Committees on Arms Export Controls
Oral evidence: UK Arms Exports During 2016, HC 666i
Wednesday 21 February 2018
Ordered by the House of Commons to be published on 21 February 2018.
Watch the meeting
Members present: Graham P. Jones (Chair); Ann Clwyd; Leo Docherty; Mike Gapes; Mr Ranil Jayawardena; Mrs Pauline Latham; Chris Law; Emma Little Pengelly; Priti Patel; Faisal Rashid; Gavin Robinson; Lloyd Russell-Moyle; Stephen Twigg; Henry Smith; Royston Smith; Catherine West.
Questions 1-78
Witnesses
I: Martin Butcher, Policy Adviser, Arms Campaign, Oxfam; Oliver Feeley-Sprague, Programme Director for Military, Security and Police, Amnesty International UK; and Elizabeth Kirkham, Small Arms and Transfer Controls Adviser, Saferworld.
Witnesses: Martin Butcher, Oliver Feeley-Sprague and Elizabeth Kirkham.
Q1 Chair: Welcome, everybody. Thank you for your attendance. Thank you to Oliver, Martin and Elizabeth for taking the time to come today. It is really appreciated. Please introduce yourselves and make a brief comment before we move into the questions. I will start with Oliver first.
Oliver Feeley-Sprague: My name is Oliver Feeley-Sprague and I’m the programme director for Amnesty UK’s work on arms control and policing. We are all delighted to be back in front of the Committees again because of the enormously important work that the Committees do in holding the Government to account on their arms export controls. We are grateful for the opportunity to give evidence to you again and for you to hear what we think about the situation.
Martin Butcher: I’m Martin Butcher, and I’m Oxfam’s policy adviser on arms and conflict—the global lead on arms policy for Oxfam. I echo Ollie’s words.
Elizabeth Kirkham: I’m Elizabeth Kirkham. I’m an adviser in Saferworld’s arms unit. I have been in that role for some years. As Oliver said, we are delighted to be back here in front of the CAEC, and we look forward to your questions.
Q2 Chair: I shall move straight into the questions. First, there are several different types of licence available for the export of arms. Can you give us a brief overview of what they are and how they operate? Elizabeth, perhaps you will answer first.
Elizabeth Kirkham: There are three basic types of licence that the export control system is built upon. The most restrictive one is the standard individual export licence: SIEL. Those are for a specific exporter to export a detailed set of equipment up to a certain value or quantity to a specific recipient or end user. Those are the licences that have most scrutiny. They are done on an individual basis—
Ann Clwyd: Chair, could everybody speak up?
Chair: I was going to ask about the microphones.
Elizabeth Kirkham: Okay?
Chair: If you could just speak up a bit.
Elizabeth Kirkham: I will try to. SIELs are the most restrictive licences. They are considered on a case by case basis and are scrutinised against the consolidated EU and national criteria. Then there are open individual export licences, otherwise known as OIELs. Those are for one specific exporter, but it allows that exporter to export a range of equipment to a range of approved destinations with no upper limit. They are generally valid for about two years. Sales are usually valid for two years as well. Exporters who have OIELs are considered to be in quite a favoured position, because you have to have demonstrated good standing in terms of export control compliance over a number of years before you can obtain one of those licences.
Finally, there are open general export licences. Those are pre-published licences. They include in the licence the goods that can be exported and the destinations that the goods can be exported to. Almost anyone can apply for or can register and use an open general export licence. They are basically a way of allowing less or non-sensitive goods and technologies to be exported to less sensitive destinations.
Such licences are also used for trade controls. You might have standard individual trade control licences, which are for brokering. You may have open individual trade control licences, which are also used for transhipment. There are open transhipment licences as well. I think that has covered it.
Q3 Chair: Thank you very much, Elizabeth. A secondary question I would like to ask—perhaps Martin would be the best person—is: are the licences currently available adequate and effective in controlling arms exports?
Martin Butcher: The licences themselves are not, for the most part, what we find problematic in the system, although we have some problems particularly with the least restrictive licence, the open general export licence, in terms of the reporting and transparency that are possible under that licence. That is something that might come up later. That is an area we are worried about.
Q4 Chair: Do you want to comment briefly, Oliver?
Oliver Feeley-Sprague: The only thing to add is to echo what Martin said. The different licences come with different types of obligations, especially for reporting. The job of anyone responsible for scrutinising Government export licensing against its stated policy objectives is quite hard to do for some of the open licences, specifically the open general licences but also open individual licences. For example, for at least the last 20 years—maybe not quite that long—there has been an established practice for the UK Government to report on quantities of small arms and light weapons, because they are regarded internationally as an item of high concern.
We get very good numeric information in SIEL export licensing about how many items of that category we are exporting. Are we exporting five shotguns or 5,000 assault rifles? Under open licensing, that quantity information is not available. If small arms and light weapons are exported under open licensing, you do not know the quantities that are exported. I would go so far as to say that, given the high risk around those particular items, you should be very cautious about allowing small arms and light weapons to go under those more permissive licences anyway.
For example, previous Committees have highlighted, as have we, the anti-piracy open general licences, which seem to us to be extraordinarily permissive about the number of small arms and light weapons that could be exported under an open general licence for anti-maritime private military companies operating overseas. Those are some areas within the licensing system about which we have concerns. The concern is essentially about our ability to scrutinise them properly.
Q5 Chair: That is a relevant point; I note that industry is seeking to extend these open general export licences to cover non-contentious cryptographic goods. Do you have any views on that?
Oliver Feeley-Sprague: When we talk about cryptography we need to be careful about what we are talking about. In general terms, from a human rights perspective, cryptography is an important safeguard. It allows human rights defenders, journalists and us NGOs to communicate without intrusive surveillance of what we are doing. There is a risk to having insecure information in that context. In the private sphere, anyone who uses online banking, uses a service till, pays by a chip and PIN machine or uses PayPal expects that their financial information will be secure. If it is not, the whole system falls down. We need to be quite realistic about what we talk about when we talk about cryptography.
At the same time, there is a recognition among the exporting community—things like the Wassenaar arrangement, but also the European Union and the dual use regulation—that the area of cyber-controls, or controls on equipment to monitor and carry out surveillance of the internet, for example, has struggled to cope with the technology advances that have happened. With a list-based system, these items tend to be things that the list struggles to cope with, because technology advances much faster than the list can.
There is an overall move, within both the Wassenaar arrangement and the EU, to strengthen our controls in this area of goods because of the human rights concerns that can occur when they are misused. At a time when others are looking to ensure that our controls are as strong as they possibly can be, relaxing them may not be the right thing to do at the moment.
Chair: I have two people who would like to ask a further supplementary. Priti?
Q6 Priti Patel: Thank you, Chair. I would like to come back to the Chair’s point on transparency, both for Oxfam and for Amnesty International, if I may. Your comments are absolutely relevant and valid to the discussion that we are having in the Committees today, but can I press you both to be more specific on what needs to be done on the transparency front and where you think there is more scope?
Martin Butcher: Let’s take an example. Last year, an open individual export licence was granted to the Philippines for a category that we do not know, because it is not reported, but that the Government said in their quarterly report was small arms, or small arms components, or body armour, or body armour components and a couple of other things. There was no value attached to that licence and no quantity of what equipment was licensed for export, so it is impossible not just for us to know what was actually exported under that licence, but for you as the Committees responsible for scrutinising policy and practice in arms exports to know what was licensed for export under that licence. I would suggest that is somewhat problematic in a situation like the Philippines, where there is a Government with a President who is under investigation for inciting crimes against humanity.
Chair: Thank you, Martin. Quickly, Lloyd?
Q7 Lloyd Russell-Moyle: Could you go into more detail about some of the dangers of having an open licence for cryptography? I am looking down the list of surveillance and cryptography that we have sent to Bahrain, Bangladesh, Iraq, Saudi Arabia and Sri Lanka. Those are all the same countries that are on the Foreign Office’s list of countries to worry about for surveillance. When the Department and the export unit have been asked about this, they have said that they do not keep information about the capacity of Egypt and the UAE, for example, in terms of their laws and legislation around surveillance. What more information would we need for these licences? What other kinds of licences could we use to restrict those kinds of weapons being sold?
