Export Control Bill

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Mr. Key: If the powers were not in the dummy orders, I would have supported the hon. Member for Twickenham in his amendment. However, the Minister is right—they are in the secondary legislation, and if it is the judgment of his Department that the provision will work, I see no objection to it. The hon. Member for Twickenham was right to raise the matter. He may have preferred to see it covered in the Bill, but the Secretary of State has the powers now and will have them in future, and I can therefore see no reason to object to the Minister's proposal.

Dr. Cable: I shall deal first with the comments by the hon. Member for Aldershot (Mr. Howarth). We find ourselves in an unholy alliance this morning, so perhaps I am less surprised than I should be that he is defending the contractual ambiguity that would enable spares to go to Mr. Robert Mugabe. I know that they are not being used against the settlers, but it is an odd position for him to take.

The hon. Gentleman made a confusion between policy and legal powers. If the Government were constantly revoking contracts, that would create, for Britain and for the industry, a reputation for unreliability. We are talking not about policy change, but about circumstances in which the Government have already decided to change policy, for good or bad reasons, and whether they can implement that new policy direction.

I may be wrong on the legal side, but my understanding is that when problematic cases have arisen in the recent past—Zimbabwe and Indonesia are the two that are most frequently cited—the Government have given as the reason for their inability to stop further supplies the fact that there are legal obligations that prevent their powers from being used. That is the line that the Foreign Secretary has taken in Foreign Office questions when trying to explain why the Government have difficulty with such contracts. I find that argument difficult to square with the Minister's assurance that the Government have all the legal powers that they need. If that is so, why was it a problem?

The final comments by the hon. Member for Salisbury (Mr. Key) were helpful. If the new dummy orders strengthen the powers and give adequate powers for revocation, I will be happy. However, I am a little concerned that the Government are using legal difficulties as an excuse for not following through on their promises, while at the same time telling the Committee that they have all the powers that they want.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nigel Griffiths: I beg to move amendment No. 63, in page 5, line 7, at end insert—

    `( ) requiring persons to keep (and produce) records;

    ( ) requiring persons to provide information to any person specified in the order;'.

The Chairman: With this it will be convenient to discuss Government amendment No. 64.

Nigel Griffiths: Amendment No. 63 seeks for the avoidance of doubt to add to clause 7 the record keeping provisions that relate to orders made under clauses 1, 2, 4 and 5 and to which clause 6(3) made reference.

Amendment No. 64 clarifies the provisions for information use and sharing in the Bill.

Under amendment No. 63, the Government concluded that requirements for record keeping may in fact be met using the powers in clauses 1, 2, 4 and 5, so the introduction of additional powers under clause 6 was unnecessary.

However, for the avoidance of doubt we want to add to clause 7 the record keeping provisions that relate to orders made under clauses 1, 2, 4 and 5 and to which clause 6(3) made reference. I am sure that Committee Members would agree that the approach taken in the dummy orders is simpler for exporters than requiring a separate order for record keeping requirements. I also confirm that the changes will still allow the Government to meet their international reporting commitments to institutions such as the UN arms register and the Wassenaar agreement, which we take very seriously. At first sight, the amendment may appear to give the Government broad powers to require records to be kept on any topic, but that is not the case. The record keeping requirements that the amendment would include in clause 7 can only be included in an order made under any of the preceding clauses of the Bill, and so must be connected with the licensing process or the purposes for which licences are required.

Amendment No. 64 aims to clarify the provisions of information use and sharing. It seeks to ensure that there is no doubt that orders can provide for the sharing of information obtained under legislation, such as the Customs and Excise Management Act 1979, in respect of measures established in an order under that Act. The amendment makes it clear that the Government have powers to exchange information related to activities carried out as a consequence of orders under the Act, as well as to exchange information related to activities done directly under the Act. Any information sharing or disclosure provisions in orders will be constrained by the purposes for which the orders can be made, and that is essentially by the matters listed in the schedule. Our intentions are made clear in the dummy orders, which provide that the information is to be used or disclosed only in connection with measures introduced under the Bill, in particular to allow the United Kingdom to fulfil its reporting obligations to international bodies or regimes, such as the UN register of arms. In view of my explanations, I hope that Committee members will support amendments Nos. 63 and 64.

