Oral Evidence
Taken before the Committees
on Arms Export Controls
on Monday 4 November
2013
Members present:
Sir John Stanley (Chair)
Sir Malcolm Bruce
Richard Burden
Katy Clark
Ann Clwyd
Mike Gapes
Ann McKechin
Sir Bob Russell
Bob Stewart
Chris White
________________
Examination of Witnesses
Witnesses: Roy Isbister,
Team Leader, Small Arms and Transfer Controls, Saferworld, Oliver
Sprague, Programme Director, Military Security and Police,
Amnesty International UK, and Martin Butcher, Policy Adviser,
Arms Campaign, Oxfam GB, gave evidence.
Q1 Chair:
Good afternoon, UK Working Group representatives. Welcome to you
once again, Mr Isbister, Mr Sprague and Mr Butcher.
I am going to start with the
Arms Trade Treaty. I put this question to you—it is in part
quite a technical question, and, if you would find it helpful
to come back and give a more detailed answer than you might be
able to give off the cuff here, that would of course be entirely
acceptable and welcome to the Committee. You will have seen that
one of the questions that we put to the Government in our latest
report was to ask what changes in primary legislation, secondary
legislation and, indeed, in policy the Government would have to
make to ensure that they were fully compliant with the terms of
the Arms Trade Treaty, which of course they have signed and are
now in the process of ratifying. You will have seen the Government's
response to that question in their White Paper reply to our Committee:
their answer, in brief, is that they consider that no changes
in primary legislation are required, that a very limited change
in secondary legislation is required with regard to the ambit
of the controls on arms brokering, and that no changes in policy
are required. The question that I have for you is whether you
consider that that is a correct response by the Government: that
only one limited change is required in legislation and no change
in policy to ensure full compliance by the British Government
with the terms of the Arms Trade Treaty.
Martin Butcher:
We understand that, in addition to the changes on brokering, the
Government are taking this opportunity to revise the consolidated
criteria, in order to be fully in line with the EU common position
and the Arms Trade Treaty. We have not as yet had detailed discussions
with the Foreign Office about that. So there is an additional
change. We welcome the changes in the controls on brokering.
Olly, do you want to add something?
Oliver Sprague:
We have yet to see the secondary legislation that is coming in,
but our understanding is that they will be amending category B
of the current brokering controls in order to be more in line
with the ATT scope. That, for us, is a welcome step forward because
it actually means that a greater number of category C goods will
be moved to category B and will then be subject to full extraterritorial
controls as well as those on transport and shipping. As I said,
however, we have not yet seen the extent of those orders; this
is only what we imagine to be the case from what we have been
told.
There is another secondary
benefit, which may not necessarily come forward in legislation
but which I think would be helpful in terms of policy. It relates
to issues of enforcement—not only trafficking and brokering
controls, but arguably in tackling the brass-plate phenomenon,
in that an operative provision in the implementation section of
the ATT requires all Governments that are signatories to offer
full co-operation in terms of legal and investigative help.
It has been a problem in the past—we
have heard the argument before—that it has been difficult
to prosecute or to enforce some of these controls because they
involve overseas investigations, and it is difficult to get information.
The ATT therefore has a built-in tool that will allow you to do
that, because all signatory states will be required to co-operate
in those matters. I can see a future benefit to the ATT in terms
of the enforcement policy of UK controls in that respect.
Roy Isbister:
In terms of primary legislation, I should have thought that probably
no change has to be made, but there are two elements within the
criteria section of the ATT that are slightly interesting when
compared with UK and EU controls, and those relate to gender-based
violence and transnational organised crime. It is arguable, but
I think that there could be some revision of language to reflect
more accurately what the Arms Trade Treaty says on those issues,
but there is still a bit of a conversation going on, certainly
at the EU level, on whether or not it should be changed.
Chair:
Thank you. We come now to the DESi arms exhibition.
Q2 Ann McKechin:
There is another DESi exhibition this year and another set of
problems. We have had another example this year of companies being
found to be promoting banned goods at the exhibition. As you will
be aware, there have been calls to close the exhibition in its
entirety. What do you think is the right balance to be struck
in order to ensure that trade can exhibit legitimately while conforming
to legislation on the promotion of banned goods?
Oliver Sprague:
I would state here that the policy of Amnesty is one that is not
opposed to a regulated arms trade. We do not take a position on
whether an arms exhibition should be banned, but I would say that
there is a long-standing track record of failure to comply and
of companies promoting illegal or banned goods. In this case,
it would be two companies, a French company and a Chinese company,
prominently displaying such goods in product brochures. It was
not something that was hidden from view; it should have been quite
easy to spot. There are questions about whether the fair is able
to operate within the law. Certainly, I would say, yet again,
that the enforcement of the controls has not been good enough.
I think that serious questions need to be asked about how the
fair is run in future.
We have put forward recommendations,
but one of the things that should be pretty essential at the moment
is that all product brochures should be screened in advance. A
person whose responsibility is enforcement should be responsible
for looking at all the promotional and display materials before
they go live in the fair. I also think that this Committee should
examine the memorandum of understanding between the company that
hosts DESi and the Government. We have tended to see both camps—the
company organising the fair and the Government—almost blaming
each other or pointing to each other's policies as a way of showing
how they are enforcing at the fair; but yet again, as at every
exhibition since 2005, we have seen problems.
Q3 Ann McKechin:
Do either of the other two witnesses want to add to that, or do
you concur?
Roy Isbister:
I agree with what Olly says, but one other issue that came up
this year—a more fundamental issue in a way—is the
way in which the fair brings certain buyers and certain sellers
together. This year, there were eight or nine countries on the
Foreign Office's human rights report list of the most problematic
countries on human rights grounds that had delegations at the
fair. They are potential buyers, and you are bringing them together
with, for example, the chief Russian marketing organisation, at
the same time as Russia is the main supplier to the Syrian regime,
so it is operating in direct opposition to what the UK has described
as its foreign policy goals. Bringing those two people together
and creating a space for them to talk to each other about arms
sales—I have a problem with that.
Q4 Ann McKechin:
There is obviously an issue about sufficient punishment, but your
suggestion, Oliver, is that there should be an enforced screening
of all material before the exhibition starts. I presume that you
are referring to this being a role for the Government to play
rather than the organisers.
Oliver Sprague:
Yes. Another point—this would cut across licensing but it
is specifically relevant to DESi—is that, within normal
licensing, a country's adherence to the relevant non-proliferation
standards is central to whether they should be permitted destinations
for certain licences. They take, for example, whether you are
signed up to the Australia Group, whether you have signed up for
the non-proliferation treaty regime and so on. There is a clear
case for adding the Arms Trade Treaty to the list of relevant
proliferation standards that Governments have to sign to make
them eligible for certain more permissive licences. I think that
non-signatory countries should not have the automatic right to
display through an open licence.
