Committees on Arms ExportsLetter to the Chair of the Committees from Rt Hon William Hague MP, First Secretary of State and Secretary of State for Foreign and Commonwealth Affairs, Foreign and Commonwealth Office

Thank you for your letter of 25 January on exports to China, your letter of 17 January on the vessel “Thor Liberty”, your letter of 16 January on questions arising from Annex B of the Government’s Answers to earlier CAEC questions about equipment that could be used for internal repression, and our letter of 24 October concerning the classification of Government responses to the Committees’ questions concerning Quarters 3 and 4 2010.

We are committed to continuing to work closely and constructively with the CAEC. The Committees play an important role in scrutinising Government policy on arms exports and are an important vehicle for building public confidence in our export licensing regime.

I enclose:

Annex A—a response to your letter of 16 January;
Annex B—a response to your letter of 17 January;
Annex C—a response to your letter of 25 January.

I hope shortly to be able to send you a substantive response to your letter of 24 October. In the meantime, I enclose a copy of the Statement that the Business Secretary and I laid before Parliament this week as part of our efforts to increase transparency.

I look forward to seeing you and the CAEC on 7 February. I propose not to make an opening statement, knowing your desire to allot as much time as possible for Members’ questions. But I would like to take the opportunity in this letter to outline briefly some thoughts on export licensing and the importance of this in relation to Britain’s economy and industry.

Effective arms export controls are central to both the UK’s security and prosperity. They ensure that we always act in accordance with our values of promoting human rights and democracy. I believe that defence and security exports that comply with the Consolidated EU and National Arms Export Licensing Criteria arc both legitimate and important. All countries have the right to an effective, secure defence. The Government uses its export licensing powers to ensure that Britain only licences defence exports that comply with the Consolidated Criteria.

Our defence and security sectors are important areas for British jobs and for our economic recovery. UK Trade & Investment (UKTI) report that Britain’s defence and security sectors employ over 600,000 people and export over ES billion worth of goods and services a year. But the importance of the sector does not mean ignoring our values, including the promotion of democracy and human rights abroad. I maintain that Britain has one of the most robust licensing systems in the world, with human rights and freedoms at his heart.

The Government responded swiftly to the Arab Awakening and revoked a number of licences. These revocations were correct and responsible decisions to take in the light of changed circumstances, this does not mean that the original licensing decisions were flawed or misjudged. Given the significant changes in the region, it is right and reasonable that risk assessments be updated and licences that no longer are consistent with the Consolidated Criteria need to be revoked.

We have looked to further strengthen the system following the FCC) Review; we are making progress on implementing the proposals. In my Written Ministerial Statement of 13 October, I described the measures I am taking to strengthen further our already robust system. Implementation is well underway and I [will] this week announce to the House that the new suspension mechanism is now ready for use.

The new mechanism allows immediate licensing suspension to countries experiencing a sharp deterioration ha security or stability, thus ensuring that export licensing policy is more responsive to rapidly changing circumstances overseas. Suspension may not be automatic or invoked lightly, but triggered for example when conflict or crisis conditions change the, risk suddenly, or make conducting .a proper risk assessment difficult.

We are firmly committed to securing agreement this year on a robust and effective, legally binding Arms Trade Treaty to regulate the international trade in conventional arms. This remains a priority for us and we will be working hard over the coming months towards that goal with a reinforced team in our newly created Arms Export Policy Department, who will continue their regular dialogue with NGOs, Industry and civil society on this and. other export licence issues.

Annex A

Thank you for your letter of 16 January attaching Questions arising from Annex B of the Government’s Answers to the Committees questions relating to the review of Government policy and practice with regard to the export of equipment that might be used for internal repression (my letter of 30 September refers).

It is now my pleasure to forward to the Committees the attached response which answers Questions in your letter of 16 January, our answers are in italics.

SIEL Revocations

1. Have there been any SIEL revocations additional to those set out in Table 1? If so please provide the details as in Table 1

No.

