Scrutiny of Arms Export Controls (2009): UK Strategic Export Controls Annual Report 2007, Quarterly Reports for 2008, licensing policy and review of export control legislation - Business and Enterprise Committee Contents

2 The work of the Committees

Relations between the Committees and the Government

7.  We are pleased to report that the relations between the Committees and the Government have remained constructive and cooperative. In particular, we found our exchanges with the then Minister of State in the Foreign and Commonwealth Office, Rt Hon Bill Rammell MP, to be helpful and frank. The then Economic and Business Minister, Department for Business, Enterprise and Regulatory Reform,[10] Ian Pearson MP, in response to the debate in Westminster Hall on our last Report, thanked the Committee for its input into the post-implementation review of the export controls introduced in 2004. "We are grateful for the input of the Committees, NGOs and industry stakeholders. All parties were struck by the collaboration that we managed to achieve together, and I look forward to that continuing."[11] We look forward to continuing this constructive relationship with the successors of both Ministers, and to seeing more evidence that the Government has seriously considered our recommendations.

Export Control Organisation Reports and Statistics Website

8.  We were pleased to receive an advance demonstration of the searchable database located on a new website launched on 8 June by the Department of Business, Innovation and Skills.[12] Staff from the Export Control Organisation demonstrated to us the statistics and reports that it is now possible for the public to access (registration is necessary), which can be tailored to particular areas of interest. We warmly welcome the launch of the new website as an important step towards greater transparency of arms exports licences granted and refused. We return to this matter in Part Five of this Report.

Review of drafts of secondary legislation

9.  Our last Report concluded that the two weeks we were given to comment on the draft Trade in Goods (Categories of Controlled Goods) Order was "wholly inadequate."[13] We recommended that, in future, the Government give interested parties at least two months to comment on drafts of the third tranche of secondary legislation.[14] At the time of our last Report, the third tranche of legislation had not yet been finalised. We were shown parts of the draft of the third Order, the Draft Export Control Order 2009, on 9 September and on 24 September 2008 the Department of Business, Enterprise and Regulatory Reform (BERR) wrote to the Committees inviting comments on the draft Export Control Order 2009 by 24 October. We sent our comments on the draft Export Control Order 2009 to the Business and Enterprise Minister on 22 October, and this is attached as Annex 1.

10.  Alongside our comments on the draft Order, we also expressed our concern at the inadequate time given to us to properly scrutinise the legislation. The draft Order did not appear in a "final" form, it did not have an Explanatory Note or a text of the type of Explanatory Memorandum laid with orders when they are made, and there were blank parts of schedules which hampered our scrutiny. We requested that Orders be put in a state which the Department would regard as fit for signature and laying before being passed to the Committees for consideration. We wrote to the Chairman of the Liaison Committee on 22 October 2008 to express our concern that, yet again, the Committees had not been given adequate time to consider the draft secondary legislation.[15] The Chairman of the Liaison Committee wrote to Ian Pearson on 20 November who responded on 16 December. In his response, the Minister said that he could not accept that the Committees were unable to properly examine the draft in the time available, and that the Government had sent the Committees drafts as soon as had been possible.[16]

11.  We are extremely disappointed that the Government did not accept our previous recommendation, but instead merely committed to giving the Committees one month only to consider the third Order.[17] In its Review of Export Control Legislation (2007)—End of Year Response, the Government suggested that a further tranche of legislation might still be required after April 2009,[18] in which case the Committees would expect to have more time than previously given to scrutinise the draft Order. We conclude that we do not accept the comments of the then Economic and Business Minister that we had adequate opportunity to scrutinise the third tranche of secondary legislation. We therefore repeat our recommendation that, in future, the Government should ensure that interested parties have at least two months to comment on drafts of secondary legislation implementing the Government's conclusions on the outcome of its Review of Export Controls.

