Global Security: Non-Proliferation - Foreign Affairs Committee Contents

 Submission from Export Group for Aerospace and Defence

  Many thanks for inviting us to give evidence to the Committee on the afternoon of Thursday 28 January 2009, which we very gladly accept.

  We must apologise for failing to meet the Committee's deadline for the receipt of memoranda. If we may, we would like to submit to the Committee, for their consideration, the following comments, which we hope that you will be able still to accept.

  The Export Group for Aerospace and Defence (EGAD) is the only dedicated national industrial trade body in the UK dealing with export control issues. EGAD operates under the joint auspices of: the Association of Police and Public Security Suppliers (APPSS), the British Naval Equipment Association (BNEA), the Defence Manufacturers Association (DMA), INTELLECT, the Society of British Aerospace Companies (SBAC) and the Society of Maritime Industries (SMI).

  The services provided to Members include:

    —  Providing reliable information concerning export control issues;

    —  Providing a forum for discussion and education;

    —  Sharing of information and experiences;

    —  Lobbying Government for and on behalf of the Membership.

  EGAD's overall purpose may be summarised as follows:

To provide a Defence and Aerospace Industry focus for export control issues'

  1.  We believe that Her Majesty's Government's stated commitment to non-proliferation efforts is highly laudable, and, indeed, is utterly essential, especially at this time with a growing perception of increased threat to us all, especially from non-state actors. However, conversely, industry continues to experience practical difficulties in getting signed End-User Undertakings (EUUs) out of our own UK MoD, to satisfy the export control authorities of other sovereign nation states. While we understand the arguments of principle adduced by the UK MoD, the fact is that this does not offer a very good example to others.

  2.  In this regard, it must be understood that the constituent elements of a so-called "dirty bomb" are, for the most part, more likely to be found on the dual-use control list than on the military list. Therefore, at present the greatest enforcement effort does not appear to be focused on the greatest perceived threat. Enforcement is, though, not the first stage in the export control process; more significant is the need to ensure that exporters of licensable items are actually working within the export control system, in the first instance.

  3.  Prima facie, it is worrying that the Defence industry, which accounts for approximately 2% of UK GDP, accounts 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.

  4.  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.

  5.  The difficulties of bringing these companies into the compliant community are well recognized, both by Government and Industry; however, the risk of not doing so is that an easy market for proliferators is created, in addition to an "uneven playing field" commercially where compliant companies alone carry the overhead of the Regulations and the non-compliant compete at an advantage, at a time of acute financial stress.

  6.  For the foregoing reasons, we believe that HMG must put in much greater effort (and resource) into enhancing the effectiveness of the UK's export controls relating to the dual-use sector, as this is clearly the area of greatest potential concern in this arena; if only HMG could be clearly perceived to be doing this just as vigorously as it is in the conventional sector (eg the Military List), then there would be far fewer concerns.

  7.  We were delighted to read recently about the fact that Mr Colin Stott and Mr Simon Knowles, directors of Organic Intermediates Limited, based near Liverpool (which went into liquidation in August 2004), have become the first people to be prosecuted under the Chemical Weapons Act, and been fined for breaching rules designed to halt the spread of weapons of mass destruction (WMD). We look forward eagerly to hearing and reading more about other similar successful prosecutions that HMG may pursue in the future.

  8.  Currently, global efforts at counter-proliferation just do not work, as they cannot actually prevent proliferation, but, at best, can merely delay it and mildly inconvenience the potential customers, whilst they scour around the World for an alternative source of supply. Therefore, on this basis, it really does not matter how much more effective we make our own system, unless these efforts and systems are replicated by other nations. With that in mind, we applaud HMG for its outreach activities in other countries, but believe that much more of this needs to be done.

  9.  We believe that HMG is to be congratulated for its efforts to promote the proposed International Arms Trade Treaty, which does offer considerable potential benefits, although, contrary to the overly-enthusiastic pronouncements of some in the NGO lobby, we do not perceive this, alone, as being a panacea, in itself.

  10.  Business has gone global, whilst regulatory regimes are still implemented at the national level; this basic fact must be seen to be what it is: a fundamental weakness in the global counter-proliferation system.

  11.  Under the ATT, we would want to see total transparency on what has been approved for export by other nations.

  12.  For a truly effective ATT to be introduced, there must be provision of capacity-building outreach assistance to other signatories, by HMG, and other nations who have effective and robust export control systems of their own.

  13.  For the ATT to succeed, there needs to be greater clarity on definitional issues, to minimise the burden on legitimate Industry and to make the systems and procedures more robust.

  We hope that the above comments may be of interest to the Committee.

Mr Brinley Salzmann,


18 December 2008

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