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

3 Review of export control legislation


23.  As detailed in our previous Reports, the origin of the Export Control Act 2002 was the Report of the Scott Inquiry published in February 1996, which criticised the export control regime at that time for its lack of accountability and transparency. The report recommended that "the present legislative structure, under which Government has unfettered power to impose whatever export controls it wishes and to use those controls for any purposes it thinks fit, should […] be replaced as soon as practicable".[26] Following a White Paper on Strategic Export Controls[27] in 1998 and the draft Export Control and Non-Proliferation Bill in March 2001,[28] the Export Control Act 2002 (as the draft Bill became) passed all its parliamentary stages and received Royal Assent in 2002. As the 2002 Act was primarily an enabling power the new export control regime was enacted under secondary legislation which came into operation on 1 April 2004.

24.  As detailed in the Introduction to this Report, the outcome of the Government's Review of export control legislation has been the production of three tranches of secondary legislation. In previous years we commented on early drafts of the Export Control (Security and Para-military Goods) Order 2008 and the Trade in Goods (Categories of Controlled Goods) Order 2008 which restructured Trade Controls into Categories A, B and with the aim of aligning them more effectively with the relative risks of the items they controlled. In advance of the third draft Order (which covered aspects of transport, transit and transhipment as well as trade controls on light weapons and missiles), our last Report made specific recommendations on brokering, trafficking, extra-territoriality, transport and ancillary services, and torture end-use control.[29] Since then, the Government has announced decisions on the implementation of legislative changes on these matters.

25.  We noted that both the Export Group for Aerospace and Defence (EGAD) and the UK Working Group on Arms praised the Export Control Organisation (ECO) for the way in which it conducted the Review. The UK Working Group on Arms said "there has been a welcome willingness on the part of [ECO] to engage in a meaningful and sustained consultation with stakeholders."[30] EGAD said:

      We believe that the ECO is to be warmly commended for the open and transparent way in which it has undertaken the review— whilst we, in Industry, might not have agreed with all of the proposed changes and the way that they have been introduced, the ECO has clearly gone out of its way to try to frame and implement new regulations which are proportional to the perceived threat.[31]

Extra-territorial controls

26.  In our 2007 and 2008 Reports we concluded that the Government should bring forward proposals to extend the extra-territorial provisions of the export control legislation to encompass trade in all items on the Military List. In addition, all residents in the UK and British citizens overseas should obtain trade control licences, or be covered by a general licence, before engaging in any trade in the goods on the Military List.[32] The reason for this was the view that it was desirable to bring within the ambit of the law activities, which if they had been carried out in the UK without a licence, would be criminal activity.[33] The Committees recommended the use of general licences for categories of trade between specified countries, or in certain activities such as advertising, to cover British citizens working overseas for reputable organisations so as not to undermine their employment prospects.[34]

27.  Through the three tranches of secondary legislation resulting from the Review, Government has introduced the following new three tier system:

  • Category A goods include torture equipment and cluster munitions, and other goods the supply of which is inherently undesirable. Any person within the United Kingdom, or a United Kingdom person anywhere in the world, is prohibited from supplying or delivering, or doing any act calculated to promote the supply or delivery of, Category A goods without a licence from the Secretary of State.[35]
  • Category B goods include small arms, light weapons, man portable air defence systems (MANPADS) and other goods in respect of which there is legitimate trade, but which on the basis of international consensus, have been identified as being of heightened concern. Any person in the United Kingdom, or a United Kingdom person anywhere in the world, is prohibited from transferring, acquiring or disposing, or arranging or negotiating a contract for the acquisition or disposal of Category B goods without a licence from the Secretary of State. Financing, insuring, advertising and promotion for Category B goods will not be controlled, but active or targeted promotional activities aimed at securing a particular business deal will be.[36]
  • Category C goods includes any item on the Military List but which are not category A or B goods. Trading between two countries in Category C goods is only controlled if carried out from within the UK.

28.  Whilst we welcomed the creation of Category B, and UK control over extra-territorial transactions of people based in the UK and of British citizens overseas carrying out legitimate brokering in arms, in our last Report we concluded that the restriction of Category B to trading on items causing "heightened concern" was problematic as the subjective definition was likely to throw up inconsistencies.[37]

29.  Our more recent comments on the draft Export Control Order 2009 included a recommendation that the draft Order should not be enacted until it was revised to bring the trade in all goods on the Military List within Category B (see Annex 1). This was not accepted by the Government as the Order was introduced in 2009 without the change.[38]