Ann McKechin:
One of the companies—it was stated to be a French company—would
be covered, would be allowed in, but there is still the same problem
about what they are trying to market. Thank you.
Chair:
I want to turn now to the all-important issue of Syria.
Q5 Mike Gapes:
You are well aware that the Government were instrumental, along
with France, in getting the lifting of the European Union arms
embargo on Syria towards the end of last year and the early part
of this year. Subsequently, however, it was decided, I think rightly,
not to pursue the policy of supplying weapons into the Syrian
civil war.
In your submission to us,
you say that the supply of arms to any of the warring parties
would be hard to justify under existing UK and EU legislation.
Can you clarify whether that is subsequent to the lifting of the
arms embargo? Even with the lifting of the arms embargo, it would
be difficult to justify. If the UK Government were to supply lethal
weaponry into the Syrian conflict to some element within the Syrian
opposition, would that in your opinion be in line with abiding
by the EU common position and the UK consolidated criteria, specifically
3 and 4?
Martin Butcher:
While the process was ongoing for the lifting of the embargo,
we were quite disappointed that the Government, at the same time
as they were working hard to agree the Arms Trade Treaty and establish
that global norm, were pushing to have the embargo on Syria lifted.
We worked with some barristers to develop a legal opinion, which
is reflected in the memorandum on Syria that we supplied to the
Committee.
Yes, even after the embargo
was lifted, the conclusion that we came to after going through
the consolidated criteria point by point is that it is extremely
hard to see how all of the hurdles set out in those criteria could
be overcome to supply arms to any party in the conflict. There
is the obvious risk of the diversion of arms. Even the groups
that recognise the authority of General Idris and his supreme
command work on the ground closely with a wide spread of other
groups that do not—and on occasion even groups that are
part of al-Qaeda. There are clear human rights concerns across
a spread of opposition groups, although the Government are preponderant
as a problem in that area.
There are other concerns and,
yes, we have taken the position that, although we cannot say it
is absolutely impossible to leap all those hurdles, in sum it
is very difficult.
Q6 Mike Gapes:
Given that there are 1,200 opposition groups apparently operating
in Syria, it might be rather difficult to be clear about which
ones were, if you like, reliable and which were not.
Martin Butcher:
Absolutely, and the membership of the different brigades changes
all the time. They are interchangeable, and the alliances that
they form vary city by city. It is a very confused situation,
and it shifts on a daily basis.
Q7 Mike Gapes: I
now move on to the wider question that relates to something on
which we have been in correspondence with the Government—in
fact, the Chair has been in extensive correspondence with the
Secretary of State for Business—which is the decision taken
in January 2012, when the civil war was intensifying, to issue
two licences for chemicals that are precursors for the production
of sarin to a country that was known, but was not at the time
admitting, to be a holder of chemical weapon stockpiles. The country
was not at the time a signatory of the Chemical Weapons Convention
and therefore not subject to the rules of the Organisation for
the Prohibition of Chemical Weapons. Do you have any comment to
make on that? Do you have any view on whether a proper risk assessment
was carried out?
Oliver Sprague:
Of course, we are aware of the correspondence that we are currently
having with BIS on this issue. It is also worth stating that,
as you are probably aware, although the chemicals in question
might be precursors for chemical agents, they are also fairly
standard chemicals that have a wide variety of industrial uses.
The reason why they are on a control list is that they fall within
the Australia Group's list of proscribed chemicals. What that
should have done is trigger a detailed and thorough risk assessment.
Being a member of the Australia Group, there is a whole set of
additional export control factors that you are supposed to apply
in these cases. A lot of that is intelligence led, but basically
you have to check the end use; given the nature of these chemicals,
you have to be pretty sure that they are going to the right place.
Given the sensitivities of
this case, for obvious reasons the onus is now on the Government
to show their workings in this area. For example, I would want
to see how they applied those criteria and what risk assessments
they made—and in some detail. We would want to know what
the companies were, who the end users were, what the quantities
were, how sure they were that they were for use in health care,
toothpaste, aluminium window-frame manufacture and so on. It is
not good enough, in this particular incidence, to say that we
applied the criteria and we are sure that nothing went wrong.
You have to see that those criteria were applied and that nothing
untoward went wrong.
Chair:
We are going to turn now to the Arab Spring, and the Government's
arms export policy review, which took place after the Arab Spring
commenced.
Q8 Richard Burden:
When we questioned the Foreign Secretary about the policy review,
we asked him what had changed. His response—I paraphrase—was
basically, "Well, the controls are much the same, but we
are implementing them in a much more robust fashion." In
your evidence to this inquiry, you say that there has been little
change in practice and that the tendency of the Government is
to react to events after they have happened, rather than to look
ahead and evaluate risks. You are also concerned that undertakings
to improve transparency in strategic exports have been abandoned.
We are going to come on to transparency a little later, but on
the first of those issues, how has the review been operating in
practice? Has much changed?
Roy Isbister:
We do not get to see inside the licensing process, so we start
from the position of there being an element of ignorance. All
that we can go on is the figures of what has been exported.
Looking at the MENA region
as a whole, there is little indication that there has been a change
in the pattern of exports. I have some figures showing, for example,
that licences to the MENA region as a proportion of total licences
issued increased from 9.5% in 2008 to 30% in 2012, and that, by
value, arms licences—SIELS—to the Middle East were
over 50% of total arms exports in 2012. That first cut opens up
some questions.
Using Egypt as an example,
and drawing on the work of the Committee and the information that
it revealed in its report earlier this year, we struggle to understand
how that policy is working in Egypt. If you were going to argue
in 2011 that you could not see it—that is, what happened—coming,
we could argue about whether it was a valid argument, but it is
very difficult to make that argument in 2013. We were certainly
arguing for a tight policy on exports to countries such as Egypt.
When the level of civil disturbance lifted again, we saw the Government
start by revoking five licences. More than a month later, and
only after an EU Council conclusion, the Government suspended
48—it turned out to be 47—more licences. It is a slow
way of operating. Again, we are not sure why those licences were
issued in the first place.
There have been a couple of
other issues around that, so we have been trying to find out.
It would be helpful in cases like this, if the Government think
that there is a big enough change to provoke this response, if
they not only gave the number of licences being refused, suspended
or revoked, but said what is still licensed for transfer to Egypt.
We understand that nothing was being licensed to the army, the
air force or the Ministry of the Interior, but quite a number
of open licences were never suspended. Open licences do not name
the permitted end user, so how did the Government know that this
equipment was not going to those end users?
