Return to an Address of the Honourable the House of Commons
dated 18 July 1996 for the Appendices to the Report of the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq and Related Prosecutions laid before The House on 15 February 1996*

Volume One
Section C The Export Control System
Chapter 2 Export Licensing Procedures

Excerpt:
THE WORKING GROUP ON IRAQI PROCUREMENT

C2.73 The Working Group on Iraqi Procurement (WGIP) was somewhat of an offshoot of the REU. By May 1989 government, and the Prime Minister, Mrs Margaret Thatcher, in particular, *45 had become concerned about the extent of the Iraqi network for the procurement of materials and equipment for proliferation purposes, as well as of conventional defence-related goods and equipment, from the United Kingdom. Arrangements to counter the activities of the network were desired. In a letter dated 16 May 1989 to Mr David Manning, Cabinet Office, Mr Beston said that “Earlier briefing has made it clear that the network is large, sophisticated and well financed”. He said that at a meeting in his office on 10 May attended by representatives of the FCO and SIS it had been suggested that a small Working Party should be set up “to help co- ordinate action on potential suppliers and targeted companies.” *46 It seems to have been contemplated that the same departments and agencies that sent representatives to REU meetings should be invited to send representatives to the Working Party. The Working Party was to meet forty five minutes before REU meetings so that the members could “update each other on developments and discuss action”. The proposed Working Party became the WGIP, held its first meeting on 25 May 1989 and met regularly until February 1990. Attendance was the same as at REU meetings save that no representative from the Security Service ever attended a WGIP meeting. Mr C2, *47 an SIS attendee at WGIP meetings, in his written evidence to the Inquiry submitted on 1 August 1994, said that: “The WGIP was set up in order to provide a venue in which to discuss Iraqi procurement with other members of the intelligence community and intelligence customers. The idea behind the meetings was to discuss all the latest snippets of information that SIS and other Whitehall departments had obtained on the Iraqi network.”

C2.74 In February 1990 the WGIP was, on Mr Beston’s suggestion, disbanded on the ground that “nothing came up that could not equally well have been dealt with in the REU.” *48 In agreeing to the disbanding of the WGIP Mr Manning asked that he be informed “in about 6 months time how the revised arrangements are working out in practice”. This was never done. Mr Beston left his post as head of OT2/3 in March 1990, his successor Mr Coolican did not become aware of Mr Manning’s request and the Iraqi invasion of Kuwait in August 1990 led to the introduction of a total embargo on exports to Iraq.

C2.75 The WGIP, like the REU, dealt with highly classified secret information. Circulation of its minutes was, therefore, necessarily restricted. But, like the REU, it constituted a means by which valuable intelligence relevant to licensing decisions and prosecution for breaches of export controls was brought to the attention of representatives of the relevant departments and agencies.

C2.76 I would add that Mr Beston’s perception that the REU could discharge the function expected of the WGIP was, in my opinion, a justified one. In the period between the disbanding of the WGIP and the Iraqi invasion of Kuwait, relevant intelligence about Iraqi procurement efforts in the United Kingdom was brought forward at meetings of the REU.

Endnotes
*45 - see DTI/45.1.236 and DTI/45.1.239

*46 - DTI/45.1.239; see also paragraph A.3.6 of Mr Beston’s written statement dated 16 November 1993

*47 - Members of the intelligence services and DIS are not named in this Report. Letters are used to distinguish them. A key to the letters is contained in the CLOSED ANNEX, which is not available to the general public.

*48 - see Mr Beston’s letter dated 12 February 1990 to Mr Manning and Mr Manning’s response dated 19 February 1990. DTI/45.1.271 and DTI/45.1.273.

* The Full report is available from The Stationery Office Ltd., PO Box 276, London, SW8 5DT.