30.  In its Response to our 2008 Report, the Government stated that the further extension of trade controls on activities by UK persons anywhere in the world to cover other weapons currently in Category C was being considered by NGO and industry stakeholders, with the aim of making a joint proposal for Government to consider further, with the possibility of implementing the proposals in further legislation at a later stage.[39]

31.  When questioned further on whether extra-territorial provisions of the export control legislation should be widened to encompass trade in all items on the Military List, Ian Pearson told the Committee that Government, NGOs and industry had a shared responsibility in considering further changes to the legislation:[40]

    I have to say that further measures need to be based on evidence of risk; they need to be proportionate and workable; and target activities of real concern in an effective way. We are not at the stage yet where there has been a consensus in terms of taking these matters forward. We still want to continue to work with stakeholders to come up with proposals for any further extensions which we believe are workable.[41]

32.  In answer to the question on whether all groups on the Military List ought to be within Category B, Ian Pearson said: "I think you would need to look at whether that would impose a disproportionate burden on industry […] If consensus [between stakeholders] cannot be reached, then, as I have said, it will be for the Government to form a view."[42]

33.  When asked how discussions with the industry on widening Category B controls were progressing, Roy Isbister of Saferworld said:

    [NGOs] have been in discussions [with EGAD] for some time, and we have probably got as far as we can together, talking about the way that you could possibly use registration and flexible record keeping as a way of extending the scope of extraterritorial control to allay business concerns about bureaucratic burden […] We now need to get back together with Government, because obviously it is not for us to make the decision and there are some questions that only Government can answer[...][43]

    The Government has let us work, I suppose, at our own pace to a large extent, though they do inquire how we are getting on. I would not say they are putting pressure on us, but then I think it would be unfair to say that industry and NGOs have been pushing this forward just as fast as we can and that the Government have been slowing us down.[44]

34.  The Export Group for Aerospace and Defence (EGAD) questioned the Committees' previous recommendation that extra-territorial control be extended to all Military List goods:

    the potential impact for UK nationals employed by perfectly legitimate and responsible overseas firms (such as Boeing, EADS, Lockheed Martin, Raytheon and Thales, etc, etc, etc) could be very great, despite the fact that they must undoubtedly very greatly outnumber those (potentially globally very few) UK traffickers and brokers whose irresponsible activities we all want to catch and curtail. Without a clear and concise definition of what HMG regards as being "trade" which is licensable, many perfectly responsible activities undertaken on behalf of these legitimate companies would be caught.[45]

35.  In evidence to us, David Hayes, Chairman of EGAD questioned why the UK thought that it could effectively "police the world" through extending extra-territorial controls and sought further clarification how it would work in practice.[46] Ms Bernadette Peers, a Member of EGAD's Compliance Support and NFO Liaison Sub-committees, questioned whether there was a level playing field for UK companies operating in trafficking overseas. She also questioned whether BERR and the FCO had the resources to enforce compliance or to properly inform UK employees working overseas of the changes in the UK legislation.[47] However, Mr Hayes told the Committee that EGAD accepted the reality that extra-territoriality was upon them—but did not believe that it was effective or the best way of achieving the end. Despite this, EGAD intended to continue its dialogue with NGOs and Government to determine how best extra-territoriality could be implemented whilst minimising the burden on legitimate industry.[48]

36.  It appears from the evidence that we have received that NGOs and industry have gone about as far as they can go in their discussions on their own on possible extensions to extra-territoriality. We conclude that the Government must now take the initiative and set a deadline for NGOs and industry to bring forward draft proposals for consideration on the further extension of the trade controls on activities by UK persons anywhere in the world to cover other weapons. We recommend that Government reports back to the Committees on progress on this work by the end of October 2009.


37.  In its written submission to us, the UK Working Group on Arms raised the specific issue of anti-vehicle landmines (AVMs) which had been omitted from Category B, but for which they considered there were "compelling humanitarian and security arguments" for stricter controls on brokering and transport. For example, the use of AVMs in improvised explosive devices against civilians and UK forces in Iraq and Afghanistan.[49] The Working Group told the Committee that it thought that AVMs ought to be included in Category B as a "matter of urgency."[50] In 2006 the UK had signed a joint declaration with 19 other countries that it would adopt certain practices as national policy in connection with AVMs (which included that it prevent the transfer of AVMs to any State that had not stated the same policy).[51]

38.  Bill Rammell explained to us why AVMs were not in Category B:

    The reason for that is that Category B occurs where there is an international consensus about the degree of concern. Not only does that not exist; but explicitly we did not achieve that. That is why we have gone down the road of trying to take individual actions in concert with 19 other states. However, I do not shut the door on Category B listing, if we could achieve it at a later stage; but because there is not that international consensus, we have not achieved it.[52]