We see now that some of those
suspended licences—around half of them—have been opened
up again. What has changed in Egypt to give the Government the
extra confidence that this is appropriate? Looking at Egypt as
an example, there are a lot of unanswered questions, and we would
like much more detail about how the Government are operating their
export policy.
Q9 Richard Burden:
Do you think that the Government have their priorities right?
Roy Isbister:
Would you elaborate slightly?
Richard Burden:
In your submission, you indicated that, in view of their record,
to which you alluded, the Government may be sending the wrong
signals about priorities. Would you elaborate a little? What do
you think those signals are, and what would be the right signals?
Roy Isbister:
This links into the notion of joined-up Government. There are
a number of areas where the Government state with some vigour
that they apply one of the tightest export licensing regimes in
the world and that they apply the criteria very tightly. At the
same time, these Committees have drawn attention to the apparent
disconnect between the Foreign Office's human rights report and
the licensing policy.
The UKTI's priority countries
for arms exports include six or seven countries in the MENA region,
including Libya, which is perhaps the most obvious example. In
a number of areas, it feels that the signals coming from some
parts of Government are very different from the signals that we
receive—the rhetorical statements about the application
of licensing policy here. Again, at DESi we had the highest levels
of Government making a strong case for defence exports being such
a crucial component of the UK economy, saying that a high level
of exports was important and necessary for the UK to be seen as
being on the leader board. There are certainly questions to be
asked about priorities.
Chair:
We continue with the middle east and arms export policy.
Q10 Ann Clwyd:
I, too, want to ask about the export of components for chemical
weapons. In July 2011, DFID, the FCO and the MOD published "Building
Stability Overseas Strategy". In it, the Foreign Secretary
stated that the strategy was "built on the insight that stability
can only be achieved when a society has the strong and legitimate
institutions it needs to manage tensions peacefully." Do
you think that the present arms export policy coincides with that
statement? Obviously not.
Roy Isbister:
Again, that is part of the whole joined-up Government side of
things. If there is a real commitment to that approach to building
stability overseas, it should be reflected in export licensing
policy. To come back to the earlier point, and looking across
our export licensing policy to the MENA region, where there are
clear issues of stability and governance, that does not fit perfectly
together.
Martin Butcher:
On Libya in particular, which is a priority country for export,
we have a situation where the militia linked to one part of the
Government recently kidnapped the Prime Minister. The Government
cannot assure security even for high officials in its own capital.
Militias linked to the Government in the eastern part of the country
are refusing to recognise the authority of the Government in the
west. An ongoing situation that has lasted since the overthrow
of Gaddafi, with Libya as a prominent source of black-market arms
across the Sahel, is contributing to the problems in Mali. It
rather seems that a number of measures would be needed to assist
in building up the governance of Libya, and they need to be carried
out before thinking about it being a priority market for arms.
Oliver Sprague:
It is also certainly the case that if you apply the policy and
logic behind "Building Stability Overseas Strategy",
especially the focus on building institutions' capacity and governance
reforms, that in itself means that you need a system to develop
that has proper control over the army and security services. If
you applied that logic back to before the Arab Spring crisis,
many UK export licences to some of those countries would not have
gone ahead. We have talked about Egypt, but if you apply those
lessons—the need to ensure that you have proper accountability
over the way that the security forces operate, over their command
and control structures, and how they investigate breaches and
hold people to account—they fail on all of those counts.
Only yesterday, the same day
that President Morsi was on trial, the Government announced that
they were overruling another 23 or 24 suspensions for Egypt. As
far as Amnesty is aware, none of the perpetrators of the unlawful
killings, the civil unrest, the response to that civil unrest
or the brutal crackdowns that took place over the summer, especially
in recent weeks—none of the perpetrators—has been
held to account or even started to be investigated. It seems entirely
the wrong signal to start revoking suspensions and putting arms
export licences back into operation before those things have happened.
Q11 Ann Clwyd:
May I ask a quick question about the export of components for
chemical weapons? After the Iraq war, some firms were found to
have illegally sold components in this country, but there have
been very few prosecutions here compared, for example, with Germany.
Do you think that it would sharpen people's minds if there were
more prosecutions in the UK?
Roy Isbister:
Is that the first Iraq war or the second?
Ann Clwyd:
The first and the second.
Roy Isbister:
We have argued as a group for a number of years that a more robust
approach needs to be taken to enforcement. To be fair to the Government,
we have seen prosecutions—not for chemical weapons, that
I am aware of, but certainly for the illegal export or brokering
of conventional arms. That represents a positive shift over the
previous approach of disruption, for the obvious example that
it sets. Things are better than they used to be, but that is not
to say that they could not be better.
Chair:
Following their Arab Spring policy review, the Government set
great store by the introduction of their new export licence suspension
mechanism. As you know, the Committee has questioned the adequacy
of that. May we now turn to that issue?
Q12 Chris White:
With reference to the situation in Mali in 2012 and other similar
experiences, why do you think the strategic export licence suspension
mechanism has been ineffective? Perhaps more importantly, how
do you think it could be improved?
Oliver Sprague:
As the UK Working Group, we have serious concerns about how the
licence suspension mechanism is going to work. When we had initial
discussions about it, it was meant to be an early warning system.
It was meant to put an immediate freeze on deteriorating situations
where it was impossible to ascertain proper risk assessment in
licensing. It was supposed to be very much an early warning mechanism.
It was not used in Mali, and it was used in Egypt only when, as
far as we were concerned, it had already reached crisis point.
It was not an early warning mechanism at all. It was imposed after
the situation had already deteriorated to a pretty serious extent.
I guess that that is not the
only concern that we have with it. We question the logic of applying
suspension only to pending licence applications. We think that
that is a fundamental flaw. If you are going to suspend licensing,
you should be suspending arms transfers, not just licensing. If
there are pending shipments or extant licences, then you must
have the ability to suspend those as well. To focus only on licence
applications makes it entirely possible that a shipment to an
end user who is already licensed will go ahead, even though a
pending licence application to the same end user is subject to
suspension.
Roy Isbister:
May I build on that? The only case that we are aware of where
the suspension mechanism has been applied is Egypt. In that case,
it seems that it has been applied to extant licences, which is
not how it was explained to us; it also took a long time. As I
said, five licences were revoked on 19 July, but the actual suspensions
did not take place until 28 August. That is a pretty slow early
warning mechanism.