12.  The comments of the stakeholders involved in the Review are covered in Part Three.

Evidence and witnesses


13.  In the course of this inquiry, we held three evidence sessions with: (i) the then Economic and Business Minister, Ian Pearson MP, the Minister who then had responsibility for export controls, and officials from BERR; (ii) the UK Working Group on Arms (Saferworld, Amnesty UK and Oxfam GB), and the Export Group on Aerospace and Defence (EGAD);[19] and (iii) the Minister of State, Rt Hon Bill Rammell MP, and officials from the Counter Proliferation Department, Foreign and Commonwealth Office, (FCO).


14.  We invited written evidence and we are grateful to those who made submissions.[20] As in previous years, we sought and received replies from the Government on a wide range of matters. We are grateful to the Government for its replies and for keeping us informed of developments relevant to our inquiry. We attach to this Report all the written evidence we received—other than material with a security classification. Continuing the practice we adopted in previous years we have also made available on the Internet the written evidence we had received by May 2009, to assist those with an interest in our inquiry. We are grateful to all those who gave oral and written evidence and to our adviser, Dr Sibylle Bauer, who helped us evaluate the evidence.


15.  During our evidence session with the then Minister of State at the FCO, Rt Hon Bill Rammell MP, on 22 April 2009, we raised the issue of correspondence which had been sent to the Committee with an apparently over-cautious restricted classification. On two occasions we have requested, and subsequently received, unclassified versions of letters previously sent to us on a restricted basis by BERR.[21] As the information we receive is often of great interest to the public, we requested that Ministers ensure that as much of it as possible is submitted to us on an unclassified basis. The then Minister agreed, and told us that it was "in nobody's interests for items to end up on a restricted basis where, frankly, with some minor amendments they could end up on a non-restricted basis. I have instructed officials to view communications with your Committee on that basis for the future."[22] We are grateful for this commitment from the FCO and ask that the Department for Business, Innovation and Skills do the same.


Visit to the FCO

16.  We carried out two visits in 2008-09. In May 2009 we visited the FCO and met officials from the Counter Proliferation Department of the FCO and Rt Hon Bill Rammell MP. We found the discussion with officials and the Minister useful. We put on record our thanks to those who arranged the visit and answered our questions.

Visit to Ukraine

17.  In May 2009, we made a visit to Kiev, sponsored by the FCO. This was a return visit following a visit to Westminster in 2007 of a delegation of Ukrainian MPs from the Committee for National Security and Defence of the Verkhovna Rada (Supreme Council), and local non-governmental organisations (NGOs) partners, to discuss and compare our two systems of strategic exports control and the parliamentary scrutiny of those two systems. In particular, we discussed the opportunities for Ukrainian parliamentary committees to examine further the licensing and policy decisions of the Ukrainian government. During our visit to Ukraine we met parliamentarians, ministers, officials and NGOs. We are extremely grateful to the FCO for organising such an interesting and useful programme in Ukraine. A note of the visit programme is attached at Annex 2.

18.  As well as being one of the world's leading arms exporters of newly produced weapons, Ukraine inherited a large stockpile of weapons and ammunition from the former Soviet Union which is a concern to the Government, NGOs and other countries. With guidance from the EU and USA, Ukraine has put in place a system of regulating the licensing of arms exports. Occasionally, the Ukrainian Parliament had held hearings on specific cases of arms exports and had invited Ministers to answer questions. Although Commissions may be set up on an ad hoc basis to investigate suspected abuses of the licensing system, and the Committee for National Security and Defence in Ukraine has the scrutiny of arms exports in its remit, there was no in depth public scrutiny of the overall system carried out on a regular basis. The Committees were told in Ukraine that the membership of the ad hoc Commissions consisted of representatives of the relevant Parliamentary Committees, exporters, legislators and the security forces. Deliberations were held in private and only the findings of the Commission were published—not its full report.

19.  We discussed with the Chairman of the Ukrainian National Security and Defence Sub-committee whether strategic exports control ought to have a higher profile within the activities of the Sub-committee. We agreed to continue the fruitful dialogue between our committees on this matter.