    We achieved internationally the consensus on anti-personnel land mines, and because it is similar technology and there are similar concerns, in principle we would like to stop the sale of anti-vehicle land mines. We are not in a position to be able to do that at the moment[...][53]

    […] we are dealing with competitiveness and industrial concerns, not to create an un-level playing-field, and that is why we have gone down the route we have. We have made a number of specific commitments that I think clean up and police the export of anti-vehicle land mines.[54]

Andrew Massey, Head of the Arms Trade Unit added: "When we talk about licensing of anti-vehicle land mines, we are only aware of one licence since November 2006, which was an export to Sweden where the AVMs were actually going to be disposed of. I do not think we are talking about a major problem in terms of export control from the UK."[55] The then Minister wrote to us subsequently to confirm that 25 countries had now aligned themselves with the statement of 2006 on Anti-Vehicle Mines.[56]

39.  The Working Group did not accept the Government's argument that there was not an international consensus as AVMs being of heightened concern and so could not be included into Category B. They said:

    […] if you look at cluster munitions, there is now an international prohibition on cluster munitions, although a number of notable governments do not accept that prohibition, and yet cluster munitions are still included in Category A. Obviously there are a number of humanitarian security concerns around AVMs: the way that they prevent the movement of civilian vehicles, including, for instance, ambulances, aid vehicles; the fact that they can be triggered by civilians on foot, not just people in vehicles; the ease with which they can be transferred, similarly to small arms light weapons; and, also, as people have discussed this morning, the potential risk of the use of parts of AVMs in the IEDs (improvised explosive devices).[57]

40.  EGAD in response to the evidence given by the Minister on 22 April, wrote to the Committees on 22 May 2009 and shared an email that it had sent the Government on 22 December 2008 where EGAD stated that it supported the NGOs' stance on the possible inclusion of AVMs in Category B of the UK's trade controls. It also stated that the impact on UK industry would be minimal and therefore EGAD would have no objections to the subject being re-examined by the Export Control Organisation.[58]

41.  We are convinced by the UK Working Group on Arms' argument that there is a compelling case for anti-vehicle landmines to be included in Category B particularly as this stance is supported by EGAD. We recommend that the Government extend Category B to include anti-vehicle land mines as a matter of priority.

Transport and ancillary services, transit and transhipment

42.  In our Report last year we concluded that the Government should decide whether or not to include the control of transport and ancillary services within Category B. We also concluded that the Government ought to consider which services to include, how to control them and the duties and liabilities that could reasonably be placed on those providing ancillary services.[59] In its Response to our Report, and the End of Year Response published later that year, the Government stated that it had decided that:

  • finance or insurance services in support of movement of Category B goods would not be controlled;
  • general advertising and promotion of Category B goods would not be controlled, but active or targeted promotional activities aimed at securing a particular business deal would;
  • certain activities relating to transport are controlled depending on the risk associated with the goods. Therefore, whilst all activities associated with transport of Category A goods will be controlled, the sole provision of transport in relation to Category C goods will not be controlled;
  • the supply and delivery of Category B goods between two third countries will be controlled, and individuals involved in arranging transport will also be controlled. However, the provision of the transport service will only be controlled in certain circumstances. For example, a UK transport provider who is sub-contracted by a UK entity to provide a driver and a vehicle to move controlled goods would not be controlled.[60]The Government decided that requiring transporters of Category B goods between countries overseas to provide documentary evidence that those goods had been appropriately licensed by the overseas authorities would be too burdensome for the transport providers to do in practice, and
  • licences would always be required for Category A goods transiting or transhipping the UK, and licences would be required for Category B goods for a specified list of destinations of concern.[61]

43.  These changes were incorporated into the draft Export Control Order 2009 which was sent to the Committees for pre-legislative scrutiny. We wrote to BERR on 22 October 2008 questioning the need to exclude from the provisions UK sub-contractors to a UK concern that provides transport services as we believed that if they were included it would increase the effectiveness of the controls. We also asked what powers the Government had to seize goods in transit which did not fall within the specified categories, and how often the Government had seized goods under the then existing powers.[62] The answers to these questions have not been provided.

