British citizen working overseas for a reputable and responsible organisation applies for a trade control licence we recommend that there be a presumption that a licence will be granted. We conclude that to do otherwise may penalise the responsible British citizen and may undermine the UK's extra-territorial controls on brokering and trafficking. (Paragraph 60)
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| 13. | We recommend that the Government enquire whether the extra-territorial provisions in the legislation have placed British citizens overseas in unacceptable positions. (Paragraph 74)
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| 14. | We conclude that the Government should bring forward proposals to extend the extra-territorial provisions of the export control legislation to encompass trade in all items on the Military List. In our view the experience of the past three years has shown that the current arrangements have failed and that the extension of the extra-territorial provisions is overdue. We therefore recommend that the Government require all residents in the UK and British citizens overseas to obtain trade control licences, or be covered by a general licence, before engaging in any trade in the goods on the Military List. In order not to undermine the employment prospects of British citizens working for reputable organisations, we further recommend that the Government issue general licences covering British citizens working overseas and engaged in categories of trade between specified countries or in certain activities such as advertising. (Paragraph 76)
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| 15. | We conclude that the EU Common Position on the control of arms brokering sets the best practice and we recommend that the Government follow best practice to establish a register of arms brokers. We conclude that a register will help to ensure that brokers meet defined standards, requirements and checks as well as deterring those—for example, with a relevant criminal conviction—for applying for registration. We also recommend that any brokering or trafficking in arms by a person in the UK or a British citizen abroad who is not registered be made a criminal offence. (Paragraph 82)
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| 16. | We recommend that the Government obtain and publish in its reply to our Report definitive legal advice setting out whether primary legislation is required to publish a register of brokers and, if the conclusion is reached that primary legislation is required, that the Government bring forward an amendment to the Export Control Act 2002 to permit publication. (Paragraph 83)
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| 17. | We conclude that the imposition of a duty on exporters to enquire into the intended use of their goods and to withhold exports where they have a suspicion that goods could be used for WMD purposes is not yet justified. There are, however, a number of steps that the Government could take to improve the operation of the current system. First, we conclude and recommend that the Government regularly remind exporters of the provisions of WMD end-use and encourage exporters voluntarily to report any suspicions that they may have about WMD end-use. Second, for the system to work the Government has to gather intelligence from its own sources and exchange information with its EU partners and other services, as well as carrying out market surveillance in the same way as the Zollkriminalamt, the German Customs Criminological Office. In addition, it must use its powers under the Export of Goods, Transfer of Technology and Provision of Technical Assistance (Control) Order 2003 (S.I. No. 2764/2003) to inform exporters where a WMD end-use is suspected and to bring the prospective exports within export control. We recommend that the Government in responding to our Report confirms that this is the approach it has adopted. Third, we are concerned that HMRC cannot seize goods destined for a WMD end-use without evidence that the exporter was aware of the intended use. We recommend that in its reply the Government explain whether this requirement has been an impediment preventing enforcement action against proliferators of WMD or whether other legislation provides HMRC with adequate alternative powers to seize goods. If the absence of a provision is an impediment to effective enforcement, we recommend that the regulations be changed to allow HMRC to seize goods where there is good intelligence that they are likely to be used for a WMD end-use, irrespective of the knowledge and intentions of the exporter. (Paragraph 89)
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| 18. | We recommend that the Government in responding to this Report clarify whether each e-mail exchange within a group containing participants from within and outside the EU working on the collaborative development of IT source code requires a licence under the legislation and, if it does, whether an open or general licence or exemption could be provided. (Paragraph 91)
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| 19. | We recommend that the Government request COARM to examine whether Member States are following a consistent interpretation of Criterion 8. (Paragraph 106)
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| 20. | We conclude that there is no strong case for amending the primary legislation to require greater weight to be given to sustainable development. (Paragraph 107)
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| 21. | We accept that the list of countries eligible for IDA loans provides a foundation on which to build the first stage of the filtering arrangements for consideration of applications for export licences against Criterion 8. The Government itself has recognised that the IDA list needs to be supplemented with the addition of 14 countries. We conclude that the Government's approach gives the correct degree of flexibility to the system. We recommend that the Government also consider adding countries such as Morocco to the list. (Paragraph 114)