Oliver Feeley-Sprague: The basic answer to your question—this is the value of the Committees, because with Government-published reporting, it is hard for every single licence to have a narrative explanation about what it is. An awful lot more could be done to make that better. The role of the Committees is to look at those inherent contradictions—the countries that we seem to have been supplying with that equipment, which, it sounds like, could be used by those Governments, when we know that those Governments use that equipment to round up people, to detain them unlawfully and to torture them—and it is for the Government to explain how those licences were issued and what precisely they were for. This is the issue.
I have talked a bit about cryptography. There is a huge difference between selling a large licence to a banking institution in a foreign country, which may have human rights concerns, but still has a right to have secure banking for everybody else, and selling that same equipment, which would allow monitoring of people’s activities, to the internal security forces. There may also be end users within Governments for whom the risk that equipment could be misused is less, but the reports are not specific. They might give you that something went to a Government end user, but who was the Government end user and what conditions were applied to the licence?
That is what the Committees have the power to do. They have the power to ask Government to provide that much more detailed narrative around these seemingly problematic licences.
Q8 Lloyd Russell-Moyle: A detailed session on that might be useful.
Oliver Feeley-Sprague: Or at least some follow-up questioning. The Government have provided that to the Committees before about chemicals to Syria, where there were some licences for that. The Government were quite forthcoming about writing to the Committees and explaining what those licences were for. This is one example in this area where that would be a very valuable exercise.
Lloyd Russell-Moyle: The Committees hold confidential sessions to deal with that particular issue.
Q9 Catherine West: You suggest in your written evidence that the consolidated criteria may have provided a cover for decision making, rather than a meaningful check and control. Why have you reached this conclusion?
Martin Butcher: The Government—this Government and past Governments since the consolidated criteria were brought in—repeatedly say that Britain’s arms export controls are among the strongest in the world, that these criteria are among the best in the world and that we implement them fully. In certain circumstances, it seems to us that those statements are honouring the criteria more than in name than in reality.
Until spring last year, at the beginning of the conflict in Yemen, 709 licences were approved for export to Saudi Arabia and only five were refused, despite the criteria saying that where there is a clear risk that there might be serious violations, we will not approve items for export. There is a worry when we export under open licence small arms and body armour—that kind of equipment—to a country such as Egypt, which was permitted last year, when we know that there are serious human rights violations internally in Egypt. Standing behind the consolidated criteria on paper and saying, “Look how good we are”, is a concern to us.
Q10 Catherine West: How could we strengthen our approach to that?
Martin Butcher: As a coalition of organisations, we have consistently asked that Governments robustly implement the consolidated criteria, looking at exact wordings and holding to those. Since the arms trade treaty came into force, we have called for the robust implementation of that, not just adhering to the absolute minimum letter of the law but to the spirit of the law, too.
Although the High Court case is not yet finished, we were concerned in the judgment that is now under appeal that the court suggested that as long as the Government have a process, it does not seem to matter too much what that process is; there just needs to be a process. Our point is that that is not enough. If we are, as we say in the consolidated criteria, to hold human rights and international humanitarian law as a standard by which all arms exports must be judged, that process really needs to be robust.
Q11 Stephen Twigg: Are there other countries from whom we can learn, who you would argue treat the consolidated criteria in a more robust fashion than we do?
Martin Butcher: All countries have areas where they do and where they don’t. We have been pleased to see in the last year that a number of countries—Sweden, the Netherlands, Belgium and Germany—have said that they are restricting certain kinds of exports to the Yemen Saudi-led coalition. Germany, for example, was very concerned when rifles that it had sold in the 1970s and ’80s to Saudi Arabia turned up stamped with the Saudi crest. They were airdropped into Yemen and turned up in the hands of all sorts of people who should not have had them, and so Germany has cut off co-operation on the production of rifles today. There are other circumstances where we are deeply concerned. For example, not long—not many weeks, even—after the European Union, with Britain in the lead, decided that because of human rights abuses in Egypt the sale of arms and equipment that could be used for internal repression must not happen, the Czech Republic sold 50,000 small arms to Egypt, so all countries have areas where they are good and where they are bad.
Q12 Stephen Twigg: Are the examples you gave with regard to Yemen, Germany, Sweden and so on a product of them having better processes, or is it just a matter of political will in those countries?
Martin Butcher: I would say the latter.
Oliver Feeley-Sprague: It might just be worth coming in with a very quick point—something that we have recommended in the past and is quite important here—about how the system could be tightened. There are an established number of countries that the Government admit are problematic in terms of human rights. They publish the report every year. There are other indices that the Department for International Development uses. Everybody knows that there are certain countries that raise a certain number of problems. They are published, and there is no debate about that. After the Arab Spring, we explored with the Committees looking at those countries and acknowledging that they are sensitive. Given that licensing is supposed to be allocated towards risk, for that set of countries that are problematic there should be a change in the way the system is implemented. We should be looking for a presumption of denial to be put in place for licences to those countries. That does not mean that you are saying that you cannot sell them any weapons, but it means that you start from a position that is different from what it is now. The position now is that we will sell them a weapon unless there is a compelling reason for us not to. In a pre-defined list of problematic countries you flip that the other way around and say that we do not sell them weapons unless there are compelling reasons why we should. You start from a position that says that we probably will not sell them, so we have to go that extra mile to work out why we should. I think that is quite a useful model to be looking at.
Q13 Chair: Can I probe on that point? If there was a presumption of denial on countries that are not arms trade treaty signatories—there are 94 signatories, including Honduras and the Central African Republic—is there a presumption in reverse that you would sell to the signatories?
Oliver Feeley-Sprague: I do not mean all of the countries that are not signatories to the arms trade treaty.
Q14 Chair: Among the 94 signatories are countries like Honduras, the Central African Republic—I am not saying the state of Palestine is dubious—and Guatemala. So are you saying that if countries are not in that 94, we have a presumption of denial, and if they are in that 94, we have a presumption of supply?
Oliver Feeley-Sprague: I am saying: let us start with the established reports, for example the “Human Rights and Democracy” report. In that set of countries, there are maybe 15 that are routinely identified as high risk in terms of human rights. Let us start by tightening export control policy to those countries.
There is a separate point when we talk about open licences. One of the ways that open licences are allowed to happen is that there are destinations that are regarded as safe destinations and therefore it is okay to have an open licence to them. Those destinations are basically established on the basis that those countries sign up and adhere to all the relevant standards that exist. For example, before the ATT it was things like the Australia group for chemical weapons and the biological weapons convention. Countries where the UK Government perceive that they have the standards in place to implement that would be eligible destinations for open general licences. The arms trade treaty is the new instrument and international norm for the export of conventional arms around the world, so it is entirely consistent with UK Government licensing practice to say that for open general export licences, only signatory countries of the international arms trade treaty—those countries that have actually said “We wish to adhere to a global standard”—should be eligible for those licences. That would be entirely consistent with how that licensing works. I am rather surprised that the Government have not amended their OGEL destination schedule to reflect that.
Q15 Mike Gapes: On this, are you actually arguing that we should ignore the fact that we have already got the consolidated criteria and that we are at the moment bound by collective European Union criteria, as well as having our own governmental position—are you saying that that is, in fact, weak, so we should go much further than that unilaterally? Is that what you are arguing? I am not clear.
Oliver Feeley-Sprague: No, I am not arguing that at all. I am saying that it is a way to tighten the implementation of the rules. How can we better apply the clear risk that items might be used for internal repression?
Q16 Mike Gapes: So to be clear, you are not saying that the current criteria set out in the ministerial statement are wrong; it is a question of implementation of the criteria. Is that what you are saying?