44.  The UK Working Group on Arms told the Committee that controls on transit and transhipment have been improved with the introduction of the Open General Transport Licences (OGTLs) in addition to the licences for specific shipments of Category A and B items. However, the Working Group thought that the controls are "quite complicated and confused across different jurisdictions",[63] with frequent confusion over which party to a shipment was responsible for ensuring compliance with transit regulations—with the risk that non-compliance could occur as a result.[64] It wanted to see the UK Government engage in outreach to try to simplify transit across different jurisdictions to enable more effective international regulation. [65] The Working Group also questioned in what circumstances the list of destinations of concern would change (and how often could that happen) and whether that list of destinations referred to the final destination of the shipment, or all the intermediate destinations along the route.[66] Roy Isbister also noted that:

    […]the law on transit now ranks sensitivity in part based on whether the goods are classed as Category A, Category B or Category C. However, the licence, the open general transhipment licence, seems to use a different system of judging the sensitivity of equipment, so some Category C goods (for example, military vehicles and components for military vehicles) seem to be regarded as more sensitive and to get lumped into the small arms/light weapons category. I am a bit confused about what the Government's thinking is. It would be good to have clarity that the same system is used from the law right down to the level of the licence.[67]

45.  We welcome the improved controls that have been introduced by the Government on transport and ancillary services, transit and transhipment.

46.  We recommend that the Government should provide the Committees in its Response to this Report with more information, as previously requested, on the reason why it decided to exclude from the provisions of the draft Export Control Order 2009 UK sub-contractors to a UK concern that provides transport services, on what powers the Government had to seize goods in transit which did not fall within the specified categories, and how often the Government had seized goods under the then existing powers.

47.  We also recommend that the Government should provide information in its Response to this Report on what practical steps it is taking to simplify transit across various jurisdictions and to ensure that transport providers, and parties to shipments, are aware of the relevant regulations. We further recommend that the Government should specify also in its Response whether, and how often, the list of destinations of concern would change and whether that list of destinations referred to the final destination of the shipment, or all the intermediate destinations along the route.

Register of arms brokers

48.  In our Report last year, we again concluded that the EU Common Position on the control of arms brokering adopted on 23 June 2003 provided best practice and we reiterated our recommendation from previous Reports that the Government establish a register of arms brokers.[68] This followed evidence from the then Minister of State for Energy, Malcolm Wicks MP that BERR was "not opposed to the idea of a register of arms brokers in principle" and that he could see certain advantages of a register.[69] John Doddrell, Director of the Export Control Organisation told the Committee "we do see advantages for a register in terms of increasing compliance" but BERR would have to decide on practical considerations for entry onto the register and also its administration.[70] In its Response to our Report, the Government stated that it was not yet fully convinced that the benefits of a pre-registration system would outweigh the burden that it would impose on the industry.[71]

49.  We raised again the question of a register of arms brokers with Ian Pearson.[72] Perhaps unsurprisingly given the Government's view, he told us that responses to consultation on the issue had been very mixed, and that in practice, a register did exist for BERR through the Government's electronic system for processing export licences—SPIRE. Mr Pearson raised the question of the administrative burden that would accompany a pre-licensing registration system, a point which was expanded upon by John Doddrell, who described it as "another hoop which an exporter has to go through before they can apply for a licence".[73]

50.  We were told that a pre-licensing registration system was still under consideration, but time was needed to assess the impact of introducing such a system and to consider what information would be required, and whether or not the register would be limited to traders and brokers or extended to exporters.[74] When asked whether a conclusion on whether to introduce a system would have been reached by January 2010, the Minister's reply was only "Possibly".[75] This level of uncertainty surprised us, and we found the Minister's explanations for the delay in reaching a decision on whether or not to introduce a register for brokers unconvincing.

51.  As described in paragraphs 20-22, the list of UK brokers given to us by the Ukrainian Deputy Minister for Foreign Affairs raised concerns that UK brokers could be exporting arms to countries for which there are FCO policy restrictions without the knowledge, or supervision, of the UK Export Control Organisation or the FCO. We conclude that the justification remains for the need for an additional element of vetting, whether through a separate system, or by some modification of the electronic export licence processing system. We repeat our recommendation made previously that the Government establish a register of arms brokers, the need for which was further confirmed by the Committees' visit to Ukraine.

End-use control for torture equipment

52.  We concluded last year that the Government was right to seek to introduce an end-use control on equipment used for torture, or to inflict inhuman or degrading treatment, through the EU, in order to ensure that controls on torture equipment where also implemented across the EU and so that UK exporters could not circumvent the control simply by temporarily exporting from other nearby EU countries. However, if this was not possible to achieve end-use controls through the EU, we recommended that it be introduced by the UK.[76]

53.  The Government's Response in November 2008 to our Report stated that the Government had made good progress in taking this forward with the Commission and other Member States, but if it was not possible to achieve through the EU, the Government accepted that it would consider introducing the end-use control on torture equipment unilaterally.[77] Shortly afterwards, in its End of Year Response in December 2008, the Government stated that it would be meeting the Commission in early 2009 to discuss the introduction of a control where the exporter would be required to submit an export licence application where they had reason to believe, or had been informed, that the items could be used for capital punishment, torture or other cruel, inhuman or degrading treatment. This control would supplement the current list of items already controlled by EC Reg 1236/2005.[78]

