Extraterritorial US Legislation (Sanctions against Cuba, Iran and Libya) (Protection of Trading Interests) (Amendment) (EU Exit) Regulations 2022
Debate between Viscount Younger of Leckie and Lord Lennie
Lord Lennie (Lab)
My Lords, I thank the noble Viscount, Lord Younger, for his characteristically thorough and detailed explanation of this regulation before the Committee. I gave notice to him that I would be brief, and I intend to keep to that.
As we have heard, this SI updates the cross-reference in Article 4(4) of the 1996 order to reflect the wording in Section 30(3) of the 2015 Act, as amended by the EUWA 2018, and remove the reference to the EU countermeasures regulation. That is the sexy bit of what I am going to say.
Obviously, this side of the Committee supports the regulations, but I have a couple of questions for the Minister, if he would care to speculate. First, what would the implications have been if this had not been fixed—can he speculate on that? Secondly, are any further changes expected or anticipated, especially given that the previous update to legislation seemed to have missed these specific updates which are now before the Committee? With that, I shall leave it to the Minister to consider briefly, and perhaps he can give us a response.
Viscount Younger of Leckie (Con)
My Lords, I thank the Committee for its response and thank the noble Baroness, Lady Northover, and the noble Lord, Lord Lennie, for their general support for these regulations. I will do my best to answer the rather rapid series of questions that cropped up.
I start by gently saying to the noble Baroness, Lady Northover, that she asked a few slightly leading questions about pausing for thought and inconsistencies and deficiencies. I ask her to forgive me for saying so, but we have left the EU and we need to make the very best of it. This is part of that, and however many SIs we need to take through this Committee or indeed the Chamber, that is the way it should really be. But I hope I can answer some of the noble Baroness’s questions as well.
On her question about Cuba, the UK considers that the continued US embargo against Cuba is counterproductive, and we consistently vote in support of the annual United Nations General Assembly resolution calling for it to be lifted. The UK continues to consider the activation of Titles III and IV of the Helms-Burton Act, which strengthen and continued the embargo against Cuba, to be contrary to international law. We have made our position very clear on that and regularly engage US officials on this issue through our embassy in Washington, as well as with the US embassies in Havana and London. That gives a very much high-level answer to the question, which I hope very much helps the noble Baroness.
On the noble Baroness’s question about Iran, it is fair to say that we are all appalled by what is going on there and we will continue to hold Iran to account for its repression of women and girls and the shocking violence it has inflicted on its own people. Across international fora and working closely with our partners we will continue to expose the regime’s appalling human rights violations, pursue accountability and amplify the voice of the Iranian people. I note that the noble Baroness raised the issue of a nuclear deal; something may be forthcoming on that in a moment and, if it is not, I shall certainly write to her, because that is germane.
The noble Lord, Lord Lennie, asked a couple of questions. I think one of them was about what happens if this instrument does not pass—in other words, how significant is this SI for life, if I may put it that way. The DIT could be expected to then publish a report regarding penalties applicable in the EU and measures taken to implement EU law, specifically EC Regulation 2271/96, by EU member states, notwithstanding that the EU law in question no longer applies to the UK. That is a slightly detailed answer. Therefore, it is important that we pass this legislation.
On the question raised by the noble Baroness, Lady Northover, of whether we remain in line with the EU on sanctions, she will be aware that this instrument does not concern UK sanctions directly. However, we continue to work closely with the EU on sanctions and seek to align where appropriate. On the question, from the noble Lord, Lord Lennie, of whether any further changes are required, the answer is no. I hope that is a very succinct repeat of his question and a succinct answer.
As I said earlier, this amendment is very much a technical fix. I am gaining a reputation for taking through some rather detailed minor and technical legislation, but nevertheless, as ever, each piece is important in its own way. The instrument does not change the Government’s approach to this issue or any other diplomatic or trade issue. It simply updates the 1996 order to reflect that the United Kingdom has left the European Union. Nothing in this regulation represents a change for British businesses. With that, I beg to move.