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| 22. | From the information we obtained during the inquiry we conclude that the system for assessing applications against Criterion 8 appears sound and that it is underpinned by a robust methodology. We recommend that the Government publish the methodology in the Annual Report on Strategic Export Controls along with a list of the countries on the IDA list, as supplemented. (Paragraph 119)
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| 23. | We recommend that DFID consider including an assessment in the Criterion 8 methodology applied by Government to test whether the contract behind an application for an export licence is free from bribery and corruption. (Paragraph 122)
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| 24. | We recommend that, in any case where intent to evade export controls is suspected, the case should be investigated and where there is evidence of intent, irrespective of the sensitivity of the goods exported or of their destination, prosecution should always be initiated under section 68(2) of the Customs and Excise Management Act 1979. (Paragraph 126)
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| 25. | We conclude that, because of the need to secure evidence or witnesses from abroad or to reveal evidence provided by the intelligence services in court, prosecutions under section 68(2) of the Customs and Excise Management Act 1979 against those posing most threat to the UK's strategic export controls are problematic. (Paragraph 131)
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| 26. | To ensure that the process of levying compounding fines is as transparent as possible we recommend that HMRC continue to provide full disclosure of the details of all cases, but without names. In addition, we recommend that, when a suitable opportunity arises, the Government bring forward legislation to require HMRC to publish the names of those paying compounding penalties. (Paragraph 138)
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| 27. | From the evidence we received about the enforcement of export controls in other Member States of the EU we concluded the following. First, the level and pattern of prosecutions in the UK is not significantly out of line with that in other EU States, but further examination is required for a comprehensive analysis of procedures, approaches and court rulings across the EU. Second, given the similarity of work and problems faced we are disappointed that the 2007 Consultation Document fails to draw in evidence from other EU Member States. Third, we recommend that the Revenue and Customs departments continue to develop arrangements to share information and experiences with enforcement authorities across the EU. (Paragraph 143)
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| 28. | We conclude that in those cases where evidence is required from overseas HMRC is correct to concentrate on those cases involving sensitive goods and destinations where there is a likelihood of cooperation to obtain evidence. (Paragraph 144)
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| 29. | We recommend that the Government increase resources for investigations and prosecutions under section 68(2) of the 1979 Act, particularly, to ensure the coordination and exchange of information with EU and other governments. (Paragraph 144)
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| 30. | We recommend that as a matter of course HMRC consider all breaches of export control for prosecution under section 68(2) of the Customs and Excise Management Act 1979 and that where the evidential and other tests carried out by the Revenue and Customs Prosecutions Office are met prosecution should be initiated. (Paragraph 145)
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| 31. | We conclude that no change should be made in the operation of the reviews and tests carried out by the Revenue and Customs Prosecutions Office before a prosecution can be launched. (Paragraph 145)
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| 32. | We conclude that it would be detrimental to industry if the Government were to increase the administrative burdens on exporters without convincing evidence that the existing measures were being fully enforced against those who with intent flout export controls. (Paragraph 147)
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| 33. | We recommend that in any case of breach of export control where prosecution under section 68(2) of the Customs and Excise Management Act 1979 is not possible, the Revenue and Customs Prosecutions Office as a matter of course consider, and take steps to maximise successful prosecution under section 68(1) of the 1979 Act and that the outcome of successful prosecutions be publicised by HM Revenue and Customs. (Paragraph 149)
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| 34. | We conclude that a warning letter should not be an alternative to a prosecution that meets the Revenue and Customs Prosecutions Office's tests for a viable prosecution and we recommend that, in those cases where a letter is issued, HMRC follow it up to ensure that all deficiencies have been rectified. We also recommend that HMRC examine the opportunities for greater publicity about warning letters subject to ensuring that the reputation and legitimate commercial interests of exporting companies are not unjustifiably damaged, and report its conclusions in the Government's response to this Report. (Paragraph 151)
