5 Arms export control legislation
and procedures
Extra-territoriality
20. The Committees' previous scrutiny of extra-territoriality
can be found at paragraphs 19-27 in Volume II of the Committees'
previous Report (HC 205), and the Committees' Conclusion and Recommendation
at paragraph 37 of the Report.
21. The Committees' Conclusion and Recommendation
on extra-territoriality in their 2013 Report (HC 205) and
the Government's Response (Cm8707) were as follows:
The Committees' Conclusion and Recommendation:
The Committees conclude that it is not justifiable
to enable a UK person to escape UK criminal jurisdiction by engaging
in arms export or arms brokering activities overseas which would
be a criminal offence if carried out from the UK. The Committees,
therefore, continue to recommend that extra-territoriality is
extended to the remaining military goods in Category C.[19]
The Government's Response:
The Government has set out its position in relation
to extra-territorial controls on brokering of Category C goods
on a number of occasions, most recently in the Response to the
Committees' Report of the 2012-13 Session (paragraph 8 of Cm 8441)
and in the Business Secretary's oral evidence to the Committees
on 19 December 2012. We remain unconvinced that there is a compelling
public interest in applying controls on UK persons outside the
UK engaged in brokering of Category C goods between non-embargoed
destinations that would outweigh the administrative burdens placed
upon UK nationals engaged in legitimate business activity. We
will continue to consider amending the scope of Category B in
order to bring under control brokering of additional items by
UK persons overseas where necessary and where justified by evidence
of a need to act.[20]
22. The Export Control Order 2008 defines the following
categories:
Category
A goods consist of cluster
munitions, and specially designed components therefor; and certain
paramilitary goods whose export the Government has already banned
because of evidence of their use in torture. These include electric
shock batons, electric-shock belts, leg irons and sting sticks.
Category
B goods consist of Small Arms and Light
Weapons, Long Range Missiles (LRMs) with a range over 300km (Note:
this includes Unmanned Air Vehicles (UAVs)) and Man Portable Air
Defence Systems (MANPADS) and accessories, ammunition, and specially
designed components therefore. "Production" equipment
specially designed for MANPADS, field test equipment specially
designed for MANPADS and specialised training equipment and simulators
for MANPADS are also covered in this category.
Category
C goods consist of all goods contained
within Schedule 1 of the Export of Goods, Transfer of Technology
and Provision of Technical Assistance (Control) Order 2003 that
do not fall into either of the two categories above, and certain
substances for the purpose of riot control or self-protection
and related portable dissemination equipment.[21]
23. In its Written Evidence the Export Group for
Aerospace and Defence (EGAD) said that it believed that an extension
of the extra-territoriality trade controls would fail to achieve
the desired results and would in practice be easily evaded by
illegal arms brokers, whilst subjecting companies to two different
jurisdictions for the same transaction. It stated that, in its
view, a more productive approach would be to improve the level
of control on the export of defence material by encouraging states
to sign and ratify the Arms Trade Treaty (ATT). It continued by
stating that the ATT seeks to address the problem and the Government
should be encouraged to provide outreach and assistance to those
countries that request it to bring their export control systems
up to a comparable level of the UK's.[22]
24. When we asked EGAD about its reservations to
the extension of extra-territoriality in the Oral Evidence session
on 4 November 2013, Michael Bell , Export Controls Consultant,
re-iterated EGAD's objection in principle to "having a situation
where somebody is subject to two different jurisdictions for the
same action." He added that it was "extremely hard to
bring successful prosecution against extraterritorial breaches
or violations of export controls" and that the only people
who would suffered would be those who were compliant with the
legislation.[23]
25. On 3 April 2014 the Foreign Secretary wrote to
the Chairman of the Committees answering a number of questions
that he had put to him regarding the Arms Trade Treaty. In responding
to a question relating to what domestic legislative and regulatory
steps were required to achieve full UK compliance in law with
the terms of the Arms Trade Treaty the Foreign Secretary stated:
On 19 March the Department for Business, Innovation
and Skills (BIS) laid before Parliament an Order amending UK trade
(brokering) controls to ensure that they are fully compliant with
Article 10 of the ATT. The Export Control (Amendment) Order 2014
(S.I. 2014 No. 702) adds to Category B of the trade controls
those items listed in Article 2.1 of the ATT that are not already
included in Category B, namely: battle tanks and armoured combat
vehicles; large calibre artillery systems; combat aircraft and
attack helicopters; certain warships; and certain missiles and
their launchers. As a result, brokering of these items by UK persons
will be subject to control wherever in the world those persons
are located. The amending Order comes into force on 9 April.[24]
The introduction of this legislation, therefore,
extends the ambit of extra-territoriality for brokering of arms
to a wider range of arms now included in Category B, but still
does not extend to all Category C goods, for example certain substances
for the purpose of riot control or self-protection and related
portable dissemination equipment.
26. Over a long period successive Governments have
agreed a substantial number of offences committed overseas for
which a British citizen could be prosecuted in this country. The
Acts of Parliament concerned and the criteria used by the Government
in deciding whether or not to take extra-territorial jurisdiction
in respect of particular offences are set out in Annex 7.
27. I propose that the Committees continue to
recommend that it is not justifiable to enable a UK person to
escape UK criminal jurisdiction by engaging in arms export or
arms brokering activity overseas which would be a criminal offence
if carried out from the UK.
28. I propose that the Committees further conclude
that the fact that the Government has now been obliged, in order
to achieve compliance with the terms of the Arms Trade Treaty,
to extend extra-territoriality to the brokering by UK persons
worldwide of battle tanks, armoured combat vehicles, large calibre
artillery systems, combat aircraft, attack helicopters, certain
warships, and certain missiles and their launchers is welcome.
29. I propose that the Committees continue to
recommend that extra-territoriality is extended to the remaining
military goods in Category C.
30. I propose that the Committees further recommend
that the Government in its Response to this Report states whether
in order to achieve full UK compliance with the terms of the Arms
Trade Treaty the Government is obliged to extend extra-territoriality
not only to UK persons engaged in arms brokering activities worldwide,
but also to UK persons engaged in direct arms export activities
worldwide, and, if so, when it will be introducing the relevant
legislation.
"Brass Plate" companies
31. The Committees' previous scrutiny of "Brass
Plate" companies can be found at paragraphs 28-33 in Volume
II of the Committees' previous Report (HC 205), and the Committees'
Conclusion and Recommendation at paragraph 38 of the Report.