It has been quite confused
since then. It was applied in a way that seems different from
the message that we were given. There is also the change that
Olly mentioned, with approximately 24 licences being unsuspended
in the last couple of days. If you look at the notice to exporters,
it says that the suspension mechanism has been modified. I shall
quote from it, if I may. It states that we have "agreed to
modify the way the suspension is applied. In future we will not
adopt a blanket approach to the Egyptian organisations listed
in paragraph (1) but consider each extant licence and new licence
application on its merits." As far as I can see, that is
a standard licensing policy. I do not understand how it is a suspension
mechanism, but apparently the mechanism has been modified, not
stopped. I do not understand how the Government are operating.
Q13 Chris White:
Just to clarify, do you think that this is a timing problem, or
do you think that, in terms of a mechanism being triggered, the
bar is being set too high?
Roy Isbister:
It is probably both, as far as we can see. As I said, it feels
confused as to how it is supposed to be applied and when.
Q14 Chris White:
What is your advice as to how it could be improved?
Oliver Sprague:
Use it as it was intended, which is as an early warning mechanism.
It was needed because it was argued that to revoke licences was
quite a problematic process—that you had to cancel a licence
and then go through the entire process of reapplying for the licence
even if the decision to cancel it was, in hindsight, slightly
ill-judged.
The idea of a suspension mechanism,
where you would put a temporary freeze on something while a situation
was developing and unfolding, and answers were being sought, seems
to be inherently sensible, so our advice would be to use it as
it was originally intended: to lower the threshold for it being
used; to use it when situations are deteriorating, and information
about the conduct of the security forces is questionable or unknown;
and to apply it to all of the transfer process. Apply it not only
to pending licence applications but to extant licences and pending
deliveries.
Q15 Chair:
Would you agree that the fundamental frailty of resting policy
on a suspension mechanism is that, once the goods have been shipped,
the UK Government have effectively lost any control over them?
I use the phrase "once the bullets have bolted, that is the
end of the story". Does not that indicate that the really
crucial decision, as has been highlighted by the Committee in
successive reports, is the original decision as to whether you
export a particular group of goods to a particular country or
not?
Roy Isbister:
Absolutely. As I have said before, and using Egypt as an example,
the first question is why so many licences have been issued over
the last couple of years, when the situation was so bad in 2011.
You could ask any number of experts and they would all advise
extreme caution.
Martin Butcher:
May I just add quickly to that? Mali has been mentioned, which
is a good example. There is a rising number of credible reports,
although still at a fairly low level, of the Malian army, as it
moves north, behaving in a fairly bad way towards Tuareg herders
and some of the nomadic communities in the north of Mali, and
people are now fleeing to Mauritania, for example. At the moment,
it is still at a fairly low level, it would seem. Without looking
it up, I do not know what, if any, extant licences there are from
this country for Mali, but a political signal could be sent at
this point to the Malian Government to get their soldiers under
control by suspending licences now, while things are still at
a fairly low level.
Chair:
I want to move on now to goods that can be used for internal repression.
Q16 Chris White:
You state that you believe that there are additional items that
could be used for internal repression which should also be incorporated
into UK and EU lists. You have been critical of the Government's
actions with regard to restrictive measures for equipment that
could be used for internal repression. In this instance, where
do you think the Government have gone wrong—and, again,
what do you think they could do better?
Oliver Sprague:
There are a number of issues that we should touch upon here. The
first thing to say is that the idea of an enhanced list of goods
that could be used for internal repression being subject to export
control is a good one and one that we support. There is a conversation
to be had with the Government about what that range of equipment
is.
One of the issues that we
have—you might want to ask the defence industry representatives
about this as well—is that many of the items that the UK
has on its additional list of goods that could be used for internal
repression do not currently appear on any export control list.
It is full of examples, and I shall quote from it. They include:
"Fire-arms, ammunition and related accessories…not controlled
by the Common Military List", "Explosive substances
and related equipment…not controlled by the Common Military
List", and "military knives and combat knives with blade
lengths in excess of 10 cm". At the moment, as far as I can
tell, none of those items currently appears on any export control
list, so how are the Government outreaching to companies that
might be making and exporting those goods, as they would never
have fallen within the licensing system in the first place? Do
companies that are making military combat knives or knives with
a blade in excess of 10 cm now know that those products are subject
to control in certain circumstances? I don't know.
Q17 Chris White:
Are you suggesting that there is a problem of awareness?
Oliver Sprague:
I would want to know how companies have been made aware of these
new restrictions, because they would never have been subject to
licensing requirements in the first place.
The other point is that there
are some notable exclusions from that list, things that groups
like Amnesty would like to see included. A whole variety of policing
equipment—handcuffs and restraints, specialist batons and
police whips—seems to be missing from the list and should
be included. When Governments start identifying targets for state
repression, the first thing that they look to is surveillance
technology, image processing and phone surveillance, stuff that
is used to intercept e-mails, face-recognition software—all
those kinds of equipment, which are the first sign that a Government
wish to crack down on their own civilians, are missing from the
list. There is a conversation to be had there about making sure
that that equipment, too, is captured.
The idea of having an expanded
list of goods that could be used for internal repression is a
good one. It is not something that we are opposed to.
Chair:
The Government, as you know, have made a great deal of what they
term their transparency initiative in this area, and we have some
questions on that.
Q18 Ann Clwyd:
Given the reduced amount of information that will be available
about open licences, and the fact that the Government are now
going to publish it annually instead of quarterly, and obviously
with greatly reduced content in that information, how valuable
is this going to be?
Roy Isbister:
We need to be very clear in the first instance that there is not
going to be a reduction in transparency but that the improvements
that were promised in transparency are not going to happen. We
are very disappointed by the outcome of this whole process and
by the way that the process has been managed. When the Government
announced their intention, they held a formal public consultation
process. Approximately 100 industry representatives responded
to that consultation, and to a large extent they announced themselves
content with what was proposed, saying that it was manageable
and so on.
That was in July last year. As
recently as May, it was announced that this was still planned
but that, because of teething issues and IT issues, there was
to be a three-month delay. We met the Government on 11 July and
were told that everything was fine and still going ahead. There
was a hint on 18 July that not all was well, when the Secretary
of State for Business, Innovation and Skills said that we are
looking at the quarterly versus annual reporting issue, but then
we were hit with the bombshell on 31 July that all bets were off.
We do not understand how this happened. A follow-up freedom of
information request was tabled by Action on Armed Violence, which
asked an exploratory question about what further contact there
had been with industry on this subject, and the answer was that
the records had been searched and that there was no record of
correspondence or e-mails on this.
What has happened? Why has
the change been announced? We are told in one of the notices to
exporters that there had been some indications from industry that
this was more burdensome than they had wanted, but what was the
process by which this happened? A transparent process was producing
a significant improvement in transparency, but the process disappeared
behind closed doors and, all of a sudden, the transparency of
the outcome has disappeared. We would like to know why.
