WIREDGOV

Government to strengthen measures on export licensing

News Release issued by the COI News Distribution Service on 07 February 2012

The Secretary of State for Business today announced a series of measures on UK export licensing designed to make the system more transparent and to allow for the immediate suspension of export licences to countries that experience a sharp deterioration in security or stability.

These proposals build on the Foreign Secretary’s recent review of defence and security export policy conducted in the light of events in the Middle East and North Africa.

The Secretary of State for Business, Vince Cable, said:

"We take our export control responsibilities very seriously. The UK operates one of the most rigorous arms export control regimes in the world. All licences that we issue or refuse are made public, however we appreciate the need for more detail to be available on the work we do.

“The Foreign Secretary announced in his recent review of arms exports that there were no fundamental flaws with the export licensing system. We share this view. However, the review did identify some areas where our system could be further strengthened, so I am pleased that we are able to work closely together to bring about these changes.”

The Foreign Secretary William Hague said:

“I am pleased to report that the new suspension mechanism for UK defence exports is now in place. The FCO and BIS have worked closely together to develop it. This new measure will ensure that export licensing policy is more responsive to rapidly changing circumstances overseas. In light of recent events in the Middle East and North Africa, this is now more important than ever.

“Suspension will not be invoked automatically or lightly, but triggered when conflict or crisis conditions suddenly increase the level of risk, or make conducting a proper risk assessment difficult. We will conduct these assessments on a case by case basis, in the same way that we do whenever issuing a licence.”

The suspension mechanism will allow for the immediate suspension of pending licence applications to countries experiencing a sharp deterioration in security or stability. This will mean that licences pending approval will be ‘paused’ for a defined period. The Government will notify exporters, Parliament and the media when this has happened.

The transparency proposals are to:

· Insert a provision into open export licences requiring the exporter to report periodically on transactions. Government will then publish this information.

· Explore ways in which more information could be published on standard export licences. Currently, all applications for these licences are made in confidence so the Government plans to explore ways in which more details can be made public while protecting any sensitive material.

· Appoint an independent person to scrutinize the Export Control Organisation’s licensing process. The role of this independent auditor would be to confirm that the process is being followed correctly and report on their work at regular intervals.

In considering these proposals, the Government will speak to various interested parties, including exporters and non-governmental organisations. The Business Secretary intends to make a further announcement before the summer recess, setting out the Government’s conclusions and plans for implementing any further changes.

Notes to Editors

1. WRITTEN MINISTERIAL STATEMENT

RT HON DR VINCE CABLE, SECRETARY OF STATE FOR BUSINESS, INNOVATION AND SKILLS.

STRATEGIC EXPORT LICENSING

7 FEBRUARY 2012

My Rt Hon Friend the Foreign Secretary (William Hague) 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 & 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 has 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 (e.g. 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 Rt 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 Rt 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.

2. The Export Control Organisation publishes details of export licences issued and refused at http://www.exportcontroldb.bis.gov.uk

3. General and comprehensive information on the export licensing process can be found at: http://www.businesslink.gov.uk/exportcontrol

4. BIS's online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See http://www.bis.gov.uk/newsroom for more information.

Contacts:

BIS Press Office
NDS.BIS@coi.gsi.gov.uk

Lucy Bell
Phone: 020 7215 5361
Lucy.Bell@bis.gsi.gov.uk