32. The Committees' Conclusion and Recommendation
on brass plate companies in their 2013 Report (HC 205) and
the Government's Response (Cm8707) were as follows:
The Committees' Conclusion and Recommendation:
The Committees conclude that it is most regrettable
that the Government have still to take any action against "Brass
Plate" arms exporting and arms brokering companies who have
the benefit of UK company registration but carry out arms exporting
and arms brokering activities overseas in contravention of UK
Government policies. The Committees recommend that the Government
sets out in its Response to this Report what steps it will take
to discontinue the UK registration of such companies.[25]
The Government's Response:
The Government confirms that existing export
control legislation does, in certain circumstances, allow enforcement
action to be taken against brass plate companies and their officers.
However there needs to be sufficient evidence to justify any such
action. The Government also continues to pursue utilising other
legislation to discontinue the UK registration of such companies
on public interest grounds.[26]
33. During the Westminster Hall debate on the Committees'
Report of last year Nia Griffith MP stated that some "brass-plate"
companies had the benefit of UK company registration but export
arms and carry out arms-brokering activities in contravention
of UK Government policies. She called for the UK Government to
pay "significantly more attention" to the issue of "brass-plate"
companies and for a concerted strategy to pursue these companies
"more rigorously", closing loopholes and collecting
evidence "in order to get the necessary detail and put the
measures that are needed in place to enable us to discontinue
the UK registration of such companies."[27]
The BIS Minister, Michael Fallon, responded to the debate by stating
that:
The existing legislation would, in certain circumstances,
allow enforcement action to be taken against those and their officers,
but sufficient evidence is necessary to justify such action. We
continue to pursue with other relevant agencies the possibility
of using other legislation to discontinue the UK registration
of such companies on public interest grounds. I hope that that
is helpful. It is a complex issue, which raises difficult questions
about the nature of any evidence that may be disclosed in any
proceedings.[28]
34. I propose that the Committees continue to
conclude that it is most regrettable that the Government have
still to take any action against "Brass Plate" arms
exporting companies who have the benefit of UK company registration
but carry out arms exporting and arms brokering activities overseas
in contravention of UK Government policies.
35. I propose that the Committees again recommend
that the Government sets out in its Response to this Report what
steps it will take to discontinue the UK registration of such
companies.
36. I propose that the Committees further recommend
that the Government in its Response to this Report states the
number of such companies whose UK registration the Government
has discontinued on public interest, or on any other grounds,
in the present Parliament, and also states the names of the companies
so de-registered.
Arms brokers
37. The Committees' previous scrutiny of arms brokers
can be found at paragraphs 34-44 in Volume II of the Committees'
previous Report (HC 205), and the Committees' Conclusions and
Recommendations at paragraphs 39 and 40 of the Report.
38. The Committees' Conclusions and Recommendation
on arms broker in their 2013 Report (HC 205) and the Government's
Response (Cm8707) were as follows:
The Committees' Conclusions and Recommendation:
The Committees conclude that as 4 of the 19 individuals
and companies who are listed as having received criminal convictions
for arms export offences in the Government's Strategic Export
Controls Annual Reports for 2010 and 2011 had previously received
Government SPIRE registration, as had Mr Gary Hyde and Mr Michael
Ranger both of whom have since received criminal convictions,
the Government's reliance on its SPIRE registration system to
regulate arms brokers falls far short of what is required. The
Committees further conclude that as the BIS Secretary of State
has now acknowledged to the Committee that:
a) SPIRE registration does not constitute Government
approval of an arms broker;
b) the only check that the Government makes for
SPIRE registration "is to ensure that any person registering
on behalf of an entity is properly authorised by that entity to
act on its behalf"; and
c) it is possible to apply for a licence on SPIRE
without "registering" to use the system
the Government's regulation of arms brokers is
patently inadequate. The Committees continue therefore to repeat
their recommendation that the Government carries out a full review
of the case for a pre-licence register of arms brokers.[29]
The Government's Response:
The Government questions the Committees' conclusion
that "regulation of arms brokers is patently inadequate".
On the contrary, the fact that a number of individuals have been
successfully prosecuted for illegal brokering activity is evidence
of robust regulation and enforcement.
The Government does not rely on SPIRE to regulate
arms brokers. Brokering is regulated through the relevant provisions
of the Export Control Order 2008. Any person wishing to carry
out a controlled brokering activity must do so under the authority
of a trade control licence granted by the Secretary of State.
SPIRE is simply the means by which companies and other entities
or persons apply for Standard and Open Individual Trade Control
Licences (SITCLs, OITCLs) or register for Open General Trade Control
Licences (OGTCLs). As such SPIRE holds details of all those companies,
entities and persons that have ever been authorised to engage
in brokering of military goods. It performs one of the functions
of a register, i.e. it contains a list of known brokers. The Government
would never claim that SPIRE registration "constitutes Government
approval of an arms broker". Indeed we would be wary of "approving"
an arms broker in isolation from other considerations such as
the risks associated with particular transactions. Our focus has
always been on the assessment of proposed transactions against
the Consolidated Criteria and either granting or refusing licences
for those transactions, as appropriate.
A number of those persons or their associated
companies convicted of export or brokering offences were granted
licences for legitimate export or brokering activity many years
before they engaged in the illegal activity for which they were
subsequently prosecuted. Those licences were granted because there
were no grounds for refusal against the Consolidated Criteria
at the time the licence application was made. If a pre-licensing
register had existed at that time it is not at all clear that
we would have had sufficient grounds on which to refuse entry
to the register given that we would have to provide the applicant
with reasons for any such refusal which would be subject to appeal
and, potentially, judicial review. The activities that led to
conviction were undertaken without a licence - either because
one was not granted or one was never applied for. If a person
is willing to export or broker without a licence it is unlikely
that they would seek registration.
However, the Business Secretary has now decided
to take a fresh look at the evidence for and against a register.
As he stated in his letter to the Committees of 30 July this will
involve a public consultation to run in the autumn and will address
a number of questions including:
· What
should be the criteria for acceptance onto the register?
· Should
the register be made public?
· How
would a register help to prevent illegal brokering activity?
What would be the additional costs to business
of complying with a registration scheme on top of the costs already
incurred in complying with the licensing requirements? What offsetting
benefits would a register bring?