It is also worth mentioning
that the information that would be entering the public domain
is basic to standard inventory control, so it is not that industry
would not have this information. It is required to make it available
to the Government in the event of an audit, so it is hard to understand
where things have gone wrong. We would welcome an explanation.
Chair:
We now want to turn to some quite extraordinary and surprising
information that we have been highlighting in relation to the
particular scale of export licence shipments granted to private
security companies, supposedly for anti-piracy.
Q19 Mike Gapes:
Can we look at the overall situation? We have statistics on the
export of various things, including 24,000 assault rifles, 2,700
combat shotguns, 9,000 rifles, 1,000 sniper rifles and 3,000 sporting
guns, which have been exported supposedly under the heading of
anti-piracy. That includes the export of assault rifles to Sri
Lanka. Given the concerns that we have about human rights situations
in a number of the countries on the list—another is Maldives,
where there has been a coup, which has been contested and the
situation has been difficult since then—is it possible that
these numbers conceal the fact that some of the weapons might
have been diverted to purposes other than anti-piracy?
Oliver Sprague:
It is worth stating here that it is not just the SIELs that you
need to be looking at; there is also an open general export licence
for the supply of ML1 and ML2 for anti-piracy operations. I am
unaware of the reporting requirements for OGELs, but I imagine
that the figures do not appear in any of the annual reports. The
last time I looked, over 85 UK private military security companies
had registered to use the open general licence.
As a general rule, we would
be opposed to the idea that you could have an open general licence
to allow the transfer of assault rifles and combat shotguns for
private military security companies operating overseas. It seems
to be a very lax licensing regime for those sorts of activities,
not least because we have long-standing concerns about the conduct
of private military security companies operating overseas stemming
from real concerns about accountability and oversight. We have
seen from numerous examples, not just relating to anti-piracy,
that there is an accountability gap. When things go wrong, what
legal recourse is available to ensure that the perpetrators of
atrocities are held to account?
You have a situation in the
UK where you have a proliferation of over 80 companies working
in the realms of private security provision overseas. What happens
if there is an incident in international territorial waters? Who
is going to be responsible for the outcome? What level of human
rights training, combat training, do these individuals have? It
seems to us that the only eligibility requirement at the moment
for these licences is that you need to be signed up to the international
voluntary code of conduct on private military companies.
We have long argued that a
voluntary regulatory approach to something as serious as the provision
of private and military security companies is wholly inadequate
and that we need a legal framework and a licensing system. In
general terms, we are concerned about the proliferation of the
huge number of small arms and light weapons and their related
ammunition for private military companies engaged in anti-piracy.
That is not to say that we do not acknowledge that piracy is a
big problem, but we have long-standing concerns about the conduct
and accountability of private military companies.
Q20 Sir Malcolm Bruce:
To follow that up, if you look at the countries, what we would
expect is a bit variable. Do you have any idea to whom these are
being supplied? I know that it is a small place, but 12 rifles
for the Seychelles, which is very much in the area, does not seem
very much if they are engaged in it. Who is buying them?
As you have said, given that
we are trying to restrict small arms distribution, is there not
a danger that the genuine concern about piracy, and the alarms
and incidents that have happened, could nevertheless be a kind
of cover for saying, "Let's get some more weapons out there"?
What information do you have to suggest that the way that these
have been licensed and to whom they are being licensed is being
properly tracked?
Oliver Sprague:
I go back to talking about the risks of the system. At the moment,
we have no specific evidence of large-scale diversions taking
place or of weapons being secured in unsafe facilities. The point
is that we are supposed to have some of the strictest and most
robust controls possible for the export of small arms and light
weapons overseas, but it seems that, for anti-piracy, those rules
are thrown out of the window. It seems to us that, as long as
you say that it is for anti-piracy, you are going to be given
a licence. The requirement on you to prove that you are going
to use them responsibly is that you adhere to some notional voluntary
code of conduct, but who scrutinises the application of that code
of conduct? We don't believe that a voluntary code of conduct
is sufficient to regulate private military companies, and we certainly
do not think that light-touch licences should be allowed so easily.
Roy Isbister:
To add to that, we do not know where they are going, but that
links back to the transparency review and Olly's point on the
open general licence. We have no knowledge, and as far as I can
tell the Government do not collect information about it, on the
scale of small arms exports for anti-piracy operations that take
place under the open general licence. That is what the transparency
review originally said would be the case—that we would be
told at least what the quantities and the nature of the equipment
exported under open general licence would be, but we do not have
any information on that.
Q21 Sir Malcolm Bruce:
Something in excess of 40,000 guns have been licensed, and we
do not know where they are going or who is using them. You are
saying that we should do something about it.
Roy Isbister:
That is 40,000 under the standard licence. We do not know how
many have gone under the open general licence.
Oliver Sprague:
It is certainly the case that the current reporting requirements
on the open general anti-piracy licence fall well below the international
standards to which the UK Government subscribe. The international
marking and tracing regime for small arms and light weapons, of
which the UK was a big supporter, has a requirement to keep records
for 20 years. The ATT says that records for small arms exports
must be kept for a mandatory 10 years. The reporting requirement
on the OGEL is that companies are required to keep records for
only four years, which is five times less than under the international
agreement that we have signed up to, and it is clearly at odds
with requirements under the ATT. We simply do not know what is
being exported under those licences.
Chair:
Thank you. We have time for one last short question about cluster
munitions.
Q22 Mike Gapes:
In your submission to us, you expressed concern that the Government
have gone back on a commitment to end indirect investment in the
financing of cluster munition producers from this country. Will
you clarify why you think that that is? How can we ensure that,
as well as the direct financing, which is stopped, indirect financing
is not being promoted from this country?
Oliver Sprague:
Let me go back to the passage of the Cluster Munitions (Prohibitions)
Act 2010, which was initiated in the House of Lords. The previous
Government committed themselves to developing with civil society
and financial institutions a voluntary code of conduct to end
the practice of indirect financing of cluster munitions. When
in Opposition, the current Government tabled a specific amendment
in the House of Lords to ensure that indirect financing was captured
under the terms of the Act. They withdrew that amendment because
agreement was reached on a ministerial statement on the need to
develop a voluntary code of conduct. In other words, when it was
announced that a voluntary code of conduct would be developed
and that the Government would seek to work with civil society
and the industry to develop that, the amendment was withdrawn.
All parties at the time recognised
that indirect finance was a problem that needed to be tackled,
and we remain disappointed that the current Government have not
honoured that commitment and have left it up to the banks to develop
their own code of conduct. I have met representatives of a number
of high street banks—a month ago, I was in the offices of
a very large household name that has revised and strengthened
its policy, and its message to me was simple. The banks are crying
out for the Government to get together with all the financial
institutions and civil society NGOs to start the process, because
they think that developing policies in these tricky areas in isolation
is not helpful. What is needed is everybody to get together, because
each financial institution will have a different set of problems
that it needs to address, as it is a complicated area.