Elizabeth Kirkham: Can I just say something? In the consolidated criteria, criterion one is about the behaviour of the recipient vis-à-vis the international community, so having a presumption of denial to non-signatories or non-parties to the ATT would represent an assessment of the behaviour of the recipient in that regard. So it is consistent with the criteria.
Chair: I am conscious of the time. I know Lloyd wants to come in very briefly afterwards, but now Ranil. Then we will move on with questions.
Q17 Mr Jayawardena: I want to probe, just like Mike, what it is exactly that you are suggesting here. So the US have not signed this—
Martin Butcher: Ratified.
Mr Jayawardena: Sorry, ratified this. So on that basis, you would be saying that they shouldn’t be entitled to the same licences.
Oliver Feeley-Sprague: I think to be realistic, with a new instrument like the arms trade treaty, a signature is what is required, because a signature means that you have made a positive contribution not to break the spirit or the terms—
Q18 Mr Jayawardena: But it doesn’t have any legal weight in their jurisdiction, does it?
Elizabeth Kirkham: Well, a country that has signed a treaty is bound not to do anything to defeat the object and purposes of that treaty.
Q19 Mr Jayawardena: But if it has not been implemented then it still has no legal weight.
Elizabeth Kirkham: Not quite. But in any case we are not arguing that we should not sell arms to any country that has not signed the ATT or ratified the ATT and put that into practice. We are suggesting that in terms of implementing our arms export policy in practice, the fact that the country has ratified the ATT and put its measures into national implementation should be a guide to maybe that country being one that can receive OGELs. There are other measures as well that would be in play there.
Oliver Feeley-Sprague: I think what we are actually saying here is that for open general export licences—the most permissive export licence that exists—if you have not signed the ATT you should not be an eligible destination for an open general export licence. That does not mean that you are not eligible for another type of export licence—a single individual export licence. You can apply for that through the normal channels. That is what we are saying. We are not being quite as restrictive as I think you might be hinting at, but we are saying that it would be a consistent approach to put that in place.
Q20 Lloyd Russell-Moyle: The predecessor Committees under Sir John Stanley believed that the Government had weakened the consolidated criteria by changing some of the introductory text. Do you agree that the Government have gone in a direction of weakening both the wording and implementation of the criteria, or was that a storm in a teacup?
Oliver Feeley-Sprague: I would not use the words “storm in a teacup”, but my view is that there was not a conscious decision to weaken the criteria in the way that was implied, but I do think that within the implementation of the criteria there is a lot of scope for different levels of interpretation—
Lloyd Russell-Moyle: The language is loose.
Oliver Feeley-Sprague: One of the things that the Committees could do quite helpfully is to probe the Government on how they reach the determination. What threshold are they using? When they reach this judgment about when there is a clear risk, ask them how they determine that. At what point does something become foreseeable—a likely consequence? What level of evidence are they using to make that determination? It is only when you start looking at the thresholds that they apply for the decision that you can start to understand how decisions might be made. Now, I don’t know what those thresholds are.
Q21 Ann Clwyd: Can I take you on from there to ask how helpful you think the country case studies in the 2016 annual report are in giving an insight into the licensing decision at the end of the day? In written evidence it has been suggested it would be helpful to know more about how decisions around the consolidated criteria are made, which you touched on earlier, including the risk thresholds, the evidence used in the process and how dissenting opinions are taken account of. Would you agree?
Oliver Feeley-Sprague: I think you are referring to section 3 of the 2016 report where they give a list of countries and try to explain how the decisions are made. I understand the purpose of having that in the report. I think it is useful for the Government to be able to articulate for difficult destinations how they might have reached some of the decisions they have reached. I think the way they have done it in that report gives you no indication that that is what has happened, so I question how useful it is in its current form.
If it was, for example, a case where they are using the human rights identified priority country list and they are explaining, for example, the Honduras cryptography licences or the Philippines open licence that Martin talked about, that would be a very valuable use of that section in the report. So I think my recommendation would be to make that section more useful.
Q22 Gavin Robinson: You have already raised the question of whether the criteria themselves are meaningful—whether they are just a check and control, or cover for granting an export licence. If applied appropriately, do you think that they are fit for purpose?
Elizabeth Kirkham: The criteria, as far as they go—we think they are good. They could be better. For example, obviously the consolidated EU and national criteria are based on the EU common position on arms exports, and there is a review just starting—because it is 10 years since the common position was agreed—in the Council of Ministers COARM working group. Today colleagues of ours have been in Brussels talking to COARM about what our hopes and wishes would be for the review.
There are one or two things. For example, there could be something beneficial on governance—looking at the governance situation of a country before you consider, or as part of the consideration of, an export licence. There is an issue around corruption and organised crime. Those are two issues that are mentioned in the arms trade treaty, as well. It would be good to see those reflected in the common position and the consolidated criteria.
Then there are issues around things that are already there. We feel that some aspects could be more elaborated, for example, on the development criterion—criterion eight—and could spell out exactly how the criterion could be applied. At the moment, it is just about how much a weapons system costs, and not the impact of the sale or the impact of the potential use of those weapons, which can have, obviously, very negative effects on development. So there is a whole range of things that you could do to improve the criteria and to add to them, but as they stand the criteria—particularly criterion two, for example, on human rights and international humanitarian law—are very clear. It is not so much the fault of the criteria; the implementation is often lacking.
Q23 Gavin Robinson: So some sort of illustrative key, or interpretive notes for guidance, to set alongside criteria, rather than a wholesale review?
Elizabeth Kirkham: There is a users’ guide that the EU have published. It is very extensive and very comprehensive and it gives some useful pointers to things that you might consider and sources that you might go to for information, but fundamentally licensing decisions are risk-based. Regardless of where you go to get your information, and the things you consider, you have to look at what the prevailing trends are in the recipient country—or look at indicators: fragile states, states with brutal governance and states that may fail, for example.
We saw it in the Arab Spring situation, where a number of countries that European states had been supplying with arms ended up with civil war.
Obviously, no one can see into the future completely, but there are certain things that can point you towards certain conclusions—the nature of the Government or the nature of the regime that you’re dealing with, and also the trends of use up to that point.
Q24 Mrs Latham: I don’t know who wants to answer this, or whether you all do, but has the establishment of the Export Control Joint Unit in 2016 had an impact on the decision making on arms export licensing? DFID is not in that unit, but do you think they should be?
Martin Butcher: Yes, we do, in short. We think so and have said it to the Committees on a number of occasions, and we have talked to DFID as well about its role in the risk assessment process for arms export licensing. We think it is not involved enough; we think it should be involved in that unit. The reason we think that is that DFID as a Department has staff across the world, particularly in countries that are or have been conflict-affected, where problems relating to arms exports are particularly strong or can be particularly strong. The information that those staff can provide would be extremely useful in this process. We also think that the work that DFID does in producing its report on conflict-affected countries would usefully inform arms export licensing.
As Liz said, we have some concerns about criterion eight, namely that it is not wide enough, that it is too mechanical and that it just looks at whether a Government can afford a particular weapons system in a particular circumstance. We think that in a more effective and more comprehensive application, particularly of criterion eight but of arms licensing generally, DFID would have a good role to play.
Q25 Mrs Latham: And has the Export Control Joint Unit had an impact on the decision making?
Martin Butcher: It is hard, if not impossible, for us to judge that, since we have very little insight into its workings. That is probably something that you will need to ask the Government, rather than us. We would like to know more.
Oliver Feeley-Sprague: I would echo Martin’s point that we are the wrong people to ask that question. However, at a general level, to have everybody who is involved in export licensing sitting in the same place and in the same team is probably a helpful development in terms of making more effective and better decisions. We obviously would like to see DFID formally being part of that process, for all the reasons that Martin said.
Chair: I think there will be a Division in a minute or two, so I will suspend the sitting if we do have a Division. It would be 15 minutes for the first Division and if there are any other Divisions, I will add a further 10 minutes and then we will reconvene after that.