We will also consider the administrative costs
to Government of setting up and maintaining a register. In addressing
these questions we will seek to learn lessons from those countries
that have introduced registration of brokers.
We will publish the conclusions of this review.[30]
The Committees' Recommendation:
The Committees further recommend that the Government
in its Response to this Report states whether, when the Arms Trade
Treaty comes into force, the UK Government will be compliant,
or non-compliant, with the provisions of the Treaty relating to
the regulation of arms brokers and, if non-compliant, what action
it will take.[31]
The Government's Response:
Article 10 of the Arms Trade Treaty requires
States Parties to "take measures, pursuant to its national
laws, to regulate brokering taking place under its jurisdiction
for conventional arms covered under Article 2(1). Such measures
may include requiring brokers to register or obtain written authorization
before engaging in brokering."
Any persons in the UK, and in certain circumstances
UK persons overseas, are already required to obtain "written
authorisation" in the form of a trade control licence before
engaging in any controlled brokering activity.
In the context of the ATT we interpret "under
its jurisdiction" to mean brokering by UK persons anywhere
in the world. Therefore we need to ensure that a licence is required
by UK persons brokering the items listed in Article 2(1) of the
Treaty wherever in the world those persons are located.
As a result we will add to Category B of the
trade controls those items in Article 2(1) of the Treaty that
are not already specified in Category B, namely; main battle tanks
and armoured fighting vehicles, large calibre artillery systems,
certain missiles and rockets and their launchers, combat aircraft
and attack helicopters, and certain warships. We will do this
through an amendment to the Export Control Order 2008. This amendment
will be made before the UK ratifies the Treaty. We therefore expect
the UK to be fully compliant with the Treaty when it comes into
force.
Separately from this, and as noted above, the
Business Secretary has committed to review the evidence for and
against a pre-licence register of brokers in addition to the requirement
to obtain written authorisation (i.e. a licence) (see response
to paragraph 39). However this is not necessary in order for the
UK to comply with the ATT's obligations on arms brokering.[32]
39. In the Westminster Hall debate on 21 November
2013 the BIS Minister, Michael Fallon, said in regard to arms
brokers:
[The Business Secretary] has decided that now
is an appropriate time to look again at the issue of a pre-licensing
register of arms brokers. We will therefore be launching a public
consultation to help in gathering the necessary evidence to allow
the Government to decide whether to introduce such a register.
There will, of course, be an emphasis on the relative costs and
benefits, alongside the likely effectiveness of such a register.
The public consultation is now planned for early next year.[33]
40. In a follow-up letter to the Westminster Hall
debate Michael Fallon wrote to the Chairman of the Committees.
With regard to the pre-licence register of arms brokers he stated:
You [the Chairman of CAEC] made a comment about
HMG changing policy on the pre-licence register of arms brokers.
You said, "we will be paying close attention to the welcome
and long-awaited change of policy on a pre-licence register of
arms brokers that the Minister has just announced." I want
to clarify that I made reference to a public consultation as a
means to a fresh consideration of this issue. This is not a change
of policy in itself although the consultation may result in a
change in due course.[34]
41. In the Oral Evidence session on 18 December 2013
the Business Secretary, Vince Cable, when asked about the proposed
consultation on a pre-licence register of arms brokers said that
the CAEC Committees had persuaded him that the register was a
"serious issue" and that he was sorry that the consultation
had not yet started. He gave a "clear understanding"
that the consultation would be undertaken "as soon as possible
in the New Year". He said that there was a need to get the
"rest of Government on side" and that legal opinion
was required on "some of the more complex issues". The
Business Secretary admitted that the Government had been slow
to implement the consultation, but that an "absolute deadline"
had been set to ensure that it would be done before the end of
March."[35] When
asked what the consultation would cover the Business Secretary
said that the consultation would "cover as much ground as
possible" and included the industry and campaigning groups.
Chris Chew, Head of Policy, Export Control Organisation, BIS,
said that it would be a public consultation, but that BIS could
be proactive and send the consultation to specific companies and
to people who have brokering licences. He added that the consultation
would also be sent to NGOs that have "regularly expressed
an interest in the subject" to enable them to comment. When
asked how long the consultation would last Chris Chew responded
that the usual procedure was to consult for between 6 and 12 weeks,
however for this specialised subject a shorter consultation might
be more appropriate.[36]
42. The Business Secretary wrote to the Chairman
of the Committees on 3 February 2014. The section of his letter
referring to the pre-licence register of arms brokers was as follows:
I reaffirm my commitment to launch a public consultation
on a proposal for a pre-licensing register of arms brokers in
March of this year. The consultation will help us to gather the
necessary evidence to allow me to decide whether or not to introduce
such a register. There will be an emphasis on the relative costs
and benefits alongside its likely effectiveness. As a part of
this evidence gathering exercise we also intend to enquire about
the use and effectiveness of registers in other Member States
of the EU. According to previous submissions to the Committees
by the UK Working Group on Arms the following countries maintain
a register of arms brokers: Bulgaria, Czech Republic, Estonia,
Lithuania, Portugal, Romania and Spain. We also want to seek the
views of major EU arms manufacturing and exporting countries who
do not have registers, in particular, Germany, France, Italy and
Sweden.[37]
43. The Department for Business, Innovation and
Skills finally launched its document "A Pre-Licence register
of Arms Broker - Call for Evidence" on 17 April 2014.[38]
The Committees' response to the call for evidence is in the letter
sent by the Chairman of the Committees to the Department on 22
May 2014.
44. I propose that the Committees conclude that
the Government's acceptance of the Committees' repeated Recommendation
that it carries out a full review of the case for a pre-licence
register of arms brokers is welcome.
45. I propose that the Committees recommend that
the Government both completes its public consultation and announces
its policy conclusion before the end of October 2014 at the latest.
EU dual-use controls
46. The Committees' previous scrutiny of EU dual-use
controls can be found at paragraphs 45-50 in Volume II of the
Committees' previous Report (HC 205), and the Committees' Recommendation
at paragraph 41 of the Report.