In the first instance, what we
continue to call for is simply the setting up a meeting of all
the relevant parties, so that we can at least thrash out some
of these issues. All the banks support it, and all civil society
NGOs working on it think that it is a good idea.
Q23 Mike Gapes:
Which is the lead Government Department? Which Department is causing
the problem?
Oliver Sprague:
It falls within the remit of the Foreign and Commonwealth Office,
because it is dealing with international treaties. I expect that
it also touches on areas of finance and banking reform, so the
Treasury may well be involved. Specifically, the lead Department
is the Foreign and Commonwealth Office.
Chair:
Mr Isbister, Mr Sprague and Mr Butcher, thank you very much indeed.
We are grateful to you for your evidence, and also for your written
evidence. Thank you so much.
Examination
of Witnesses
Witnesses: Mr David
Hayes, Chairman of Export Group for Aerospace and Defence
(EGAD), Mrs Susan Griffiths, Head of Export Control UK,
MBDA UK Ltd, Ms Bernadette Peers, Compliance Manager, Strategic
Shipping Company Ltd, and Mr Michael J.V. Bell, Export
Controls Consultant, gave evidence.
Q24 Chair:
Good afternoon David Hayes, Susan Griffiths, Ms Bernadette Peers
and Michael Bell. We are very glad to see EGAD again. We thank
you also for your written evidence to us before this session.
I would like to start with
a broad question about the Export Control Organisation. From where
you sit, from the business standpoint, do you believe that ECO
is producing a gradually improving service for you, or a gradually
deteriorating service, or is it much the same service as before?
What is the direction of travel?
David Hayes:
It is difficult to say what the direction of travel is. It is
clear to most people that the organisation is operating under
serious constraints at the moment.
Q25 Chair:
Do you mean financial restraints?
David Hayes:
Ultimately, yes—both financial and resource constraints
driven by the financial constraints. It also has to react to issues
such as the Arab Spring within existing resources, and that necessarily
has an impact on the day-to-day licensing processing and the resources
available for day-to-day running when unexpected issues arise,
but that is true of all departments in all circumstances.
It is clear, as I say, that
the organisation itself is struggling at the moment. It is endeavouring
to deal with that in a number of ways, one of which is a proposal
that we move further towards the use of open licensing in an effort
to reduce the number of standard individual export licences. This
type of initiative may help, but only time will tell how successful
that is in achieving its objective in the broader sense.
Q26 Chair:
Do any others want to comment on how they perceive ECO and its
direction of travel? Is it getting better for you, getting worse
or staying the same?
Okay, let us move on. I come
back to trade exhibitions. What is your view as to the performance
of DSEi on trade exhibitions? I would expect you to say that you
are embarrassed because it can reflect poorly on the arms export
industry generally if things are found in those exhibitions that
should not be there, but what is your view on the utility of these
exhibitions as far as you are concerned?
David Hayes:
The utility of the exhibitions is a commercial matter. If they
were not of use to the industry and not of benefit to the industry
overall, then market forces would dictate that they no longer
happened. The fact that they continue to happen is presumably
a demonstration to the contrary—that they are of use to
the industry. There are incidents at these fairs and exhibitions
that should not happen, and it would help, when these incidents
do happen, if there was perhaps a little more transparency around
what happened and precisely how it was dealt with, and what was
happening to the individual companies involved.
To set this in context, DSEi
happens in a very tightly regulated environment. There are countries
in which similar events happen without a fraction of the control
that is exercised over them in the UK. The fact that every now
and again companies step out of line is clearly something that
we do not wish to tolerate, but some greater transparency for
all of us around what actually happens when these transgressions
are identified would be helpful.
Chair:
We want now to turn to the issue of transparency. The Government
set much store by it, but on some aspects it is not at all clear
to us whether transparency has increased or is reducing.
Q27 Mike Gapes:
The Government recently increased the reporting period for open
licences from quarterly to annually; they also dropped the requirement
for companies to provide descriptions of goods shipped or their
ratings. Did the Government consult your organisation, or your
individual members, before they took this decision?
David Hayes:
We took part in the consultation more broadly. Did they specifically
consult us on the plans to change the reporting period from quarterly
to annually? No, not that I am aware of.
Q28 Mike Gapes:
You were not in a position to give them any advice, because they
did not indicate to you that they were going to do it.
Susan Griffiths:
The only thing that we took part in was that a number of companies,
through EGAD, took part in some user acceptance testing on the
Spire system prior to that. There were a number of things about
which we went back to ECO using the tool—about not meeting
the requirements and not being able to report accurately as it
had asked—but at no stage was it proposed to us that these
things would change.
Q29 Mike Gapes:
Do you believe that the new arrangements will be helpful to parliamentary
and public scrutiny, or will they reduce it?
David Hayes:
They would reduce it in the sense that the more data you have
to process, the easier it is to lose things in the midst of those
data. The data that were going to come out of the system focused
largely on the use of licences, the scope of which was already
entirely in the public domain. For the most part, the data in
relation to exports under those licences were already in the possession
of the Government, so there was a repetition in data collection,
certainly for any exports going outside the EU, which ran counter
to the red tape challenge.
The licences themselves, particularly
open general export licences, are already published in full on
the internet, and their scope is entirely around very low risk
exports. It would not be logical to anticipate people having particular
issues with exports that were within the scope of those licences,
and, if they were, then the problem would surely be around the
scope of the licence and not the number of occasions on which
the licences had been used.
Q30 Mike Gapes:
The Export Control Organisation has improved its processing of
single export licences to 71% within 20 working days and 95% within
60 days. However, the processing of appeals has declined to 23%
within 20 days against a target of 60%, and to 60% within 60 working
days against a target of 95%. Does it concern you that this appeal
time scale has deteriorated, and how can the Export Control Organisation
improve its processing of appeals?
David Hayes:
The answer to that has to be yes, although the number of appeals
taken as an absolute figure is low anyway. It comes back to the
original question of resource. With a defined amount of resource,
you can only do a certain number of things. If you increase the
focus on one of those things, you necessarily have to remove some
of the focus from one of the other activities. That is the price
that we pay for the constrained environment.
Q31 Sir Malcolm Bruce:
I have a quick question on the change in the licence. How can
greater transparency be achieved cost-effectively? It seems to
me that you are saying that the system was cumbersome, that the
cost falls on you and that the Government have the information
anyway, but that changing the licensing term from quarterly to
annually nevertheless gives the impression that we are lowering
the visibility of what is going on, rightly or wrongly. How can
you make this change in ways that reassure the public that the
information is just as available, and that it is cost-effective?
