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

7 The EU and the international perspective


105.  Previous work of the Committees has included scrutiny of the reviews on arms exports at a European level: we follow up that work here. In this section we also report on progress made by the UK in work towards an international arms trade treaty. Finally, throughout 2008 the Committees have focussed their evidence sessions with Ministers and stakeholders on the subjects of export of arms to Sri Lanka and Israel. We report on the evidence we have received so far.

Adoption of the EU Code of Conduct on Arms Exports as a Common Position

106.  The EU Code of Conduct on Arms Exports adopted on 8 June 1998 forms the basis of the UK's decision-making process for licence applications. The Code contains political commitments, but is not legally binding. It represents minimum standards which all Member States have agreed to apply to exports of controlled goods. These standards are defined through a common set of criteria to be used in deciding whether proposed exports should be allowed. The Government has published consolidated EU and National Criteria which explain how it interprets the terms of the Code.[150]

107.  As noted in our previous Reports, the EU Code has been subject to a fundamental review and a revised code was agreed at a technical level with an agreement in principle that the revised text should be adopted as a Common Position under Article 18 of the Treaty of European Union. This Common Position would be legally binding on Member States, who would be obliged to ensure that their domestic legislation conformed with the Common Position.[151] We welcomed the revisions and recommended in our last Report that the Government continue to press determinedly for the revised EU Code of Conduct on Arms Exports to be adopted with this status.[152] In response to our recommendation the Government said that it remained strongly committed to seeing the Code of Conduct adopted as a Common Position and had detailed discussions with other Member States aimed at resolving concerns that had been raised. In addition, it had already subjected the text to parliamentary scrutiny, which would enable the UK to move quickly to adoption once consensus on adoption has been reached.[153]

108.  We recommend that the Government report back to the Committees by the end of 2009 on how discussions with other EU Member States have progressed towards consensus on a revised EU Code of Conduct on Arms Exports to be adopted as a Common Position.

Peer review of implementation of EU Council Regulation 1334/2000 on dual use

109.  In 2006-07, the Committees asked about progress in carrying out recommendations arising from the 2004 peer review on the implementation of EU Council Regulation 1334/2000 on the control of dual-use items in the enlarged EU. In a memorandum received in April 2008, and printed in our last Report, the Government said that there was no need for domestic legislation but that Council Working Groups were still considering the Regulation.[154] In our last Report we recommended that:

    the Government explain whether the conclusions and recommendations from the peer review of the implementation of EU Council Regulation 1334/2000 on the control of dual-use items have led to changes in the operation of the export control system to improve its effectiveness.[155]

In response, the Government said that work on the Regulation would be finished by the end of 2008, and "thereafter it will be possible to focus more attention on some of the other aspects of the Review's conclusions and recommendations".[156]

110.  Ian Pearson was questioned by us in January 2009 on the progress made by the Council Working Group review on the dual-use regulation:

    I think there was some hope that during the French Presidency it would come to conclusions, but that has not been possible […] There is still some more work for the Council Working Group to do and we are playing our full part in that.[157]

111.  In evidence to us on 11 March, the NGOs expressed frustration that little action appeared to have been taken on amending the dual-use regulation, even though the Government had promised to take a lead on EU discussions.[158] A main concern for the NGOs was to ensure that the EU implements its obligations on dual use so far as they relate to UN Security Council Resolution 1540 (2004) on the non-proliferation of weapons of mass destruction and their means of delivery.[159]

112.  EGAD also raised separate concerns about non-compliance and enforcement in the dual-use sector:

    [I]t remains worrying that the Defence Industry, which accounts for approximately 2% of UK GDP, continues to account for over 60% of export licences. At the very least, this lends strong support to the (very considerable) anecdotal evidence that there is significant non-compliance in the dual-use sector […] This non-compliance is not that which is often encountered by the relevant agencies, that of a mostly law-abiding and compliant exporter making an honest mistake or a technical breach of licence conditions; rather it is a sector of what should be a regulated Industry operating wholly outside of the regulatory regime.[160]

EGAD recommended that the government put in as much effort into enhancing the effectiveness of the UK's export controls relating to the dual use sector as it put into controls on controlled goods within the conventional sector.

113.  We recommend that the Government report back to the Committees by the end of 2009 the progress made by the EU Council Working Group on the implementation of the recommendations of the review on EU Council Regulation 1334/2000. In its Response the Government should set out the necessary steps that need to be taken by the EU to implement the recommendations of the review together with the Government's strategy for achieving implementation.