54.  In evidence to the Committee, Jayne Carpenter, Assistant Director of the Export Control Organisation, said that initial indications were that there was a good deal of support amongst other Member States for the UK proposals. However, the slow pace of the European process would mean that it would take some time before the UK Government considered the alternative of unilateral controls.[79] We recommend that the Government should provide the Committees in its Response with an update with its progress in pursuing end-use controls on torture equipment through the EU.


55.  In previous Reports we have highlighted the issue of maritime patrol aircraft which were exported from the UK to India and then sold by the Indian government to Burma. We concluded that this undesirable outcome would not have been prevented by pre-licensing checks on a "friendly" country, but could have been avoided if a standard requirement of licensing had been in place that export contracts for goods on the Military List contain a clause preventing re-export to a destination subject to UN or EU embargo. Several other EU countries (Austria, Belgium, Bulgaria, Finland, France, Germany, Italy, Poland, Romania, Spain and Sweden) use re-export controls to some degree. In addition we recommended that the contracts included a subrogation clause allowing the UK Government to stand in the place of the exporter to enforce the contract in the British or Foreign courts.[80]

56.  In its Response to the Committees' last Report, the Government rejected the recommendation of re-export clauses. It stated that the existing licensing process was sufficient:

    The Government considers all export licence applications rigorously, against our Consolidated EU and National Arms Export Licensing Criteria, taking full account of the prevailing circumstances at the time of application and other announced Government policies. This consideration takes account of the risk of diversion to undesirable end users, including the risk of diversion to countries subject to EU or UN embargoes, and also consideration of the recipient countries' attitude towards international agreements/commitments.[81]

    The Government is not […] attracted by the idea of using subrogation clauses in the way in which the Committees suggest. There are legal difficulties in doing so because of the limits of UK jurisdiction, as well as difficulties in enforcement. It is also difficult to see what a subrogation clause achieves that cannot be achieved by other means—for example, by refusing applications from the exporter to the end user in question on the grounds of risk of diversion (Criterion 7). [82]

57.  In January 2009, BERR gave evidence to the Committee on the efficacy of the licensing system in assessing the risk of re-export. Ms Jayne Carpenter, Assistant Director of the Export Control Organisation, said that before licence were issued, UK diplomatic posts overseas were asked to comment on the applications. That could involve them looking at the application documentation and physically going to see where the end-user entity was located and assessing what sort of operation they have set up.[83] The then Economic and Business Minister, Ian Pearson, reiterated the Government position:

    Our view has always been as a government that the introduction of a no re-export clause on licences is not necessary or feasible and would be onerous to operate and virtually impossible to enforce […] there is I think a commonsense view that this would be a desirable thing to do but in practice there are some very serious practical legal barriers.[84]

However, the Minister added that he would be interested in seeing an assessment of how legally effective the no re-export clauses used by EU countries were.

58.  When asked what end-use monitoring was undertaken by the Export Control Organisation (ECO) after the licence was issued to ensure that controlled goods were not exported to an undesirable location or misused, Ms Carpenter said where there were a variety of different reporting mechanisms on end use: reports from FCO Posts overseas, NGOs, human rights organisation reports, media reporting, intelligence reports. However, it was not possible to check everything: "Given that we issue 10,000 or 12,000 licences a year, there is a limit in practical terms to the extent to which we can monitor the end use of every exported item".[85]

59.  After the evidence session, in a letter dated 19 February to the Committees, the Minister reiterated the Government's view that controlling re-export clauses would be problematic. He pointed out that the Government already had the power to revoke licences if it had evidence that an exporter was sending military equipment or technology to a licensed production facility that was using it to breach an arms embargo. The Minister claimed that re-export clauses would not add anything to the process other than an administrative burden to the exporters and the ECO, specifically in the case of licensed production facilities overseas:

    [I]n reality we would still lack any further power to stop equipment from the licensed production facility reaching sensitive destinations […]stating that something should happen in a contract is no guarantee that it will happen, and we would usually only become aware of breaches after the equipment in question had been exported. By that time, it would be too late to apply for an injunction to stop the export […] there would be no guarantee that any injunction would be enforceable in the country of the licensed production facility.[86]

60.  In a subsequent letter, the Minister was able to provide the Committee with an example of where Government policy had changed towards an end user and destination as a result of information received from sources. One such example was Mapna Turbine Blade Company, for which licences had been granted in the past.[87]