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| 35. | We received no evidence that the power to disrupt had been abused and we accept that it is a legitimate and crucial weapon in HM Revenue and Customs' armoury. The exercise of the power by HMRC is not, however, usually subjected to review by the courts and it therefore needs careful supervision by ministers and Parliament. We recommend that HMRC as part of the review of export controls bring forward proposals to provide more information about the use of the power to disrupt exports of concern and to provide suitable safeguards, and provide information about how this is handled in partner countries. (Paragraph 155)
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| 36. | We recommend that the Government in replying to this Report provide an explanation for the reduction in the number of seizures since 2000-01. (Paragraph 157)
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| 37. | We reiterate our recommendation made last year that the Sentencing Guidelines Council conduct a review of the guidelines on sentences for breaches of export control and we press the Council as a matter of urgency to include the review in its programme for 2007-08. (Paragraph 165)
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| 38. | We recommend that the Government examine the effect of the Export Control Act 2002 on academic institutions and on postgraduate research and consider whether the legislation is working as intended. We also recommend that the Government formulate and adopt a publicity strategy to inform academic institutions, research councils and similar bodies of their responsibilities under the Export Control Act 2002. (Paragraph 175)
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| 39. | We recommend that HMRC produce and publish a report on the outcome of the exercise it is conducting on the operation of Open General Export Licences and that HMRC conduct a similar exercise on the operation of the Open General Transhipment Licences in time for the results to be taken into account by the Government before it reaches conclusions on its Review of Exports Controls. In our view it is of crucial importance that not only sensitive goods such as landmines, torture and paramilitary equipment and goods destined for use in a WMD programme or goods destined for embargoed destinations are denied transit and transhipment through the UK but also goods destined for terrorists. (Paragraph 183)
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| 40. | We recommend that those who fail to comply with open licences should be denied the privilege of open general licences for at least a year. We also conclude that for the public to have confidence in the system of open licences there needs to be a thorough system of regular compliance checking of those who use open general licences. We welcome the ECO's and HMRC's consideration of additional enforcement options and conclude that, when the Government has reached its conclusions, we should look at this matter again in our next report. At this stage we do not wish to pre-empt the ECO's and HMRC's consideration of additional enforcement options but we recommend that the Government also review whether resources dedicated to compliance visits and to outreach to industry are sufficient and ensure that the ECO and HMRC produce a joint strategy which, for example, could include joint compliance visits. (Paragraph 190)
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| 41. | We recommend that as part of its review of export controls the Government bring forward proposals for penalties such as fixed fines to be imposed in cases where the authorities discover dual-use goods exported in breach of export controls but which would normally be given an export licence had the exporter applied for one. (Paragraph 193)
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| 42. | We conclude that the appeals procedures are working satisfactorily. (Paragraph 195)
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| 43. | We conclude that the secondary legislation has not impeded the provision of support to British armed forces. (Paragraph 197)
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| 44. | We conclude that the Export Control Act 2002 does not impose an excessive burden on those organising arms fairs and exhibitions in the UK and that the current legislation provides a reasonable framework for regulating arms fairs provided that the legislation is actively enforced by the authorities and the organisers of arms fairs and similar exhibitions. We have, however, serious concerns about enforcement. We recommend that the Government in responding to this report set out the criteria for HMRC attending arms fairs and similar exhibitions. It would also assist us to have an account (a) from HMRC of the breach of export controls which arose at IFSEC 2007 and what information about the requirements of the Act had been conveyed to the defendant in the recent court case; and (b) from the Crown Prosecution Service about the charges brought and why no charges concerning breach of export controls were initiated. We further recommend that where HMRC attends a fair or exhibition its officers patrol during the opening hours, inspect the goods being displayed and put questions to those on stalls to ensure that export controls are not being breached. In addition, we recommend, where HMRC does not assign officers to attend a fair or exhibition at which goods subject to export control are displayed, that HMRC send officers to carry out spot checks and provide expeditious access to officers to deal with matters raised by the organisers, exhibitors or those attending. (Paragraph 208)
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| 45. | While we accept that little can now be done in respect of the proposed export of British-made maritime-patrol aircraft from India to Burma, we recommend that it should become a standard requirement of licensing that export contracts for goods on the Military List contain a clause preventing re-export to a destination subject to UN or EU embargo. In addition, the contracts should include a subrogation clause allowing the UK Government to stand in the place of the exporter to enforce the contract in British or foreign courts. We also recommend that the Government require as a condition of licensing that all export contracts make provision to allow for end-use inspections. (Paragraph 217)
