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Lord May of Oxford: My Lords, I share many of the reservations that have been expressed. In my case, I have a vivid personal acquaintance with the problems created by legislation such as this if it is not carefully drafted. In my 11 years of experience at Princeton University as Vice-President for Research in the late 1970s and early 1980s, one dealt with several court cases that arose from forbidding mathematicians to present work. There was, in general, a history in the United States—until the whole matter was cleaned up about 15 years ago—of misapplication of such regulations in ways which inhibited research. Cases were always resolved happily, but only after much fuss and bother.
As your Lordships will recall, the original Export Control Bill was amended in this House and sent back to the other place, where the amendments were swept away. It then came back here for a happy resolution, led by the noble Lord, Lord Sainsbury, which satisfied my fact-based—although from another country—worries.
We were reassured in the earlier discussions that, even if the amendments had not stood, the orders would clear up any ambiguities. Unhappily, far from doing so, they have recreated some of the original obfuscations, although not with intent. Through the generosity of the noble Lord, Lord Sainsbury, in sharing with me his preliminary thoughts, I am under the impression that he will lay all my worries to rest.
I have two minor points that I would like put even more formally to rest. The noble Baroness, Lady Miller, also referred to them. First, I trust that we shall hear that the Government are committed to consulting with representatives of the academic community to provide further and clearer guidance, where appropriate, specifically tailored to the academic context. Why do I say that? The helpful notes and guidance prepared by my erstwhile colleagues in the DTI from my brief sojourn as Chief Scientific Adviser, well-intentioned though they are, clearly reflect the fact that most of the dialogue in the context of export control—it is an evocation of Scott and so on—is not between academics and officials in the Department of Trade and Industry but between rather different people. In short, there is what might generously be called a certain degree of mutual incomprehension between the academic culture and that of the people who drafted this document. The thought that it could come happily together is not reassured by the fact that the Royal Society and Universities UK's efforts to get together with officials before the order came to the House was, despite much polite exchange of promises, not effective. I am left with the harsh view that the guarantee of such dialogue must rest on ministerial assurance that officials will be told what to do. That is a crude thing to say, but it is best said openly.
Finally, I also hope—and this fleshes out something said by the noble Baroness, Lady Miller, and what the noble Baroness, Lady Warwick, may be about to say—that there will be an undertaking that there will be a formal review of how the bits that relate to the academic world are going 12 months from the order coming into being, rather than three years.
Baroness Warwick of Undercliffe: My Lords, I am grateful for the opportunity to debate the regulations currently before the House, and pay tribute to the efforts of the noble Baroness, Lady Miller of Hendon, in pursuing the issues that she raised this afternoon. I also declare an interest as chief executive of Universities UK.
I broadly welcome the regulations and I wholeheartedly welcome the spirit of co-operation with which officials in the Export Control Organisation of the DTI have approached the concerns raised by academics and by the Royal Society and ourselves. Indeed, it is only a shame that we did not manage, as the noble Lord, Lord May, said, to get a meeting with them. In calling for clear, adequate and tailored guidance, I hope that the same spirit of co-operation can be maintained and built on to ensure that the regulations now before us are capable of being clearly understood by those in the academic community.
As noble Lords have already made clear, however, there are a few areas of outstanding concern that I hope the Minister will be able to clear up. My own reaction in reading the regulations and the accompanying draft guidance was similar to that of the noble Baroness, Lady Sharp—that they were hopelessly opaque and difficult to understand. The draft guidance in particular failed to clarify the obligations that the new controls will place upon academics and others, or to make clear the difference between existing controls and new ones. If we are not to produce a situation in which academics simply scratch their heads and give up on international collaboration in certain fields, it is incumbent upon the Government to make efforts to explain the scope of the existing and new legislation. I therefore join others in calling for clear, transparent and tailored guidelines for the academic community that make absolutely clear what they must do and how they must do it.
I also believe that the Government should keep the regulations now before us under review, as others have said. I believe that the impact of the regulations should initially be reviewed 12 months after their implementation, with full and active consultation with the academic community. I hope that the Minister will be able to offer a full clarification on those points.
I conclude with one final point, which relates to the requirements imposed by Schedule 4 Part II of the regulations. There has been some discussion of this already, but I would like to reiterate the concerns expressed by the noble Baroness, Lady Miller of Hendon, about the record keeping and reporting requirements imposed by Schedule 4 Part II, which are utterly unrealistic for collaborating academics. The easiest solution to this problem would be for the Minister to provide some reassurance that the Export Control Organisation will look favourably on applications by information security academics for individual licences. I understand that the normal practice is to discourage applications for individual licences when existing licences are applicable. My view is that the reporting and record-keeping requirements of Schedule 4 Part II make the Community general export authorisation inappropriate for collaborating academics. I look forward to the Minister's reply.