OIEL Revocations

2. Have there been any OIEL Revocations additional to those set out in Table 1? If so, please provide the details as in Table 1

No.

Abu Dhabi, Kuwait Qatar

3. In Table 1, details are provided of arms export: licences to Abu Dhabi, Kuwait and Qatar, The CAEC asked for details of all extant arms export licences in respect of each country for which licences have been revoked. No details of extant arms export licences to Abu Dhabi, Kuwait and Qatar appear in any of the Tables 3(a), 3(b), 4 or 4(b). Please could these details be provided for Abu Dhabi, Kuwait and Qatar in the same format as in Tables 3(a), 3(b), 4 or 4(b)?

The two licences which were revoked for Abu Dhabi, Kuwait and Qatar included Bahrain as a destination and were revoked for this reason only. As there have been no reports of civil unrest in Abu Dhabi, Kuwait and Qatar and we judged that licences for these countries would still be consistent with the Criteria. Licences have not been revoked for these countries unless they are linked with another destination for which licences are being revoked.

Bahrain

4. Why are there arms export licences still extant for cryptographic software and equipment employing cryptography (Tables 3(a) and 3(b)) when licences for cryptographic software and equipment employing cryptography have been revoked (Tables 1 and 2)?

Table 3(a) and 3(b) identifies extant SIELs for Bahrain. There are still it extant licences for cryptographic software and equipment employing cryptoloaphy. Seven of these licences were granted for civil end use for telecommunications systems, internet/network connectivity and data connectivity. The remaining four licences are for Government end use to be used as a telecommunications system between two buildings and for internet connectivity. Following the review of licences for Bahrain in 2011 we judged that these licences remained consistent with the Criteria following a consideration of the goods, end user and purpose of the export.

5. Why are there arms export licences still extant for small arms ammunition (Tables 3(a) and 3(b)) when licences for small arms ammunition have been revoked (Tables 1and 2)?

Table 3(a) and 3(b) identifies extant SIELs for Bahrain. There are five extant licences for small arms ammunitions. These licences are for sporting shooting and vermin control. Following the review of licences for Bahrain in 2011 we judged that these licences remained consistent with the Criteria following a consideration of the goods, end user and purpose of the export.

6. Why are there arms export licences still extant for body armour (Tables 3(a) and 3(b)) when licences for body armour have been revoked (Table 2)?

Table 3(a) and 3(b) identifies extant SIELs for Bahrain. There is one extant licence for a small quantity of body armour for personal protection use only. Following the review of licences for Bahrain in 2011 we judged that this licence remained consistent with the Criteria following a consideration of the goods, end user and purpose of the export.

7. Is the Government still satisfied that none of the extant arms export licences to Bahrain listed in Table 3(a), 3(b), 4 and 4(b) with values for SIELs “now contravenes Criteria 2 and 3”, this being the Government’s “Reason for Revocation” for every revoked arms export licence listed in Annex 1 of the Government’s Response (Cm 8079) to the CAEC’s last Report MC 686)?

We are satisfied that none of the extant arms export licences listed in Tables 3(a), 3(b), 4 and 4(b) contravene Criteria 2 and 3. We continue to monitor the situation in Bahrain. In line with normal practice, export licences for Bahrain are kept under constant review and every licence is scrutinised in light of changing facts on the ground.

Egypt

8. Why are there arms export licences still extant for military communications equipment (Tables 4 and 4(b)) when licences for military communications equipment have been revoked (Table 2)?

Extant licences for military communications equipment

Table A and 4 (b) identifies export licences (OIELs) that are still extant for military communications equipment (three in total). These permit i) temporary exports of software modules for use during exhibitions, demonstrations, consultancy and personal use by company employees ii) software for military equipment to authorised agents, value added resellers and area partners for marketing and support purposes in country iii) communications equipment and subassemblies for military use such as software for headset. Following the review of licences for Egypt in February 2011 we judged that these licences remained consistent with the Criteria following a consideration of the goods, end user and purpose of the export.