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| 46. | We recommend that the Government bring forward proposals for an end-use control on equipment used for torture or to inflict inhuman or degrading treatment. We conclude that given the range of items that could potentially be caught it would be unreasonable to impose a requirement of due diligence on all exporters for all goods. There are, however, two less stringent obligations we recommend the Government impose on exporters. First, there be a requirement to withhold an export where an exporter has reason to believe that the goods are to be used for torture or degrading treatment. Second, there be an obligation on exporters to inform the Government if they know or have reason to believe that an export is to be used for torture or degrading treatment. Irrespective of the duty on the exporter, we recommend that there should be an obligation on the Government to investigate reports that exports from the UK are being used for torture or to inflict cruel, inhumane or degrading treatment. We recommend that, where the Government establishes a reasonable suspicion of abuse, it be under an obligation to inform exporters who would then be in breach of export control if they exported the goods to the destinations or end users notified by the Government. (Paragraph 225)
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| 47. | On the basis of the evidence we have received this year and the work done by our predecessor Committees we conclude that the current controls over licensed production overseas are inadequate and need to be extended. We conclude that there are advantages in pursuing the third option put forward by the Government in the 2007 Consultation Document: the Government make export licences for supplies to licensed production facilities or subsidiaries subject to conditions relating to the relevant commercial contracts. (Paragraph 238)
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| 48. | In addition, we recommend that where licences encompass overseas production the Government make it a condition of the license that the contract underpinning the agreement prevent exports from the overseas facilities in breach of EU and UN embargoes and allow inspection. In addition, the contract should include a subrogation clause allowing the UK Government to stand in the place of the exporter to enforce the contract in British or foreign courts. (Paragraph 238)
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| 49. | We recommend that the Government ensure that its database identifies licences which encompass overseas production. (Paragraph 239)
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| 50. | We recommend that the Government extend export controls to encompass exports of goods and destinations subject to EU or UN embargo by overseas subsidiary companies, in which a majority shareholding is held by a UK parent or where UK beneficial ownership can be established. In such cases the parent company would be required to obtain a UK export licence or, in the absence of a licence, would be in breach of the Export Control Act 2002. (Paragraph 242)
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| 51. | On the basis of the evidence we received we conclude that the feasibility and practicability of a Military End-Use Control "catch-all" provision has not yet been established. We recommend that the Government examine other countries' experience with Military End-Use Control "catch-all" provisions before reaching its conclusions. (Paragraph 251)
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| 52. | We recommend that the Government in responding to this Report explain how the existing WMD end-use controls work and why no prosecutions have been initiated. (Paragraph 258)
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| 53. | We recommend that the blanket exemption from controls of Government and its agencies as exporters of licensable goods and technology be ended and that details of the Government's and its agencies' exports be reported on the same basis as those of industry. There should, however, be one exception. In order to ensure that exports by the Government and its agencies to UK forces overseas are made expeditiously they should continue to be covered by Crown exemption. (Paragraph 268)
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| 54. | We reiterate the conclusion we set out in our Report last year that a prior scrutiny model for certain sensitive (or precedent-setting) arms export decisions should be developed on a trial basis for transfers to countries under, or recently under, embargo. We recommend that the Government examine this proposal in detail as part of its review of export controls. (Paragraph 269)
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| 55. | We recommend that the Government consider whether the development of e-mail to allow it to be used as a means to transfer entire software packages or detailed technical manuals between groups comes within export control and, if it does not, whether it should be brought within control. Given the pace of technological change and globalisation of industry we recommend that the Government carry out a further review of the legislation in five years. In the meantime we recommend that the Government set up an ongoing internal review which responds to technological and global developments and examines best practice and innovative ideas that enhance the effectiveness of export controls in other countries. (Paragraph 272)