61.  When the then Minister for State at the Foreign and Commonwealth Office, Rt Hon Bill Rammell MP, gave evidence to us on 22 April 2009 he too repeated the Government view that re-export clauses would ask UK exporters to do something that is beyond their control and would be beyond the UK Government's legal jurisdiction.[88] When asked how other EU Member States use re-export clauses, Andrew Massey, Head of the Arms Trade Unit, told us:

    When I talk to my colleagues sitting around the COARM table in Brussels and say to any of them, "Okay, guys, this is all very well—when was the last time you tested it?" they all said, "We have never actually put it to the test". Then I ask them, "Do you think it is enforceable?" and there is then much staring at their toecaps. The reality is that they have this legislation there, but in my experience none of them have any confidence that if they went to apply it, it would make any difference. They do not believe that it is enforceable.[89]
  1. The UK Working Group on Arms remains opposed to the Government's position on re-export clauses and gave evidence to the Committees in March on the use of re-export clauses. Roy Isbister of Saferworld told the Committee, that in the case of the maritime patrol aircraft sold by India onto Burma, the Indian Government had told the UK Government that there had been nothing in the contract to say that the aircraft could not be sold on to Burma.[90]
  2. We are minded to take further evidence on the use of re-export clauses by other countries

64.  We conclude that, despite the Government's view that it considers that non re-export clauses would an unnecessary burden as they would be difficult to enforce, the requirement to have a non re-export clause in contracts for the supply of controlled goods would send a clear message to both parties to the contract that re-export to certain countries is unacceptable. We recommend that the Government gives further consideration to blocking this demonstrable loophole in its arms export controls regime.


65.  In previous Reports we have concluded that existing controls over licensed production overseas were inadequate and needed to be extended. We had considered the option that Government had set out in its 2007 Consultation Document that export licences for supplies to licensed production facilities or subsidiaries could be made subject to conditions relating to the relevant commercial contracts.[91] After further consideration, we recommended in our last Report that the Government make export licences for supplies to licensed production facilities or subsidiaries subject to a condition in the export contract preventing re-export to a destination subject to UN or EU embargo.[92] The Government Response to our Report stated that it had concluded that there was no convincing case for enhancing controls on the exports of controlled goods specifically in relation to licensed production.[93] We conclude that we do not agree with the Government's decision not to enhance controls on the exports of UK controlled goods produced under licence overseas and we recommend that the Government should explain in its Response why it came to this decision and whether it will reconsider its policy.

Military end-use controls and the "single action" clause

66.  End-use controls already operate in relation to items or technology that:

    are or may be intended […] for use in connection with the development, production, handling, operation, maintenance, storage, detection, identification or dissemination of chemical, biological or nuclear weapons or other nuclear explosive devices or the development, production, maintenance or storage of missiles capable of delivering such weapons.[94]

67.  However, the current Military End-use Control does not control complete items that, whilst not strategically controlled, could nevertheless be of significant use to the military in an embargoed destination; neither does it control any exports to non-embargoed destinations, some of which might be of considerable concern.[95]

68.  The Committees' 2008 Report recommended that the Government bring forward proposals for a systematic military end-use control regime.[96] The Government's Response stated that it was seeking an expansion of the current EU Military End-Use Control which would require licences for goods:

    which the exporter knows are intended for use in listed destinations by the military, police or security forces, or has been informed by the Government that the goods are or may be so used, where there is a clear risk that the goods might be used for internal repression, breaches of human rights, or against UK forces or those of allies.[97]

It is possible that the exports on the list provided to us in Ukraine would fall into this category. It was also intended that the control should be extended to apply beyond embargoed destinations, to additional listed destinations that are of heightened concern. The Government intended to hold further consultation with industry and NGOs on the wording of the proposed new control, including whether it would be workable in practice, with the intention of the UK negotiating changes at EU level.[98]

69.  Oliver Sprague of Amnesty International told the Committees that the NGOs were concerned that the control would not cover components parts, and questioned whether the proposals would cover the export of assembly kits of vehicles.[99] In its submission, the UK Working Group on Arms expressed disappointment at the slow progress of the proposals, particularly as the Government announced its decision in February 2007 to develop EU policy in this area.[100] The Working Group provided examples of cases where it believed that uncontrolled UK-made parts and components for military and security equipment being used in regions of instability: Land Rover vehicles used by Azeri military and UK traders allegedly involved in transfer of electronic components for Improvised Explosive Devices (IEDs) in Iraq.[101]