EU Arms Embargo on China

114.  In our last Report we noted that the value of standard individual exports licences (SIELs) issued for exports to China had increased steadily from 2004 to 2007, despite the arms embargo being in place since 1989.[161] When asked whether the embargo had any economic or commercial effect, the FCO responded:

    It is important to note that it is not a "full scope" embargo. The export of some controlled goods to China was always envisaged and thus, increases in the volume of exports for controlled goods that are not covered by the terms of the embargo should not be seen as a barometer of the effectiveness of the embargo. It is also difficult to assess the economic and commercial impact of the embargo based on one year's figures, and this needs to be assessed against a longer period.[162]

115.  Whilst the Government told us that it continued to have "serious concerns" about human rights in China, it argued that: "Strengthening the arms embargo would do nothing to encourage dialogue, and would risk isolating the Chinese Government in a way which would make it significantly more difficult for us to raise human rights concerns."[163]

116.  We repeat our conclusion that the British Government and the EU should maintain their arms embargo on China, and that the Government should provide us in its Response with an update on its assessment of the human rights situation in China and of the adequacy of the current arms embargo in place.

Progress towards an Arms Trade Treaty

117.  We have previously commended the Government's support for an international Arms Trade Treaty (ATT)[164] and continue to monitor the progress of negotiations. This subject has also been covered more fully in the Foreign Affairs Committee's recent Report on non-proliferation.[165]

118.  The meetings of a Group of Governmental Experts (GGE) between February and August 2008 established the existence of divergent views as to the feasibility of the ATT, what should be its scope and which activities and transactions should be covered, and the parameters of the treaty, for example the "applicability of existing international human rights law and international humanitarian law".[166] Subsequently, in December 2008, despite US opposition and a number of key abstentions, the General Assembly endorsed a First Committee resolution which called on the UN to establish an Open Ended Working Group (OEWG) to "further consider those elements in the report of the Group of Governmental Experts where consensus could be developed for their inclusion in an eventual legally binding treaty.[167] The OEWG will be open to all Members States to participate and will meet a total of six times between March 2009, when it first convened, and 2011.[168] Despite voting against the General Assembly Resolution, the US are taking part in the OEWG and Bill Rammell described the contributions of the US delegate as "constructive".[169] Jo Adamson, the FCO's Deputy Head of Counter Proliferation added that she had been "really struck by the change in tone from the delegate at that meeting", but admitted that "we have now got to dig below what would be beyond engagement."[170]

119.  The Export Group for Aerospace and Defence (EGAD) continues to support the Government in its pursuit of an ATT. However, EGAD referred to "the overly-enthusiastic pronouncements of some in the NGO lobby", adding "we do not perceive this, alone, as being a panacea."[171]


120.  One critical question remains the balance that will emerge between the strength of an ATT and the number of Member States willing to sign up to its provisions. One of the key elements of the strength of the treaty will be its scope. NGOs stressed to us that the a scope limited to the UN Register of Conventional Arms' seven categories of major conventional weapons with the addition of small arms and light weapons, the so-called "7+1 formulation", would not produce a sufficiently comprehensive treaty.[172] For example, it would exclude a number of categories of weapon, as well as components and parts.[173] Amnesty further suggested that states would find such a treaty difficult to implement "because [7+1] is not reflected in their own control lists".[174] In oral evidence Amnesty, Saferworld and Oxfam went as far as to state that they would not lend support to a treaty based on 7+1.[175] Marilyn Croser of Oxfam said:

    We feel very strongly that the Government needs to be out there arguing for broad scope, high standards, because otherwise they are going to end up with something that is not effective. If you go into a negotiation position with a kind of fairly low bar, then what tends to happen is the bar goes down as negotiations go on, and that is why it is very important going into a negotiation to have the bar high.[176]

EGAD also highlighted the practical implementation problems of using the UN list as a basis for the treaty and additionally stressed that re-using the alternative Wassenaar Military list would run the risk of associating the ATT with the Wassenaar states.[177] Further, they expressed concern about adding to the burden on industry and suggested "some kind of harmonisation of the list so that everybody was playing off the same level playing field". They stated that a harmonised list would be preferable to maintaining individual states' rules on extra-territoriality.[178]

121.  Bill Rammell acknowledged the "absolutely legitimate concern" with respect to the strength of an eventual ATT and told us that:

    we most certainly do not want a weak treaty and will do everything in our power—and I do have a difficulty without revealing a negotiating hand—to ensure we set the threshold as high as possible. If, at the end of the day, we get a weak treaty that does not make a material difference, I would regard that as a failure.[179]

122.  We conclude that the Government is to be commended for its continuing commitment to an international Arms Trade Treaty (ATT). We recommend that the Government continue to seek an ATT that is as strong as possible. We conclude that a successful ATT should be clearly enforceable, have as wide a scope as is achievable, and underline the applicability of international human rights and humanitarian law. We concur with the recommendation of the Foreign Affairs Committee, that if in the future, the Government is forced to choose between giving priority to the strength of the treaty or achieving the widest possible ratification, it should give priority to securing the strongest possible treaty.