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| 56. | We note that the Government's predictions about the effect of the legislation overestimated the number of licences likely to be sought by exporters. We conclude this was in part a product of industry's apprehensive approach to the legislation and the greater than anticipated use of open licences. (Paragraph 274)
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| 57. | We conclude that the implementation of the Export Control Act 2002 has not undermined the competitiveness of the UK's defence industries. (Paragraph 277)
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| 58. | Taking the defence manufacturing sector as a whole we reach two conclusions about the implementation of the export control legislation. First, the cooperation and involvement of industry in drawing up guidance assisted the smooth implementation of the export control secondary legislation. Second, while we acknowledge the constructive approach taken by EGAD, we had concerns about the tone and inaccuracy of some of industry's representations about the implementation of the legislation. (Paragraph 282)
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| 59. | Whilst we accept that it is reasonable to assess the benefit in terms of counter-proliferation of any extension of export controls, we conclude that a detailed objective test may not be practicable and its absence should not preclude changes to the system of export controls consistent with a precautionary approach. (Paragraph 283)
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| 60. | We conclude that transitional arrangements lasting six months were adequate for the full introduction of the new export controls. (Paragraph 285)
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| 61. | We recommend that the Government work with industry to produce an Open General Export Licence as soon as possible to address the concerns of the chemical, biological, radiological and nuclear sector about the need to obtain export licences before submitting technical information to UK Armed Forces and blue light services prior to contract signature. (Paragraph 290)
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| 62. | We recommend that the ECO review and modify its website to make it easier to use. (Paragraph 295)
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| 63. | We conclude that the Export Control Organisation has a key role to play in preventing inadvertent transfer of goods and technologies which can be used in weapons of mass destruction. We recommend that the ECO publish and regularly update Guidance on the Operation of the WMD End-Use Control, including lists of suspected front companies. (Paragraph 297)
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| 64. | We recommend, as we did last year, that the outreach programme to industry be expanded significantly. (Paragraph 300)
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| 65. | To ensure that the export control system maintains its integrity we conclude that the holders of OIELs with terms of five years or longer must be subject to regular compliance checks and we recommend that in its reply the Government explain the extent to which the holders of such licences are subject to compliance visits and checks. (Paragraph 302)
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| 66. | On the basis of the evidence put before our inquiry we conclude that there is no overwhelming case in favour of setting up an export enforcement agency. (Paragraph 304)
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| 67. | We recommend that the Government improve the arrangements for monitoring and controlling large volumes of weapons that enter the UK for destruction or re-export. In addition, we recommend that the Government provide a full account of the 200,000 assault rifles that were imported into the UK from the former Yugoslavia between 2003 and 2005, explaining how many were made unusable and how many were re-exported. (Paragraph 310)
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| 68. | We recommend that the Government do not cut defence attaché posts in countries where the export of goods and technology from the UK requires careful consideration to ensure that they meet the EU Code of Conduct on Arms Exports and the National Export Licensing Criteria, and in countries where the UK and other members of the international community are assisting in the destruction of surplus conventional weapons and WMD materials, or where there are concerns about the exporting of such surplus weapons and materials. (Paragraph 312)
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| 69. | We recommend that in responding to this Report the Government set out the progress that has been made in carrying out the recommendations arising from the 2004 review of the implementation of EU Council Regulation 1334/2000 on the control of dual-use items in an enlarged EU. We further recommend that the Government consider whether the EU review's conclusions have implications for its own 2007 Review of Export Control Legislation. (Paragraph 314)
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| 70. | In our view the Government needs to formulate a policy to respond to any proposals emerging from the European Commission to remove the barriers to the free movement of military goods and technology that currently exist within the EU. The Government's policy needs to address the effect that any changes would have on export controls and to ensure that UK and EU export controls are not weakened. We recommend that the Government set out its policy in responding to our Report. (Paragraph 320)
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| 71. | We share EGAD's concerns about the European Commission's proposals for changes to the dual-use regulations and recommend that the Government in its response to this Report explain its policy to the changes proposed by the Commission to the regulations. (Paragraph 323)
