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Dr. Julian Lewis: I agree with the point that the hon. Gentleman makes. Will he share with the House his thoughts on what sort of sanctions he would recommend if such an abuse occurs? Revoking licences has been mentioned, but could penalties be imposed that would continue when the company wanted a future application to be approved?

Mr. Llwyd: Indeed; I am sure that that is right, and both those points are valid. We are currently talking about developing the international courts, and I wonder whether they will be able to impose sanctions—I know not, but I hope that the important points that the hon. Gentleman makes will be discussed in Committee.

I welcome moves to regulate arms traffickers. In September 1998, Kofi Annan spoke about making arms brokering to embargoed countries a punishable crime and said:

That important principle should be considered very carefully. The Bill will impose trade controls on goods passing through the United Kingdom, or if the transaction involves a UK national. Again, it is worth noting that that will be done through secondary legislation. The Bill simply states that the Secretary of State may make provisions by order, and so on. We need to extend regulation to British nationals based abroad, not just to those operating in this country. Without that safeguard, it will be all too easy for brokers or for traffickers simply to move their operations to another country. The Bill refers to that problem, but it says only that the Secretary of State "may" do something about it. Again, many important provisions in the Bill will be left to secondary or subordinate legislation.

I also seek clarification of how British companies can license foreign arms manufacturers. There is another potential loophole, because the growth of such licensed production effectively allows companies to circumvent regulations. In the United States, if a company producing arms overseas under a US licence wants to export goods, it must obtain a further licence from the US Government before that export can take place. I hope that this issue will also be discussed in Committee and that the Government will consider an equally stringent system.

One advance in the Bill is the extension of parliamentary scrutiny, but I and many other Members have argued that that might not have gone far enough. I have no doubt that this issue will be discussed in Committee.

The Government have published three annual reports on strategic export controls, and I am pleased that the publication of the annual report on this subject has now been given a statutory basis. In the past, Plaid Cymru has been concerned that this report has not included full information on the number and type of weapons exported. In its report of 2 February 2001, the Quadripartite Committee made several recommendations on expanding the level of detail in the annual reports to include the quantities of equipment supplied and end-user information. The Government promised more detail but, so far as I know, it has not yet appeared.

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The Bill does not allow for prior parliamentary scrutiny of applications for licences. The issue has been debated today, so I shall not go over that ground again but I believe that parliamentary Committees are made up of responsible people who are there to do a job and I see no reason why prior parliamentary scrutiny should not occur even though issues such as commercial confidentiality mean that it is not a simple matter. I hope that before we dismiss the possibility of such scrutiny out of hand, we will consider it further in Committee.

Such scrutiny takes place in the United States and Sweden, and the Quadripartite Committee suggested a wholly workable two-stage process whereby only the licences that could cause concern need be examined in detail. The Government refused the Committee's first suggestion, but I believe that the Committee has come back with a modified model, which the Government are still considering. I hope that this important issue will be considered in Committee and that the Bill will be amended accordingly.

The problem of misuse of the arms exports systems is a global one, but the Bill is a very welcome step forward. We in Plaid Cymru—I also speak for the Scottish National party—argue that, once the UK has put its own house in order in relation to arms controls, it will be in a better position to influence the development of arms controls elsewhere. The ultimate goal should and must be the development of truly international safe- and-sound controls.

8.13 pm

Mr. Eric Joyce (Falkirk, West): Although the hon. Member for Hertford and Stortford (Mr. Prisk) is no longer in the Chamber, I congratulate him on his excellent speech. I have been sitting here rubbing my neck—very stupidly, I once agreed to play a season as tight-head in the front row and he has brought all those memories flooding back. I have had a sore neck ever since.

I was also refreshed to hear the speech of—I shall try to pronounce this correctly—the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd). It was refreshing to hear a nationalist speak about foreign affairs. However, saying that one has obtained the agreement of the Scottish National party does not necessarily commend one's policies. The SNP policies that I have seen often form the weakest foreign policy that I can imagine.

I welcome the Bill, which follows a number of improvements made to the arms control export regime since 1997 that have not required legislation, including the introduction of tough new arms export licensing criteria and a unilateral ban on the export of equipment used for torture. Other improvements have been this country's role in securing a European Union code of conduct on arms exports and the Government's widely welcomed ban on the import, export, manufacture and transfer of anti-personnel land mines.