47. The Committees' Recommendation on EU dual-use
controls in their 2013 Report (HC 205) and the Government's
Response (Cm8707) were as follows:
The Committees' Recommendation:
The Committees recommend that the Government
in its Response to this Report:
a) sets out what information it currently
has as to the extent the European Commission has, or has not,
accepted the Government's concerns about certain proposals in
the EU Commission's Green Paper The dual-use export control
system of the European Union: ensuring security and competiveness
in a changing world;
b) states whether the Commission's forthcoming
dual-use legislation will be decided upon by Qualified Majority
Voting and, if so, what steps the Government is taking to try
to ensure that EU dual-use legislation is not enacted which will
be detrimental to the British Government's arms export control
policies and procedures; and
c) explains whether the Government
agrees with the European Commission's view that: "it has
been commonly accepted that dual-use export controls constitute
an exclusive competence of the European Union and form an integral
part of the EU's Common Commercial Policy."[39]
The Government's Response:
a) The European Commission has not published
any proposals in relation to possible amendment of the EU export
control regime for dual-use items and therefore we are unable
to say whether they have or have not accepted the Government's
views set out in our response to the Green Paper.
The Commission received more than 100 responses
to the Green Paper. A summary of the views expressed are contained
in the Commission Staff Working Document (CSWD)
http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150459.pdf
In developing formal proposals it is likely the Commission
will want to demonstrate that they have taken account of a wide
range of the views expressed by respondents. This process is ongoing
and they continue to seek the views of stakeholders on the issues
raised in the Green Paper - for example the Member States met
in Dublin in May and an exporter conference was held in Brussels
in June specifically to discuss these issues. The Government is
fully engaged in these ongoing discussions.
b) As a measure falling within the EU's Common
Commercial Policy any proposal to amend or replace Council Regulation
428/2009 (the 'Dual-Use Regulation') will be subject to the Ordinary
Legislative Procedure meaning that the agreement of both the European
Parliament and the Council will be required. Strictly speaking
the Council acts by Qualified Majority Voting on matters falling
within the Common Commercial Policy; however by convention decisions
relating to the Dual-Use Regulation are taken by consensus. We
expect this arrangement to continue.
c) The Government does accept this view.
Since 1994 the EU has adopted legislation applying export controls
to dual-use items under the Common Commercial Policy which is
exclusive EU competence. That these controls fall within the Common
Commercial Policy was confirmed by a ruling of the European Court
of 17 October 1995 (Case C-83/ 94).[40]
48. Following publication of the Government's United
Kingdom Strategic Export Controls Annual Report 2012 the Committees
wrote to the Government asking two questions about EU dual-use
controls. The questions and answers were as follows:
The Committees' question:
Has the EU's analysis of the responses to the
consultation on the EU Commission's Green Paper, "The dual-use
export control system of the European Union: ensuring security
and competiveness in a changing world", been published? If
so, please provide the link to the analysis and inform the Committees
of any responses the Government made to it.
A link was provided in the Government's response
to the Committees' Annual Report for 2012 (Cm 8707). The Government
does not intend to make any formal response to this document.
The Committees' question:
When does the Government now expect the EU Commission's
Report on Council Regulation (EC) 428/2009 (the so-called "Dual-use
Regulation") to be made to the EU Council and the European
Parliament? Please inform the Committees of any response the Government
makes to that Report when published.
We expect the report to be submitted before the
end of the year. Should we make a formal response to that report
we will of course provide a copy to the Committees.[41]
49. I propose that the Committees recommend that
the Government states in its Response to this Report:
a) whether the EU Commission's Report on
Council Regulation (EC) 428/2009 (the so-called "Dual-Use
Regulation") has now been published, and
b) whether the Government has made, or will
be making, a response to that Report.
EU end-use control of exported
military goods
50. The Committees' previous scrutiny of EU end-use
control of exported military goods can be found at paragraphs
51-55 in Volume II of the Committees' previous Report (HC 205),
and the Committees' Recommendation at paragraph 42 of the Report.
51. The Committees' Recommendations on EU end-use
control of exported military goods in their 2013 Report (HC 205)
and the Government's Response (Cm8707) were as follows:
The Committees' Recommendations:
The Committees recommend that the Government
in its Response to this Report sets out what information it currently
has as to the extent the European Commission has, or has not,
accepted the Government's concerns about the adequacy of the Commission's
military end-use proposals in the Commission's Green Paper The
dual-use export control system of the European Union: ensuring
security and competiveness in a changing world with particular
reference to ensuring that military end-use control:
a) can be applied to the export of complete
items which are to be used as complete items; and
b) will permit preventing the export of unlisted
items that are to be modified for military purposes, either in
the destination country or in an intermediate destination.
The Committees further recommend that the Government
states whether it has provided to the Commission the draft text
it has offered to the Commission on a) and b) above.[42]
The Government's Response:
The Green Paper did not contain any proposals
in relation to the military end-use control - rather, the Government's
response to the Green Paper highlighted what we believe to be
the limitations of the current military end-use control which
is set out in Articles 4(2) to 4(4) of Council Regulation 428/2009.
We have no information on the Commission's thinking on this issue.
We have not provided any text to the Commission.[43]
52. I propose that the Committees recommend that
the Government states in its Response to this Report whether it
remains concerned about the current limitations of EU end-use
control of exported military goods with particular reference to
ensuring that military end-use controls:
a) can be applied to the export of complete
items which are to be used as complete items; and
b) will permit preventing the export of unlisted
items that are to be modified for military purposes, either in
the destination country or in an intermediate destination.
If so, I propose that the Committees further recommend
that the Government states in its Response what action it is taking
with the EU to remove the above limitations of EU end-use control
of exported military goods.
Torture end-use control and end-use
control of goods used for capital punishment
53. The Committees' previous scrutiny of torture
end-use control and end-use control of goods used for capital
punishment can be found at paragraphs 56-65 in Volume II of the
Committees' previous Report (HC 205), and the Committees' Recommendation
at paragraph 43 of the Report.
54. The Committees' Recommendations on Torture end-use
control and end-use control of goods for capital punishment in
their 2013 Report (HC 205) and the Government's Response
(Cm8707) were as follows (the Recommendation relating to UK subsidiaries
can be found at paragraph 65 below):
The Committees' Recommendation:
The Committees recommend that the Government
states in its Response:
a) what is the current position on the European
Commission's review of the Torture Regulation and what steps it
is taking to hasten that review;
b) whether the Government has yet made any
submission to the Commission relating to this Review;
c) whether, in the context of the EU Torture
Regulation, the Government still considers that list-based controls
are more likely to be effective than end-use controls, and whether
it has considered pressing for both; and
d) whether the Government intends to introduce
new end-use controls on torture and death-penalty goods and, if
so, by what date. [44]
The Government's Response:
a) The
Commission has initiated preparatory work on a broad review of
the Torture Regulation, including consultation with an informal
Experts Group*, and has indicated that it intends to convene a
meeting later this year for formal discussion with Member States
on its proposals.
