Examination of Witnesses (Questions 60-79)
MR IAN
GODDEN, MR
DAVID HAYES,
DR JERRY
MCGINN,
DR SANDY
WILSON AND
MS ALISON
WOOD
21 NOVEMBER 2007
Q60 Mr Havard: I do not want to prolong
this but that is the whole point, is it not? Is this not therefore
a mechanism whereby if you choose to enter it—and it will
be industry that chooses to enter it—that could undermine
the exact point that you have just made and government would effectively
abdicate control to you on the basis of your individual needs
and whether you decide to participate or not, so strategically
we actually lose control rather than reinforce control and the
benefits you put out about the Defence Industrial Strategy are
lost?
Dr Wilson: I could not see that
happening.
Mr Godden: Neither could I.
Dr Wilson: I think there is such
a thrust within the Ministry of Defence on sovereign through-life
control that I cannot imagine that happening, no.
Q61 Chairman: Can I make a point
about the tone of what we do in select committees. What we do
in select committees is we probe, we ask questions, and we therefore
do our best to reveal weaknesses, and that tends to create an
atmosphere whereby whatever we are asking questions about looks
rubbish, but clearly your overall view is that this Treaty is
a thoroughly good thing, it is a step forward. I wanted to make
that point in the middle of this exchange in order to rebalance
the tone.
Mr Godden: Yes, that is absolutely
right.
Chairman: Bernard Jenkin?
Q62 Mr Jenkin: Thank you for that
preamble to my question, Chairman, because I was almost going
to say the same thing! Personally, I am a huge supporter of the
principle behind this Treaty, but concerns have been expressed
to us about the unequal nature of the Treaty—that effectively
the US gains, by proxy or by actual fact, control over what we
export in terms of technology, but we are giving them a blank
cheque to export any technology that we transfer to them. Would
you describe that as an unfair caricature of the Treaty?
Mr Godden: Yes!
Q63 Mr Jenkin: Can you reassure us?
Mr Godden: I think it is. I think
the whole principle here is that UK-based operations will have
an advantage in the US versus what they have at the moment in
that for the very reasons we mentioned—the slowness and
the overheads—behaviourally it means that the US is less
likely to use the resources here, so in that sense it is reciprocal,
there is a reciprocity about it.
Q64 Mr Jenkin: But it is absolutely
true, is it not, that whatever technology we transfer to the United
States—this is part of the problem of being a very unequal
partner—as part of this arrangement whatever we give them
we no longer control their export of that technology to another
country, a third country, and we do not have a say over that?
Dr McGinn: That is not correct.
Q65 Mr Jenkin: That is not correct?
Dr McGinn: That is not correct.
Q66 Mr Jenkin: Could you show me
within the Treaty text itself or is that too complicated?
Dr McGinn: The Treaty talks about
an approved community and the approved community is approved US
and UK entities. Within that approved community you can transfer
goods and services under mutual agreement, but when things leave
that approved community, either on the US side or on the UK side,
then the licensing laws fall into effect, the ITAR.
Q67 Mr Jenkin: Our own licensing
laws or American licensing laws?
Dr McGinn: For a UK product that
went to the US it would fall under US ITAR.
Q68 Mr Jenkin: That is the point,
is it not, we might have different arms export policies from the
United States but once we have transferred our technology to the
United States, which we are obliged to do under this Treaty, if
you are in the approved community, they can export it to a country
that perhaps we would not have exported it to, but we do not have
the same freedom to export technology that they have given to
us?
Mr Hayes: That is exactly the
situation that exists today, it is no different.
Q69 Mr Jenkin: I think that is the
key point.
Mr Godden: It is no different,
it is just taking what we currently have.
Q70 Mr Jenkin: Except that we can
choose not to export certain items to the United States now.
Mr Godden: We can choose not to
do so under the Treaty.
Q71 Mr Jenkin: So how does this Treaty
make any difference?
Mr Hayes: It makes it easier for
goods and technology to flow from the United States to the UK.
Q72 Mr Jenkin: I understand. What
you are saying is that this Treaty is necessary to enable the
United States to change their arrangements; it really will not
make much difference to the arrangements we already have in this
country?
Mr Godden: That is close I think.
Mr Hayes: I think it is important
to appreciate that we are looking at two sides of the same coin
effectively. This is an export control situation from a US perspective;
it is a security situation from the UK perspective.
Q73 Mr Jenkin: Can I just ask one
final question on this which is the export of the technology from
the approved community requires the consent of the United States,
but does that then bring British technology under the control
of the United States so we cannot then export British technology
to a third country of our choice because it is not part of the
approved community?
Mr Hayes: Only if it is co-mingled
with US technology.
Q74 Mr Jenkin: So it has to be "contaminated"
with US technology? I think that has been of great reassurance
Ms Wood: Again that is today's
situation.
Mr Godden: It is the same.
Q75 Chairman: You said this was in
the UK a security issue and in the US an export control issue,
so if in the UK something is passed outside the British approved
community, then the sanction is the Official Secrets Act?
Mr Hayes: Yes.
Q76 Chairman: There is no similar
sanction in the United States if in the United States something
is passed outside the American approved community is there, or
is there?
Mr Hayes: Being passed outside
the American approved community within the United States or outside
of the United States?
Mr Jenkin: Outside.
Q77 Chairman: Either probably.
Mr Hayes: If it is passed outside
of the US approved community outside of the United States then
it would be punishable under ITAR unless there was a licence or
agreement in place. If it was passed outside of the approved community
of the United States, depending on how that approved community
is defined, it may still be an offence under ITAR because you
are required to register under ITAR if you are a manufacturer
of defence articles in the United States, regardless of whether
you export them, so it would be a case of the recipient company
holding military and technical—
Q78 Chairman: I see so the Official
Secrets Act in the UK and ITAR perhaps in the US?
Mr Hayes: Yes.
Q79 Mr Jenkin: Very briefly to make
sure that we have absolutely understood it, basically we are depending
on the ITAR system to be gatekeeper to British technology in the
United States, but what you are saying is that we have such an
intense technology-sharing relationship at the moment that really
amounts substantively to no change?
Mr Hayes: Correct.
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