Q26 Priti Patel: I had better declare that I am, of course, a former Secretary of State for International Development. I would like to make a point and just get feedback from you all. The point is that there is one Government. Government Departments do not work in isolation at all. And of course the Foreign Office and others—we have the Export Control Joint Unit for that very reason, so that all information comes back. What do you think is the additionality that could be applied, because quite frankly, having been in Government, I can categorically say that everybody shares the same information and the same platforms, particularly in this specific area?
Martin Butcher: Having never been in Government, I find that a little hard to answer, but my impression is that you are right that information is shared and people have access to the same things—it is one Government—but each Department has its own interests in a particular corner. The MOD has different interests from DFID, which has different interests from Trade. Having all those perspectives put into the mix of decision making, it seems to us, would have to be useful.
Q27 Priti Patel: We will speak predominantly about areas of conflict in the world, which is, of course, where DFID’s footprint is, along with the Foreign Office. We have a platform called 1HMG, where you will see an integrated Foreign Office and DFID footprint. Oxfam representatives around the world will have seen that in many areas of conflict where countries have been dependent on aid, but also they will have come across Foreign Office as well as DFID operatives on the ground, so that shared insight and information comes back to Government. It is unfair to put DFID in an isolated category and say that they are not involved, when actually they are in many integrated ways across Government.
Martin Butcher: Absolutely, but it looks strange to us from the outside that there is one Department which is not.
Q28 Priti Patel: Even though there is a joint unit? That is the point: there was a joint unit.
Oliver Feeley-Sprague: Between 2000 and 2002, we worked incredibly hard to ensure that issues of sustainable development and the role of DFID were central to export licensing, because we thought it was really important. Together—we all worked on this—the Committees did quite a good job of ensuring that that was the case. For us, it just seems a shame, therefore, that a joint unit has been set up and DFID doesn’t have a place in it. That’s all we are saying. They have a valuable insight. I accept what you say about one Government, but it seems to us a shame that they are missing from that team.
Elizabeth Kirkham: Can I also say that before the joint unit was set up, my understanding is that export licences would be circulated around the different Ministries if they were contentious, but that DFID would only be consulted on licences where criterion 8 was a factor? If they are not in the room, it is not going to help integrate DFID into the mainstream of export licensing.
Chair: Given the rich membership of the Committees—Stephen?
Q29 Stephen Twigg: This is a joint unit, and other Departments are separately represented on it, so it seems to me to be a gap that DFID aren’t there. Certainly, when we looked at this on the International Development Committee in the previous Parliament, in the context of Yemen, the concern that we raised was that DFID would be consulted if arms were being sold to a DFID recipient country, but because of Saudi Arabia’s average income, there is no such consultation. This isn’t really a question, but that DFID voice seemed to me to be a really important one to be heard in these sorts of debate.
Martin Butcher: The one area where I personally have worked closely with people from all the Departments involved in arms licensing is during the negotiation of the arms trade treaty. DFID was certainly represented in the cross-Whitehall team there, and we worked very closely with DFID, as with the FCO and other Departments, and a voice from DFID was very valuable in that negotiation.
Oliver Feeley-Sprague: Also, if you remember, through history, when the UK Government has been increasing its concern over the control of small arms and light weapons—from UN processes through to our own export control licensing system—the voice of DFID has been quite important. They have had the experience to say that small arms and light weapons in conflict-affected countries are an incredible driver of poverty and all the related issues that come into it. That voice was instrumental in strengthening Government positions on these issues, so we value it.
Q30 Lloyd Russell-Moyle: You mentioned that in the old system DFID was only able to contribute to criterion 8. We have a new system now, and we are here scrutinising the 2016 report that was signed off by all four Secretaries of State, including yourself, Priti. This is the report we are scrutinising. Have you noticed any change since the joint unit has been established in terms of DFID’s involvement in any of the other areas? Or is it still from your perspective the case that DFID is not included as an equal partner to the other three Departments?
Martin Butcher: I do not think we have noticed any change, but we do not have a good insight into the internal workings of that joint unit.
Q31 Lloyd Russell-Moyle: Is it almost the same as the exclusion that existed before?
Martin Butcher: Yes, but we are not categorically saying that that is the case, because we do not have a good insight into their—
Lloyd Russell-Moyle: I am sure we will ask the same question of the other side.
Q32 Leo Docherty: You note that in 2015 and 2016 the UK did not report on the imports of arms covered by the arms trade treaty. Why, in your view, is the UK not doing so?
Oliver Feeley-Sprague: The UK Government traditionally have not reported on imports. They have decided that what they should do is report on their exports. Their import licensing system is different from their system for export licences. For example, we only have import licensing for goods that are essentially covered by the firearms legislation. It is broad, but essentially it is small arms, light weapons and things that fire projectiles that require import licences to import them into the UK. Other items on the military list do not require import licences, but they do not have the criteria applied to them, either. It is paper-based. If you are bringing barrelled weapons into the UK, you need an import licence, but there is no scrutiny involved in that.
The arms trade treaty put a requirement on all Governments to report not only on their exports, but on their imports. The UK Government are out of step with their requirements under the arms trade treaty. It is as simple as that. The treaty requires them to do it, but as yet they have not. However—this has been ongoing for at least two years, if not longer—there is a new system for processing licences. The SPIRE system within export licensing is changing. This is how industry and the Government run the IT infrastructure for export licensing. That is being changed.
Chair: Hold that thought.
Sitting suspended for Divisions in the House.
On resuming—
Q33 Chair: We were talking about question 6. Do you want to add anything?
Oliver Feeley-Sprague: I cannot quite remember where we got to, but I think I was just saying that the Government licensing system—the online IT system—is undergoing review at the moment. It has been going for a couple of years, and one of the things it is doing is allowing better information to be stored on that system that links up customs systems at the border with import licensing and export licensing. It may well be that that system could allow some of the ATT reporting requirements to be done more easily. So it would be good to ask the Government how they have integrated ATT requirements into that system being built over the last two or three years. That is probably all I want to say, unless Liz wants to add something.
Elizabeth Kirkham: With regard to the question of reporting on imports, there are a couple of things. The UK’s import controls are partial, so if the Government reported on what it knew about, or what it could potentially know about, there would be gaps in that, so that would not look great. And the other thing is, improving importing in the report—access to information—would take resources and person hours. So I think, at this particular moment in time when officials are dealing with Brexit and lots of other issues, I do not think it is high on their list of priorities.
Q34 Chair: But there are opportunities?
Elizabeth Kirkham: I guess. There may be a possibility they could find them, but it would take some serious effort to get UK import controls to the point where they could report comprehensively. They would probably rather not report than report on figures they are not 100% sure are accurate.
Q35 Emma Little Pengelly: You have all mentioned ways in which the report could be improved—there was some mention of including quantity in relation to open licensing, and we have heard your views about import reporting—but are there any particular ways in which you think the report could be improved in terms of either extra reporting requirements on the Government or things that the Government should be doing to improve transparency and access to information? How would you balance that against the pressures that those additional requirements would put on the Department and the bodies themselves?
Elizabeth Kirkham: If you are talking about the statistics on which exports have gone to which countries, the way it is laid out is not as clear as it could be. You have all the licences and then you have a description, and then at the very end you have footnotes that talk about end users. If it were structured in a slightly clearer way—in table form or something, with licence, description and end-user information—you would not be constantly flicking backwards and forwards to try to figure things out.
The other thing is that some of the descriptions for licences have footnotes saying, “Military end user”, “Civilian end user”, “Temporary export: will be returned to the UK after display” or something, but some descriptions do not have anything. When you read things that are explained and then you come across something that is not explained, it makes you think, “Where’s that going?” You assume that it must be bad, otherwise they would be telling us. So, structuring it a bit better—I am not sure how much effort that would take, or whether it is something they could do relatively easily—and providing more consistent information on end use would help. Those are two things.