Export Control (Amendment) (EU Exit) Regulations 2022
Debate between Viscount Younger of Leckie and Lord Lennie
Viscount Younger of Leckie (Con)
My Lords, I am pleased to open this debate. The aims of this statutory instrument are threefold: first, to make technical amendments to the Export Control Order 2008 to implement the EU dual-use regulation, which applies in Northern Ireland by virtue of the Northern Ireland protocol; secondly, to correct an error introduced in an earlier instrument; and thirdly, to remove the Russian Federation as a permitted destination from the scope of certain general export authorisations.
I will start by giving some background. This instrument amends legislation relating to the export controls of the United Kingdom. This is a technically complex area of law. The export controls to which this instrument relates are specifically “strategic” exports; these include goods, software and technology capable of having a military use. In particular, the exports to which this instrument relates are “dual-use” exports: that is, exports that are capable of both civilian and military uses. The restrictions applying to strategic goods, software and technology are known as “controls” and can take different forms. There may, for instance, be controls relating to dual-use items and to end uses relating to weapons of mass destruction. Controlled items may be licensed for export; exporting controlled items without a licence constitutes an offence.
While the United Kingdom was a member of the European Union it was subject to the EU law on export controls. The EU set out a number of controls relating to strategic exports, as well as extensive lists of goods, software and technology subject to control. As noble Lords will be aware, since the UK’s withdrawal from the EU, certain EU rules have continued to apply in Northern Ireland in accordance with the terms of the Northern Ireland protocol. When the United Kingdom left the European Union in 2020, many of the detailed rules describing which strategic goods could not be exported without a licence were set out in European Union law.
I will pause here to say that I will use three distinct descriptions of relevant legislation, which are as follows. First, there is the old EU dual-use regulation which applied to the United Kingdom before our withdrawal from the EU. It continued to apply throughout the EU, and in Northern Ireland in accordance with the Northern Ireland protocol, until 9 September 2021. Secondly, there is the retained dual-use regulation. This is the version of the old EU dual-use regulation that was retained in UK law when we left the European Union. It applies in Great Britain. Thirdly, there is a new—I will use the EU word, “recast”—EU dual-use regulation, which came into force on 9 September 2021. Recast essentially means, in this instance, to revoke and replace. The recast dual- use regulation replaced the old dual-use regulation in the EU. Since 9 September 2021, the recast dual-use regulation has applied automatically in Northern Ireland in accordance with the rules of the Northern Ireland protocol.
The recast dual-use regulation sets out the rules that govern the export of dual-use goods, software and technology from the EU and Northern Ireland. This includes new controls on cyber surveillance items and technical assistance, which provide for additional controls relating to EU member states’ national control lists. For regulatory purposes, the recast dual-use regulation is incomplete. It sets out controls on dual-use items but does not provide the necessary legislative detail on how to license exports of those items, the offences applicable for breaching controls or the applicable customs enforcement powers. These matters have been left for domestic implementation.
In this case, the regulation that we are seeking to ensure functions properly controls the export of dual-use goods—that is, goods that have both a military and a civilian use. The statutory instrument before us aims to make the necessary changes to the Export Control Order 2008 to ensure that the recast dual-use regulation is properly connected to the existing domestic law provisions on licensing, offences and customs enforcement. To that extent, it provides for the technical implementation of the United Kingdom’s obligations under the Northern Ireland protocol, rather than representing a change in export control policy.
I will briefly give some further detail. I would like to clarify that these regulations are subject to the draft affirmative procedure because they modify criminal offences to make the new European Union controls on cyber surveillance items, technical assistance and national control lists operable in Northern Ireland. Paragraph 8F(1) of Schedule 7 to the European Union (Withdrawal) Act 2018 specifies that instruments that make provision falling within paragraph 8F(2) must be made using the draft affirmative procedure.
I will now explain what these regulations do, first with respect to the changes made to the Export Control Order, then with respect to the changes to the retained dual-use regulation. First, with respect to the order, Regulation 3 updates and clarifies definitions relating to the recast dual-use regulation as it applies in Northern Ireland and the retained dual-use regulation as it applies in Great Britain. Secondly, Regulations 4 to 8 and 15 and 16 update various cross-references to refer to the recast dual-use regulation. References to Article 20(1) of the old dual-use regulation, for instance, have been updated to refer to the equivalent provision in Article 27(1) of the recast dual-use regulation.