There is an argument that
the industry needs to be part of the process of reassurance, but
you seem to be implying that the Government should be responsible
and that the Government should pay. Should it not be at least
a joint effort?
David Hayes:
I am not implying that the industry should not play a role in
this. I am implying that industry should not be asked to provide
the same information twice, which was the case with many of the
requirements under the transparency initiative. There are other
ways in which this information could be compiled. For example,
the point was made that a lot of this information already exists
in companies anyway, in preparation for audit. Yes, it does, and,
if we could find a way in which the information could be collated
without putting in place a completely new, repetitive and duplicative
system, that would be a cost-effective means of doing it.
Companies have to collect the information,
and they have to provide it to the ECO in questionnaires in advance
of compliance visits. One solution may be to extract the information
that has already been provided in previous questionnaires—not
all of it obviously, but extracting those parts of the data that
are required for the transparency initiative—and publishing
it in some form, perhaps in the annual report.
Q32 Sir Malcolm Bruce:
I guess that that would be helpful. This Committee obviously prides
itself on getting information out of the Government, which quite
often is like drawing teeth. The more proactive the system, the
more reassurance everybody has. I suggest that the industry has
as much interest in assuring the public as the Government do.
Bernadette Peers:
The industry certainly feels that it has a role to play and is
quite happy and content to provide the information, which of course
it does at a compliance visit. What companies object to is that
they have to provide it for compliance audits and provide it when
they try to make an export, so the information is already being
given twice, and they are now being asked to supply it a third
time in the transparency initiative. If there was some give, so
that we had to give the information once or perhaps twice and
that was it, I think that the industry would be content.
Q33 Sir Malcolm Bruce:
I am sure that a clever computer programmer could solve that problem.
Bernadette Peers:
That is resource again.
Q34 Chair:
We turn now to the website issue, which we have dealt with before.
When you came before us last year, you were concerned about the
Government's introduction of the gov.uk website to replace the
existing ECO website. In the light of experience so far, do you
think that your concerns were justified, or do you feel that they
have been allayed by the way in which the Government website is
now operating?
David Hayes:
A little of both. Now that we have had experience of it, there
is a lot of information in there, and much of it is valuable.
Unfortunately, the downside is that it is very difficult to find
the information. It is difficult for us, as seasoned practitioners,
to find the information, so for people who need it more than we
do, because they are new to the compliance world and are desperately
trying to find a source of help, it has to be said that it is
not particularly user-friendly.
Susan Griffiths:
I second that. As David says, when you are used to using it on
a regular basis you become familiar with it and can find a way
around it and navigate it. Some time ago, they had something like
an A to Z on the website that was extremely useful, and new exporters
could find the information readily and easily. If they were to
go back to something like that, just as an example, it would help
enormously.
Q35 Chair:
I turn now to the issue of extraterritoriality. As you know, the
Committees have consistently advocated the extension of the provisions
of extraterritoriality to the remaining goods in category C. We
have done so because it seems to us to be self-evident that an
arms transfer, brokering, or whatever act involving goods on the
military list or dual use list that would be an offence if committed
in the UK should equally be an offence if committed by a British
person overseas. You have previously expressed some reservations
about that. Do you still have reservations, and if so would you
explain why?
Michael Bell:
Yes, we do have reservations. We have reservations of principle.
We object in principle to having a situation where somebody is
subject to two different jurisdictions for the same action, which
is the case if a UK person is in a foreign country and subject
to that foreign country's laws. Secondly, we have objections in
practice. We all know that it is extremely hard to bring successful
prosecutions against extraterritorial breaches or violations of
export controls. In fact, the only people who suffer are the compliant:
people who are not compliant find it relatively easy to get around
them.
EGAD said in its letter that
we regarded the way forward as the successful implementation of
the Arms Trade Treaty, because that places on individual countries
the responsibility of ensuring that exports from that country
are properly regulated according to principles that we share.
In a sense, the effect of the Arms Trade Treaty should be that
the requirement for brokering controls disappears.
Q36 Chair:
Would you not agree that it is difficult to erect an argument
against what the Committees are proposing on grounds of principle,
given that if such a principle exists it has been breached on
successive occasions for about 150 years by successive British
Governments? We have published in our reports the list of the
totality of extraterritorial provisions that exist in statute
dating back to the middle of the 19th century, so I suggest that
the principle that you have erected about double jurisdiction
is one that the British Government have set aside in cases of
what they regard to be serious criminal offences.
Michael Bell:
Yes, and indeed, there are circumstances where extraterritorial
jurisdiction is entirely defensible—war crimes and so on.
In this case, however, I repeat that the position is that an individual
is subject to two different jurisdictions for the same action.
That, to my mind, cannot be right. However, it is also true, Chair,
as you mentioned in the previous question period, that the new
Arms Trade Treaty has resulted in the British Government saying
that they wish to extend brokering controls to the range of items
covered by the Arms Trade Treaty. That would be an extension of
the category B controls. We do not share that interpretation of
the Arms Trade Treaty; none the less, assuming that it is sustained,
it will get you a fair way towards your objective.
Chair:
I want to turn now to a number of international arms export trading
agreements that we have. The first are the US export control amendments.
Q37 Richard Burden:
You warned that there could be "considerable commercial and
bureaucratic consequences for UK businesses trading with the US"
because of developments in the US's own export control reform.
Would you tell us what the reforms are that you are worried about,
and what the consequences are that you mentioned?
David Hayes:
To pick a practical example, with effect from 15 October, US suppliers
of a range of aerospace items that we would regard as military
for UK purposes will be able to export from the US to 36 countries
without applying formally for an export licence, under arrangements
that the US calls licence exceptions, which you can regard as
being conceptually akin to OGELs. One of those countries is Turkey,
which is on our doorstep and not the doorstep of the United States.
That gives US exporters of this type of equipment a clear advantage
over UK exporters, who currently cannot supply the equivalent
items to Turkey under open licence.
Q38 Richard Burden:
As far as UK legislation is concerned, are there things that could
be done that would address these matters without weakening controls
that we have brought up over quite a long time?
David Hayes:
Very easily. The UK has the option to amend military OGELs to
add countries very simply. I do not underestimate the difficulties
of adding Turkey to general licences, and the terms of those licences
would probably need to be reviewed carefully, particularly in
relation to the ultimate end user of the goods, but there is no
reason why that avenue should not be explored, with the safeguards
necessary to implement it being added to the licences at the same
time.
