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 D Arms and Defence-Related Exports to Iraq
Chapter 1 The Howe Guidelines

Excerpt:
THE MOD WORKING GROUP

D1.103 I have earlier referred to Arms Working Party (AWP) applications for preliminary rulings as to whether licences for the export of defence equipment would be likely to be granted. By 1984 the AWP members no longer met to discuss these applications. Instead, each application was circulated by an official in DESS to the individuals who had used to meet as the AWP. The DESS official, after receiving the responses, would communicate the decision to the DESO Regional Marketing desk and the RMD would give an official MOD reply to the applicant. After the adoption of the Howe Guidelines it was decided that the AWP would be reconstituted as a Ministry of Defence Working Group (MODWG) to discuss, under the chairmanship of a senior DESS official, both Iran and Iraq AWP applications and Iran and Iraq ELAs. It was contemplated that the recommendations of the MODWG would be placed before the IDC meeting at which the ELAs in question were to be considered. It would be the particular function of the MODWG to provide the “prior assessment” referred to by Lord Howe in his letter of 4 December 1984 to the Prime Minister. The terms of reference and membership of the MODWG were never formally set out in writing. Mr McDonald described the MODWG as “a small and informal group at desk level, a primary function of which was to co-ordinate the MOD assessment as to whether specific exports would or would not constitute a significant enhancement to the military capability of Iran and Iraq.” *114 He added that “consideration of other factors such as employment, exports and foreign policy was not ruled out but would not be relevant unless the assessment was that the export in question was not a significant enhancement or constituted a ‘borderline’ case”.

D1.104 The MODWG was chaired by DESS 2, a Grade 7 official, with DESS 2A (an HEO) as deputy Chairman, and with a DESS official as Secretary. The usual members of the MODWG included the incumbents at the following MOD desks *115 (the ranks given are those of the incumbents during Mr Barrett’s tenure as Chairman):

D Cts(ROW) (Wing Commander) - to provide an overall view of the operational significance of each ELA.

DI(Def Sales) - to provide background intelligence advice on matters such as current operational capabilities and to act as a focus for other intelligence matters such as technology transfer. This was a DIS Desk. *116 The DIS expert with responsibility for technology transfer issues was also a member of MODWG.

DOR(Sea)RST (Commander) - to provide advice on naval equipment.

LSOR 10c SY (Lieut-Colonel Retired) - to provide advice on army equipment.

Sy3(RAF)(Group Captain Retired) - to provide advice on airforce equipment.

MOD Sy(S&T)(Senior Scientific Officer/Higher SO) - to provide background advice on science and technology issues and on the scope of the paragraph in the EG(C)O under which the goods were licensable.

RMD2a (HEO/EO) - to represent the interests of UK exporters to Iraq.

RMD2b (HEO/EO) - to represent the interests of UK exporters to Iran. The RMD Desks were DESO Desks.

D1.105 The Chairman of the MODWG had a co-ordinating role. It was his function to look for and encourage the formation of a consensus among the MODWG members. Mr McDonald regarded it as “an important part of the Chairman’s function to test the strength of the rationale of the emerging MOD view to ensure that, as well as being consistent with military advice, it could be presented to laymen and understood by them (i.e. Ministers and other Government Departments).”

D1.106 LSOR 10c Sy from March 1985 was Lieut-Colonel Richard Glazebrook. It was not the custom for Minutes of MODWG meetings to be kept but Lieut-Colonel Glazebrook made and retained notes of the MODWG meetings. These notes have been of the greatest assistance and the Inquiry is indebted to Lieut-Colonel Glazebrook for them.

D1.107 The MODWG had two distinct functions. On the one hand, it was the function of the MODWG to provide the expert prior assessment on “significant enhancement” contemplated by paragraph 7 of Lord Howe’s letter of 4 December 1984 to the Prime Minister. In the discharge of this function the RMD (DESO) members would, logically, have no legitimate role. Their function and interest was to promote defence sales. They were not, unless by coincidence, experts in the fields relevant to the “prior assessment”. If the prior assessment were adverse i.e. if it were judged that the export in question would significantly enhance the capability of the recipient, then, if the Guidelines meant what they said, a licence for the export would have to be refused unless Ministers, and it would have had to be senior Ministers, were prepared to authorise the export notwithstanding that it would constitute a breach of the Guidelines. On the other hand, there would be cases in which the proposed export would not, in the view of the MODWG experts, significantly enhance the capability of the recipient. In these cases, the Guidelines would not bar the grant of an export licence but it would still be necessary for an MOD view, whether to support or oppose the grant of a licence, to be formed. Security or operational factors, quite apart from the Guidelines, might present sound reasons for refusing the licence. Technology transfer risks might, for example, be present. And DESO reasons for the grant of the licence could properly be brought forward by the MODWG DESO members in opposition to any security or operational arguments for the licence to be refused. In the passage from his evidence that I have cited, Mr McDonald contemplated that factors such as employment and the importance of exports might be deployed at MODWG meetings, but that they would not be treated as relevant unless the assessment was that there was no significant enhancement or unless the case was judged to be “borderline”. This evidence correctly, in my opinion, identified the point at which the factors mentioned could properly become relevant in the MODWG deliberations. Mr Hextall, the first deputy Chairman of the MODWG, said that “the WG’s remit encompassed the consideration of each application, both AWP and EL, under the “’normal’ criteria .... and the specific aspects of the Guidelines.” *117 He said also that “the role of DESS was to co-ordinate the activities of the WG, to ensure that members were kept informed of political developments .... and to encourage discussion about the relative merits of each application ....”