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| 72. | We recommend that the Government provide firm and explicit answers to questions about its decisions to grant, or withhold, export licences for goods or technology which could be used for internal repression in countries where human rights are abused. (Paragraph 330)
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| 73. | We conclude that it is entirely reasonable for a government to have a policy of refusing to license exports to a particular country for a stated reason or a foreign policy objective. (Paragraph 333)
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| 74. | We conclude that on the basis of the statistics there is evidence that the licensing policy to Israel may have been tightened up. We conclude that the Government's "case by case" response in explaining decisions to grant or refuse licences is unclear. While the "case by case" approach gives the Government flexibility this appears to allow latitude to adjust policy without the need for public explanation, which is neither transparent nor accountable. (Paragraph 339)
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| 75. | We recommend again this year that the Government explain its policy on licensing exports to Israel, Jordan or other countries in the Middle East and that it explain whether it has adjusted its policy since 1997 as events in the Occupied Territories and Middle East have unfolded. We further recommend that Government explain how it assesses whether there is a "clear risk" that a proposed export to Israel might be used for internal repression (for the purposes of Criterion 2). (Paragraph 340)
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| 76. | We recommend that in responding to this Report that the Government explain what was the purpose of the Foreign and Commonwealth Office's recent visit to China to discuss export controls and what was the outcome. (Paragraph 346)
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| 77. | We reaffirm the recommendation we made in our last Report that the Government work within the EU to maintain the arms embargo on the People's Republic of China. (Paragraph 348)
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| 78. | We recommend that the Government press for the inclusion of provisions in the arms trade treaty to regulate the trade in small arms and light weapons. We recommend that the Government provide a report on progress on the treaty in responding to this Report. (Paragraph 356)
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| 79. | We recommend that the Government press for the inclusion of provisions in the arms trade treaty to promote good governance and combat bribery and corruption in arms transfers. (Paragraph 358)
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| 80. | We conclude that, if a comprehensive treaty is secured, its full benefit will only be realised if countries across the world put into operation export control systems capable of implementing the provisions of the treaty as well as with non-proliferation requirements under UN Security Council Resolution 1540 of 2004 and other treaties and that countries with fully developed systems will have to assist those without. In the UK this will include providing licensing, technical and enforcement staff to participate in outreach missions. (Paragraph 360)
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| 81. | While we consider that the Government ought to give top priority to the international arms trade treaty, there is a risk that it may distract support for the non-proliferation regimes. We recommend that the Government bring forward proposals to extend the non-proliferation regimes. (Paragraph 362)
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| 82. | We congratulate the Government on its support for a ban on "dumb" cluster bombs and on its commitment to withdraw the UK's stocks of "dumb" cluster munitions with immediate effect. (Paragraph 368)
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| 83. | We recommend that the Government also withdraws "smart" cluster bombs, provided that an operational alternative is available for military use to counter massing troops in formation on the battlefield. (Paragraph 368)
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| 84. | We recommend that the Government publish future Annual Reports on Strategic Export Controls by the end of April each year. (Paragraph 370)
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| 85. | We recommend that future Annual Reports on Strategic Export Controls set out in a consistent and systematic manner the resources made available by the Government to implement and enforce strategic export controls with details of enforcement actions. (Paragraph 372)
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| 86. | We recommend that section 1 (Policy Issues Relating to Strategic Export Controls) of future Annual Reports be widened to include a detailed report on UK export control policy as a whole along the lines of that provided in the Swedish Annual Report. We welcome the Government's offer of a "Restricted" report on outreach and recommend that the Government provide such a report at the same time that it publishes its Annual Reports on Strategic Export Controls. (Paragraph 376)
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| 87. | We recommend that the "country by destination" section of future Annual Reports provide, for each country, a statement on the general arms transfer control approach or policy, along with any policy changes that have occurred over the year. We also recommend that the Government bring forward proposals to allow the data in the Quarterly Reports to be easily extracted in order to be summarised and analysed. (Paragraph 379)
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| 88. | We recommend that the Government make the following changes to its Quarterly Reports.