5 p.m.
Lord Sainsbury of Turville: My Lords, I apologise to the noble Baroness, Lady Miller, for wasting her weekend. The thought of negotiating my speech line by line and word by word with her led to a moment of weakness on Friday evening that should not have taken place. I apologise to her for that.
As Minister with responsibility for science and innovation, I believe that the UK must have strong international relationships if it is to remain at the leading edge of world science. I am proud of the fact that we carry out 4.5 per cent of all the world's science, but that means that 95 per cent is done elsewhere. If we are to stay at the leading edge, we need strong relationships with the science being done elsewhere in the world. However, I believe that there is nothing in the Export of Goods, Transfer of Technology and Provision of Technical
Assistance (Control) Order 2003 that in any way prevents that happening. I want to reply in detail to the specific points raised by the noble Baroness, Lady Miller. First, however, I should put things in a wider context.The order is one of two made under the Export Control Act 2002, which will come into force, together with a third order now in preparation, on 1st May next year. The order consolidates the extensive export controls that already apply under current legislation to the export of controlled military and dual-use goods and technology, and also to non-controlled goods that are to be used in connection with a programme of weapons of mass destruction. However, there are certain gaps in the present controls that this order will remedy. First, it will impose a control on the export of military technology by electronic means, to complement the existing controls on the export of dual-use technology by electronic means. Secondly—and this is the point which I believe to be of concern to the noble Baroness—it will impose controls on the transfer by any means within the UK of non-controlled technology and software intended for use in a weapons of mass destruction programme outside the EU. It will also impose controls on the provision of technical assistance to WMD programmes. The second order, with which I do not intend to deal today, introduces new controls on the trafficking and brokering of military goods between countries outside the UK.
At present, it is possible for those engaged in the production of WMD to obtain relevant technology and software or technical assistance within the UK or from a UK person outside the UK without the need for the transferor to obtain approval from Her Majesty's Government under export control legislation. Clearly, this is an area in which we must have adequate regulations. The new controls on the transfer of technology relevant to weapons of mass destruction do not represent a radical change in direction; they build on the existing dual-use regulations that have been in force since 2000. The new controls on technical assistance implement an EU joint action.
Equally, I accept that the controls must be proportionate, practicable and well understood by those subject to them. We have therefore engaged in extensive consultation before they were finalised. That started with a White Paper and we also published draft secondary legislation when the Bill was introduced into Parliament. We then had a final round of consultation of the draft orders starting in January this year.
Copies of that consultation document on the secondary legislation were sent to, among others, the Royal Society and Universities UK, and the Government have also discussed the operation of the new controls with them. Officials from the DTI's Export Control Organisation will continue to work with them during the implementation period and beyond to help their members become aware of, understand and operate the new controls. I have asked that a meeting take place early in the new year, and we will work with the academics to provide appropriate guidance for academics. I hope that that allays any fears that the noble Lord, Lord May, or the noble
Baroness, Lady Warwick, have about the matter. We will produce appropriate guidance, working with academics.Detailed user guidance on the new controls has been published on the Export Control Organisation website, including frequently asked questions tailored for academics. The Export Control Organisation provides a helpline and free ratings inquiry service, which further helps academics understand and operate the new controls. Additional advice is provided by compliance officers during their regular audits of open licence holders, including suggestions to help open licence holders understand and comply with the terms and conditions of their licences. In addition to this ongoing communication effort, the Government will consider what further guidance may be necessary in collaboration with representatives of academia.
The Government are already committed to a systematic review of the new controls three years after their coming into force. We have also undertaken to work with representatives of institutions of higher education to monitor current preparations for the new controls and their operation during the first year after coming into force. I am more than happy to give a cast-iron assurance that, in both reviews, we will consult representatives of higher education institutes.
The Government accept that institutes of higher education and the research community do not have wide experience of export controls, and we are committed to helping them to comply with strategic export controls, both under the new controls introduced by the order and under the existing dual-use regulations.
Some concern has been expressed about the ability of academics dealing with information security to comply with the existing EC dual-use regulation. The main concern seems to be the record-keeping requirements of the Community General Export Authorisation—the CGEA—a form of open licence that permits anyone to transfer encryption software or technology controlled in annex 1 to the EC regulation within the Community and to 10 of our close allies, including the United States. The Government have met representatives of higher education institutes to discuss the issue and are willing to continue working with academics dealing with information security to help them meet their obligations under the existing controls. However, I stress that the controls have been in force for the past three years, and, although we are making every effort to be as flexible and understanding as possible, we are constrained by the record-keeping requirements of the EC regulation with regard to the CGEA.
