5. EXPORT CONTROL FOR DUAL USE GOODS
(8888/98)
Letter from Lord Tordoff, Chairman of
the Committee, to Michael Wills Esq MP, Parliamentary Under-Secretary
of State, Department of Trade and Industry
At its meeting on 19 January, Sub-Committee
A (Economic and Financial Affairs, Trade and External Relations)
considered this document with the help of your predecessor's Explanatory
Memorandum of 10 December.
This Memorandum drew attention (in paragraph
13) to a potential detriment of the move from unanimity to qualified
majority voting. We should be glad to know what effect the Government
believes the proposal would have on the ability of the United
Kingdom to protect its foreign and security interests.
In relation to Article 8 of the proposal, we
are surprised that no reference is made to the EU Code of Conduct
on Arms Exports, even though that Code appears to apply to certain
categories of dual use goods. Does the Government consider that
the regulation should expressly refer to the Code?
We are holding this document under scrutiny
awaiting your reply to these questions, and a copy of the Regulatory
Impact Assessment promised by your predecessor.
When you write, we should also be grateful if
you could explain why this document, which is dated 25 May 1998,
has only now been submitted for scrutiny. We also note that it
refers to a report by the Commission on the application of the
present regime. We take it that this will be deposited with an
Explanatory Memorandum in the normal way.
19 January 1999
Letter from Kim Howells MP, Parliamentary
Under-Secretary of State for Competition and Consumer Affairs,
Department of Trade and Industry, to Lord Tordoff, Chairman of
the Committee
I refer to your letter of 19 January concerning
the Commission proposals for a new Regulation on the export of
dual-use goods (8888/98) submitted with an Explanatory Memorandum
on 10 December.
Paragraph 13 of the Memorandum of 10 December
deals with the Commission's proposal to introduce a Community
general authorisation (Licence). Any changes to this licence,
under the Commission's proposals, would be subject to qualified
majority voting (QMV). Therefore, the UK could be outvoted on
future proposals to change the coverage of this licence even if
the changes would be contrary to its national or foreign policy
commitments or obligations. My officials, in consultation with
officials in FCO and other Departments, are currently considering
ways to safeguard our essential national interests with respect
to this and other aspects of the Commission's proposals.
The Commission's proposals were produced prior
to the adoption of the EU Code of Conduct on Arms Exports on 8
June 1998. This explains why there is no reference to the Code
in Article 8, which identifies the various criteria Member States
should take into account before deciding on whether or not to
grant a licence. My officials are in discussions with officials
from other Member States and the Commission on its proposals and
have already recommended that reference is made to the EU Code
in Article 8.
A supplementary Explanatory Memorandum together
with the Regulatory Impact Assessment will be submitted by my
officials as soon as they receive responses from industry associations
on their request for possible costs the Commission's proposals
will have on industry.
It is regretted that neither the Commission's
proposals for a new Regulation (8888/98) nor the Commissions report
on the operation of the current Regulation (8889/98) was submitted
for scrutiny earlier. This omission resulted from the fact that,
although transmitted by the Commission to the Council Secretariat
the documents were not sent to national capitals in the usual
way under cover of a Council Communication.
The Official Report by the Commission on the
application of the current report will be deposited shortly together
with an Explanatory Memorandum in the normal way.
4 February 1999
Letter from Lord Tordoff, Chairman of
the Committee, to Kim Howells Esq MP, Parliamentary Under-Secretary
of State for Competition and Consumer Affairs, Department of Trade
and Industry
Thank you for your letter of 4 February, replying
to mine of 19 January.
When Sub-Committee A considered your letter,
it noted that the question of the proposed change of legal base
had also been raised by the House of Commons European Scrutiny
Committee. We have since received a copy of your letter of 27
April to the Chairman of the House of Commons Committee responding
on that point. We also have your Supplementary Explanatory Memorandum
of the same date covering the regulatory impact assessment. We
remain concerned about the likely effects of the change of legal
base on the United Kingdom's ability to protect its foreign and
security interests. But we do not intend to press this point further,
and we have now cleared both documents.
However, we should be grateful for your views
on another aspect of the proposal. We understand the academic
community has expressed concern that the provisions on the export
of intangible capital would catch exchanges of information on
research matters. How is it proposed to deal with this problem?
17 June 1999
Letter from Kim Howells MP, Parliamentary
Under-Secretary of State for Competition and Consumer Affairs,
Department of Trade and Industry, to Lord Tordoff, Chairman of
the Committee
Thank you for your letter of 17 June on export
controls for dual-use goods. You raise the question of the proposed
extension of the EC Dual-Use Goods Regulation to the transfer
of technology by intangible means and the concerns of the academic
community about the exchange of information on research matters.
You may be aware that the current EC Regulation
on Dual-Use Goods (No 3381/94) already imposes an export control
requirement on the export of various categories of technology
for the development, production or use of goods which are themselves
subject to control. However, at present this applies only where
the technology is exported in tangible form, for example on paper
or computer disk. The Commission's proposal for a revised dual-use
Regulation would provide that such technology required an export
authorisation if exported by electronic means (eg fax, email,
or telephone). The same general principles determining whether
or not an authorisation is required would apply to electronic
transfers, as apply to exports in physical form.
Tangible transfers of technology in the public
domain and basic scientific research are, under the current Regulation,
not normally subject to export control (the exception is that
transfers of public domain technology or basic scientific research
may be caught by the end-use control related to weapons of mass
destruction) and under the Commission's proposal for a revised
Regulation, these exclusions would apply equally to electronic
transfers. Many academic exchanges of information—to the
extent that they related to information that would otherwise be
subject to export control—would be likely to be excluded
from export control as they would either be considered to be in
the public domain, which is defined in both the present Regulation
and the Commission proposal as "`technology' or `software'
which has been made available without restrictions upon its further
dissemination (copyright restrictions do not remove `technology'
or `software' from being `in the public domain')" or would
constitute basic scientific research, which is defined as "experimental
or theoretical work undertaken principally to acquire new knowledge
of the fundamental principles or phenomena or observable facts,
not primarily directed towards a specific practical aim or objective".
So, to sum up, under the Commission's proposal
for a revised Regulation, there would be no difference in the
types of technology subject to export control from the present
position—it would simply apply to electronic as well as
physical transfers in future. And much academic exchange of information
should continue to be excluded by virtue of its falling within
the exclusions for information in the public domain and basic
scientific research.
8 July 1999
Letter from Lord Tordoff, Chairman of
the Committee, to Dr Kim Howells MP, Parliamentary Under-Secretary
of State for Competition and Consumer Affairs, Department of Trade
and Industry
Thank you for your letter of 8 July, in reply
to mine of 17 June. Sub-Committee A considered it on 20 July and
asked me to express its appreciation of your prompt and helpful
reply to its query.
It still has concerns over the issue of intangible
exports in relation to international collaboration between academic
researchers studying, for example, in the fields of chemical or
biological warfare. However, it considers that the universities
should fight their own battles on this issue; a copy of your letter
will be sent to the Committee of Vice Chancellors and Principals
and to the research councils.
23 July 1999
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