Q36 Lloyd Russell-Moyle: I am terribly sorry—I want to draw you back to the previous question, which was asked before the break. You mentioned the EU firearms directive. From my understanding, the EU firearms directive requires background checks for people who sell arms. The consolidated criteria do not seem to require background checks for the individuals involved. Am I correct in that assessment? Is there a contradiction here that we have a higher bar for some things but do not fulfil that for others?
Oliver Feeley-Sprague: It is very interesting that you raise the EU weapons directive. On brokering and trafficking controls and the need to register people involved in that activity, which previous versions of these Committees have supported incredibly strongly, there has been a fairly key and fundamental change to the EU firearms directive. It has been undergoing review, like a lot of these mechanisms do—they undergo a formal review every five or six years. It used to be that under that directive, for brokering and dealing in firearms—small arms and light weapons—registration was an optional extra. It was something that you might consider to be helpful, alongside licensing.
That changed in March last year. It is now a mandatory requirement under the weapons directive to register both firearms dealers and arms brokers, and, more importantly, to run a registration system that includes a fit and proper persons vetting system. Because it is a directive, the UK is required to implement that system through its own national structures and to explain how it is compliant. As far as I understand it, the UK Government now has a requirement to register and vet firearms brokers as part of this EU agreement that we are still party to. The reason that is important is that that weapons directive is about a multilateral response to the threats posed by the unregulated control of firearms, whether it is for terrorism, organised crime or serious human rights violations. I guess it is a question for Government officials and not for us. However, is the UK Government going to introduce a registration system and a vetting system for firearms dealers and brokers, as required under the reformed EU weapons directive, or not?
Chair: Lloyd, do you want to follow up on that?
Q37 Lloyd Russell-Moyle: I guess the only thing is to confirm that at the moment your understanding is that they are not doing that vetting at all, either in small arms or in large weapons categories, just so I’m clear and the Committees are clear about the current situation—
Oliver Feeley-Sprague: The Government has consistently argued against the introduction of, one, a registration system for arms brokers and, two, a vetting process for that registration system. So you don’t just look at the equipment; you look at the people doing the deals. The last time the Government was asked about this, there was a private Member’s Bill in the House of Lords—that was a couple of years ago—and the decision was the same. The Government rejects that notion.
Q38 Lloyd Russell-Moyle: When you say vetting, do you mean just checking to see whether they have criminal records, or are you looking at a wider sense of, “Are they a person in good standing with the regime, or in good standing with other investigations going on?” How have other countries implemented that? Do they just look at a CRB check or at wider issues?
Oliver Feeley-Sprague: I guess it is for the Government to argue how it will develop a system that checks probity that is relevant to what we’re doing. Obviously, background checks on criminal activity are important, but there is also whether there are any investigations that are ongoing around export control violations, especially in other jurisdictions, which would be important.
Q39 Lloyd Russell-Moyle: That’s something that’s not checked at the moment?
Oliver Feeley-Sprague: As far as I’m aware, it is not checked at the moment, no.
Q40 Mr Jayawardena: I want to go back to the questions that I was asking earlier around ATT. First, what do you think are the real barriers to other countries acceding to or ratifying the treaty, taking heed of the world-leading role that the UK already plays?
Martin Butcher: There are a number of barriers and there are a couple that we would be concerned about in particular. One would be for countries with less capacity, particularly in the developing world, where the requirements of the national implementation system for the ATT might be onerous, both in financial terms and in technical terms. Those barriers can be overcome by the UK, other countries in Europe and the US providing technical, legal and financial assistance through a number of mechanisms. Those are real barriers, where training for customs officers is expensive and paying customs officers or other security forces is expensive, relative to a very small Government budget. Those are real problems, but they can be overcome.
There is another barrier, which we are seeing creeping in. Take the example of east Africa, where Djibouti has signed the treaty but no other country in the horn of Africa—east Africa—has even signed it. We are hearing, for example, in meetings at the African Union or in workshops in that region that countries don’t see a lot of point in joining a global treaty, partly—
Q41 Mr Jayawardena: What is the barrier there?
Martin Butcher: The barrier is partly that they have already got a regional regime and where the ATT is not seen to be changing large exporter behaviour they don’t see the point in joining the global one.
Q42 Mr Jayawardena: Just for the record, I refer Members to my entry in the Register of Members’ Financial Interests. Evidence from Control Arms UK proposes that the Government should operate “a presumption of denial”. We talked about that earlier. Whether in respect of the countries you have just talked about, which may well have a regional agreement, or indeed other countries that simply don’t, do you think we should put promotion of the ATT ahead and over all other trade relationships and other diplomatic relationships with these countries?
Martin Butcher: I don’t know about ahead of trade and diplomatic relationships, but—
Q43 Mr Jayawardena: Ultimately it is a choice. Which comes first?
Martin Butcher: We would say that the ATT should be a prominent part of British diplomacy and trade relationships with countries across the world. The UK was a leader in the negotiation of the treaty with a very proud record of bringing a lot of countries with it and working very hard to make sure the treaty was negotiated. It seems to us that since the treaty entered into force it has done less in terms of bringing countries into the treaty.
Q44 Mr Jayawardena: Let me put it a different way: would continuing arms exports, subject to the UK rules and controls, not be better than completely freezing countries out and driving them towards much less licensed markets?
Martin Butcher: Coming back to what we said before, we were not talking about freezing countries out if they were not part of the ATT. We were saying that the ATT should be used as an indicator of a country having good practice, and therefore potentially being a country that might need a lighter touch of regulation. It is one indicator among others; it is not the only one. We are not saying, “Don’t export to any country that is not in the ATT.” We are saying, “Apply appropriate regulation.” Where a country has undertaken to abide by the ATT and where that is happening, that might be an indication that they could have lighter-touch regulation.
Q45 Mr Jayawardena: So you are suggesting that the ATT is fine and is a consideration, but it should never be the only consideration? Yes or no, because I have another question.
Martin Butcher: Yes.
Q46 Mr Jayawardena: Thank you. The US—I touched on this earlier—is one of our closest and most special partners in the world. We rely heavily on them for our defence and, through NATO, for Europe’s defence. Again, we talked about this earlier: do you really think adopting a position that says we should try and push everyone towards ATT—even if we are not freezing them out, but we are at least marking them down—would, in the case of countries like the US, make ourselves safer and actually add something to the international debate, simply because they have not acceded to the ATT?
Martin Butcher: In the case of the US, we would mark them up because they have signed it.
Q47 Mr Jayawardena: But they haven’t acceded to it.
Martin Butcher: They haven’t acceded to it, but then we would mark them up again because their national arms export control system is ATT-compliant.
Q48 Mr Jayawardena: It seems to me that the ATT is a very minor consideration, given that at every turn of my question you have said, “Well, it is one thing, but there are all these other factors out there.” It therefore seems to me that the ATT, while it is an important international treaty, is a very small part of deciding what we should and should not decide to export.
Martin Butcher: We might then look at another country that is a major exporter—Russia, for example. We would look at them and say, “They’ve refused to sign the treaty; they say it’s pointless, and their export control regime, such as it is, is not compliant with the treaty at all.” In that case, that might be a major factor. I know we are not exporting for other reasons to Russia, but in the future, were that to change—
Q49 Mr Jayawardena: We should not deal in hypotheticals, should we?
Martin Butcher: The ATT would be a major factor in that case.
Elizabeth Kirkham: To go back to the point I made earlier, consolidated criterion 1 talks about the behaviour of the recipient in relation to the international community. In the context of the ATT, decisions on arms exports or arms transfers are made based on the criteria of the ATT, fundamentally. There are obviously things like article 7, which talks about peace and security and the contribution or otherwise to peace and security that an arms export might make. You would have to look at whether a country was, if not part of the ATT, then party to a regional agreement that was of a similar standard. Then I don’t think it would necessarily be an issue. It is more about the behaviour and the nature of the recipient. Being an ATT signatory is part of the lens through which you would look, but every decision is not weighted on that.