D1.108 Lieut-Colonel Glazebrook described the function of the MODWG as entailing:

“(1) vetting each application under the normal security rules that applied to defence exports from the UK.
(2) And then categorising it under the terms of the Guidelines into one of the following categories:
(a) Approve - provides no enhancement (A Nil)
(b) Approve - insignificant enhancement (A I)
(c) Refuse -on security grounds (R Sy)
(d) Refuse - on prolongation grounds (R Pr)
(e) Refuse - on enhancement grounds (R Enh)” *118

D1.109 Mr Sandars described the role of the MODWG as being “to prepare a military assessment of equipment against the new Guidelines taking into account such factors as the use to which the equipment was likely to be put, the state of technology involved, the quantities to be exported and the existing holdings of the purchasing country.” *119

D1.110 It is difficult to see how factors such as employment and export prospects could be brought into play for the MODWG function described either by Lieut-Colonel Glazebrook or by Mr Sandars.

D1.111 As I have said above, *120 an ELA or AWP application for equipment which did not fall foul of the Guidelines might nevertheless, be refused for security or operational reasons. When Lieut-Colonel Glazebrook described in written evidence the function of the MODWG, he referred to the “normal security rules” to be applied to defence exports from the UK. *121 He went on to list “security” as a ground for refusal of an ELA or an application for AWP clearance. It was for that reason that the annotation “R(Sy)” featured in the ELA and AWP lists. The “normal security rules” to which Lieut-Colonel Glazebrook was referring were the procedures whereby the security classification of the goods to be exported was compared with the security rating of the country to which the goods were going, in order to enable a decision on the ELA or AWP application to be made. *122 Security classifications were dictated by the RMIPC in order to protect the military or technological information that would be released to other countries as a consequence of the supply or promotion to those countries of equipment from the United Kingdom. *123 The RMIPC assessed the maximum level of release of “classified information and equipment to individual countries which [could] be approved at certain delegated levels.” *124 However it was always possible for an ELA or AWP application to be refused on security grounds independent of the RMIPC arrangements. Decisions approving the release of classified information could be taken where the political, economic, military or commercial advantages of the promotion or supply of the equipment in question outweighed the security risks. *125 But the decision to approve the release of information above the prescribed maximum levels would have to be taken by the RMIPC or a Minister. *126 Mr Sandars produced a defence sales internal instruction dated 31 December 1984 setting out the procedure within MOD for obtaining clearance for, inter alia, the release of classified information. He said in the instruction that:

“the security classifications given [by the RMIPC] are not to be taken as in themselves giving any sort of clearance to the release of information even within the limits stated. Even the release of unclassified equipment and information can effect a serious transfer of technology to unfriendly powers where the West enjoys a technological lead over the Soviet Bloc and China.” *127

D1.112 The evidence to the Inquiry from the MOD suggests that, although the “normal security rules” might not require the refusal of an application, nonetheless the MODWG could recommend refusal on security grounds. *128 Other reasons in addition to those considered by the RMIPC would therefore have to be present for refusal on security grounds. These other reasons would usually include operational or technology transfer concerns. Although operational and technology transfer concerns were acknowledged by the MODWG as general criteria to be applied in determining ELA and AWP applications *129 refusal on these grounds would still be signified by “R(Sy)”. It is not possible always to know what precise grounds lie behind an “R(Sy)” refusal.

