Memorandum from the Export Group for Aerospace
and Defence (EGAD)
THE OUTCOME
OF THE
ECO'S REVIEW
OF THE
ECA 2002
The Government is proposing that: the current
two category structure which underpins the UK's trade controls
should be replaced with a new, three category structure; the current
inclusion of long-range missile/UAVs in the "Restricted Goods"
category under the trade controls, but the exclusion of small
arms and light weapons from this, should be reviewed again, with
a view to creating a new, third category of goods which is also
subject to extraterritorial controls (but of a less stringent,
catch-all nature); a form of Torture End-Use Control should be
created; and a form of trade controls on non-military explosive
goods should be introduced—all of this entirely concurs
with the separate proposals that came out of the deliberations
of a joint Industry/NGO working group, which we had formed back
in late-2005.
We have long argued that the creation of a dedicated
Government/Industry/NGO working group looking in depth at the
review of the UK's export controls system, in the immediate aftermath
of the publication of the 1996 Green Paper, would have been able
to reach a more positive, constructive and expeditious solution
to the UK's export control needs than HMG's chosen route, and
this now appears to be entirely vindicated by this experience.
We would like to put on record our strong desire
to commend, very warmly, the unfailingly highly constructive approach
adopted by the British Government, in general, and the ECO, in
particular, on the consultations, both with Industry and the NGOs,
that have taken place as part of this Review, which we have found
extremely productive; we hope that the ECO, similarly, has found
it to be a beneficial exchange of views. We only wish the US State
Department (for one) was half as willing to engage with Industry
in similar fashion, and we are sure that the ECO's willingness
to engage with us is to be highly recommended as a model for others
to follow.
Thus, Industry generally welcomes the Government's
initial response, as published on 6 February 2008, and stands
ready to assist with any further work required, as has been identified.
We are concerned that, in the long-range missile/UAV sector in
particular, the needs of legitimate Industry have still not been
sufficiently distinguished in the trade controls arena from those
of illicit proliferators. Specifically, more needs to be done
to facilitate activities involving these goods where the end-user
is demonstrably known to be a responsible Government, especially
given that such activities are almost invariably approved from
the marketing stage by our own Government.
The current proposal to consider extending the
controls to the component level represents a "scatter gun"
approach that must, in all certainty, fail—the sheer volume
of transactions at the component level will just overwhelm the
whole UK export control system, unless there is massive expansion
of the UK's system of Open Licensing, such that HMRC and other
agencies will not be able to identify and pursue the "bad
guys", who will continue to do what they do already today.
Oversight and monitoring of legitimate businesses and individuals
by HMG officials searching out paperwork discrepancies upon which
to levy "fines" for the benefit of the Exchequer, is
not a constructive way to go.
We look forward to the future discussions with
HMG on this, and other points.
EGAD has generally cautiously welcomed the announced
intention to extend the extraterritorial controls in the small
arms sector, having first sought the views of the Members of the
DMA's Section 5 special interest group (which represents the interests
of those firms who deal with prohibited firearms) to ensure that
this was not perceived to present an unacceptably onerous additional
burden on them, due to their much shorter supply chains. In our
view, now and all along, what needs to be controlled are the illegal
export and movement of lethal weaponry (the things that actually
kill and maim; ie SALW such as pistols, rifles, machine guns,
grenades, land-mines, mortars, and the bullets). This is what
the HMG proposals are clearly aimed at addressing.
THE NEED
FOR AN
ARMS TRADE
TREATY
The essential problem which has clearly illustrated
from this Review by the British Government of its own national
export and trade control legislation was summarised very succinctly
by Miss Rhian Chilcott, the Head of the CBI's Washington DC office,
at a briefing in London on 21 February 2008, when she stated that:
"Business has gone global, whilst the political world has
remained fundamentally based on the concept of the nation state".
It seems as though national Governments, including our own, are
essentially impotent and powerless to address this essential change
in the dynamics of the way in which modern business is done. They
can only propose national solutions to what is, in reality, a
global issue (like climate change, the internet, etc, etc), rather
then being able to "think outside the box" and propose
effective multilateral solutions to the problems that are confronting
mankind.
We believe that there has been far too much
public focus on the issue of trying to curb the activities of
British brokers, and that this is in many ways a red herring in
global non-proliferation terms. At the end of the day, if it is
inherently undesirable for a supplier and a customer to come together
and do a deal, then it is inherently undesirable, whether the
broker who brings them together is British, French, Italian, Israeli,
Ukrainian or Saudi, etc, etc, or whether there is no broker involved
at all, and they do it directly—the nationality of any broker
involved is totally irrelevant, and it remains inherently undesirable
under any circumstances.
What is really needed, rather than focusing
on the issue of British brokers, and controlling them in the UK
and/or overseas, is drafting some effective international and
multilateral control regime which will prevent these deals from
happening at all! Many proponents of the introduction of extraterritorial
controls by the UK we believe appear to be unable to gain a strategic
vision. As an instrument to try to curb global proliferation and
the sorts of deals that we all want to see stopped, the UK arbitrarily
and unilaterally changing its regulations will be about as effective
as rearranging the deck chairs on the Titanic!
Thus, the degree of support that the UK Defence
Industry has been perceived to have given to the proposal to introduce
an International Arms Trade Treaty, which would seek to address
this lack of co-ordinated international action against proliferation,
at least at the policy level.
Industry remains highly concerned that the introduction
of the SPIRE system, coupled with the recent changes to its "Helpline",
and the non-user friendly nature of its website, has meant that
the ECO has seemingly lost its "personal touch" in its
dealings with companies, especially for those "novices"
who do not have any personal contacts within the ECO to fall back
on when queries arise. We believe that ECO must seek to be seen
to address this, and have been delighted in recent weeks to have
assisted the ECO in consulting with Industry on the proposed re-vamping
of its website, which we hope will yield the required benefits
for all concerned.
RECENT DEVELOPMENTS
IN THE
UK
Industry welcomes the introduction of the new
SPIRE electronic licensing system by the ECO, which, almost unbelievably
for a Government IT system, was actually introduced both on time
and on budget!! Many of our Members have responded enthusiastically
to the benefits of this new system, although some minority of
companies have experienced the opposite effects of this (eg one
dual-use company reported that the average turnaround timescales
for its licence applications had gone up from 16 working days,
to three and a half months, following the introduction of SPIRE!)
We are certain that the ECO will be seeking to identify and iron
out any such aberrations in the months ahead.
There is still some uncertainty with the adoption
by HMRC of the National Clearance Hub, and we are keen to assist
UK companies to identify and adopt best practice in their dealings
with the NCH.
March 2008
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