Mr. Key: I am grateful for that explanation. I have read the draft statutory instruments. The Export of Goods, Transfer of Technology and Provision of Technical Assistance (Control) Order 200x states in paragraph 12(3):

    ``The records referred to in paragraph 1(2) shall be kept for at least 3 years from the end of the calender year in which the authorised act took place.''

The next dummy, the Trade in Controlled Goods (Control) Order 200x, similarly states in paragraph 7:

    ``The records referred into paragraph (1) shall be kept for at least 3 years.''

The words are almost identical. However, when we turn to the Export of Objects of Cultural Interest (Control) Order 200x, for some reason everything has changed and

    ``records shall be kept for at least 4 years.''

A year in the life of an object of cultural interest is perhaps not of great importance. Nevertheless, I should be grateful if the Minister would clear up this interesting difference that I have discovered in the small print. That is, of course, what we are here for.

Nigel Griffiths: I would be very happy to clear up that matter when I have the necessary information to hand. Cultural issues, such as exports of that nature, are dealt with by my right hon. Friend the Culture Secretary. If it satisfies the hon. Gentleman, I will ask her to write to him with the details of the apparent discrepancy.

Mr. Key: Yes, it would, but I shall scrutinise the response very carefully indeed, having been a national heritage Minister myself responsible for such exports.

Amendment agreed to.

Amendment made: No. 64, in page 5, line 8, leave out paragraph (c) and insert—

    `( ) about the purposes for which information held in connection with anything done under or by virtue of the order may be used;

    ( ) about the persons to whom any such information may be disclosed;'.—[Nigel Griffiths.]

Dr. Cable: I beg to move amendment No. 14, in page 5, line 17, leave out `may'.

The Chairman: With this it will convenient to take the following amendments: No. 15, in page 5, line 18, after `(a)', insert `shall'.

No. 16, in page 5, line 19, after `(b)', insert `may'.

No. 17, in page 5, line 21, after `(c)', insert `may'.

No. 18, in page 5, line 25, after `(d)', insert `may'.

No. 19, in page 5, line 26, after `(e)', insert `may'.

Dr. Cable: The purpose of the amendment is to address the issue of Crown immunity and whether the powers under the Bill should apply to the Crown in cases of government-to-government, or government-to-private-sector, arms transactions. At present, such powers are highly circumscribed. As I understand it, the Bill provides for the Crown's being bound in cases in which Britain has international obligations, for example, in the European Union dual-use treaties, but that does not apply to Government contracts in the round. That seems to me to be unreasonable as a matter of principle. It is unfair and anomalous that the private sector should be subject to close regulation and export control procedures but that the same degree of diligence should not apply to Government agencies and Departments.

I shall take a concrete example of where problems may have arisen. One of the biggest Government arms transactions in modern times was the Al Yamamah project in Saudi Arabia. Elements of that contract may well have been in mutual national interests. Saudi Arabia is a military ally and needed the equipment for security purposes, and the contract provided good business to UK companies, including oil companies. However, it was generally believed that the matter was not handled in a very transparent way. Aspects of the contract gave cause for worry at the time. For example, Channel 4 television gave an expose'' that torture equipment was part of the package. I do not know whether that was ever established, but the allegations were made, and when the National Audit Office investigated the matter, the results were never published. It was never possible to establish whether the accusations were correct. The key point is that a government-to-government contract was not subject to the same degree of export control as a purely private contract would have been.

The legislation is trying to act on good advice and prior investigation by other Committees of the House. The Scott report was unambiguous in recommending that the list of international organisations and Crown agencies should be abolished. Perhaps more importantly, from the point of view of the House, the Quadripartite report recommended that

    ``consideration be given to the desirability of ending the blanket exemption from controls of Government and its agencies as exporters of licensable goods and technology.''

It is arguable whether our amendments adequately capture the flavour of the recommendations from Scott and the Quadripartite report, but they try to carry forward those recommendations, which I fear that the Government may have taken too lightly.

 
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Prepared 16 October 2001