Examination of Witnesses (Questions 52
- 59)
THURSDAY 20 MARCH 2008
MR DAVID
HAYES, MR
BRINLEY SALZMANN,
MS BERNADETTE
PEERS AND
MR BARRY
FLETCHER
Q52 Chairman: Mr Hayes, welcome to
you and your colleagues. This is the first meeting of the re-branded
Committees on Arms Export Controls. It has taken us almost 10
years to discover that the Quadripartite Committee might not be
well known outside so we kindly persuaded the House authorities
to let us change our name. We persuaded ourselves to change our
name so we are now officially the Committees on Arms Export Controls.
You have re-branded over the years so you know what it is like.
For the record, would you like to introduce yourself and your
colleagues.
Mr Hayes:
I am David Hayes, the chairman of the Export Group for Aerospace
and Defence. I am in the export control section. On my right is
Bernadette Peers from the Strategic Shipping Company; on my left
Brinley Salzmann, the export director of the Defence Manufactures
Association and the secretary of the Export Group for Aerospace
and Defence; on the end is Barry Fletcher who is an independent
export control consultant and also a member of EGAD.
Q53 Chairman: Thank you for your
written submission which I very much enjoyed reading. The standard
question I always ask is: are you happy with the performance of
the Export Control Organisation. Last year you indicated some
concerns about their website. I gather you have been working with
them and consulting users on the website. Have those problems
now been resolved or are they in the process of being resolved?
Mr Salzmann: They are in the process
of trying to resolve them by taking in the inputs from the industry
about our perceptions of the website and its shortcomings and
trying to put together proposals for the redesign of the website.
There is a positive development. With regard to the performance
of the Export Control Organisation, we are very happy in most
regards with it but certainly the introduction of the SPIRE system,
which was introduced on time and to budget remarkably for a government
IT system, has resulted in a loss, to a certain extent, of the
personal touch. We have made our views known to the ECO[1]
in that regard and are hoping that can be addressed.
Ms Peers: In general the outreach
that BERR[2]
are conducting in the ECO in particular is seen as very good and
very productive but the issues with SPIRE, the personal service,
as Brinley pointed out, has diminished. There is no helpline.
When you apply on the SPIRE system now for a licence, we were
told that we would get an acknowledgement letter and it would
then specify who the licensing officer was that there would be
contact with. You get an acknowledgement letter but you do not
get any personal contact so you will still be dealing with an
unnamed person in the system. There have been some glitches with
using SPIRE although, on the whole, it is a very good system.
My concerns are how it interfaces with CHIEF[3]
which is what was meant to happen on the electronic system. It
may be better if I talk to that when we talk about Customs.
Q54 Chairman: What about your relationship
Customs? Do you meet regularly? Are you happy about the National
Clearance Hub in Salford and is it working satisfactorily?
Ms Peers: We have had a visit.
The EGAD sub-committee, which I am on, for Customs went up to
the Hub and met with the staff up there who were very happy to
receive us and were very happy and keen to learn about the industry
side. We are going to do an awareness session with them about
how we interface with CHIEF. Concerns with Customs are several.
On the request by ourselves and yourselves to see what enforcement
could be done on open general licences, that was addressed. There
were some issues which apparently were fed back to them and ECO
but we do not know what the outcome of that was, whether there
were substantial discrepancies or whether it was very positive
and there was good enforcement and good compliance by industry.
On the interface with CHIEF, which is the electronic licence system
that you apply through SPIRE, where you get an electronic licence
which then feeds into CHIEF, checks whether the licence is correct
and is decremented, it is not actually working. We are told it
is going to be up and running at the end of this month but in
the interim if I have applied for an electronic licence through
SPIRE and the SPIRE licence is issued I cannot interface with
CHIEF so I have to print-off the licence. I have to send it to
the Hub. I have to get the Hub to decrement it and then the goods
are allowed to leave. My concern is if I then print off another
licence and send that up to the Hub and that is then decremented,
what is to say I cannot send 40 when I actually have permission
for 10. There do not seem to be any checks that I can find to
prevent people just downloading another licence, sending it to
Hub and then allowing the goods to go. There may well be some
checks that the Hub is doing, but having been to the Hub and seen
how it works I cannot see how they can actually physically do
that. Perhaps you could raise that with the enforcement and customs
when they come.