70.  In our last Report we examined the "Einzeleingriff", or "single action", clause used in Germany, whereby the transfer of an unlisted item could in principle be refused.[102] Although the NGOs thought that this approach would have advantages, EGAD and the Government had reservations. The then Minister told us that use of the clause had given the German authorities flexibility, but gave rise to uncertainty for exporters about what is and what is not controlled.[103] We also considered whether the ML6 category of the Military List should be amended to cover utility and transport vehicles supplied for military, security or police use, including those supplied as complete items or in kit form, and the ML10 category should be amended to cover utility and transport aircraft supplied for military, security or police use. The Government Response to our Report accepted that there was a case for tightening controls on the export of non-controlled goods but stated that its aim was to achieve this through expanding the EU Military End-use Control.[104]

71.  We are concerned that, since our last Report, the Government does not appear to have made much progress in its discussions with the industry on its proposals for an amended EU Military End-use Control. Our visit to Ukraine, and the information we received there about the possible exports made by UK brokers to overseas armed forces and police, has heightened our concern. We recommend that the Government report back to the Committees by the end of 2009 with further detail on the discussions that have taken place with industry and a timetable for introduction of its proposals for an amended EU Military End-use Control.

End-user undertakings

72.  The Export Group for Aerospace and Defence (EGAD) raised the issue with us in evidence that some of its members had encountered difficulties when seeking End-User Undertakings from the Ministry of Defence at the request of other EU Member States. In particular, EGAD stated that extent of knowledge and understanding of export control issues was variable amongst Integrated Project Teams at the Ministry of Defence—to the extent that the exact definition of "End-User" were greatly misunderstood. This has led to the MOD refusing to sign End-User Undertakings for intra-EU trade that are required of exporters by other EU Member States.[105]

73.  We recommend that the Government ensure that Integrated Project Teams in the Ministry of Defence who deal with UK exporters are fully aware of the regulations surrounding End-User Undertakings.


74.  We have in our past three Reports highlighted the need for the Government to commission independent research into the operation of the export control system.[106] In our Report last year we repeated the recommendation of the previous year that the Government carry out a government-wide assessment of the effectiveness of the operation of export control legislation since 2004 and that the Government in responding to our Report produce detailed evidence to demonstrate the effectiveness of export controls.[107] To assist the Government, we highlighted a number of areas where we considered further research would be profitable:

  • what volume and categories of the goods falling within definitions on the Military List and in the dual-use regulations were being exported without licences in breach of export controls;[108]
  • the extent to which dual-use goods not subject to control were exported from the UK and were then incorporated into equipment which had it been exported from the UK would have been subject to export control;[109]
  • whether the controls on the transfer of software were adequate, practicable and enforceable;[110] and
  • the reasons for the small numbers of applications for trade control licences from British citizens overseas.[111]

75.  The Government's Response to our last Report repeated the argument of previous years that the public consultation on the Review of export control legislation, the Government's own analysis, responses from COARM Member States to a UK questionnaire and consultation with Non-Governmental Organisations (NGOs), industry and the Committees provided evidence of the effectiveness of the system, and had fed in to the Review.[112] However, it also stated that once the Review had been concluded, the Government would take "a closer look" at the issue of the extent to which industry is aware of, and complies with, export controls. The Government was still considering commissioning a study but first needed to be certain that this would "add value to existing analysis, and would represent value for money."[113] The Response stated that any study commissioned would not be primarily about quantification of levels of non-compliance with strategic export controls, but would focus on "how to best implement and enforce strategic export controls and raise industry's compliance and awareness, so as to provide a basis upon which to review, and potentially re-focus, Government's awareness activities."[114]

76.  In our previous Report, we accepted that answers to such questions in the Consultation Document may have been useful but we pointed out that the respondents were self-selecting and the answers to some measure were unstructured. We were therefore not surprised that the Government said that it "did not get quite as much as we had hoped"[115] in response to the 2007 Consultation Document.[116]

77.  When asked in January 2009 whether the Government was still considering whether or not to commission a study, Ian Pearson, the then Economic and Business Minister, told the Committee that he would like to see a study happen, specifically "I do think that it would be a sensible use of public money to have a study that looked at non-compliance in the dual-use sector."[117] We are disappointed that the Government still has not made a formal decision on whether or not to commission research. We repeat our recommendation that the Government take steps to demonstrate the effectiveness of the export control system through the commissioning of independent research.