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- Divide up information on financial values and descriptions between Military List items and "Other".
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- Combine the information on financial values, number of licences issued and descriptions to give a better indication of the volume of each type of goods licensed for export.
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- Provide more systematic information on the type of end-user.
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- Provide information on the final destination of goods covered by "incorporation licences".
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- Provide separate information on each license denial with a description of the goods covered the reasons for the denial. (Paragraph 382)
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| 89. | We recommend that the Government produce data on the value of exports broken down by Military List category and data on the value of dual-use exports, which is published in future Annual Reports. In addition, as the EU Code of Conduct on Arms Exports applies to dual-use goods we recommend that the UK press the EU to produce an EU reporting standard for data on conventional dual-use exports and for the data on dual-use goods to be included in the EU's own Annual Reports. (Paragraph 383)
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| 90. | We recommend that the Government consider amending customs codes either to include a sub-category of controlled items in each relevant category or to add a digit that indicated that a good was listed. (Paragraph 385)
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| 91. | We recommend that the Government bring forward a proposal for a fully searchable and regularly-updated database of all licensing decisions. If the Government propose that the database replace the Quarterly Reports it must demonstrate that there will be no loss of functionality or data. In addition, the Government will need to make a proposal for supplying the classified information that it provides to us each quarter. (Paragraph 386)
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| 92. | We conclude that the Government's explanation about the breaches of export control in respect of UK-manufactured imaging equipment found in South Lebanon was satisfactory. (Paragraph 387)
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| 93. | The DTI's (now the Department for Business, Enterprise and Regulatory Reform's) 2007 Review of Export Control Legislation is an opportunity to stand back and look at the changes in strategic export controls since the 1990s. As a result of the Export Control Act 2002, and the secondary legislation made under it, the UK now has generally efficient and reliable export controls. The volume and quality of information that the Government provides about strategic export controls has improved considerably in the past ten years and we hope will continue to improve. (Paragraph 390)
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| 94. | We conclude that the DTI's 2007 Review is a constructive process that addresses many of the issues which we and other interested parties have raised over several years. Much careful thought and work has gone into the Consultation Document and it shows that the Government has been listening. The options for changes it sets out in important areas such as extra-territoriality are welcome and we conclude provide the basis for change. The Review has two shortcomings. First, it ignores the fact that strategic export controls rely on Government-wide cooperation and communication. The Consultation Document does not mention HMRC, which enforces strategic export controls. Second, it ignores the EU dimension. The States of the EU face exactly the same problems as the UK in administering an export control regime, a significant part of which is derived from EU legislation. (Paragraph 391)
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| 95. | We look forward to reviewing the Government's conclusions arising from the 2007 Review in our next Report. (Paragraph 392)
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| 96. | The past year has seen the start of the UN process to secure an International Arms Trade Treaty. The groundswell of support for the treaty has been greater than could have been anticipated and we are pleased to report significant progress. We conclude that the Government has continued to show skill in promoting the treaty and, significantly, to press for a comprehensive treaty including both military and dual-use goods and technology. The next year will be crucial for the treaty when the governmental experts start on the details. We hope that in our next report we shall be able to report further significant progress. (Paragraph 393)
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