UK Brokers operating in Ukraine

20.  During our meeting on Monday 18 May, the Ukrainian Deputy Minister for Foreign Affairs gave us a document which we subsequently had translated into English.[23] The document contained a list of UK-registered brokers to whom the Ukrainian State Service for Export Control had licensed the export of collectors items (light arms) from the Soviet stockpile of weapons. We were alarmed to see that the end users on the list included countries for which there are FCO policy restrictions on the export of strategic goods. The list itself did not provide the date that the Ukrainian licence was granted, nor did it specify the type of goods or their value. It is also not possible to ascertain whether the goods were shipped directly from the Ukraine to the end users, or whether the goods were shipped via the UK.

21.  We were invited to visit Ukraine because of perceived weaknesses in the parliamentary oversight of its strategic export control system. The UK, amongst other countries, has been greatly interested in the future of the massive stockpile of ex-Soviet weapons since the dissolution of the USSR. Particularly, concerns persist that Ukrainian arms might be ending up in undesirable locations. For example, there were reports as recently as 18 June 2009 that Ukrainian arms were intercepted in Nigeria on the way to Equatorial Guinea.[24] Therefore, we are extremely concerned that the UK Embassy in Kiev, the Export Control Organisation and HM Revenue and Customs were all unaware of the existence of this list of UK brokers who had been granted export licences by the Ukraine State Service for Export Control, particularly as it was provided to us freely by the Ukrainians. We have passed the list onto the FCO, Export Control Organisation and HM Revenue and Customs.[25] We are alarmed at the prospect that UK brokers might be importing ex-Soviet weapons into the UK for onward export, and/or directly exporting from Ukraine, to countries for which there are FCO policy restrictions. We return to the subject of controls on UK brokers later in this Report.

22.  We conclude that it is of serious concern that the UK Government was unaware of the existence of a list of UK brokers granted licences by the Ukraine, We recommend that, in major arms exporting countries, such as Ukraine, the FCO should ensure that its embassies and diplomatic posts engage more effectively with the national export control organisations to obtain information on UK arms brokers licensed by overseas states. We further recommend that the Government should instigate an investigation into the list of UK brokers provided to us by the Ukrainian government and provide confirmation as soon as possible that the UK brokers on the list obtained any necessary licences from the Export Control Organisation and breached no UK legislation in the course of their business in Ukraine. We intend to return to this issue in our next Report.

10   On 5 June 2009 the Department for Business, Enterprise and Regulatory Reform (BERR) and the Department for Innovation, Universities and Skills were replaced by the Department for Business, Innovation and Skills (BIS). BIS continues to have responsibility for the Export Control Organisation.  Back

11   HC Deb, 26 Mar 2009, col 165WH Back

12   See  Back

13   Business and Enterprise, Defence, Foreign Affairs and International Development Committees, First Joint Report of Session 2007-08, Scrutiny of Arms Export Controls (2008): UK Strategic Export Controls Annual Report 2006, Quarterly Reports for 2007, licensing policy and review of export control legislation, HC 254, para 14 Back

14   HC (2007-08) 254, para 14 Back

15   Not printed. Back

16   Not printed. Back

17   Ev 41-42 Back

18   BERR, Export Control Act 2002, Review of Export Control Legislation (2007)-Government's End of Year Response, December 2008, p 7 Back

19   EGAD operates under the joint auspices of the Association of Police & Public Security Suppliers (APPSS), the British Naval Equipment Association (BNEA), the Defence Manufacturers Association (DMA), the Society of British Aerospace Companies (SBAC) and the Society of Maritime Industries (SMI). Back

20   "Strategic Export Controls", Committees on Arms Export Controls press notice 01/0809, 11 December 2008 Back

21   For example, Ev 64 and Ev 84 were originally sent to us as restricted, but with some minor amendments eventually were sent to us in an unrestricted form at our request. Back

22   Q 209 Back

23   Not printed. Back

24   "Nigeria holds Ukraine arms plane", BBC News online, 18 June 2009, Back

25   Ev 110 Back

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Prepared 19 August 2009