Purposes: Orders and licensing
48. Clauses 1 and 2 provide for Orders to be made
in relation to goods or technology of any description. Clause
3(1) provides that the purposes for which export controls on goods
or transfer controls on technology may be imposed are those specified
in the Schedule. It can reasonably be assumed that the Orders
to be made will be in effect a repetition in amended form of the
two principal existing Orders, which set out the Military List
and the Dual Use List.
The Orders are by and large confined to setting out in schedules
the detailed categories of goods to be subject to control
49. These lists are almost entirely the result
of various multilateral agreements on what goods should be controlled.
For example, we noted in our February 2001 Report the progress
made in establishing a common EU Military List. The Dual-Use List
is an EU list, now laid down in EU rather than national Regulations.
There have in the recent past been some instances of unilateral
extension of controls to new categories of good, most recently
in relation to instruments of torture. The result of the new proposed
Schedule is that an extension of controls to goods or technologies
hitherto not requiring licensing could only be done where the
Secretary of State judged that there was a risk that their export
or transfer might have any of the undesirable consequences listed
in the Schedule. The draft Bill therefore seems to constrain
the freedom of Ministers to decide what goods or technologies
may be subject to controls; but in practice Ministers are already
constrained by the nature of existing multilateral regimes.
50. The imposition of export controls is in practice
exercised not only through secondary legislation on the definition
of goods and technology requiring a licence, but through the actual
process of granting or refusing particular licences for particular
destinations in particular circumstances. The draft Bill is
silent on the licensing process. There are no statutory criteria
for licensing decisions, nor any requirement that licensing decisions
should follow any guidelines. Cm 5091 states that "the effect
of the provisions in the Bill will be that any licensing decision
which ignores completely the purposes set out in the Bill is likely
to be an improper use of the powers provided in the Bill...the
purposes will set definite parameters for legitimate Government
It records the suggestion made by some that the national criteria
or the EU Code -now in effect mergedshould in some way
be incorporated in the legislation. The Government considers that
this " would simply introduce rigidity" into the consideration
of applications, and "would be as likely to require the Government
to grant a licence in a borderline case, as to prevent it from
granting such a licence". The paper concludes by repeating
the phrase that "the purposes will set definite parameters
for legitimate Government action".
The Secretary of State confirmed in oral evidence his understanding
that licensing decisions would have to be within the purposes
set out in the Schedule.
The UKWGA seemed happy with the assurance that licences would
conform to the purposes as set out.
It has however sought and continues to seek the incorporation
into statute in some way of the EU criteria, so that the licensing
process would have to conform to some statutory norms.
51. The Schedule at present sets out parameters for
the making of control Orders under the Bill, but does not provide
explicitly for such parameters on decisions on licences. A positive
duty could be laid on Ministers in making decisions on
licences to have regard to the need to avoid the undesirable consequences
listed in the Schedule. Conversely, a Minister would not be able
to refuse a licence unless there appeared to him to be a risk
of one of the undesirable consequences listed. We recommend
that consideration be given to putting on the face of the Bill
the assurances given in the explanatory paragraphs accompanying
the draft Bill and in evidence to us, that licensing decisions
should have due regard to the general purposes for which controls
can be imposed, as set out in the Schedule to the Bill.
Government transfers and Crown
immunity: Clause 13
52. As drafted, the Bill does not bind the Crown.
That means that Government-to-Government transfers can continue
to take place outside the licensing regime, and in theory outside
the purposes set out in the Schedule. In our first Report of February
2000 we called for Annual Reports to set out details of sales
and other permanent or temporary transfers by Government and its
agencies, and for "an explicit account of exemptions from
the licensing regime".
The Government Response stated that details were included in the
Annual Reports, and noted that the 1939 Act did not bind the Crown.
In our July 2000 Report we noted that a recent Written Answer
had revealed that most of the five entries given for such transfers
in the 1998 Annual Report had been wrong, and emphasised the importance
of full, accurate and open reporting of arms transfers by Government,
whether or not judged by the government to be "major".
The Government Response stressed that the Annual Report contained
information on "the vast majority of government transfers
or disposal sales".
53. The Secretary of State told us that the Government
did not intend to change the provisions in relation to Crown immunity,
but that it would adopt the principles it itself had laid down
in relation to Government dealings.
The transparent reporting of Government transfers offers some
reassurance that Governments will indeed abide by the principles
governing non-governmental arms transfers. There might, however,
be some advantage in binding future Governments to have regard
to the purposes for which export controls are applied when considering
their own transfers. We recommend that consideration be given
to the desirability of ending the blanket exemption from controls
of Government and its agencies as exporters of licensable goods
52 Scott Report, K 2.16-20 Back
65, para 25 Back
5091, para 33 Back
Qq 4-6 Back
56 ibid Back
59 Qq7-8 Back
65, para 15 Back
Paper 72, paras 22 and 29 Back
5091, page 10, para 31; page 40, paras 22-23 Back
page 22, para 2 Back
Paper 72, paras 20 and 29 Back
Export of Goods (Control) Order 1994 Back
Dual-use Items (Export Control) Regulations 2000 Back
p 5, paras 25-7 Back
225, para 76 Back
4799, page 13 Back
467, paras 68-9 Back
4872, page 9 Back