Revoked licences for military communications equipment

Table two identifies two applications for Military communications equipment and software for military communications equipment. -These two OIELs were revoked following the review of Egypt extant licences in February. We noted that the goods would offer capability for situational awareness, command and control. Furthermore the second OIEL contained goods for military helmets and components for an integrated helmet system. As the OIELs permitted export to government linked end users, which would in practice enable exports to the internal security forces and the police we judged that these applications were no longer consistent with the Criteria and the Government would request SILL licences for exports of this nature.

9. Is the Government still satisfied that none of the extant arms export licences to Egypt listed in Tables 3(a), 4. And 4. (b) With values for SIELs contravene Criteria 2 and 3?

We are satisfied that none of the extant arms export licences listed in Tables 3(a), 4 and 4(b) contravene Criteria 2 and 3. We continue to monitor the situation in Egypt. In line with normal practice, export licences for Egypt are kept under constant review and every licence is scrutinised in light of changing facts on the ground.

Libya

10. Is the Government still satisfied that none of the extant arms export licences for Libya listed in Tables 3(a), 4 and 4(b) with values for SIELs contravene Criteria 2 and 3?

We are satisfied that none of the extant arms export licences listed in Tables 3(a), 3(b), 4 and 4(b) contravene Criteria 2 and 3. We continue to monitor the situation in Libya. In line with normal practice, export licences for Libya are kept under constant review and every licence is scrutinised in light of changing facts on the ground.

Saudi Arabia

11. Is the Government still satisfied that none of the extant arms export licences to Saudi Arabia listed in Tables 3(a), 4 and 4(b) with values for SIELs contravene Criteria 2 and 3?

We are clear that the identified was do not contravene Criteria 2 and 3. We examined extant licences following the unrest in Saudi Arabia and we were satisfied that licences remained and continue to remain consistent with the Criteria. To date, there is no evidence that UK supplied equipment has been used in breach of the Criteria in Saudi Arabia, or in Bahrain where Saudi forces were deployed to protect installations as part of the Peninsula Shield force, at the legitimate request of the Bahraini Government. In line with normal practice, export licences for. Saudi Arabia are kept under constant review and every licence is scrutinised in light of changing facts on the ground

Syria

12. Is the figure of only one arms export licence revocation to Syria stated in Annex B, paragraph 1, this being for military cargo vehicles and components for military cargo vehicles, correct given that a further licence revocation of small arms ammunition to Syria was detailed by the BIS Minister Mark Prisk in his Written Answer to Sir John Stanley on October 10 (Column 258W)?

There has been one licence revocation for Syria for small arms ammunition. The licence for military cargo vehicles and components for military cargo vehicles is in fact a licence that was revoked for Libya and not for Syria.

13. Is the Government still satisfied that none of the extant arms export licences to Syria listed in Table 4 with values for SlELs, including the licences relating to equipment employing cryptography, contravene Criteria 2 and 3?

We are satisfied that none of the extant arms export licences listed in 4 contravene Criteria 2 and 3. We continue to monitor the situation in Syria. In line with normal practice, export licences for Syria are kept under constant review and every licence is scrutinised in light of changing facts on the ground.

Tunisia

14. Why were the arms export licence revocations to Tunisia detailed in the Government’s Response (Cm 8079) not included in Table 1 and/or 2?

Tables 1 and 2 were produced in answer to a question which asked about revocations made since the Government announced its review of licences on 18 February 2011. The licences in question were revoked earlier.

15. The CAEC asked for details of all extant arms export licences in respect of each country for which licences have been revoked. No details of extant arms export licences to Tunisia appear in any of Tables 3(a), 3(b), 4 or 4(b). Please could these details be provided for Tunisia in the same format as in Tables 3(a), 3(b), 4 and 4(b)?

As noted above the tables were produced in response to a question which excluded the Tunisia revocations and therefore we did not include details of the extant licences for Tunisia. Tables with details of extant licences for Tunisia similar to those provided for other countries are enclosed with this reply.