Sri Lanka

123.  In the course of our evidence sessions, we raised our concerns with witnesses on the subject of Sri Lanka. On 11 March 2009, we asked representatives of the Export Group for Aerospace and Defence (EGAD) to what extent they saw similarities between exporting arms to Sri Lanka and Israel. David Hayes, Chairman of EGAD, told us that an embargo would be "a matter for Government, not for industry".[180] However, Nigel Knowles, Vice Chairman of EGAD, felt able to offer an argument against an embargo, citing the leverage generated by trade. He suggested that it was sometimes necessary "to take a little grief in order to keep a friendship".[181] We were not persuaded either by the leverage generated in this case, or indeed the general principle. Indeed, the Campaign Against Arms Trade notes in its written memorandum that the Defence Industrial Strategy concluded that "the balance of argument about defence exports should depend mainly on non-economic considerations".[182]

124.  We pursued the issue of Sri Lanka with Bill Rammell at our session on 22 April 2009.[183] He told us that the FCO's judgment was that an embargo, or the threat of one, was not the best vehicle for trying to secure a ceasefire.[184] Using an embargo signalled "the end of the diplomatic road" and demonstrated that a lot of influence had been lost.[185] The Minister told us that few licences had been granted for exports to Sri Lanka since the beginning of 2007 which he cited as evidence of procedures being effective.[186]

125.  The issue of Sri Lanka illustrates the difficulties faced by the Government, and by those who, like us, scrutinise the licensing decisions made by Government, in assessing how exports of arms might be used by the destination country at a future date, particularly if political situation in the country at the time of the exports appears stable. Bill Rammell told the Committees that licensing decisions were based on evidence from FCO posts, from NGOs, newspaper and media reports and a variety of other sources.[187] He said that "you make judgments based on the situation at the time; you do not make judgments for ever and a day."[188] In its submission to us, Saferworld listed the type of weapons that had been licensed for export to Sri Lanka from 1997 onwards, including the period of the fragile ceasefire starting in 2002.[189] During the ceasefire, a wide variety of military equipment and weapons were exported to Sri Lanka, and, due to the extremely limited access of international observers to Sri Lanka, it is impossible to be certain how many of those weapons were used subsequently against the civilian population when hostilities began to escalate again in 2006. Bill Rammell argued that few licences had been issued for Sri Lanka since 2007, but accepted that the international community had not focussed enough on what had been happening in Sri Lanka.[190] We note the fact that in the period 1 April 2008 to 31 March 2009, 34 licences were issued for export to Sri Lanka, and we will be keeping a keen eye on all future exports.

126.  We conclude that the policy of assessing licences to Sri Lanka on a case-by-case basis is, in our opinion, appropriate. However, we recommend that the Government should review all existing licences relating to Sri Lanka and provide in its Response an assessment of what implications the situation in Sri Lanka will have on how the Foreign and Commonwealth Office judges the possible future use of strategic exports by that country and the risk that the export licensing criteria might be breached. We further recommend that the Government provide in its Response an assessment of what UK supplied weapons, ammunition, parts and components were used by the Sri Lankan armed forces in the recent military actions against the Tamil Tigers.


127.  We have focussed particularly this year on arms exports to Israel, an issue on which we have previously commented. In parallel, the Foreign Affairs Committee has reported on these issues in its Report into Global Security: Israel and the Occupied Palestinian Territories.[191] We will not repeat the full discussion of the evidence in that Report on the merits of imposing an arms embargo on Israel. Instead, we focus particularly on the more technical issues relating to whether or not components supplied under licence from the UK (particularly incorporated in products assembled in a third intermediary country) were used by the Israeli Defence Forces (IDF) in Gaza during Operation Cast Lead which began on 27 December 2008. The Foreign Secretary made a Written Ministerial Statement on 21 April which stated the Government's understanding of the situation.[192]

128.  We have previously commented on the Government's decision in 2002 to authorise the export to the USA of components for incorporation into aircraft for onward export to Israel, when it would not authorise the export of the relevant components or aircraft to Israel directly.[193] Under the 2002 decision, the UK has supplied components to the US for incorporation into F-16 fighter aircraft and Apache attack helicopters. We questioned Ian Pearson on this subject in January and he later wrote, clarifying the Government's position:

    At the evidence session I stated, on the basis of advice that I had received, that no export licences for F-16 Head-Up Display (HUD) equipment to Israel had been granted since 2002.

    While this is correct, I would like to clarify that this refers to licences for the export of F-16 HUD components direct (underlined) to Israel, for use in Israel. Since that date there have been a small number of licences granted for these goods where, although not going direct to Israel, we were aware that Israel was the ultimate end-user.[194]

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