*The following link provides more information
on the informal Experts Group: http://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupDetail
&groupID=2718).
b) The Government does not have full information
as yet on the scope or form of the Commission's review. We have
however provided some information on an informal basis to the
Commission to aid its preparatory work. We will consider the need
for any formal submission to the Commission once we have full
details on the form and scope of the review.
c) The Government continues to believe that
list-based controls are more likely to be effective than horizontal
end-use controls, which can have uncertain impacts on legitimate
trade and be problematic to enforce. However, the two approaches
are not mutually exclusive and we remain ready to engage positively
with the Commission should they seek to consider a potential torture
end-use control.
d) We have no current plans to legislate
at national level for end-use controls on torture and death-penalty
goods. Experience has shown us that list-based controls are more
likely to be effective than horizontal end-use controls. However,
list-based and end-use controls are not mutually exclusive and
we remain ready to engage positively with the Commission should
they seek to consider an EU-wide torture end-use control.[45]
55. Following publication of the Government's United
Kingdom Strategic Export Controls Annual Report 2012 the Committees
wrote to the Government asking two questions about torture end-use
control and end-use control of goods used for capital punishment.
The questions and answers were as follows:
The Committees' question:
What UK and/or EU export controls are currently
in place over the export of pancuronium bromide to the USA for
the use in executions by lethal injection?
As stated in both the Government's response to
the Committees' questions on the Government's Annual Report for
2011 (Section 1, paragraph 1.3 (a)), and in the Annual Report
for 2012, the UK control on the export to the United States of
the drug pancuronium bromide was made permanent on 16 April 2012.
There are no EU controls on the export of this drug to the USA.
The Committees' question:
Has the EU Commission now commenced its review
of Council Regulation (EC) 1236/2005 (the so-called "Torture
Regulation)? Please inform the Committees of any response the
Government makes to this review.
Please see the Government's response to Recommendation
43 of the Committees' Annual Report for 2012 (Cm 8707).[46]
[The Government Response to recommendation 43 is at paragraph
53.]
56. In its Written Evidence the UK Working Group
(UKWG) stated that it was disappointed by the UK Government's
decision to "abandon its commitment to introduce new end-user
controls on torture and death-penalty equipment". It continued:
In the 2008 review of UK export control legislation
the introduction of new end-user controls was deemed a policy
priority and one that received widespread and unanimous support
from NGOs, the CAEC and defence industry representatives. We are
dismayed that the UK Government has dropped this policy without
consultation with the original stakeholders.[47]
UKWG stated that:
end-user controls on torture and death-penalty
equipment would both enhance a system of list-based controls and
bring UK export control policy into line with its international
legal obligations to prohibit torture and ill-treatment. End-user
controls in this area were widely accepted to be an important
safety net to allow the UK Government to take action on areas
of trading activity where there is universal agreement that involvement
in such activities is unacceptable. By scrapping this commitment,
the UK Government is sending a signal to would-be exporters that
it will permit UK involvement in the facilitation of torture,
ill-treatment and capital punishment as long as the equipment
is not covered by an export control list.[48]
57. UKWG went on to say that a torture end-use clause
would also help by mitigating the danger of relying purely on
list-based controls, which tend to be reactive in nature and slow
to respond to new and emerging technologies or unforeseen items
and called for the UK Government to reverse its decision to abandon
the introduction of new end-user controls on equipment for use
in torture or for use in carrying out the death penalty.[49]
58. I propose that the Committees recommend that
the Government states in its Response to this Report:
a) whether the British Government is represented
on the informal Experts Group being consulted by the EU Commission
in its review of the EU Torture Regulation and, if so, by whom;
b) whether the EU Commission's intended meeting
last year with Member States for formal discussion on its proposals
for the EU Torture Regulation took place, and whether the UK Government
was present at the meeting;
c) whether the Commission's proposals for
the EU Torture Regulation have now been published and, if so,
what the UK Government's response to them has been; and
d) whether it will reconsider its policy of
not legislating at national level for end-use controls on torture
and death penalty goods.
Re-export controls and undertakings
59. The Committees' previous scrutiny of re-export
controls and undertakings can be found at paragraphs 66-71 in
Volume II of the Committees' previous Report (HC 205), and the
Committees' Recommendation at paragraph 44 of the Report.
60. The Committees' Recommendation on re-export controls
and undertakings in their 2013 Report (HC 205) and the Government's
Response (Cm8707) were as follows:
The Committees' Recommendation:
The Committees recommend that the Government
states whether it has any information about controlled goods with
export licence approval from the Government having subsequently
been re-exported for undesirable uses or to undesirable destinations
contrary to the Government's re-export controls and undertakings
which became compulsory from July 2010 and, if so, provides the
Committees with details.[50]
The Government's Response:
We are aware of one case, as follows: two sniper
rifles were exported under a UK licence to France and the rifles
were exported from France to a defence exhibition in Armenia in
2012.[51]
61. I propose that the Committees recommend that
the Government states whether, in addition to the sniper rifles
to France case in 2012, it has any information about controlled
goods with export licence approval from the Government having
subsequently been re-exported for undesirable uses or to undesirable
destinations contrary to the Government's re-export controls and
undertakings which became compulsory from July 2010 and, if so,
provides the Committees with details in its Response.
Licensed production overseas
62. The Committees' previous scrutiny of licensed
production overseas can be found at paragraphs 72-76 in Volume
II of the Committees' previous Report (HC 205), and the Committees'
Recommendation at paragraph 45 of the Report.
63. The Committees' Recommendation on licensed production
overseas in their 2013 Report (HC 205) and the Government's
Response (Cm8707) were as follows:
The Committees' Recommendation:
The Committees recommend that the Government
states whether it has any information that, during the lifetime
of the present Government, breaches of UK arms control policies
may have occurred as a result of the export of UK-designed goods,
including components, from licensed production facilities overseas,
and, if so, provides the Committees with details.[52]
The Government's Response:
The Government has no evidence that any such
breaches have occurred.[53]
64. I propose that the Committees recommend that
the Government states whether it is still the case that the Government
has no evidence that, during the lifetime of the present Government,
breaches of UK arms control policies may have occurred as a result
of the export of UK-designed goods, including components, from
licensed production facilities overseas. If this is no longer
the case, the Committees further recommend that the Government
provides details of such breaches in its Response to this Report.