Q50 Chris Law: I am fairly new to the Committees, so I am learning as we go. I was just having a look: 94 countries have ratified and 41 are pending. Which of those nations has best practice in terms of the standards set in the arms trade treaty and supporting it, and how it exchanges that with other nation states to try to get them on board?
Elizabeth Kirkham: You can look at best practice in a number of ways. There is having the infrastructure, the mechanics and the systems, and then you can look at how the criteria of the treaty are applied to exports. The United States obviously has a very good system. It is a bit more opaque than, say, the UK one, but none the less it is a decent system. The UK and other European member states all have similar standards, and a lot of countries on the periphery of the EU have good standards because they have had capacity-building and exchange programmes and so on. A lot of work was done with a lot of the former communist states on export controls in the 1990s.
There are plenty of states out there, and around the world export controls are improving in a lot of contexts. Where there is a lagging behind, which comes back to the outreach issue, is that in some contexts states do not see the ATT as relevant to them because it is mainly about exports. They think, “Well, we don’t manufacture arms, we don’t export arms, so why do we need to bother going through all this when it doesn’t really affect us?” But there are many benefits to being a signatory to the ATT. For example, the ATT covers transit controls. Even if you are a non-exporting state, if you are in a region where there are a lot of illicit arms flows, for example, having good transit controls can really help your own security because you can prevent illicit weapons from entering your territory. ATT capacity building can involve building things such as transit controls. There are those kinds of thing.
On the application, I would probably not give anybody an A*. It is difficult to say. To make a judgment you have to look in detail at the export licences that have been granted, what equipment they cover, who they are going to and what they will be used for. Unfortunately, we do not have that information. The UK produces one of the most comprehensive reports and we still do not know sometimes; a lot of the time it is still difficult to make an assessment. It is very difficult. There are places where we know things are not going well—for example, some state parties transferring weapons to Saudi Arabia and other members of the coalition that will be used in Yemen. We know that those things are not consistent with the treaty, in our view, but it is hard to say who is doing really well. We need more information and probably more time to see how things pan out.
Q51 Lloyd Russell-Moyle: I just want to be clear, because a few times we have got caught up on the ATT presumption of denial or presumption of acceptance. When I hear the words “presumption of” it means that it is the starting point, but you can change through that process. Is that how you mean it when you say presumption, or are you saying an absolute cast-iron yes or no according to the ATT?
Oliver Feeley-Sprague: It is worth saying that the rules of the ATT, in terms of the criteria that are contained in it—whether it is article 6 on the prohibitions or article 7 on the risk assessment process—are applied to everybody equally. If there is a substantial risk that a decision will lead to serious violations, it can never be acceptable under the ATT. It is completely no. It is against the rules. In the same way, under article 6, if you are aware that it is going to be used to commit violations of IHL—war crimes and so forth—there is a duty on you to say, “No”, no matter who it is or where it is. If that is the assessment you make, you have to say, “No”.
What we are talking about here is how the UK might implement some of its licensing arrangements, which is different. Our term “presumption of denial” is essentially for the very sensitive level of countries that are predetermined. You start from the position of running a very tight ship—an even tighter ship than you might already run.
The other point is about the open general licences—the most permissive licences we have, which are supposed to be based on the reliability and suitability of the end user to apply the global norms. The ATT is the global norm for the movement of weapons across the world. That is what it is. If you are going to have a permissive licensing system that establishes that fact, signing the ATT is quite important when you are saying that you can use those licences. We are not saying you can’t sell weapons to them; we are just saying that that particular kind of licence should be dependent on signing up to the global norms.
Q52 Lloyd Russell-Moyle: So getting an open licence is dependent on signing up to the global norms. You can get any other licence—I am trying to clarify this—but you would have to apply licence by licence or company by company. Companies can still get some sort of open licence; it just wouldn’t be a country open licence. You are happy with the threshold, which is that a country has just indicated that it approves with the ATT, not that it has ratified the ATT. Both have legal weight. One has legal weight in setting some international norms, and the other has more legal weight in-country. You are happy with them just signing up to indicate that they agree with that?
Oliver Feeley-Sprague: If you were being as purist as you possibly could, you would want full accession to the treaty as the threshold.
Q53 Lloyd Russell-Moyle: In an ideal world?
Oliver Feeley-Sprague: Yes. But we are talking about a fairly new international treaty anyway. The United States is a very good example, for all sorts of reasons. Expecting the United States to become a full state party and to ratify and accede to that threat in the short term is probably unrealistic. It is enormously significant that they signed it, and that should be recognised.
Q54 Lloyd Russell-Moyle: Just so I am 100% clear, for alcohol licences, for example, inner-city areas are cumulative impact zones, which means that the presumption is not to allow bars to open up unless the bar can prove that it will do good in the community. For bar licensing in rural areas, we have a system in which the presumption is to accept, and the council has to demonstrate that the bar will cause harm. Is that what you are getting at with this regime? It is perhaps a bit frivolous to say that it is like a bar licensing system, but they are both licensing systems that have different presumptions depending on where you are based.
Oliver Feeley-Sprague: A better analogy would be health and safety legislation. In health and safety legislation, the presumption is that you have to prove that something is safe for it to be allowed to go ahead. Given that we are talking about very dangerous items that have very significant impacts when they are misused or sold in the wrong circumstances, applying that logic to them seems to make sense. But because we are living in the real world and we have to start somewhere, I think we should start with areas that everyone has already established are problematic. Is that clear?
Lloyd Russell-Moyle: I think I am more clear on what you are saying, but maybe we can work on it more through written communication.
Mr Jayawardena: Lloyd said he is more clear, which means that there are still elements of doubt. I need to get further clarity. On the presumption of denial, to use your health and safety example, which is far less fun than Lloyd’s bar example, someone has to prove that it is safe. Are you supporting the Control Arms position that the presumption of denial for these countries means that the US—to take this example—has to actively prove, on every occasion, that it has signed if it has not acceded? Are you saying that they have to actually prove that they are going to do everything in the best and least harmful way to everyone in the whole world? In that case, the whole purpose of having the weapons might not be in effect.
Elizabeth Kirkham: I don’t think that is what we are saying.
Q55 Mr Jayawardena: This is the point that we are trying to clarify.
Elizabeth Kirkham: Trading in arms is not a risk-free business, is it?
Q56 Mr Jayawardena: Exactly, so how can they prove—
Elizabeth Kirkham: We were not asking them to prove—
Q57 Mr Jayawardena: But that was what Oliver just said.
Elizabeth Kirkham: No. The US is a signatory. We obviously won’t necessarily agree with every arms sale that it undertakes, but it has nevertheless got the system in place. It is ATT compliant, as we have said, and the UK has a relationship with the US on this. So I think fundamentally you have to say that we are not talking necessarily about signatories so much as the outliers.
Q58 Priti Patel: In the few minutes that we have left, I would like to talk about Brexit—[Interruption.] I could have brought in some other words and phrases, but I’m not going to. I think it would be useful to get all of you to provide your insights on the UK’s application of the consolidated criteria after Brexit, but be specific in terms of the approach that you feel should be taken to ensure consistency and continuation of delivery.
Elizabeth Kirkham: Obviously, the UK was a key instigator of the EU common position on arms exports, which then became the common position. The consolidated criteria are based on that. We feel strongly that the UK should continue to align with the common position post-Brexit and also should seek to be part—there is a consultation mechanism, a denial notification, so if one member state denies a licence, they have to tell all the other member states within 30 days, except that they now have an electronic system that basically notifies denials in real time. So they have to do that, and then, if another state wants to take up a licence for an essentially identical transaction, they have to consult with the state that issued the denial. That does not mean there is no undercutting, but it does mean that there is more convergence, more understanding and greater harmonisation than there would be otherwise. Sharing denials is a really important way of sharing information with other states, which may unwittingly, unknowingly, license an export that they perhaps shouldn’t.
Q59 Priti Patel: May I stop you there? Have you heard enough thus far from the Government about information sharing? The Government are obviously working right now, throughout the process, and there has been, in relation to security in particular, quite a strong focus on this. Particularly around the consolidated process and information sharing, but also the significance—as you have already said, Elizabeth—of licences and sharing that information, have you seen enough from the Government thus far?
