Select Committee on Trade and Industry Minutes of Evidence


Annex A

SUMMARY OF GOODS AND TECHNOLOGY CONTROLLED FOR STRATEGIC REASONS

  Goods currently subject to control for strategic reasons are as follows:

"Military list"

  Military, security and para-military goods and arms, ammunition and related material entered in Part III of Schedule 1 (known as the "Military list") to the Export of Goods (Control) Order (EG(C)O) 1994 are subject to control. In addition, certain explosive-related goods and certain vehicles are controlled under groups 2 and 3 of Part I of Schedule 1 to the Order. This Order is made under the Import, Export & Customs Powers (Defence) Act 1939 and amended from time to time in response to policy or technological developments. The UK controls the export of these goods to all destinations in line with its participation in international control regimes, including the Wassenaar Arrangement. The UK also imposes national controls on the export of certain other military and paramilitary goods.

Dual-use goods

  Dual-use goods listed in Council Decision 94/942/CFSP and in Schedule 2 to the Dual-Use & Related Goods (Export Control) Regulations 1996 (DUEC) as amended are subject to control.

  Council Regulation (EC) 3381/94 ("the EC Dual-Use Goods Regulation"), together with Council Decision 94/942/CFSP established a Community regime for the control of exports of dual-use goods, in accordance with member states' commitments under the Wassenaar Arrangement, the Australia Group, the Nuclear Suppliers Group, the Missile Technology Control Regime and international obligations under the Chemical Weapons Convention. Under the Dual-Use & Related Goods (Export Control) Regulations 1996, (DUEC) as amended, the UK also imposes certain national controls, several of which apply to certain destinations only.

  A licence is not needed to export most dual-use goods to other Member States but exporters have to register with the Export Control Organisation (ECO) before making their first export and they need to keep records of any such exports. However, a licence is needed for the export of the most sensitive dual-use goods to other Member States.

Other goods subject to the end-use control

  Under the end-use control any other goods become subject to control if the prospective exporter has been told or knows or has grounds for suspecting that the goods would or might be used in activities connected with weapons of mass destruction or missiles for their delivery. The end-use of "catch-all" control is set out in Articles 4.1 and 4.2 of the EC Dual-Use Goods Regulation, and in Regulation 4(2)(b) and (c) of the DUEC.

Controls on the export of technology

  The export of technology is controlled, principally where it relates to the development, production or use of certain goods in the lists of specifically controlled goods. In the context of export controls, technology means specific information necessary for the development, production or use of goods. This information may take the form of such things as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, or manuals and instructions. Technology that is in the public domain is not controlled (unless caught by the end-use control), nor is basic scientific research nor (unless it is directly associated with dual-use nuclear goods) is the minimum information needed for patent applications. The technology subject to control is detailed in the lists in the EG(C)O, the DUEC and the EC Council Decision.

  At present these controls apply only to technology in tangible form; they do not apply to the transfer of technology in an intangible form, eg by electronic mail, fax or orally. 25[24] The White Paper on Strategic Export Controls published on 1 July proposes that new primary legislation should give Government the power to control the transfer of technology by intangible means. The European Commission has also published a proposal to amend the EC Dual-Use Goods Regulation to cover the transfer of technology by electronic means.

Controls on transhipment

  A transhipment licence may be required where controlled products are exported when they have entered the UK solely for transit to another country but most transhipments subject to export control can be made under one of the Open General Transhipment Licences in force (see Annex B), provided in all cases that the relevant conditions are met. Where this is not the case an individual transhipment or export licence is required.

Controls on the supply of goods (trafficking and brokering)

  The Import Export and Customs Powers (Defence) Act 1939 does not give the Government the power to impose controls on the involvement of persons in the UK or UK persons abroad in arranging the supply of goods from one overseas country to another (commonly referred to as trafficking or brokering). However, where controls on the supply of military and dual-use goods (and—in the case of comprehensive trade sanctions—all goods) are required by a binding resolution of the United Nations Security Council, ie in accordance with UN trade sanctions or arms embargoes, such controls are implemented under the United Nations Act 1946. New primary legislation would be required to take powers to control the supply of goods in other circumstances, and this is one of the issues covered by the White Paper.


24   In its response to the Trade and Industry Committee's report on Export Licensing and BMARC, the then Government indicated that it would give further consideration to the extent to which it would be practical to require export licence applicants to identify potential (ie as well as actual) uses of dual-use goods. It subsequently consulted industry on this point when Form A was being revised. Although industry concerns about the impracticality of such a requirement led to the idea of including a clause about potential end-use in Form A being dropped, a new version of Form A, to be introduced shortly, will include a further question about other details relating to the end-use. In addition, the language in the explanatory notes to be provided with this form has been strengthened to emphasise to applicants the importance of providing comprehensive and accurate information on this point. The notes will read "It is in your own interests to find out and provide as much information as you can about end-use of the goods. This is partly for your own protection and partly because end-use is obviously a significant factor in our consideration of your application."

25 Intangible transfers may, however, currently be affected by sanctions imposed in accordance with UN resolutions. And in the case of technology developed under Government contract, the Official Secrets Acts 1911 and 1989 may apply. There may also be other obligations, eg copyright conditions or contractual obligations which apply to the transfer of particular technology. Back


 
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Prepared 10 December 1998