Use of UK subsidiaries to export
arms
65. The Committees' Recommendation on relating to
UK subsidiaries (within the section on Torture end-use control
and end-use control of goods for capital punishment in their 2013
Report (HC 205)) and the Government's Response (Cm8707) were
as follows:
The Committees' Recommendation:
The Committees further recommend that the Government
states in its Response:
a) whether it is the case that wholly owned
or majority owned subsidiaries of UK companies that are domiciled
in other countries are not subject to UK export controls and,
if so, whether the Government has any plans to bring forward amending
legislation; and
b) whether UK parent companies are subject
to UK strategic export controls legislation in respect of transfers
made by their subsidiaries domiciled in other countries and, if
not, whether the Government has any plans to bring forward amending
legislation.[54]
The Government's Response:
a) A subsidiary of a UK company incorporated
under the jurisdiction of a foreign country is not subject to
UK export or trade controls. It is inherently problematic to attempt
to enforce UK export controls outside of the UK's legal jurisdiction
and the Government has no plans to bring forward relevant amending
legislation.
b) UK trade controls may apply to the activities
of any person within the UK involved in the supply of military
and certain other goods between overseas destinations, to the
extent defined in Part 4 of the Export Control Order 2008. In
certain circumstances the controls may also apply to the activities
of a UK person overseas. These controls apply regardless of whether
or not the activity is conducted by or through an overseas subsidiary.
However, a UK company is not accountable under UK export or trade
controls simply by virtue of the fact that an activity is carried
out by a subsidiary incorporated under the jurisdiction of a foreign
country. The Government has no plans to bring forward amending
legislation to make UK companies accountable under UK law for
the activities of subsidiaries in another country's legal jurisdiction.[55]
66. On 4 November 2013 the Guardian newspaper
reported that a UK company had circumvented UK licensing requirements
by shipping teargas and other crowd-control equipment to the Maldives
using its Singapore-based and registered subsidiary. The report
stated that the goods were sold by a subsidiary company of Survitec
Group three weeks before the Maldives police provoked international
condemnation by preventing voting in a rerun of the presidential
elections. The shipment, it was reported, was worth £61,500,
and included 250 smoke grenades, 200 stun grenades, 900 teargas
projectiles and grenades, 100 pepper spray refills and 800 rubber
bullets, including 300 multiple projectile cartridges. The newspaper
report stated that Department for Business, Innovation and Skills
had admitted that Survitec did not require a UK export licence
because "the shipment was sold by its Singapore-based and
registered subsidiary, WH Brennan" and was outside UK legal
jurisdiction. The article quoted Oliver Sprague of Amnesty International
as saying that: "It is a serious flaw in the UK's export
licensing system that weapons exported by a UK subsidiary company,
despite being owned by a UK company, are not captured by UK controls."[56]
67. When the Committees asked the Business Secretary,
in the Oral Evidence session on 18 December 2013, about the above
example and asked what was the point of the UK having controls
over British companies if they could use a subsidiary company
in another country to circumvent UK legislation the Business Secretary
said:
We do not apply our law extraterritorially. The
issue that you raised is, from an ethical point of view, very
strong, but it would apply to any aspect of an activity by a British
subsidiary overseas. You referred to selling weapons to the Maldives,
but if a subsidiary of a British company behaved badly overseas
in relation to their labour force or their environmental standards
or whatever, the British Government do not have legal sanctions
over them.[57]
When asked if he considered this to be a "serious
flaw" in current legislation the Business Secretary replied:
"It is a frustration and a 'flaw,' [...], but it can be remedied
only by fundamentally changing the whole basis on which we operate
law in the UK.[58] He
continued:
One of the things I did was that in October I
launched with the Foreign Secretary a set of principles for British
companies operating overseas. It was an action plan under United
Nations auspices to set standards on human rights that we expect
British companies to honour when they are operating overseas.
It does not have legal sanctions, and we could not make those
legal sanctions unless we completely overthrew the basic principles
we have in the way we apply law in the UK.[59]
68. I propose that the Committees conclude that
it is a significant loophole in UK arms export controls that a
UK company can circumvent those controls by exporting military
and dual-use goods using an overseas subsidiary. The Committees
recommend that the Government states whether it will close this
loophole, and, if so, by what means and in what timescale.
The Consolidated Criteria and
EU Council Common Position
69. The Committees' previous scrutiny of the Consolidated
Criteria and EU Common Position can be found at paragraphs 77-86
in Volume II of the Committees' previous Report (HC 205), and
the Committees' Recommendations at paragraph 46 of the Report.
70. The Committees' Recommendations on the Consolidated
Criteria and EU Common Position in their 2013 Report (HC 205)
and the Government's Response (Cm8707) were as follows:
The Committees' Recommendations:
The Committees recommend that the Government
states in its Response to this Report whether it will be consulting
publicly on its updating of the UK Government's Consolidated Criteria
on arms exports and when it will be carrying out this updating.
The Committees further recommend that the Government confirms
in its Response that it will adhere to the policy unequivocally
endorsed by the Foreign Secretary to the Committees on 7 February
2012 that "The longstanding British position is clear. We
will not issue licenses where we judge there is a clear risk the
proposed export might provoke or prolong regional or internal
conflicts, or which might be used to facilitate internal repression."[60]
The Government's Response:
As stated in the Government's Annual Report published
on 12 July, we intend to review the UK's Consolidated Criteria
in order to bring it in to line with the EU Common Position. Two
factors made it desirable to delay doing so in 2012: firstly,
the EU had been reviewing the Common Position for several months
during 2012: this review process was completed provisionally in
late 2012. Secondly, progress on the Arms Trade Treaty made a
further delay desirable in the event that the EU Common Position
would have to be changed to bring it into line with any additional
requirements contained in an Arms Trade Treaty. In view of these
factors the preferred option was to await the outcome of each
and then return to the issue. We are now studying the impact of
the ATT on the EU Common Position and in light of that will be
updating the Criteria.