Elizabeth Kirkham: Probably not, is the short answer. We have talked to some officials about it, and we didn’t get the sense that there was any decision on this.
Q60 Priti Patel: Which officials, may I ask? Which Department?
Elizabeth Kirkham: We met with officials from BIS—sorry, DIT and the Foreign Office, I think. Yes, I think it was just those two. Anyway, we didn’t get any sense that that was definitely going to happen or that it was something that they would wish for, but maybe they just weren’t sure; I don’t know. But we obviously feel very strongly that it is part of the overall security apparatus—the exchange of information around arms export licences. It is really, really important that the UK continue to engage in that.
The other thing is that Norway joined the denial notification mechanism just over a year ago. Obviously, they are part of EFTA; they pay into the EU budget. But it does go to show that you do not necessarily have to be an EU member state to be part of the denial notification mechanism. So hopefully that is something that the Government could negotiate. We would certainly want them to try to do that, anyway.
Q61 Priti Patel: Oliver and Martin, do you have any thoughts or insights around this?
Martin Butcher: I agree completely with what Liz has said. Saferworld has produced a very useful report on the regulatory environment post-Brexit, and what the challenges might be, and possibilities. Just to add that, maybe for different reasons, I think this might be an area where we might have a common interest in maintaining the current system with major arms companies like BAE, because the way that supply chains work across Europe these days, having the UK sitting outside this regulatory system, or having the arms export systems diverging, would not be helpful to anybody.
Oliver Feeley-Sprague: The only thing I would add is that export controls, at least in the EU context, are very much evolving, and every five or six years they go through a mandatory period of review, reflection, changes and so on. The common position is as of today starting that process. The EC regulation on torture equipment, which the UK has championed, is very important. In 2020, we will be going through that. The dual use regulation, which is really important for industry, is going through it at the moment. So these things are in the UK’s security interest. Proliferation controls are not just about human rights; they are about the development of weapons of mass destruction. It is in everybody’s interest that multilateral processes continue. So we need to find the way that we can use in five or six years’ time, when the EU systems might have evolved in a different way—how the UK system is going to evolve in co-ordination with that. At the moment, I am unaware of how that will happen. I think that is the job now—to find out exactly how the UK wants to fit with these very important issues, because it is in all our interests that we do.
Priti Patel: Thank you very much.
Chair: We are running a little over, and we must be quorate—we are very close to not being quorate—so I am going to press on as fast as I possibly can. Votes have obviously got in the way.
Q62 Chris Law: In some information you recently submitted in writing to the Committees, you underlined an ongoing concern about the continued common position denial notification and consultation mechanism. Forgive me for not understanding what that is. Can you please explain what it is and what the implications are for the UK in not being part of it?
Elizabeth Kirkham: I touched on this a few minutes ago, but the denial notification mechanism is where one member state issues a denial for an export licence. So somebody wants an export licence and they say, “No, sorry, you can’t have that,” and they have to tell all the other 27 members. There is an electronic system now that means that denials can be shared in real time. Then, if a state wants to take up that licence, they have to consult with the state that initially refused it. So it basically means there is this thing called undercutting, where one state denies and another state comes in and takes up the licence, or the buyer goes to somebody else and they keep asking till they get the answer they want, but if they have this consultation thing they can share information or exchange information on why they denied the licence, and that can inform the decision. It does not mean there is no undercutting, but it helps reduce it and helps maintain harmonisation. You get a lot of information through this—security information and non-proliferation information, and information about potential diversion, for example. So it is important that the UK can continue to share in that for security and non-proliferation purposes, as well as for trade purposes.
Q63 Chris Law: Does anyone else have anything to say on this? I am looking at an article that was written at the end of last year about “Are post-Brexit Britain’s morals for sale?” It talks about the charm offensive and in particular about ignoring some of the issues in Poland where, as we come out and during Brexit, we might be more keen to charm them with respect to sales of arms and exports of arms. I wondered if that was a concern for each of you on the panel.
Oliver Feeley-Sprague: Our bottom-line position is that we have controls on the export of military, policing and security equipment for a number of absolutely vital and fundamental reasons, for our own safety. We all might have different perspectives—we might have human rights perspectives, and there are also bigger perspectives about national security, the development of weapons of mass destruction and the supporting of rogue regimes. Those things are important for everybody’s safety—the whole world’s safety, in many areas—and therefore whatever we do in the future, we cannot threaten to undermine those really important principles. If we start from that position—my colleagues will probably all support that, and I hope that everyone in the room would support that.
Q64 Chris Law: Good. In what other ways do you think arms export controls will be affected by Brexit?
Elizabeth Kirkham: There is one other important area, which is linked to the common position, and that is sanctions and embargos. At the moment, the UK does not have its own primary legislation that is sufficient for implementation of sanctions and embargos. That is why an anti-money laundering Bill is going through Parliament at the moment. The UK has traditionally been one of the leaders on negotiation of sanctions at the EU, because although most start in the UN and get taken up by the EU, which develops a regulation for the non-arms side of things or a decision for the arms side of things, which is implemented in member states, the EU also has its own sanctions on countries like Zimbabwe and Syria where they could not get agreement in the UN. The UK has been a leading actor in getting EU stand-alone sanctions agreed.
Sanctions work best when everyone is part of the regime and everyone is implementing them in good faith, so it would be really useful if the UK could also say that it will keep in step, align with EU policy on sanctions and continue the dialogue. If the UK thinks something is worth exploring, it would be useful to explore it with the EU 27 as well and try to get co-ordinated positions going forward. I think it has been quite successful so far.
Chair: Lloyd, question 12.
Lloyd Russell-Moyle: I am going to do the questions the other way round, if that is okay, Chair.
Chair: I am just conscious of the time.
Q65 Lloyd Russell-Moyle: In the previous Committees’ report, there was a description of gas and other chemicals being shipped to Syria after the Syria gas attack. One of the companies involved in it was a brass-plate company. The previous Committees called it, but because it was a brass-plate company no one was provided to give evidence. I read your report, Oliver, where you describe the regulatory vacuum in the UK for company registration, and a number of other bits of evidence that say that brass-plate companies are a problem. Can you describe the level of problem there really is, and whether we have seen any action from the Government to clamp down on brass-plate companies who are generally involved in brokerage of arms?
Oliver Feeley-Sprague: Remember that the whole issue started with the Committees on Arms Exports Controls going to Ukraine and being handed a list of arms brokering companies that were unknown to anyone in the UK authorities as seeking purchase of weapons from Ukraine. A majority of those were brass-plate companies. So that is where this starts from.
Amnesty has produced several case study examples of these companies being used to broker weaponry to places like Rwanda and Congo, and two examples to Sudan, including the most recent one: £34 million worth of small arms and light weapons—the largest ever illicit arms deal to South Sudan from a British company, as far as I am aware. The only regulatory—
Q66 Chair: Could I just stop you? You mentioned Rwanda, and my ears always prick up when Rwanda is mentioned—perhaps it is not best to mention that. What has Rwanda done? Because their judicial process has been accepted as being up to the required standards, we are about to extradite those currently in the United Kingdom who were involved in the genocide, and we refused to send them back to Rwanda to face trial.
Oliver Feeley-Sprague: Let’s talk about this in terms of export controls, which is what we are here for.
Chair: I understand that.
Oliver Feeley-Sprague: The case that I am referring to is about a UK brass-plate company—one of these companies that has a presence elsewhere, but uses the UK for its letterhead. It was moving anti-aircraft guns to Rwanda outside the named entry ports in the UN arms embargo and it was acting outside the UK regulatory framework, so it had not applied for any trade control. It was breaking the UN arms embargo. That is the only—
Chair: It was just for clarity, and I appreciate that.
