Committees on Arms ExportsSupplementary written evidence from Amnesty International UK

The recent collapse of a UK prosecution dealing with the brokering and trafficking of small arms and ammunition to Nigeria in 2007.

This supplementary evidence deals with a recent UK court case involving the brokering and trafficking of substantial quantities of small arms and ammunition to Nigeria from China in 2007. The case involved UK gun dealer Gary Hyde. The subsequent collapse of the case on 19 January 2012 raises a number of issues about existing UK legislation relating to brokering and trafficking activities. At the time of writing (April 2012), the case has been referred to the Court of Appeal and its outcomes not known.

My Hyde was charged with breaching article 4.2 and article 4.3 of the 2003 Export of Goods (Control Order) relating to contract negotiations and payments made for these services without the necessary trade control licences. The 2007 deal involved the brokering of 40,000 AK assault rifles, 30,000 rifles, 10,000 9mm pistols and some 32 million rounds of ammunition to Nigeria from China. The court case never disputed that Mr Hyde was involved in this deal, nor that he and his business partner, German national Karl Kleber received some $1.3 million pounds in payment to a bank account in Liechtenstein.1 The case collapsed after Mr Hyde’s Defence team successfully argued that he was not responsible for initiating contract negotiations, but was merely taking over a deal and contract that had already been negotiated. The Judge accepted the arguments that the 2003 Export Goods (Control) Order should only be considered in terms of negotiating new contracts and therefore both article 4.2 relating to contract negotiations, and any subsequent payments made for involvement in this existing contract (article 4.3) could not be considered.2 The Jury was discharged on Thursday 19 January 2012 with Judge Loraine-Smith concluding that the case had to “fail in law”.3

Amnesty remains concerned that such a narrow definition of brokering and trafficking activities could set a dangerous precedent for future and pending cases. Amnesty does not believe that it was ever the intention of the UK government to limit Brokering activities solely to the negotiation of new contracts nor limit fees or payments received for contract negotiations. We believe that the law was intended to capture “any” activity, including payments or related benefits received for any act calculated to move controlled goods from one third country to another. There were certain exemptions relating only to finance, sole involvement in transport and general promotional and marketing activities, but these were not activities undertaken by Mr Hyde in relation to this deal.

We urge the Committee to seek urgent clarifications as to the actual scope of existing Brokering legislation and if necessary, amend existing Secondary legislation to ensure that it is clear that ALL brokering activity, not that limited purely to new contract negotiations; and ALL payments and related benefits will apply to the whole spectrum of brokering activities and not limited to just new contract negotiations.

Extraterritorial Considerations

It was accepted in evidence, that My Hyde was engaging in the movement of these weapons into Nigeria from China and that he received payment for these activities to offshore bank accounts. It was however, successfully argued that some of the negotiations took place wholly overseas and therefore were not subject to prosecution. At the time the activities took place, Small arms and light weapons were not subject to extraterritorial applications, unless the destination was subject to an arms embargo. Whilst Amnesty accepts that similar items are now subject to full extraterritorial controls, by virtue of them being placed in Category B of current UK export controls, this same situation would apply to anyone engaged in brokering or trafficking activities for Category C goods. Amnesty remains concerned that UK registered companies, at the very minimum, should not avoid trade controls applicable to any goods, including Category C goods, by virtue of them doing business overseas in cases where a UK company is directly facilitating the deal, by for example using letter head and/or other documentation bearing UK company addresses as part of the negotiations. Amnesty urges that the law is amended at the earliest opportunity to close this loophole.

Full extraterritorial trade controls, at a minimum should apply to any UK registered company where that company is directly involved in brokering activities. Any UK company using its paper work or its company trading name to facilitate deals should automatically be captured under Trade Control legislation for all controlled goods, including Category C items.

April 2012