Draft Trade etc. in Dual-Use items and Firearms etc. (amendment) (EU Exit) Regulations 2019

Judith Cummins Excerpts

Monday 25th March 2019 General Committees

[Judith Cummins (Bradford South) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Roger. The sifting Committee has drawn the draft regulations to the special attention of both Houses on the basis that their drafting is defective and that particular points require further elucidation. The Department has acknowledged the legislation’s flaws, but we are still considering the defective draft, as the Government have not withdrawn it or laid before the House a draft with the defective wording amended, so the wording of the draft before the Committee may not be the wording of the final statutory instrument. Can the Minister confirm whether the Government intend to amend the regulations in the light of the sifting Committee’s comments?

That Committee referred specifically to regulation 3(5)(f), which amends the final paragraph of article 4 of the dual-use regulation so that it reads: “This Regulation is without prejudice to the right of Member States to take national measures under Article 10 of Regulation (EU) 2015/479”. In its minutes, the sifting Committee noted that it was

“puzzled as to how domestic UK legislation could, after exit day, prejudice the right of member States to take national measures under EU law”,

and that

“the Department acknowledges that this is an error and undertakes to correct it.”

Regulation 3(22) amends annex I of the dual-use regulation, which lists dual-use items for which export authorisation is required. Category 9 lists items related to aerospace and propulsion, including assemblies and components that incorporate technologies for turbine engines

“whose design or production origins are either non-EU Member States or Wassenaar Arrangement Participating States; or unknown to the manufacturer.”

Regulation 3(22)(h)(ii) amends that provision by removing

“either non-EU Member states or”.

The sifting Committee noted that that amendment would require authorisation only when the design or publication of those items originated from such places as Norway, Canada, Japan, Australia or EU member states, or when their origin was unknown. The Department acknowledged that that was an error, and gave the Committee assurances that it would seek to amend the drafting.

The sifting Committee also asked the Department to explain why the words

“This Regulation shall be binding in its entirety and directly applicable in all Member States”

had not been omitted by regulations 3 or 4. Can the Minister clarify what steps have been taken to amend the defective drafting of this legislation to correct those errors?

The regulations are intended to ensure that the existing approach to export controls applied to dual-use items and firearms is continued once we have withdrawn from the European Union. For the most part, the draft regulations proposed by the Government seek to ensure that references to “the European Union” or “the Community” are replaced, where appropriate, by references to the United Kingdom, our customs territory or the Secretary of State. To that end, we recognise that the United Kingdom must seek to ensure that we maintain an export control regime that is effective immediately after we leave the EU. That must happen with minimal disruption to ensure that the regime is operable and that controlled goods are not inadvertently exported inappropriately.

We recognise the considerable contribution that a responsible, world-leading defence and security industry makes to the UK economy. We believe that strong export controls have a vital role to play in sustaining a legitimate trade in arms while protecting UK jobs and research and development. We want to ensure that a robust and rigorous control system is in place for dual-use items, firearms and other sensitive material. We have called for a tighter approach to our export controls regime and for the cessation of exports to countries where there is a concern that they will be used to violate international humanitarian law. Will the Minister set out how the Government intend to ensure that export restrictions can be imposed when the ultimate user may be applying that item to or in a jurisdiction where there are concerns about public security or human rights?

Regulation 3(8) provides for the deletion of article 8 of Council regulation (EC) No. 428/2009. That article covers member states of the European Union where they impose restrictions on exports not otherwise included on the EU’s military list. Although it may be necessary to omit that article given that we will no longer be members of the EU, we would welcome clarity on whether the Government believe that such measures are covered in the revised regulations.

The Minister will perhaps also clarify what the basis will be for determining what constitutes a human rights violation for these purposes, given that regulation 3(27)(d)(iv) amends Annex IIe of the European regulation to omit the reference to the charter of fundamental rights of the European Union. How, then, do the Government intend to define such a violation?

Will existing licences that have been granted under the current EU regime continue to apply once the UK has left the EU, or will exporters be required to seek new licences under the UK’s stand-alone regime?

The draft regulations will impose obligations on British exporters to obtain licences and demonstrate import permission in respect of goods or services to be exported to the EU27 once we leave the EU. Can the Minister tell us whether the Government have conducted any analysis of the impact on British businesses? It is quite possible that there will be a substantial increase in the administrative burden on the British companies that service customers in those markets and the European suppliers that feed into the supply chain of those businesses—let alone the re-papering exercise that may be required for compliance with the UK’s regime.

I would also be grateful if the Minister clarified the intent of regulation 3(3)(d), which will amend the definition of “broker” to include

“any United Kingdom person who carries out brokering services from a country within the European Union into the territory of another third country”,

and will place an obligation on

“any European Union national who carries out brokering services from the United Kingdom”.

How will that provision interact with obligations that might be imposed on those people by the EU? How do the Government intend to work with European counterparts in administering such licences?

Regulation 3(7) will omit the article of the European regulation that relates to the transit through the EU customs territory of a non-Community good that would otherwise constitute a controlled good. Omitting that article leaves a question about the UK’s handling of controlled goods that are transported through the UK and intended for a destination outside the UK. I would be grateful if the Minister confirmed how the draft regulations will capture such goods.

Finally, the underlying EU regulation makes numerous provisions for procedural harmonisation, dialogue and co-operation between EU member states, including a dual-use co-ordination group chaired by a representative of the European Commission. The draft regulations would omit those obligations, which are set out under articles 11, 14, 16, 19, 22 and 23, among others. I would be grateful if the Minister advised us whether the Government intend to continue a formal dialogue with our European counterparts to ensure a common approach to restricted exports.