All export licensing applications are assessed
on a case by case basis against the Consolidated European Union
and National Arms Export Licensing Criteria. This policy was stated
by the then Minister of State for Foreign and Commonwealth Affairs,
Peter Hain in the House of Commons on 26 October 2000 and the
Government will continue to adhere to this policy until updated
Criteria are formally announced. With regard to exports that might
be used for internal repression, the UK's longstanding policy
is set out in the Consolidated Criteria. The Government will not
grant an export licence if there is a clear risk that the proposed
export might be used for internal repression.[61]
71. In its United Kingdom Strategic Export Controls
Annual Report 2012 the Government stated that it intended
to review the UK's Consolidated Criteria in order to bring it
in to line with the EU Common Position. It said that the review
would be delayed because the EU had been reviewing the Common
Position during 2012 and that progress on the Arms Trade Treaty
made a further delay desirable in the event that the EU Common
Position would have to be changed to bring it in line with any
additional requirements contained in the Arms Trade Treaty.[62]
72. UK Working Group (UKWG) notified the Committees
in its Written Evidence that it had been informed that Member
States had provisionally agreed new guidance for Criteria seven
(risk of diversion) and eight (compatibility with the technical
and economic capability of the recipient country) and that the
EU Council Working Group on Conventional Arms (COARM) had issued
a revised User's Guide on a trial basis, with Member States expected
to use the new guidance on a trial basis. However, it was open
for further revision and no new version of the User's Guide would
be published until this new guidance was finalised.[63]
UKWG recommended that the UK Government should persuade EU Member
States to publish the provisional results of the review of Criteria
7 and 8 without further delay, and if not, publish the new guidance
unilaterally.[64]
73. When the Committees asked the Foreign Secretary
when the final review of the Common Position by the EU would be
completed he replied:
The External Action Service of the EU is managing
the review of the common position, so the time scales are in their
hands; the time scales are set in Brussels. The review of the
legal text is complete, and all the member states of the EU are
satisfied that the current eight criteria have stood the test
of time and do not need amendment at this stage. That was announced
at the end of 2012. We are also all agreed that there are practical
steps we need to take to improve coordination at EU level.
We agreed to look at the EU users' guide to bring it up to date.
It needs updating in the light of the recent adoption of the arms
trade treaty. Those are the things that are now being worked on,
and we will keep you up to date. We are working on bringing the
criteria into line with the ATT and the EU common position.[65]
When asked if the UK Government would publish the
provisional review the Foreign Secretary stated that it was "up
to the EU to decide", but he did not see any reason why it
should not be published and "we would be in favour of doing
so."[66]
74. The Foreign Secretary was questioned as to whether
the UK was using the revised users' guide incorporating the changes
to criteria seven and eight. The Foreign Secretary replied: "In
the case of the UK implementing changes to criterion eight, for
instance, it does not make that much difference because we already
have a sophisticated methodology for criterion eight, but we are
already implementing at national level the changes on this."[67]
Richard Tauwhare, Head of Arms Export Policy Department, FCO,
added: "The revised guidance was agreed on a provisional
basis for criteria seven and eight. Now all the member states
are giving it a trial run to see how it works, and we are doing
the same. It is working well. We are also going on, in Brussels,
to look at the user guide on the other criteria to see what might
need updating with them."[68]
75. On 25 March 2014 the Business Secretary, Vince
Cable, made a Written Ministerial Statement headed "Consolidated
EU and National Arms Export Licensing Criteria". [69]
The full text of this WMS is in Annex 6. The Government's new
Arms Export Licensing Criteria replaces those set out in the Written
Answer given by, the then Minister of State in the FCO, Peter
Hain, on 26 October 2000,[70]
which were headed differently as "The UK's Consolidated Criteria".
The full text of Peter Hain's Written Answer is in Annex 5.
76. The Chairman of the Committees wrote to the Business
Secretary on 28 April 2014 requesting information on certain aspects
of the newly issued UK Consolidated Criteria. The text of the
letter was as follows:
Following your Written Ministerial Statement
on 25 March 2014, the Committees on Arms Export Controls have
the following questions relating to the new Consolidated Criteria
for Arms Export Licensing which replaced those announced by the
then Minister of State at the FCO, Peter Hain, on 26 October 2000:
1) Why are the new Criteria entitled "Consolidated
EU and National Arms Export Licensing Criteria" when the
text:
a) has substantial differences from the EU Council's
Common Position on arms exports not least under the UK Government's
sub-heading "Other factors",
b) is not an EU document, and
c) is clearly the UK's national variant of the
EU Common Position?
2) Why has the policy statement in the previous
Criteria announced on 26 October 2000 by the then Minister of
State at the FCO, Peter Hain, that "An export licence will
not be issued if the arguments for doing so are outweighed …
by concern that the goods might be used for internal repression
or international aggression" been omitted?
3) Why has the statement in the previous Criterion
One (d) that the Government will not issue an export licence if
approval would be inconsistent with … "The Guidelines
for Conventional Arms Transfers agreed by the Permanent Five members
of the UN Security Council, and the OSCE Principles Governing
Conventional Arms Transfers and the EU Code of Conduct on Arms
Exports" been omitted?[71]
The Business Secretary replied on 14 May 2014. The
relevant section of the Business Secretary's letter was as follows:
In respect of your three questions regarding
my Written Ministerial Statement of 25 March 2014:
1. The Criteria are entitled "The Consolidated
EU and National Arms Export Licensing Criteria" because they
bring together (i.e. consolidate) the EU and UK variants of these
Criteria, including the amendments that were necessary to allow
us to ratify the United Nations Arms Trade Treaty (ATT). It does
not purport to be an EU document; it is intended to set out how
the UK will apply the eight Criteria. In addition, my Statement
represents an update to the previous Criteria and does not represent
a substantive change in policy in any way. Retaining the name
of the "old" Criteria is intended to reflect this continuity
in policy.
2. The statement you refer to was a general
statement that formed part of the introductory text, it did not
form part of the Consolidated Criteria itself. Licence applications
have always been assessed against the eight Criteria and not against
general statements contained in the introductory text.