26   Report of the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq and Related Prosecutions (The Scott Report) HC (1995-96) 115, Vol IV, Chapter 2, para K2.1 Back

27   Department of Trade and Industry, Strategic Export Controls White Paper, Cm 3989, July 1998 Back

28   Department of Trade and Industry, Consultation on Draft Legislation: The Export Control and Non-Proliferation Bill, Cm 5091, March 2001 Back

29   HC (2007-08) 254, paras 24-33 Back

30   Ev 71 Back

31   Ev 58 Back

32   Defence, Foreign Affairs, International Development and Trade and Industry Committees, First Joint Report of Session 2006-07, Strategic Export Controls: 2007 Review, HC 117, para 76, HC (2007-08) 254, para 31 Back

33   HC (2007-08) 254, para 28 Back

34   HC (2007-08) 254, para 31 Back

35   Trade in Goods (Categories of Controlled Goods) Order 2008 (SI 2008/1805) Back

36   Export Control Act: Review of Export Control Legislation (2007)- Government's End of Year Response, pp 4-5 Back

37   HC (2007-08) 254, para 31 Back

38   Export Control Order 2008 (SI 2008/3231) Back

39   Cm 7485, p 4 Back

40   Q 2 Back

41   Q 1 Back

42   Q 4 Back

43   Q 79 Back

44   Q 80 Back

45   Ev 60 Back

46   Qq 105, 106 Back

47   Q106 Back

48   Q107 Back

49   Ev 72 Back

50   Q 78 [Marilyn Croser] Back

51   Statement by HE Mr Bent Wigotski, Ambassador, Denmark at the Third Review Conference of State Parties to the Convention on Certain Conventional Weapons, Geneva, 17 November 2006, Back

52   Q 199 Back

53   Q 202  Back

54  Q205 Back

55  Q208 Back

56  Ev109 Back

57  Q78 Back

58  Ev 109 Back

59   HC (2007-08) 254, para 33 Back

60   Export Control Act: Review of Export Control Legislation (2007)-Government's End of Year Response, p 5 Back

61   Cm 7485, p 6 Back

62   See Annex 1 Back

63   Q 82 Back

64   Ev 73 Back

65   Q 81 Back

66   Q 81 Back

67   Q 82 Back

68  HC(2007-08)254,para36 Back

69  HC(2007-08)254,Q151 Back

70  HC(2007-08)254,Q151 Back

71  Cm7485, p 6 Back

72  Q24 Back

73  Qq24-26 Back

74  Q26 Back

75  Q33 Back

76   HC (2007-08) 254, para 38 Back

77   Cm 7485, p 7 Back

78   Export Control Act 2002, Review of Export Control Legislation (2007)-Government's End of Year Response, p 6 Back

79   Q 36 Back

80   HC (2007-08) 254, paras 39-40 Back

81   Cm 7485, p 7 Back

82   Cm 7485, p 8 Back

83   Q 39 Back

84   Q 38 Back

85   Q 39 Back

86   Ev 65 Back

87   Ev 84 Back

88   Q 191 Back

89   Q 192 Back

90   Q 89 Back

91  HC(2006-07)117,para238 Back

92  HC(2007-08)254,para42 Back

93  Cm7485,pp7-8 Back

94  CouncilRegulation(EC)No.1334/2000,SettingupaCommunityregimeforthecontrolofexportsofdual-useitemsandtechnology,(theDual-UseRegulation),Article4.1,22June2000, Back

95  Cm7485,p8 Back

96  HC(2007-08)254,para46 Back

97  Cm7485,pp8-9 Back

98   Cm 7485, p 9 Back

99   Q 73 Back

100   Ev 74 Back

101   Ev 74-75 Back

102   HC (2007-08) 254, para 43 Back

103   HC (2007-08) 254, Q 204 Back

104   Cm 7485, pp 8-9 Back

105   Ev 109 Back

106   Defence, Foreign Affairs, International Development and Trade and Industry Committees, First Joint Report of Session 2005-06, Strategic Export Controls: Annual Report for 2004, Quarterly Reports for 2005, Licensing Policy and Parliamentary Scrutiny, HC 873, paras 76 and 100; HC (2006-07) 117, paras 25-32; HC (2007-08) 254, paras 22-23  Back

107   HC (2007-08) 254, para 23, HC (2006-07) 117, paras 29 and 31 Back

108   HC (2005-06) 873, para 76; HC (2006-07) 117, para 25 Back

109   HC (2005-06) 873, para 100; HC (2006-07) 117, para 25 Back

110   HC (2006-07) 117, paras 90-91  Back

111   HC (2006-07) 117, para 59 Back

112   Cm 7485, pp 3-4 Back

113   Cm 7485, p 3 Back

114   Cm 7485, p 3 Back

115   HC (2007-08) 254, para 23, Q 149 Back

116   The responses were published at Back

117   Q 61 Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2009
Prepared 19 August 2009