Memorandum from the Chief Secretary, Isle
of Man Government
Thank you for your letter by email of 1 November
2006 advising us of the terms of reference of an inquiry into
Strategic Export Controls: Post Legislative Scrutiny and inviting
the Isle of Man Government to comment if it so wishes to do.
In responding it is perhaps helpful at the outset
to clarify the position of the Island vis á vis
export controls in general, and in particular the role played
by Isle of Man Treasury and the Customs and Excise Division.
The Export Control Act 2002 of Parliament does
not apply to the Isle of Man. However, the various orders made
under that Act have, where necessary, been applied in the Island,
as part of Island law, using powers found in the Customs and Excise
Act 1993 of Tynwald. This is because the Customs and Excise Agreement
that governs the customs union between the UK and the Island requires
the Island to impose import and export prohibitions and restrictions
corresponding to those in force in the UK. The relevant paragraph
8 of the Agreement is reproduced in the Annex to this letter [not
printed].
The Island takes very seriously its international
commitments and has always made rigorous efforts to ensure that
the requirement in paragraph 8 of the Agreement is met. The Treasury
has no desire for the Island to be used as, or perceived as, a
back door for the avoidance of export controls. Any checks would
show that the Treasury has mirrored all necessary export control
and dual-use legislation.
In the Island, the role of dealing with export
control legislation, dealing with licence applications and enquiries,
and generally administering the export control and UN and EU sanctions
regimes is delegated to the Treasury's Customs and Excise Division.
The Division makes recommendation to the Treasury as to whether
or not a licence should be issued, and it would be the Treasury
that would formally grant any licence.
Before the Export Control Act 2002 and its subordinate
legislation were brought into operation Customs and Excise Division,
Isle of Man, had extensive discussions with both the Department
of Trade and Industry (DTI) and Department of Culture, Media and
Sport (DCMS) in order to agree procedures and the action to be
taken. As a result the Island was able to introduce corresponding
controls on strategic, dual-use and cultural goods on the same
dates as the controls imposed under the 2002 Act came into force
in the UK.
Whilst the Isle of Man Treasury is the designated
licensing authority for goods exported from the Isle of Man, the
orders applied into Island law contain provisions which allow
export licences issued by the UK DTI to be regarded as if they
were issued by the Treasury.
Any one enquiring about an export licence other
than for cultural goods is advised that for convenience and for
practical reasons they may wish to apply directly to the UK DTI.
It is explained to them that by doing so they would prevent any
chance of their licences not being recognised by the UK (or other)
authorities during their export—particularly as it is highly
unlikely that many exports would go directly from the Island,
but rather would go via the UK.
It is also made clear to any enquirer that Customs
and Excise Division would normally refer licence applications
to the Export Control Organisation of the UK DTI—because
there are not always the necessary resources or expertise to evaluate
such applications properly on the Island. The same is true of
export licence enquiries relating to cultural exports to third
countries.
In any event, the criteria against which any
licence application would be considered would be the same as that
in the UK. In fact, in recent years, the only export licence issued
by the Treasury was in 2004, soon after the new legislation came
into operation, and that was for the export of a painting to Ireland.
No export licence is required (except for certain
items of a cultural importance to the Isle of Man) for movements
of goods to the UK. However, once in the UK those goods would
be subject to UK laws, and if exported from there would require
an export licence issued by the UK authorities—unless purely
in transit and under cover of a licence issued by the Isle of
Man Treasury.
Similarly, whilst no export licence is required
for the movements of goods to the Isle of Man, once here they
would be subject to Manx laws, and would require a licence issued
by either the Isle of Man Treasury or the UK DTI before they could
be exported to a third country.
The Customs and Excise Division has a recently-updated
page on its website that deals with sanctions and export controls.
On it may be found a copy of Notice 279(MAN) which explains export
licensing controls in the Island. This page also includes a link
to the Export Control Organisation. The Notice includes contact
details for the Export Control Organisation and asks readers to
contact it with any technical queries or if they wish to know
if specific goods would require an export licence. The web page
may be found at—http://www.gov.im/treasury/customs/sanctions.xml
To conclude, the Isle of Man makes every effort
to ensure that export controls and UN and EU embargoes etc. are
enforced along the same lines as in the UK and maintains contact
with the relevant UK Departments to ensure that we do so. The
Isle of Man always aims to have matching export control measures
in place to come into effect at the same time as those introduced
in the UK.
Meanwhile the Isle of Man Government continues
to monitor changes to legislation and take action as required
to ensure that the Isle of Man cannot be used to circumvent the
controls imposed by the United Kingdom.
Should you require any further information or
if the Committee would find it helpful to discuss any matters
referred to above in person please do not hesitate to contact
me.
November 2006
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