Committees on Arms ExportsLetter to the Chair of the Committees from the Rt Hon Vince Cable MP, Secretary of State for Business Innovation and Skills

I look forward to giving evidence to the Committee next Tuesday.

I am aware that there is one outstanding issue on which you have asked for a letter from me prior to the evidence session. This, as set out in your letter of 10 January, is the question of our approach to three inter-related issues: preregistration of arms brokers, “Brass Plate Companies” and the extra-territorial application of arms brokering rules.

In terms of our overall approach to these issues, I think that the UK regulatory framework governing arms brokers is now broadly speaking in good shape. Those activities which should be licensable are licensable.

On the specific question of extra-territorial law enforcement, I am always inclined to be wary of going too far down this route. I think extra-territoriality can be justified in the case of the most undesirable types of activity conducted by UK nationals overseas: in other words, normally activity that we would seek to prohibit, not activity that we would seek to license. I am not so far convinced that it would be right to extend the reach of UK law to cover all trade in defence goods, including the least sensitive, by UK nationals. But I am open to hearing your views on this point.

Looking forward, the main challenge that I see in the area of arms brokers and “brass plates” is one of enforcement. The Government has had some successes in recent years. But it is an ongoing challenge: the fact that a company may be flouting the law does not necessarily mean that we can always catch them, gather the evidence and present a case that will convince a court.

With this in mind, I would be happy to offer the Committee a briefing with officials where they would be able to pursue some of these issues in more detail, and where appropriate in confidence.

The Committee might be interested in combining this with a visit to the Export Control Organisation in my Department, which could include a demonstration of the licensing process. I understand that you and your colleagues have not had the opportunity to see this in action since the introduction of the SPIRE system.

I will be happy to explore these questions with you next week.

2 February 2011