Yemen

Is the Government still satisfied that none of the extant arms export licences to Yemen listed in Tables 3(a); 3(b) and 4 with values for Sins, including licences relating to equipment employing cryptography, military cameras and body armour, contravene Criteria 2 and 3?

We are clear that the identified extant SIEI, licences for equipment employing cryptography, military cameras, and body armour do not contravene Criteria 2 and 3. In line with normal practice, export licences for Yemen are kept under constant review and every licence is scrutinised in light of changing facts on the ground.

Updating of Extant Arms Export Licences

Since Tables 3(a), 3(b), 4 and 4(b) were submitted to the CAEC, what further arms export licences have been approved to countries in North Africa and the Middle East for which licences have been revoked? Please could the details be provided in the same format as in Tables 3(a), 3(b), 4? And 4(b).

The Government has revoked no further licences since the last tables were provided. Details of all export licences issued are provided by HMG on a quarterly basis at the BIS Strategic Export Controls: Reports and Statistics website which can be found at. https://www.exportcontroldb.berrzov.uk/engifoxisdh/SDBHOME.

Table 4(a)

EXTANT OIELS: INCLUDING TUNISIA

Search Countries Outcome	Goods Ars
ISSUE (Bahrain), ISSUE (Egypt), ISSUE (Tunisia)	cryptographic software
ISSUE (Bahrain), ISSUE (Egypt), ISSUE (Tunisia)	cryptographic software, equipment employing cryptography, software for the use of equipment employing cryptography, technology for the use of equipment employing cryptography
ISSUE (Bahrain), ISSUE (Libya), ISSUE (Tunisia),	heading sensors for hydrophone arrays, hydrophones, towed hydrophone arrays
ISSUE (Egypt), ISSUE (Tunisia)	software for the use of military communications equipment, software to simulate the function of military communications equipment, technology for the use of software to simulate the function of military communications equipment
ISSUE (Egypt), ISSUE (Libya), ISSUE (Tunisia)	software for military communications equipment, technology for the use of software for military communications equipment
ISSUE (Egypt), ISSUE (Tunisia)	cutters/severing tools, detonating cord, devices for initiating explosives, explosives, linear cutting explosive charges, linear shaped cutting charges, non-military detonators, non-military firing sets, shaped charges, underwater telecommunications systems
ISSUE (Egypt), ISSUE (Tunisia)	heading sensors for hydrophone arrays
ISSUE (Tunisia)	components for equipment employing cryptography, cryptographic software, equipment employing cryptography, software for the use of equipment employing cryptography, technology for the use of cryptographic software, technology for the use of equipment employing cryptography
ISSUE (Tunisia)	components for military training aircraft, equipment for the use of military transport aircraft, general military aircraft components, military aircraft ground equipment, technology for the use of equipment for the use of military transport aircraft, technology for the use of military aircraft ground equipment, technology for the use of military transport aircraft
ISSUE (Tunisia)	components for military radars, software enabling equipment to function as military radars, technology for military guidance/navigation equipment, technology for military radars

Table 4(b)

EXTANT MILITARY OIELS: INCLUDING TUNISIA

Search Countries Outcome	Goods Ars
ISSUE (Tunisia)	components for military training aircraft, equipment for the use of military transport aircraft, general military aircraft components, military aircraft ground equipment, technology for the use of equipment for the use of military, transport aircraft, technology for the use of military aircraft ground equipment, technology for the use of military transport aircraft
ISSUE (Tunisia)	components for military radars, software enabling equipment to function as military radars, technology for military guidance/navigation equipment, technology for military radars

Table 3(a)

EXTANT SIELS: TUNISIA

End User Countries	Goods AN
Tunisia	chemicals used for pharmaceutical/healthcare production
— Tunisia	components for aircraft radars
Tunisia	components for control equipment for man portable air defence systems
Tunisia	equipment employing cryptography
Tunisia	military helmets
Tunisia	components for military improvised explosive device disposal equipment
Tunisia	corrosion resistant chemical manufacturing equipment
Tunisia	animal pathogens
Tunisia	equipment employing cryptography
Tunisia	equipment employing cryptography