D1.113 An example of an AWP application being refused on “security” grounds is the refusal of an application by Plessey Naval Systems in respect of an Infra-red Surveillance System. At an MODWG meeting on 7 February 1990 Lieut-Colonel Glazebrook undertook to expand on the reasons why the MODWG recommended refusal of the AWP application on “security” grounds. On the same date he sent a memorandum to Mr Barrett which said:

“The title [Infra-red Surveillance System] is misleading, this is a thermal imaging system. Thermal imaging is an outstanding example of an area where the west has an operational advantage over both the communist bloc and Terrorists. .... [it is estimated] that it will be at least four to five years before the USSR have a system in service. Since 1984 the UK (and COCOM) have maintained a very close control on the overseas sale of thermal imaging equipment by means of a set of ‘rules’ approved by Ministers. Under these rules IRAQ is graded Category IV (no promotion or supply). Sale of this equipment to IRAQ would erode the advantage which NATO enjoys and thus would be regarded as SERIOUS injury to the interests of the Nation.”

In the final paragraph of the memorandum Lieut-Colonel Glazebrook wrote:

“5. For DESS2 We regard [the] application to be very sensitive indeed and if it were to be decided by Minister (DP) that the MODWG had to be overruled, then we would regard the operational and security consequences to be so serious that [this case] would have to be reported to Minister (AF) ....” *130

D1.114 The set of “rules” to which Lieut-Colonel Glazebrook was referring were the rules intended to control the export of thermal imaging equipment. *131 These rules were, in effect, little more than the security and operational grounds for refusal of an export. It is readily understandable that, where equipment was of an especially sensitive and advanced nature, the Government might wish to restrict the access of certain countries to sophisticated technology. Lieut-Colonel Glazebrook’s explanation that the sale of the equipment to Iraq would “erode the advantage which NATO enjoys and thus would be regarded as [a] SERIOUS injury to the interests of the Nation” was in effect an indirect reference to the Government’s criteria for the classification “Secret”. *132 The case for refusing the release of sensitive information would, obviously, have added force if there were also operational reasons for refusal flowing from a potential threat to the armed forces of the UK or its allies.

D1.115 An interesting feature of the application of rules based on security and operational grounds, whether general or specific, to control the supply or promotion of equipment in order to prevent highly sensitive information being acquired by undesirable countries, is that the Government may have no proprietary interest in the information in question. Where the Government has a contractual interest in the development of sensitive equipment, it may have a contractual power to prevent the release of the information. Similarly, there may be cases in which it is necessary for the Government to prevent exports in order to avoid an identifiable threat to British or allied armed forces or for some other national security reason. Whether, however, it is appropriate for Government to have the power to interfere with the right of exporters to supply equipment developed solely by them where the Government has no proprietary interest and where no overriding national interests are at stake is a matter which deserves some public debate.

Endnotes
*114 - see Mr McDonald’s written statement dated 1 October 1993 p.10

*115 - see the written statement dated 1 November 1993 p.2 of Mr J Hextall, deputy Chairman of the MODWG when it was first set up. See also the written statement of Mr Barrett dated 27 October 1993 p. 6

*116 - at the first two MODWG meetings, on 13 and 17 December 1984, no DIS officer was invited to attend. A request for DIS representation at MODWG meetings was made by the head of DIS to the head of DS13, Mr Dawson (who had succeeded Mr Sandars). See MOD/8.1.33

*117 - see Mr Hextall’s written statement dated 1 November 1993 p.3. He described the “normal” criteria as “operational, strategic, security, foreign policy and other national concerns and treaty obligations” (p.A-1). He did not regard factors such as employment and the importance of exports as coming into play except in “marginal cases in the context of the guidelines.”

*118 - the use of these abbreviations followed the recommendation in paragraph 2 of a letter dated 14 February 1985 to Mr Lavender (Sec (D Sales)) from Lieut-Colonel Dickens (D Cts (ROW)): MOD/8.1.129

*119 - see Mr Sandars’ written statement dated 23 April 1993 p.6

*120 - see paragraph D1.107 supra

*121 - Lieut-Colonel Glazebrook’s written evidence dated 29 April 1993, paragraph 2(e)

*122 - Ibid. paragraph 5b

*123 - see paragraph C2.34 supra

*124 - MOD/34. The “delegated levels” related to the maximum level of release of information that a particular MOD individual or body such as the MODWG could approve on its own authority. If it proved impossible for an agreed view to be reached at the “delegated level” then the RMIPC would make the decision - MOD/138, paragraph 9. See also paragraph C2.34 supra

*125 - MOD/34

*126 - MOD/1488

*127 - MOD/275A

*128 - MOD/34

*129 - See Mr Sandars written statement dated 23 April 1993, pp. 9 - 10

*130 - MOD/31.2.49-51

*131 - see paragraph D2.202 infra

*132 - A “Secret”classification is applied to information and material “the unauthorised disclosure of which would cause serious injury to the interests of the nation”

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