Supplementary Memorandum submitted by
the Defence Manufacturers Association
We feel that the question posed by Mr Laxton
(no 37) as to what evidence Mr Evans had that delays were being
experienced as a result of the FCO's deliberations, and Mr Evans'
response, are highly illustrative of the lack of transparency
in the current export licensing system.
The fact that Mr Evans was not in a position
to give "chapter and verse" of the delays that his company
has been experiencing, and exactly where these hold-ups have occurred
within the system, is symptomatic of the lack of transparency
that pervades the system.
It is well known within Industry that the problem
does, or, at least, has, lain with the FCO, and a use of the Sherlock
Holmes method of finding out where something is by firstly finding
out where it is not, and using a process of deduction, clearly
demonstrates this to be the case in those instances where direct
evidence is not available.
With regard to Mr Butterfill's question (no
116) to the Minister, we would like to clarify that the concern
is primarily not over the technical knowledge of the DTI staff,
but rather over that of the FCO's staff. This would be less of
a problem if the officials involved contacted the companies direct
to get answers.
However, the current system requires the queries
to be put in writing by the "advisers" to the DTI, then
from the DTI to the company, with a written response from the
firm going back to the DTI, for onward transmission to the "adviser"
concerned. Thus, a simple query which should only take a couple
of minutes in a phone call to answer, in fact takes up to a week,
during which time the application is put on hold.
Companies are also concerned at the somewhat
simple nature of some of the queriesof particular concern
is that it is known that DTI officials filter out and deal with
the vast majority of queries themselves. Only a small minority
"slip through the net" and get passed back to companieswhich
makes one wonder what the scale of the problem really.
With regard to the questions (nos 54 and 63)
posed on the issue of processing timescales, I can reiterate that
the situation had improved since the start of 1998, thanks to
the commendable efforts of the FCO, although we noted with concern
the figures given in Annex E of the DTI's Memorandum to the Committee,
which clearly illustrated that the situation has deteriorated
again since June of this year.
Delays in licence processing are not a recent
phenomenon, and Industry has experienced a number of highs and
lows and occasions when the system has improved or deteriorated.
For instance, a special interest group that we established in
June 1993 called the British Defence Manufacturers Export Licensing
Group (BDMELG) was seriously considering winding itself up and
disbanding in early 1995, because the system was perceived to
have improved so muchhowever, the introduction of a new
computer system a DTI in summer 1995 completely reversed the situation.
The turn around had improved by late 1996, but, of course, deteriorated
again after May 1997, when the new Government decided to review
the UK's licensing criteria, and the backlog created took until
early 1998 before the licensing authorities really began to get
a firm grasp of the problem and clear it.
The Government has made worthy efforts to try
to deal with the problem, and these had begun to have an effect
by Spring 1998. However, in concentrating all efforts, and increased
resources, in trying to clear the backlog of Standard Individual
Export Licence (SIELs) applications officials were forced to put
the clearance of Open Individual Export Licence (OIELs) applications
on hold. This, in turn added to the flow of SIELs and the general
workload on processing them; for instance, we know of one very
small electronics components supplier company who, because its
OIEL was delayed, was having to submit some 65 SIELS per month.
Now, at last, we understand that in recent months officials have
been able to try to get the OIEL system back up and running, although
the backlog of applications will take some considerable time to
We were delighted that the DTI has very recently
decided to issue a new Open General Export Licence (OGEL) on the
return of military goods to their original supplier for repair,
the introduction of which effectively makes redundant some of
my comments in answer to Mr Cunningham's question (no 59). However,
we would state in reply to his observation that he is sure that
the processing of SIELs for the return of repaired goods to the
customers concerned may, indeed, be fairly simple and expeditious
(in the main), the fact that these have to be submitted at all
has a wider effect on the licensing system as a whole, as these
applications are merely adding to the workload of officials and,
thus, delay the system as a whole, generally for limited useful
In answer to Mr Laxton's questions (nos 65 and
66) with regard to end-user control, having perused the questions
again, in writing, I believe that I can now fully understand the
gist and am in a position to answer them more effectively. We
believe that all companies can be required to do is to provide,
in support of an export licence application, details of all relevant
information of which they are awarethey can do no more
Therefore, we would agree with Mr Laxton that
companies should be doing this, and, indeed, we always urge and
encourage our Member companies to do just this. Whilst we would
not support the withholding of relevant information by companies,
we do not believe that companies can do more than provide an end-user
statement and any and all relevant information in support of an
application. In our response to the Green paper we stated that:
"Everything stated by companies in their
applications must demonstrate the full level of their knowledge,
with them being able to be held responsible for the knowing concealment
of information, but they cannot be required to do more than this."
Certainly the seeking out of additional information
should be a matter for HMG, and not for Industry. The follow-ups
should be done by HMG, using the resources at its disposal. Certainly
we noted that the NGOs came up with some ideas as to how this
could be undertaken, some of which we would support, provided
that they did not at the same time impact upon the resources at
HMG's disposal to support export initiatives.
I noted the questioning of Sir Brian Tovey,
especially by Mr Berry, with regard to his strong opposition to
the use of the phrase "grounds for suspecting" in the
catch-all, end-use control. We would like to state that we share
Sir Brian's concerns.
It is interesting that there are, in many ways,
common grounds on which we and some of the NGOs share views. For
instance, in his evidence, Mr Eavis of Saferworld called for the
re-introduction of the list of sensitive destinations, officially
known as the "List of Destinations that are Subject to Special
Licensing Considerations", which has been defunct, since
its withdrawal earlier this year. We, too, have argued since the
demise of this list that it should be re-introduced. Industry
found this list invaluable in assisting it in planning marketing
campaigns overseas. However, we understand that the FCO required
the demise of this list due to diplomatic considerations in the
UK's dealings with the countries concerned.
We have also argued strongly for the introduction
of a common end-user form in our responses to both the Green and
the White Papers, and are delighted that the NGOs on 10 November
stated that they would also like to see this innovation introduced.
Also, as stated clearly in our evidence and
our response to the White Paper, we fully support the proposals
to introduce controls on intangible transfer, trafficking and
brokering, and to close the loopholes that these activities represent,
but merely advise caution and careful through as to how such measures
and regulations can be introduced and worded in order to avoid
potential confusion and unforeseen implications in other areas,
such as Academia, brought about by the hasty and ill-thoughtout
introduction of such controls. Whilst Ms Weir of Amnesty International
may regard three years' of discussion as being sufficient, given
the potential complexity and problems associated with this matter,
we are concerned that the wording of the White Paper would appear
to imply that more thought on these matters is still necessary.
Finally, in our response to the Green Paper
we stated that Purpose d) "to avoid contributing to internal
repression and instability within the country of destination of
the licensed goods" and purpose f) "to avoid
contributing to human rights abuse" where an unnecessary
duplication, and we welcome the White Paper's apparent recognition
However, we fully accept the necessity to cover
human rights abuses, as opposed to internal repression, and would
suggest that this Purpose be re-drafted. Some clear guidance on
the sorts of equipment, in this context, which cause concern to
the likes of Amnesty International would be quite helpful, and
may help to preclude a repeat of the stated case described by
Mr Garland when RBR International had a licence for the supply
of helmets to the People's Republic of China rejected because
the material could (apparently) be used for internal repression.
30 November 1998