Table 3(b)

EXTANT MILITARY SIELS: TUNISIA

End User Countries	Goods Am
Tunisia	components for aircraft radars
Tunisia	components for control equipment for man portable air defence systems
Tunisia	military helmets
Tunisia	components for military improvised explosive device disposal equipment

Annex B

Thank you for your letter of 17 January concerning the vessel “Thor Liberty” which, according to media reports, had been impounded in Finland because it was suspected of carrying a cargo of explosives and surface-to -air missiles to China in breach of Finnish export control law and, as you suggest in your letter, in breach of the EU arms embargo on China.

I understand that the Secretary of State for Business, Innovation & Skills will send you a substantive response on behalf of the Government soon.

Annex C

Thank you for your letter of 25 January in which you raise concerns about the. Arms Export licence approvals for China that were published by the Department for Business, Innovation and Skills for the first three quarters of 2011.

All export licences are strictly assessed against the terms of Consolidated Criteria and the EU Arms Embargo, including the possibility of diversion. Please be assured that we take the China arms embargo very seriously and are confident that it was not breathed in the cases that you have highlighted.

All export licences for China are not only assessed against Criteria One of the Consolidated Criteria which covers our commitment to the EU Arms Embargo, but also taking into account the remaining Criteria. A full assessment is carried out covering a number of factors including the nature of the goods, the stated end-use and end-user, the risk of diversion to an undesirable end-user, the risk of the proposed export being used for internal repression, and regional peace, security and stability.

We receive a large number of licence applications for China and the majority are for end users in the commercial, low-cost/mass production, industrial or scientific research and development fields. Some items are military rated but are not caught by The EU Arms Embargo, such as military rated items for non-lethal purposes ie industrial components or NBC equipment for use by environmental agencies.

The UK interpretation of the China Arms Embargo covers:

Lethal weapons such as machine guns, large calibre weapons, bombs, torpedoes, rockets and missiles.

Specially designed components of the above and ammunition.

Military aircraft and helicopters, vessels of war, armoured fighting vehicles and other such weapons platforms.

Any equipment which might be used for internal repression.

Please note components of complete military platforms such as helicopters and aircraft are not covered by the Embargo.

We have taken each of the general goods descriptions in your letter and have endeavoured to provide you with further details that will explain the nature of the “goods” and therefore the reason for approval. These are attached in the Annex to this letter.

BREAKDOWN OF LICENCES APPROVED FOR CHINA

Body Armour

The goods were for use by a global technical textile manufacturing company with a site in China capable of producing low cost manufacturing. The armoured vests were sent for testing at a police facility. After testing they would be damaged to the point of destruction and sent back to the supplier in the UK for examination and study. There were no criteria 2 concerns in this case as there was no clear risk of internal repression.

Equipment for the Production of Military Communications Equipment

The goods in this case (Multi Socket Connection Box and Frontier 1600 Cable Test Box) were Equipment Test Units to be used in the manufacture of cable assemblies which would then be incorporated into headsets for worldwide distribution by the exporter in the UK. There were no criteria concerns raised.

General Military Vehicle Components

The equipment exported under this licence was Lightweight Crew Seats to a University for research into whether the seats would be suitable for internal and military security vehicles but not for “military vehicle projects”. There was no clear risk that the proposed export would be used for internal repression. The interpretation of the embargo has consistently been taken to mean that whilst the lethal weapons or whole weapon platforms may be embargoed non-lethal equipment or components of weapons platforms are not. Therefore, these seats were not covered by the embargo.

Small Arms Ammunition

In the two cases highlighted, the equipment was for sporting and training purposes and for the sporting purpose of target shooting. In both cases, the equipment was supplied by a specialist manufacturer of sporting ammunition. The ammunition supplied were sports shooting cartridges, specially designed for training and sporting purposes. Sports ammunition is not caught under the arms embargo and as there was no clear risk of diversion, no criteria 2 concerns were raised. The interpretation of the embargo has consistently been taken to mean that whilst the lethal weapons or whole weapon platforms may be embargoed non-lethal equipment or components of weapons platforms are not. This product is not caught by the UK interpretation of the arms embargo on China.