Peace and security across the world require sovereign states to be able to ensure the security of their citizens. Ultimately, from time to time that will require that those states have the ability to use, or threaten to use, force on actual or potential aggressors. That, of course, requires weaponry. However, as all states are not capable of manufacturing their own weaponry, it is important that they should be able to import such equipment as can reasonably be demonstrated as a necessity for legitimate

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security and defence purposes. A legitimate arms trade therefore has a role to play in intelligent world governance. However, there is a flip-side to the arms trade and it takes the form of a dangerous underbelly where immoral trafficking can blight the lives of many of the world's most vulnerable people.

The defence industry in this country is an essential part of our manufacturing base, and exports are a fundamental part of that industry's future. That is why it is important that the UK maintains the most transparent and accountable arms export system in the world. I understand that the Defence Manufacturers Association has said that it fully supports the Government's efforts to replace the existing legislation and welcomes the Bill's aims to introduce controls on the activities of brokers and traffickers.

Non-governmental organisations with interests in this subject have welcomed the Bill. They include the Red Cross, which believes that the Bill will contribute to the reduction in global levels of armed conflict and the attendant human suffering. Oxfam, too, has noted that the Bill is an important step towards closing the loopholes in existing legislation.

I welcome the Bill's emphasis on controlling the brokering of weapons and related equipment. I also suspect that many unscrupulous people at the margins will seek to exploit any loopholes that it might inadvertently leave. I hope that there will be none, but it is worth raising two or three potential hazards.

The hon. Member for Aldershot (Mr. Howarth) asked for specific examples. Although he is not here at the moment, I hope that he will appreciate that I have attempted to respond to his request. In April this year, The Guardian uncovered evidence revealing that British pilots and air cargo companies had been involved in supplying weapons on both sides of the war in the Democratic Republic of the Congo. A British pilot, Brian Martin, told Oxfam that he had flown planes registered in Swaziland for two Congolese carriers from Entebbe in Uganda and Kigali in Rwanda. Meanwhile, the UK company Air Charter Services was found to have leased a Boeing 707 to a Dutch company that flew arms from Bulgaria to Slovakia to Harare for transit to the Zimbabwean forces in the Congo. In both cases, it seems that the Government were powerless to intervene.

The Guardian today points out that such unscrupulous arms dealers are past masters at creating confusing paper trails that go across the world and into areas that are the responsibility of different sovereign states so that they avoid proper oversight of their work. That is why it is so important that the Bill covers UK dealers who operate overseas. A private company called Avient Aviation is a good example of that practice. It is based in Harare and run by a British citizen, Andrew Smith. The Financial Times has obtained a contract signed in December 1999 by Mr. Smith and the Congolese Government. It says that Avient would provide a crew of Ukrainian pilots to fly Antinov 12 aircraft to operate along and behind enemy lines to support ground troops and to work against invading forces in the Congo. Avient is understood to have received about £20,000 a month for that. It is highly desirable that the activities of companies like Avient be brought within the influence of the UK Government.

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It is important to mention the significance of end-user controls, which was most notably referred to by the hon. Member for Richmond Park (Dr. Tonge) and my right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke). The Bill will improve the checks and risk assessment at the licensing stage, which is welcome, but unless a system exists to monitor the end use of weapons that are sold from the UK, there is a significant risk that British arms might continue to be used in unacceptable conflicts and repression, which is always unacceptable. However, I appreciate that that is difficult to do, as my hon. Friend the Member for Cynon Valley (Ann Clwyd) said.

In 1994, the UK company Miltec supplied more than £5 million of small arms and ammunition to the then Rwandan army from Albania and Israel. The end-use certificate said that the cargo was destined for the Ministry of Defence in Goma in the former Zaire. However, on arrival in Goma, the merchandise was loaded on to trucks and moved into neighbouring Rwanda. In 1997, the Ugandan Government bought four helicopter gunships supplied by the UK-based Consolidated Sales Corporation, registered in the Virgin Islands. Later reports in a Kampala newspaper quoted a Rwandan official as saying that two of the gunships ended up in Rwanda. He said:

Rwanda might find it difficult, but the examples that I have given of people circumventing the rules hardly sit at the apex of logistical sophistication.

The Bill represents a significant step forward and will make a considerable contribution to peace and security in troubled parts of the world. However, there remains cause for concern on some issues, and I hope that my hon. Friend the Minister will reassure us about UK traders who are based abroad, shipping agents and end-user controls.

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