Michael Bell:
One might add that another strategic trade authorisation destination
is Argentina. We might be a little uneasy at the export without
prior licensing authorisation of items that we would categorise
as military to that destination.
Q39 Chair:
As you know, we are giving specific and detailed attention to
Argentina in our next report, including a list of all the extant
arms export licences that currently exist with Argentina.
I now turn to the UK-US Defence
Trade Co-operation Treaty, to which you attach great importance,
as do the Committees. You will have seen the detailed series of
questions that we put in our latest report and recommendations,
and you will have seen the detailed reply that the Government
gave in their Command Paper 8707. The key issue for our Committees,
and I imagine also for you, is whether British industry is getting
fairer treatment—indeed, better treatment—as a result
of this treaty than was the case prior to it coming into effect.
In question f), we asked the
Government to state in their response how satisfactorily or not
the treaty is working as far as British companies are concerned.
The Government, in opening their reply, said, "The Treaty
could be working more satisfactorily than at present because the
first UK Industry-to-US Government transaction has yet to take
place." I have to say that I read that with some degree of
surprise and amazement. Would you tell us what is your perception
of how well, or not, the treaty is working as far as British industry
is concerned?
David Hayes:
The treaty was born at a challenging time. It rapidly became apparent
to us that the greater the success of the export control reforms
to which you referred, Chair, the less would be the relevance
of the treaty. A lot of the activities being undertaken by UK
companies that would previously potentially have fallen under
the treaty will now transfer to the responsibility of the Department
of Commerce in the United States and therefore be outside the
scope of the treaty. Couple that with the requirements and constraints
of the treaty itself, and you end up with something that conceptually
started life as a good idea but, as a result of the constraints
that were then put around it, combined with developments that
took place at the same time in the US export control system more
broadly, so we have ended up with something that has little operational
relevance or use to industry. That is why the uptake is so low.
Chair:
It is very disappointing to hear that, but thank you for sharing
your perspective with us.
We now come, inevitably and
inescapably, to ITAR.
Q40 Mike Gapes:
I have been asking questions on this for about 15 years, starting
with my time on the Defence Committee years ago. In those days,
we were talking about ITAR waivers, and then we were going to
have a treaty to deal with all the problems in another way, but
you seem to be telling me that it has not had a great effect.
Will you update us? You expressed concern last year about the
United States International Traffic in Arms Regulations procedure.
Has the situation improved in the last year?
David Hayes:
Considerably. There are mechanisms within ITAR that, taken in
combination with an exchange of notes between the UK and US Governments
relating to our security clearance procedures, have the potential
to alleviate a lot of the burden that previously existed.
Q41 Mike Gapes:
Does that particularly apply to dual nationals?
David Hayes:
It does.
Q42 Mike Gapes:
Is there anything further that we can do? Are there any outstanding
problems that need resolving?
David Hayes:
There was one, but industry representatives are currently working
that out with the US Department of Commerce. When things transfer
jurisdiction from the State Department to the Commerce Department
under US export control reform, we do not want to end up in a
situation worse than it would have been under ITAR. However, that
issue has already been identified, discussed and addressed.
Q43 Mike Gapes:
It is a good news story.
David Hayes:
It is, yes.
Q44 Mike Gapes:
This is the first time that I have heard that said in all these
years.
David Hayes:
There is a first time for everything.
Mike Gapes:
That is good. Thank you.
Michael Bell:
May I add that another piece of good news is the new ITAR brokering
regulation? It has finally abandoned attempts to extend jurisdiction
to foreign persons outside the United States. This has been dropped
from the latest regulation, so it will no longer be the case that
the Department of State can claim jurisdiction over foreign companies
engaged in what they describe as brokering activities. That is
extremely good news.
Q45 Chair:
Thank you. We turn now to another important trade agreement, and
that is the UK-France Defence and Security Co-Operation Treaty.
In our last report, we asked the Government to tell us how satisfactorily
or not the treaty is working as far as British companies are concerned.
The Government's reply was, "While it is for industry to
judge how the Treaty is working for them, they are able to express
views through the UK-France High Level Working Group which oversees
capability and equipment issues associated with the Lancaster
House Treaty." The Government then went on to say, "Industry
representatives have indicated a broad level of satisfaction with
progress, particularly when considering joint programmes such
as complex weapons and Unmanned Combat Air Vehicles." Do
you consider that Government reply to be an accurate statement
of the industry's position as to how well the UK-France Defence
and Security Co-operation Treaty is working?
Susan Griffiths:
I would say yes. Negotiations have been ongoing, and rightly,
so quick decisions have not been made. There is still a lot of
negotiation going on, in which we have been heavily involved,
and lots of consideration. There is recognition by both sides
that, while we are trying to move forward on this, there are some
small steps to take. There could be some advantage to this, but
it is obviously being considered at a very slow pace with the
agreement of both sides. There has been good engagement between
the Government and industry on this, and we hope for a satisfactory
conclusion.
Q46 Chair:
Thank you. The last matter that I wish to turn to is the intra-Community
transfer, ICT, directive on arms transfers within the EU. Can
you tell us how well, or not, armed transfers within the EU under
that directive are working as far as British companies are concerned?
David Hayes:
As far as British companies are concerned, from the point of view
of exporting, it was never that significant a change for us, because
our open licensing system has always facilitated export from the
UK to our European partners. It was more important for multinational
companies to be able to get exports from the EU into the UK under
the directive. How is it functioning, Susan?
Susan Griffiths:
I would say that uptake is a bit slow, primarily because some
EU countries have not yet established global licensing. We are
therefore trying to see a broader aspect of where the balance
is, because they have been introduced differently in different
EU countries.
The benefit for some EU countries
has been a change in their own national export licensing. In general,
however, it is early days to see how balanced the introduction
has been, because they are not always equal. For the UK, we have
possibly seen a slight increase in the ability to get licences
in a quicker way from those countries, but because there is an
onus on the importing side as well, the uptake in some countries
has been very small.
Bernadette Peers:
The problem is partly a lack of awareness throughout the EU. The
UK is very good at doing awareness and advertising to industry
that something is available, and we have had a lot of dialogue
between industry and Government, from the outset all the way through
to getting the directive. That was not the case in the EU, and
trying to find sources of information to make use of the directive
is difficult. Few UK companies are certified, and we are going
to go through the process in order to push the message out. The
message as to the benefits of the directive is even more limited
across the rest of the EU, because people just do not understand
it or know about it.
Q47 Chair:
Before we conclude, are there any final points that you would
like to put to us?
David Hayes:
No, thank you, Chair.
Chair:
Thank you, Michael Bell, Bernadette Peers, David Hayes and Susan
Griffiths. Thank you very much indeed for your evidence today.
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