The Secretary of State for Business, Innovation and Skills (Vince Cable)
My right hon. Friend the Foreign Secretary announced to the House on 13 October 2011 the conclusions of his review of defence and security export policy in the light of events in the middle east and north Africa.
It concluded that there were no fundamental flaws with the UK strategic export licensing system. We share this view. However, the review did identify areas where our system could be further strengthened. To this end, he announced a package of proposals that included the introduction of a mechanism to allow the immediate suspension of pending licence applications to countries experiencing a sharp deterioration in security or stability, and a commitment to continue to work to improve public information on defence and security exports, including enhanced transparency of routine export licensing decisions and how we respond during a crisis.
We have worked closely in developing the suspension mechanism, and are pleased to report that this suspension mechanism is now in place. As a result of this change the Government have ensured that export licensing policy is now more responsive to rapidly changing circumstances overseas.
The new suspension mechanism will allow the Government to quickly suspend the processing of pending licence applications to countries experiencing a sharp deterioration in security or stability. Suspension will not be invoked automatically or lightly, but triggered for example when conflict or crisis conditions change the risk suddenly, or make conducting a proper risk assessment difficult. A case-by-case assessment of a particular situation will be necessary to determine whether a licensing suspension is appropriate.
Any decision to suspend will be taken by the Licensing Authority based on advice from relevant Government Departments and reporting from our diplomatic posts. Parliament, industry and the media will be informed of any suspension.
Suspension will be tailored to the circumstances in play and will not necessarily apply to all export licence applications to a country, but may instead be for applications for particular equipment (for example crowd control goods), or for applications for equipment going to a particular end-user.
If a decision to suspend is made, work on licence applications in the pipeline will be stopped and no further licences issued pending ministerial review. Once the suspension is lifted, applications will not be required to be resubmitted.
The Ministry of Defence will apply any licensing suspension decision to MOD Form 680 applications, for which it is the Government authority, and to the assessment against the consolidated criteria of gifting cases, which it co-ordinates on behalf of the Government.
Suspension will be lifted (or partially lifted) where the Licensing Authority considers it appropriate to do so.
Transparency is also crucial because confidence in the workings of the export licensing system needs to be shared by Parliament and by the public. The system should not just be working properly; it should also be seen to do so.
I am therefore announcing today a number of proposals to improve the transparency of the export licensing system. These proposals build on my right hon. Friend’s review, and we intend to seek the views of interested parties, including the representatives of exporters and non-governmental organisations, on how they will work.
The first proposal is to insert into all open export licences a provision requiring the exporter to report periodically on transactions undertaken under these licences. The Government will then publish this information.
The second proposal concerns information contained in standard export licence applications. Currently all such applications are made in confidence, which makes it difficult to make public any more information than is already disclosed in the Government’s annual and quarterly reports. The Export Control Organisation considers that certain additional information contained in licence applications could be made public without causing concern to exporters. I will explore ways of making this additional information public while protecting any sensitive material.
The third proposal is to appoint an independent person to scrutinise the operation of the Export Control Organisation’s licensing process. The role of this independent person would be to confirm that the process is indeed being followed correctly and report on their work.
In considering these proposals we intend to consult the various interested parties to reach an outcome which achieves the Government’s objective of increased transparency while at the same time imposing the minimum additional burden on exporters.
We will, simultaneously, be pursuing further changes to the strategic licensing system to make it more efficient and customer-focused, whilst maintaining the integrity of the process. Working together, my right hon. Friend and I remain committed to robust and effective national and global controls to help prevent exports that could undermine our own security or core values of human rights and democracy; to protect our security through strategic defence relationships; and to promote our prosperity by allowing British defence and security industries to operate effectively in the global defence market.
I intend to make a further announcement to Parliament, setting out the Government’s conclusions and plans for implementing any further changes, before the summer recess.