Q55 Chairman: We are going to see
our good friends, Revenue and Customs, in Southampton quite soon.
Ms Peers: There was another issue
we had which is the Crown immunity. When goods are the property
of the Crown they do not need licences and there was supposed
to be a system whereby you could enter those goods into the system
through a code which would alert Customs that these do not need
a licence, they are Crown immune. That did not work so we had
a work-around where we had to reference an open general. The work-around
now, we found out last night, is we enter the goods NLR[4]
but we then write "Crown immunity". That seems the best
system we can have for Crown immune goods that do not need a licence.
There is not a specific code for those goods but we can work with
that. The other issue with Customs was that the Hub does seem
to be working quite well in general. The interface we have with
Customs is positive. We do have regular meetings with them and
we hope that will continue.
Q56 Mr Clapham: In response to the
consultation of 2007, the Government has suggested introducing
a new category, Category 2. What do you think should be included
in that new category?
Mr Hayes: We have actually had
discussions with the NGO[5]
community on this and at the moment we are agreeing that the extent
of that category will be small arms and light weapons.
Mr Salzmann: With clear definitions
of what that actually constitutes.
Mr Hayes: We are, at the moment,
having further discussions with the NGOs looking at ways in which
the trade controls themselves more broadly might better be targeted
so that we are addressing the areas of concern whilst trying to
make sure the impact of doing so on legitimate industry is not
too burdensome.
Q57 Mr Clapham: There is some concern
because I understand there are quarters that would like to see
missiles, like these long range missiles, as well as Unmanned
Air Vehicles actually in that category. You are opposed to that
I understand. Could you tell us why you feel those types of weapons
should not be in included in Category 2?
Mr Hayes: There are several reasons
for that. What I would like to do is ask Mr Fletcher to answer
that because there are quite a few technical aspects to this which
would be better addressed by him.
Mr Fletcher: Starting with the
UAVs, this is a very difficult subject. In BERR's review dated
6 February it just talks about UAVs, so a lot of questions immediately
arise. Are we only talking about military UAVs or are we talking
about all UAVs, are we talking about long range UAVs? The answer
to each of these questions raises other questions, none of which
cannot be overcome but it is a very difficult area. UAVs, because
they are so commonly used now, and probably more used by non-military
organisations, there are real concerns about how you would bring
them into Category 2 and not really mess up the system by having
to stop at every single stage of a trafficking and broking-type
of exercise to make sure that you were absolutely on firm ground.
It is not black and white. With long range missiles we do not
think that, from a UK perspective, they are trafficked and brokered
on that basis. We are not saying that nowhere in the world does
this go on but they are extremely regulated, not least of all
within the UK within MTCR[6]
regulations. We do not see any need, therefore, for them to be
brought into a Category 2 situation.
Q58 Mr Clapham: Would it be fair
to say that in terms of UAVs you would feel much more comfortable
if the Government was prepared to ensure a clear definition to
the category it wanted included?
Mr Fletcher: If they were to be
put into Category 2 that would be absolutely essential.
Mr Hayes: There is another point
here and it is one we have made in the past but is probably worth
rehearsing in this context. The then DTI's[7]
own Aerospace Innovation and Growth team identified UAV technology
as being one of the key technologies for the development of the
British aerospace industry over the next 20 years. That does not
sit very easily with imposing burdens on that industry which cannot
be justified in the context.
Q59 Mr Clapham: To be quite clear
and for the record, you are saying that for long range missiles
there is no need at all for Category 2 because you feel they are
sufficiently regulated.
Mr Fletcher: Yes.
1 Export Control Organisation at the Department for
Business, Enterprise and Regulatory Reform Back
2
The Department for Business, Enterprise and Regulatory Reform Back
3
Customs Handling of Import and Export Freight (HM Revenue and
Custom's declaration processing system) Back
4
No Licence Required Back
5
Non-Governmental Organisation Back
6
The Missile Technology Control Regime Back
7
Department of Trade and Industry Back
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