Oliver Feeley-Sprague: Back to your question and the specific example you raised about the £34 million deal to South Sudan. The only regulatory activity that I am aware of is the fact that the company changed its offices. Companies House re-registered it as a new operating address, so it has had no enforcement activity taken against it whatever. Because we are short of time, what is one that we can do? There is a key opportunity here, because this is an area where export controls struggle to cope. We can put in an amendment to the sanctions Bill that is currently going through the House of Commons, so that the Government can have the power to close down these companies in situations where they have reason to believe that they are involved in sanctions violations.
There is plenty of existing law, such as the Companies Act and the Insolvency Act, to allow the Secretary of State to do that where there is a public interest to do it. There is an opportunity to amend the legislation going through the House, to ensure that when cases involving brass-plate companies come to light, and where there is recent evidence to presume that they are involved in breaking sanctions, the Government can use powers they already have in the public interest to close them down—simple as that.
Q67 Lloyd Russell-Moyle: That seems like a sensible amendment. Hopefully we will have further discussion and will raise that in Committee and on the Floor of the House. I know it must be very brief, Martin and Elizabeth, but is there anything else that we can do not only to regulate brass-plate companies, but about the brokerage generally of weapons? At the moment, it is illegal to broker without a licence if you are a British citizen or company, wherever you are based, but there is no register of brokers centrally. Do you think that that is one of the changes that would be useful? Are there other things, too, that we should call for?
Elizabeth Kirkham: We have been arguing for a register of brokers since we were arguing for controls on arms brokering 15 or 20 years ago. We call for it because it is an aid to enforcement. If you can show that somebody has not registered as a broker and they are carrying out brokering activities, you do not necessarily need to prove that they shipped this to there and did not do whatever they should have done. You can strike them off the register or have a fit and proper person test, which Oliver mentioned, under the EU weapons directive. If you have that for brokers in firearms, it is not a huge step to extend it to brokers in all military equipment.
Q68 Lloyd Russell-Moyle: Do any other arms exporting nations operate a register or are any countries in the process of setting one up?
Elizabeth Kirkham: The majority of EU member states do.
Lloyd Russell-Moyle: So we are lacking?
Oliver Feeley-Sprague: Eighteen.
Elizabeth Kirkham: Yes, something like that. The US, South Africa and Australia have one; I think New Zealand will have one because it is in the process of developing it. It is quite common to have a register. You have some information about what the Government consider to be useful.
Oliver Feeley-Sprague: Yes. This is quite interesting, because it is only people like us who get into the weeds of the detail, so we read all the Government’s mission and we notice things that strike us as peculiar. When the Government announced their response to the consultation for a register of arms brokers in 2015, concluding that they did not want to have a register of arms brokers, they published the reasons that other Governments gave for why they have a register and why it works—they published it.
When the Government asked its EU partners, “Does a register work and is it any good?”, this is what the EU partners that have registers said: “It acts as a precautionary measure to send out a strong message that uncontrolled brokering activity is a bad thing. It allows better outreach to companies involved in this activity. It helps us enforce the controls in areas where legal jurisdictions are problematic and it facilitates the information exchange between us and other export control departments overseas. In some areas, it helps reduce bureaucracy because it gives a filter around allowing fit and proper people to be engaged in this activity”—very strong reasons. If you turn over the page to the Government’s response to that question, it essentially says, “We’re different because we have more brokers. Therefore, it would be very difficult for us to do that,” but they have just listed a series of reasons that are precisely why, if you have a large number of brokers, you would want to have a register, because it helps you outreach to those companies involved in illicit brokering, helps you enforce the controls where it is difficult to enforce them and helps you exchange information with other Governments in that area.
Q69 Lloyd Russell-Moyle: So they effectively said, “It is all right for everyone else, but we don’t want to do it because it might be too difficult. We’re not able to do it. Britain struggles to co-ordinate anything that all other countries in the world manage to do.”?
Oliver Feeley-Sprague: Given the list that I have just read out as to the reasons why a register of brokers has worked in other jurisdictions, the Government’s response is this: “With the larger number of UK brokers (approximately 450 trade control licence holders) a registration system may not prove such an effective tool.”
Chair: I am conscious that when Emma goes, we will have to suspend the sitting. Chris, would you like to ask probably the last question?
Q70 Chris Law: Very quickly, just to get a scale of the number of brokers, how many are there in the UK?
Oliver Feeley-Sprague: The Government have analysed that there were 450 licence applications for small arms and light weapons brokering. Obviously, companies will apply for multiple licences, so we are probably talking between 50 and 100 companies that are involved in this.
Q71 Chris Law: That’s it?
Oliver Feeley-Sprague: That is our best guess, but yes. It is small but significant.
Q72 Lloyd Russell-Moyle: It doesn’t seem like an unfeasible task to have a register for them, but maybe that is something we can explore with the Government to ask what some of their considerations are. Finally, brokerage is one of those issues of extraterritoriality that we insist on for anyone involved in it. It has been suggested a number of times that it should be extended to cover category C weapons. How feasible do you think that is and how important do you think it is in stopping abuses of the system?
Elizabeth Kirkham: Fundamentally, our point would be that if you are going to do anything to improve the brokering controls in the UK, you would introduce a register. That would be the prime—
Lloyd Russell-Moyle: The first thing?
Elizabeth Kirkham: Yes. The other thing is that the Government expanded category B goods to include the major convention on weapons control by the arms trade treaty. It is not clear that parts and components for those weapons are also included in the brokering controls. We could not find anywhere where it said they were.
Q73 Lloyd Russell-Moyle: So you could export all the different parts and components of a weapon—
Elizabeth Kirkham: You could take your tank to bits, ship the bits—
Q74 Lloyd Russell-Moyle: And you could export a person who knows how to put them together and they could put them together in a country and there would be no licence?
Elizabeth Kirkham: Or just send them an email with the directions or something, yes.
Q75 Lloyd Russell-Moyle: It seems like a huge loophole?
Elizabeth Kirkham: In the ATT, article 3 is parts and components. Basically, it is an anti-circumvention clause—that is the reason they have it in there.
Q76 Lloyd Russell-Moyle: Do we think that that is happening to a larger or lesser extent?
Elizabeth Kirkham: Experience points to the fact that if there is a loophole, somebody will take advantage of it.
Oliver Feeley-Sprague: With one or two exceptions, the UK is not a major systems platform exporter. It is essentially a component exporter. Like most of the arms industry, it is a globalised industry that works on a supply chain across numerous different countries. Yes, there will absolutely be lots of UK companies, including shippers, because the important thing here is that if you put category C items into category B, category B covers the brokering and shipping. Freight forwarders and shippers are under the same regulations.
As far as we can read it, you have an anomaly at the moment where if you ship a whole tank, you will require a licence and it will go through the case-by-case assessment process, but if you sell a part of a tank or a bit, or you flat-pack it or whatever, you don’t. Two questions: it is an anomaly that does not makes sense, but there is also a question of outreach. This was quite a major change. The extension of category C into category B, which is what happened with the ratification of the ATT, is quite a fundamental change in terms of the amount of equipment that is now covered by a full extraterritorial export control, including shipping. How much outreach has there been to industries, especially the shipping industry, about, “You are now covered by the brokering regulations, which you may not have been before.”?
Q77 Lloyd Russell-Moyle: So some companies may not know about it?
Oliver Feeley-Sprague: I don’t know—that is a question to ask Government—but it has not been very widely publicised as far as I can see.
Q78 Lloyd Russell-Moyle: Just so I am clear, if category C was all covered by the same requirements as category B, that would solve the problem?
Oliver Feeley-Sprague: The extension of extraterritorial controls to lethal items on the military list is a good thing to do. Whether every single item on the military list, given that it is an incredibly wide list, should be subject to full export controls is a question of capacity, but there clearly is a case for at least ensuring that the parts and components for combat aircraft, for example, are included.
Chair: That concludes today’s meeting. Thank you very much to Oliver, Martin and Elizabeth. It has been a long session. Thank you to everybody who came, and to those who lasted all the way to the end.