Technology for Military Communications Equipment

In this case, the goods exported were technical drawings for use in the manufacture (moulding) of parts to be used on cable assemblies. The end user is a global electronics manufacturing services (EMS) provider that serves original equipment manufacturers in technology-related industries such as communications and computer hardware. Singapore is one of their manufacturing sites. The moulded parts would be returned to Singapore who will then integrate them into headsets. These headsets will be distributed globally by the exporter in compliance with UK Export Control. This was confirmed by the British manufacturer.

There were no criteria concerns in this case as the moulds were due to be returned to Singapore.

Weapon Sights

These goods were telescopic sights originally designed for target shooting purposes (day time, not night vision). In this instance the goods were being returned to the original manufacturer in China as they were faulty. They were being returned for study and evaluation of defects and subsequent scrapping. The equipment was therefore deemed exempt from the China arms embargo.

Aircraft Military Communications Equipment

In one case, the applicant was returning the unaltered items (antennas) to the manufacturer as they were beyond economic repair. As such the parts were not expected to be fitted into any form of aircraft. As the goods were faulty and did not pose any risks, there were no criteria concerns. In the other case, the items were analogue aircraft band transceivers capable of working in Amplitude Modulation on both the Civilian 108–135 MHz Aircraft band and the Military 225–400MHz aircraft band. The transmitters were to be used by the end user for communication during construction and maintenance of a communications network and an EUU check confirmed they would not be used for military purposes. Open sources indicated that the end user is a provider of communication access equipment and network solutions. As the civil end use was considered legitimate, there were no criteria concerns raised for this application.

Components for Combat Naval Vessel/Components for Military Patrol/Assault Craft

In both cases, the goods in question were propeller shaft seals and spares that do not fall under the arms embargo. We will allow non lethal equipment with a military end use to be exported. These parts were standard components originally designed for commercial cruise liners 40 years ago and had not been designed or modified for military use. They would not provide any enhancement of combat capabilities once fitted onto the vessels. As the parts have a degree of wear and tear these seals are routinely inspected and replaced once they have deteriorated.

Unfinished Products for Military Aero-engines

The products were spare parts for the aero-engine and Rear end Forgings for an Engine. The components were sent to China to be machined to a certain specification by the exporter in the UK and will be used for spares, with eventual incorporation into the engines by the ultimate end user, the exporter, based in the UK. Despite the classification of military, this equipment is for industrial purposes only. The UK interpretation of the embargo has consistently been taken to mean that whilst the lethal weapons or whole weapon platforms may be embargoed, non-lethal equipment or components of weapons platforms are not. These products did not fall under the categories listed above and is therefore not caught by the arms embargo on China as the current UK interpretation stands.

Cryptographic Software and Equipment Employing Cryptography

End users in these cases were consumer services and the products were dual use. Some examples are:

In two cases the equipment would be used for patient monitoring and care in emergency rooms, intensive care and critical care units and incorporated into a wireless application for a portable medical device for use in hospitals.

In some cases the equipment was used for a support system for smartcards based around a banking payment system, whilst other equipment was used to enable secure internet connectivity across communications networks.

Components for Combat and Military Helicopters

These were for commercial and civilian end use. Some examples are:

Two disposable filter elements that were exported for permanent exhibition use in China initially for a Heli Expo Show, whilst a Fan Assembly Unit exported for scientific research into the potential use on a commercial airship.

Other goods exported were automatic reservoir bleed valves used to release entrapped air and/or other gases during repair and overhaul of components in aircraft.

These valves were parts of a hydraulic system which the end user would use to release gas after carrying out tests and are therefore a maintenance tool. The goods were low specification and would not add to the capabilities of a military aircraft. The export of such components and any resulting military aircraft operations is too far removed in cases such as this, so there were no criteria 4 concerns.

6 February 2012