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Lord Renfrew of Kaimsthorn: I should like to ask one question relating to the amendment and the use of the word "technology". It is not clear that it explicitly refers to biological materials. Would an animal— for instance a modified animal, the result of genetic engineering—come under the heading of "technology"? That is not a trivial point; it would apply equally to biological warfare. It would apply to germ material, and so on. I should like the Minister's assurance that living things—for instance, a cloned sheep, which might be of enormous commercial or other significance—and biological materials are fully covered under the terminology of "technology".

Lord Sainsbury of Turville: May I deal with Amendments Nos. 6, 8 and 10 together? All three relate to the Government's ability to control transfers of technology under Clause 2. While understanding the concern that there should be no loopholes in the new transfer controls, and indeed that they should not unduly burden industry, the Government do not believe that the amendments would improve the Bill. Each amendment raises particular issues and I shall address them in turn.

Amendment No. 6 would specifically provide that the Government had the power to impose controls on the publishing of technology on websites. The amendment is unnecessary as the Bill as drafted already provides such a power where there is reason to believe that technology may be transferred abroad. Clause 2 defines a "transfer" as,


That encompasses uploading material on to a website from where it could be accessed by others.

Clause 2(2)(a) provides that the Secretary of State may impose controls on transfers from within the UK to outside the UK. That would allow control of transfers to an Internet site outside the UK. Clause 2(2)(d) provides that controls may be imposed on transfers entirely within the UK where there is reason to believe that the technology may be used outside the United Kingdom. That would apply in the case of transfers to Internet sites based in the UK but accessible from outside the UK. Hence, transfers to websites or other electronic media can be controlled under the Bill as drafted.

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The new controls to be introduced under the Bill on electronic transfers of military technology will extend to transfers to and from intranet sites and in certain cases on the Internet. However, as is the case for our current controls on tangible transfers of military technology, any technology in the public domain will be excluded from that control. Clause 2 is included in the Bill specifically to cover the whole question of electronic transfer of technology, which is one of the great weaknesses of the current legislation. It was drafted to deal with the issue of electronic communication. Clearly, in today's world, the current situation in which only manuals or physical representations of technology are covered is inappropriate.

Amendment No. 8 is intended to ensure that transfers of technology within one company or group cannot be subject to control. The Government believe that having the power to control transfers of technology within one company is essential for the effective operation of our export control regime. I entirely agree with the point made by my noble friend Lord Judd. If transfers within one company were to be excluded from control, an unscrupulous exporter or individual wishing to transfer sensitive technology could do so simply by setting up a company with offices overseas in a place with different and perhaps less stringent export controls than those of the UK. I am sure that the Committee will agree that such a situation would amount to an unacceptable loophole in our controls.

However, I am aware that there are concerns that controls on intangible technology transfers may be burdensome. I assure the Committee that that is why the Government intend to continue to make extensive use of open licensing, where appropriate, to avoid unnecessary burdens on business and government resources. For example, companies will be able to apply for open individual licences to cover intra-company transfers of technology or joint ventures with international partners.

I now turn to Amendment No. 10. First, technology as defined here is only that which falls under the categories in the schedule—essentially, military equipment or something with one of the relevant consequences. Unless one suggests that garlic crushers or cricket bats could be weapons of mass destruction or lead to regional instability, they would not be included in the definition. The definition would cover biological material if it had one of those relevant consequences—for example, if it could be used as a weapon of mass destruction, which is of course a very present issue.

Amendment No. 10 would remove paragraph (b) of Clause 2(6). The removal of that paragraph would limit the type of technology that could be controlled under the Bill to information capable of use in connection with the development, production or use of any goods or software. Any other type of information, no matter how serious its potential for misuse in the wrong hands, would be excluded from control. It is

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clear that in a Bill such as this, which is an enabling Bill that we hope will have a long life, it would be wrong to take such a position.

While I understand the concern that the new controls on technology transfers should not unduly burden industry, the amendment would restrict the Government's capacity to control the transfer of sensitive technology or information that might be used to cause real harm in the hands of the wrong end-user. It must be borne in mind that what ultimately determines whether a particular kind of technology or piece of information should be subject to control is not the form that it takes, but whether it is subject to control as a consequence of an EC or other international obligation or whether it could be used to threaten one or more of the consequences set out in the schedule.

In that respect, it is important to appreciate that sensitive technology or information need not necessarily be associated with particular goods or software, let alone goods or software that are already subject to control, and therefore may not always be covered by the definition of "technology" given in paragraph (a) of clause 2(6). It might, for instance, support experimental work carried out prior to the actual development of goods or software—for example, in relation to new applications of cryptography—or relate simply to information connected with a particular activity that did not necessarily involve goods or software.

I remind the Committee that most of our controls on technology derive from EC law or from international control regimes such as the Wassenaar arrangement and the Nuclear Suppliers Group. The lists of items controlled under EC regulation and the various international control regimes are regularly updated, as new types of technology emerge that are judged to pose a risk in the wrong hands. It is of vital importance that the UK should be immediately able to update our list of items subject to control, where that is required under our EC or international obligations.

Paragraph (b) is needed because none of us can be confident that the relatively conventional definitions of technology given in paragraph (a) of Clause 2(6) will continue to be sufficient to allow the Government to control every kind of technology that we may be required by international obligation to control or whose transfer could lead to one of the relevant consequences set out in the schedule. We must have legislation that will stand the test of time and not be rendered quickly out of date by the emergence of new technological methods and processes that do not relate clearly to particular items of equipment or software. In particular, we cannot be in a position in which new primary legislation must be passed in the UK to enable us to follow our EU and international partners in imposing new controls on technology, simply because the items to be controlled are not covered, or not fully covered, by the definition given in paragraph (a) of Clause 2(6).

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It is important to remember, however, that paragraph (b) does not give the Government an open-ended power to control all kinds of technology. Controls can be imposed only on military goods and technology, on other goods or technology that are controlled as a result of our EC and other international obligations and on classes of technology or goods whose transfer or export from the UK could threaten one or more of the damaging consequences set out in the schedule. In view of the reasons and arguments that I have given, I invite the noble Baroness, Lady Miller, to withdraw the amendment.

6 p.m.

Lord Burnham: On the assumption that my noble friend will withdraw the amendment—she may not—will the Minister, before Report, consider some definition of the difference between the kind of dodgy company mentioned by the noble Lord, Lord Judd and BAe Systems? As it stands, those two extremes are being treated in the same manner. That is not reasonable.

Lord Sainsbury of Turville: We are talking about the legislation, which covers the action that the Secretary of State can take. When it comes to open licences for individual companies, the reputation of the company is the sort of factor that would be taken into account in deciding whether open licences would be given. That would distinguish between different companies; it need not be taken account of in the legislation. We must have the power to stop technology moving within a company, which would drive a hole in the Bill.


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