The noble Baroness, Lady Miller of Hendon, raised the question of the extent to which the record-keeping requirements were necessary under the EC dual-use regulation. The regulation allows member states to attach national export control restrictions to the use of the CGEA in their territory. The Government have exercised the UK's right to attach further reporting requirements through national legislation on physical exports and electronic transfer of cryptographic items, software and technology to the 10 non-EC countries
permitted as destinations under the CGEA. It is important to note that the further reporting requirements apply only to exports of cryptographic goods, software or technology specified in annex 1 to the EC regulations beyond the EC. The export of encryption beyond the EC raises national security issues, which the further reporting requirements address in a proportionate and workable way.The noble Baroness also raised a point about record keeping and compliance for electronic transfers of military technology. I stress that we are not requiring records to be kept of every e-mail to an end-user, if a transfer takes place over a prolonged period. It is sufficient to identify the technology transferred, the dates between which it was transferred and the identity of the end-user. The detailed user guidance developed with industry representatives will make clear the practical record-keeping requirements under the new controls.
The belief has grown up in some quarters that no researcher will be able to collaborate or communicate with anyone in a sensitive area without first seeking a licence from the DTI. That is not the case. Section 8 of the Export Control Act 2002 specifically acknowledges that an order prohibiting or regulating the communication of information in the ordinary course of scientific research may not be made, unless the interference by the order is necessary and no more than necessary.
The new end-use controls apply only in specific circumstances, which I shall explain, relating to weapons of mass destruction programmes and missiles capable of their delivery. Even here, there will be an exemption for information in the public domain. We believe that the vast majority of scientists would, in any case, wish to avoid having their work contribute to such programmes. I do not believe therefore that those specific circumstances will arise frequently.
I will now give the House a clear explanation of the Government's position in answer to questions about the drafting of Articles 8 and 9 of the order. Article 8(1) contains the prohibition on the electronic transfer of software or technology. The article prohibits the transfer without licence of software or technology to a person or place in the United Kingdom, if the transferor has been informed by the Secretary of State that such software or technology is or may be intended, in its entirety or in part, for a relevant use; or if he is aware that it is intended for a relevant use, and he has reason to believe that it may be used outside the European Community. The phrase "any relevant use" is defined in Article 2. The definition follows the definition in the EC dual-use regulation and broadly covers usage in connection with weapons of mass destruction programmes.
For the test in Article 8(1) to be satisfied, the transferor must first either be informed by the Secretary of State or be aware that the software or technology is intended for a relevant use. For the "aware" part of the test to be met, there must be a realistic prospect that the person who has the intention to use the software or technology for a relevant
purpose will be in receipt of the software or technology. The possible intention of an entirely unconnected person is not relevant. That, however, is not the end of the story. The transferor must also have reason to believe that a relevant use will take place, outside the EC. That does not mean that there is a theoretical possibility that it may be used outside the EC, a condition which, of course, may logically be satisfied in every case. Rather, there must be a positive reason for the belief on the part of the transferor. Article 8(5) confirms that by stating that, for the purposes of Article 8(1), a person has reason to believe that software or technology may be used outside the EC, if he knows that it may be, or is intended to be, so used, or if he has been informed by the Secretary of State that it is intended to be so used. If the constituent parts of that test are met, the transferor must apply for a licence before the transfer is made.Article 9(3) contains the mirror provision to Article 8(1) in respect of the non-electronic transfer of software and technology. For the avoidance of doubt, the comments that I made about the interpretation of Article 8(1) apply equally to the interpretation of Article 9(3).
The wording of Article 10 is deliberately different from that in Articles 8 and 9, but the "is aware" test is the same as for those articles. A person may be "aware" only if he knows that he has goods intended for a relevant use.
The noble Baroness also raised a constitutional point. The new controls have been carefully framed to respect activities that fall under certain protected freedoms described in Section 8 of the Export Control Act 2002; namely, communicating or making information generally available to the public and communicating information in the ordinary course of scientific research. The Secretary of State may regulate such activity, if interference is necessary and no more than necessary, as determined by her in accordance with Section 8(2), and she considers that the new controls imposed by Articles 8 and 9 of the order are necessary.
I hope that what I have said for the record today will reassure the House and the academic community. As Parliamentary Under-Secretary of State for Science and Innovation, I am determined that nothing should stand in the way of productive international scientific relationships. Equally, I do not think that any scientist would want to see his or her work misused in a way that threatened the security of the country.
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