Thirdly, Regulations 9, 13 and 17 modify the offences provisions in the Export Control Order 2008 to cover the new controls in the recast dual-use regulation—that is, they make it an offence to contravene the prohibitions and restrictions in the recast dual-use regulation, and specify applicable penalties. They also distinguish more clearly between the offences applicable in Northern Ireland and those that are applicable in England, Wales and Scotland. Specifically, Regulation 9 limits the application of Article 35 of the Export Control Order 2008 to offences relating to the retained dual-use regulation as it applies in England, Wales and Scotland, while Regulations 13 and 17 create new offences in Northern Ireland in respect of the new controls in the recast dual-use regulation.
Fourthly, Regulation 10 both updates certain cross-references to the recast dual-use regulation and extends HMRC’s customs powers in Northern Ireland in respect of the new controls.
Fifthly, Regulation 12 updates a cross-reference to a Council directive of 18 June 1991 on control of the acquisition and possession of weapons, also known as the EU firearms directive. This too was replaced by an updated directive on the same subject matter, EU directive 2021/555, which came into force on 26 April 2021. The new directive now also applies in Northern Ireland, in accordance with the Northern Ireland protocol, and it is appropriate that we update this cross-reference accordingly.
I turn to the amendments made by this instrument to the retained dual-use regulation. First, Regulation 19 corrects an error in an earlier instrument made during the withdrawal of the United Kingdom from the European Union. It reinstates the Secretary of State’s power to refuse, annul, suspend, modify or revoke brokering services authorisation in the retained dual-use regulation. Secondly, Regulations 20 to 22 amend the retained dual-use regulation to remove the Russian Federation as a permitted destination in certain general export licences which apply in Great Britain.
I am sure your Lordships will recognise that this is a necessary step in light of Russia’s illegal invasion and annexation of Ukraine’s sovereign territory. If that was not enough, I add that the remaining regulations are genuinely minor and technical, and made in consequence of the amendments set out above. I beg to move.
Lord Lennie (Lab)
My Lords, I thank the Minister for that extraordinarily thorough and historic briefing on the substance of these regulations. It is very welcome.
As we have heard, these regulations do three things. They make the necessary changes to ensure that the new regulations of the European Parliament operate effectively in Northern Ireland. They amend the Council regulation to correct a deficiency arising from the UK’s withdrawal from the EU, and they remove the Russian Federation as a permitted destination from the scope of certain export authorisations. Consequently, Northern Ireland can continue to operate dual-use regulations effectively. As we have heard, dual-use items are those that can be used for both civilian and military purposes.
The Secretary of State’s powers that were mistakenly taken away during the transition from the EU have been reinstated. These are powers to refuse, annul, suspend, modify or revoke brokering authorisations, and the Russian Federation is rightly removed as a permitted destination for certain general export authorisations. These changes became necessary, as the Minister said, after the EU modernised its export control system and in May 2021 adopted the recast EU dual-use regulation. This statutory instrument makes it operational in Northern Ireland.
The mistake of removing the Secretary of State’s powers is corrected, but did its removal have any effects in the period before it was reinstated? Were they forced to act without the cover of the law? The removal of Russia as a permitted destination for exports follows on from a broader policy of measures taken following its continuing aggression towards Ukraine. On this side of the House, we support this necessary updating of policy.
Viscount Younger of Leckie (Con)
My Lords, that was quite a short debate. I thank the noble Lord, Lord Lennie, for his equally short speech. There was a little bit of detail in it, though certainly not as much as in mine. I will look at Hansard and write to him answering his questions.
I conclude this extremely short debate by saying that the United Kingdom operates one of the most robust export control regimes in the world. We keep our export controls under careful and continual review. The United Kingdom also works with like-minded countries through international control regimes to decide what and how strategic goods should be controlled.
An answer has just been given to me. The drafting error was a simple mistake, which officials have identified and will now correct. The correction reinstates the Secretary of State’s power to refuse, annul, suspend, modify or revoke licences granted to brokers. The power is infrequently required, and the Secretary of State has had no need of it since the mistake was made, but essentially it was a simple mistake.