3. The reference to the "guidelines
for Conventional Arms Transfers agreed by the Permanent Five members
of the UN Security Council" was omitted because the commitments
it contains have been largely superseded since they were agreed
in November 1991, most notably by EU Common Position 2008/944/CFSP
and the ATT. We therefore felt they were of little direct relevance
today. The "OSCE Principles Governing Conventional Arms Transfers"
are now referred to in Criterion 1(f). The "EU Code of Conduct
on Arms Exports" was replaced by the EU Common Position and
it is therefore not appropriate to refer to this document.[72]
77. The issue of the omission by the present Government
of the previous Government's policy statement in the UK's Consolidated
Criteria on 26 October 2000 that: "An export licence will
not be issued if the arguments for doing so are outweighed […]
by concern that the goods might be used for internal repression
or international aggression" is dealt with in detail under
the heading "Arms exports and internal repression" at
paragraphs 390 to 398.
78. I propose that the Committees conclude that
it is misleading for the Government to have entitled its new Criteria
the "Consolidated EU and National Arms Export Licensing Criteria"
when the text:
a) has substantial differences from the EU
Council's Common Position on arms exports;
b) is not an EU document;
c) includes the policy statement
that "The Government will thus continue when considering
licence applications to give full weight to the UK's national
interest, including:
i. The potential effect
on the UK's economic, financial and commercial interests, including
our long-term interests in having stable, democratic trading partners;
ii. The potential effect
on the UK's international relations;
iii. The potential effect
on any collaborative defence production or procurement project
with allies or EU partners;
iv. The protection of the
UK's essential strategic industrial base"; and
d) is clearly the UK Government's
national variant of the EU Common Position on arms exports.
I propose that the Committees therefore recommend
that the Government should clearly differentiate between the UK's
Consolidated Criteria on arms exports and the EU's Common Position
on arms exports.
79. I propose that the Committees recommend that
the Government states in its Response when it will be providing
the Committees with its update on the EU User's Guide following
the adoption of the Arms Trade Treaty.
80. I propose that the Committees further conclude
that the fact that Government was obliged by provisions of the
Arms Trade Treaty to introduce the risk of gender-based violence,
in addition to violence against children, into the Criteria for
the first time is welcome.
81. I propose that the Committees conclude that
the Government's insertion into the Criteria that it will "not
grant a licence if there is a clear risk that the items might
be used in the commission of a serious violation of international
law" is welcome.
82. However, I propose that he Committees also
conclude that the Government's deletion of the policy in the October
2000 UK Consolidated Criteria that: "An export licence will
not be issued if the arguments for doing so are outweighed….
by concern that the goods might be used for internal repression"
represents a substantive weakening of the UK's arms export controls
and recommend that this wording is re-instated.
83. I propose that the Committees finally conclude
that the Government's assertion in relation to the new Arms Export
Criteria announced on 25 March 2014 that: "None of these
amendments should be taken to mean that there has been any substantive
change in policy" is not sustainable.
19 HC (2013-14) 205, para 37 Back
20
Cm8707, p 2 Back
21 Department
for Business, Innovation and Skills, Review of Export Control
Legislation (2007) Supplementary Guidance Note on Trade ("Trafficking
and Brokering") in Controlled Goods (in effect from 6 April
2009), January 2009, http://webarchive.nationalarchives.gov.uk/20090609093704/http://www.berr.gov.uk/files/file49827.pdf
2009) Back
22
Ev w95 Back
23
Q 35 Back
24
Ev w208 - Letter from William Hague to the Chairman of the Committees
on Arms Export Controls dated 3 April 2014 Back
25
HC (2013-14) 205, para 38 Back
26
Cm8707, p 2 Back
27
HC Deb, 21 November 2013, cols 415-416WH Back
28
HC Deb, 21 November 2013, col 428WH Back
29
HC (2012-13) 205, para 39 Back
30
Cm8707, pp 3-4 Back
31
HC (2012-13) 205, para 39 Back
32
Cm8707, pp 4-5 Back
33
HC Deb, 21 November 2013, 428WH Back
34
Ev w192 - Letter from Michael Fallon to the Chairman of the Committees
on Arms Export Controls dated 2 December 2013 Back
35
Q 79 Back
36
Qq 81-84 Back
37
Ev w199 - Letter from Vince Cable to the Chairman of the Committees
on Arms Export Controls dated 3 February 2014 Back
38
Department for Business, Innovation and Skills, A Pre-Licence
Register of Arms brokers - Call for Evidence BIS/14/662, 17
April 2014 Back
39
HC (2013-14) 205, para 41 Back
40
Cm8707, pp 5-6 Back
41
Annex 2 - The Committees' questions on the Government's United
Kingdom Strategic Export Controls Annual Report 2012 (HC 561)
and the Government's answers Back
42
HC (2013-14) 205, para 42 Back
43
Cm8707, p 6 Back
44
HC (2013-14) 205, para 43 Back
45
Cm8707, pp 6-7 Back
46
Annex 2 - The Committees' questions on the Government's United
Kingdom Strategic Export Controls Annual Report 2012 (HC 561)
and the Government's answers Back
47
Ev w130 Back
48
Ev w131 Back
49
Ev w131 Back
50
HC (2013-14) 205, para 44 Back
51
Cm8707, p 8 Back
52
HC (2013-14) 205, para 45 Back
53
Cm8707, p 8 Back
54
HC (2013-14) 205, para 43 Back
55
Cm8707, pp 7-8 Back
56
"UK-owned firm sends teargas to Maldives police: Amnesty
raises alarm over alleged licensing flaw Stun grenades and rubber
bullets in consignment", The Guardian, 4 November
2013 Back
57
Q 114 Back
58
Q 115 Back
59
Q 117 Back
60
HC (2013-14) 205, para 46 Back
61
Cm8707, pp 8-9 Back
62
Department for Business, Innovation and Skills, Department for
International Development, Foreign and Commonwealth Office and
Ministry of Defence, Strategic Export Control: United Kingdom
Strategic Export Controls Annual Report 2012, HC 561 Back
63
Ev w122 Back
64
Ev w107 Back
65
Q 183 Back
66
Q 184 Back
67
Q 187 [William Hague] Back
68
Q 187 [Richard Tauwhare] Back
69
HC Deb, 25 March 2014, cols 9-14 Back
70
HC Deb, 26 October 2000, cols 199-203W Back
71
Ev w222 - Letter from the Chairman of the Committees on Arms Export
Controls to Vince Cable dated 28 April 2014 Back
72
Ev w474 - Letter from Vince Cable to the Chairman of the Committees
on Arms Export Controls dated 14 May 2014 Back
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