Summary

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 2 Applications of The Guidelines in the period
December 1984 to August 1988

D2.427 If the history of exports to Iraq in the period from the formulation of the Guidelines to the ceasefire in August 1988 is looked at in the round, it is fair, in my opinion, to conclude that Government policy as publicly announced in the various statements to which I have referred was broadly consistent with policy as actually applied. The MODWG and the IDC, throughout the period under review, conscientiously endeavoured to apply the Guidelines to the AWP applications and ELAs that came up for consideration and to make recommendations to Ministers accordingly. FCO and MOD Ministers’ decisions were, broadly, consistent with the Guidelines. There are, however, three areas of concern to which I should draw attention.

D2.428 (i) It is clear that, so far as policy publicly announced was concerned, the equipment subject to the Guidelines was not confined to defence equipment in a narrow sense, but included all “defence-related” equipment. Defence-related equipment would, in my opinion, normally be taken to include all dual-use equipment save for equipment which was earmarked for a non defence-related use. Dual-use equipment whose intended use, whether for civil or military purposes, was uncertain, ought to have been treated as subject to the Guidelines. This approach would have been consistent with the many references to “rigorous scrutiny”, “strict controls”, and the like, and to the use of prohibitory language such as “we prohibit the sale of any defence- related equipment that could significantly enhance ...” etc. But this was not an approach that the DTI accepted. The DTI did not regard dual-use equipment as being subject to the Guidelines. This DTI approach, and the practice, pre-November 1987, under which a variety of ELAs relating to Industrial List dual-use goods, and in particular ELAs relating to machine tools, were not circulated to the MOD, was not, in my opinion, in accordance with Government policy as announced. The goods comprised in these ELAs were all capable of being used for military purposes and some of them were in fact used for military purposes. Whether their export to Iraq could have significantly enhanced Iraq’s military capability was not assessed by the MODWG or considered by the IDC. These ELAs were not subjected to the “rigorous scrutiny” claimed by Ministers.

D2.429 (ii) The “defence allocation” that was made available to Iraq out of successive Financial Protocols in order to facilitate the purchase by Iraq of defence-related equipment was not, in my opinion, consistent with the Government policy of strict impartiality or even- handedness towards the combatants in the Iran/Iraq war. The embargo on the supply of equipment to the Iranian Navy or to the IRGC, an embargo which had no counterpart so far as Iraq was concerned, was also, in my view, inconsistent with the claims of ‘strict impartiality’. Recognition that this was so is implicit in the doubts on the policy of impartiality cast by the comments in the Summary Record of the IDC meeting held on 14 March 1989. *622

D2.430 (iii) A narrow point is that the decision to allow the 1987 machine tool licences to stand and the machine tools covered by those licences to be exported to Iraqi munitions factories was not consistent with Government policy. I accept that, so far as Ministers (and departmental officials) were concerned, fear of placing the informant in physical danger and of revealing information about the workings of the intelligence agencies, would have barred any public explanation of the decision to allow the machine tools to be exported. Nonetheless, the fact of that decision made it thereafter inaccurate to say that no defence-related equipment that might significantly enhance etc. had been exported, or licensed for export, to Iraq.

D2.431 There are, in addition, a few other matters arising out of Ministerial public statements in the period up to the ceasefire to which I should refer.

D2.432 First, the use by Ministers of commercial confidence as a means of avoiding the giving of information about exports deserves some comment. On a number of occasions Ministers used a formula on these lines: “It has been the consistent policy of this and previous Administrations not to reveal details of specific defence exports to other countries.” *623 The formula was used, for example, by Mr Archie Hamilton on 1 December 1986 in answering a PQ from Mr O’Neill MP asking (inter alia) for a list of defence equipment supplied to Iran since 1979. It was the basis of a draft answer prepared by MOD officials for an answer to a PQ by Mr Dafydd Thomas MP on 23 July 1987 asking “what was the total value of non-lethal defence equipment sold by the United Kingdom to Iran and Iraq in each year since the outbreak of the war between these two countries”. *624 In a letter dated 21 January 1987 *625 to the Prime Minister, Mrs Thatcher, Mr David Steel referred to the Government’s “claims that all equipment sold to Iran by British exporters is non-lethal” and asked that a list of arms-related exports to Iran for which licences had been granted in the previous two years be placed in the House of Commons library. The purpose of the request was “so that Members can judge the observance of the policy for themselves”. In a letter, also dated 21 January, to the FCO, Sir Charles Powell suggested that “a list of all defence equipment sold to Iran in the past two years” be placed in the library. *626 Mr Young, FCO/MED, prepared a draft reply to Mr Steel and put up a submission dated 26 January 1987 to the Deputy Under Secretary of State. In the submission Mr Young recommended against approval of the request for a list of equipment licensed for export. He gave, in paragraph 3 of the submission, three grounds, namely, “(i) This Government, in common with previous governments, maintain commercial confidentiality by not disclosing details of individual export licence applications. (ii) To publish a list would expose the Government to further pressure both at home and abroad (eg the Iraqi government). (iii) Such a list could be misleading, since even when export licences are granted, goods are not necessarily exported ...”. He added that MOD and DTI concurred in his recommendation. 627 The submission went on to say, in paragraph 4: “The information could be published in aggregated form, according to the category of equipment supplied and the total value of each category. I recommend against divulging the information even in this form, as it would not satisfy Mr Steel or other interested parties, would probably prolong the correspondence, and lead to requests for information on individual export licences that the Government would not be prepared to provide”.

D2.433 Mr Young’s recommendations were accepted and the Prime Minister’s letter in reply to Mr Steel, dated 29 January 1987, dealt with the issue by saying: “Nor is it the normal practice of government to give details of individual export licences or applications, principally for reasons of commercial confidentiality.” 628 628 see FCO/2.2.161 - 162

D2.434 The grounds (i) and (iii) given by Mr Young as reasons for rejecting Mr Steel’s request for a list were, in my opinion, insubstantial. As to ground (i), Mr Steel had not asked for details of export licences or ELAs. He had asked for a list of exports of arms-related material so as to enable Government claims that the equipment exported did not include lethal equipment to be confirmed. Details, whether of numbers of items or of prices or of dates of delivery, had not been sought and need not have been given. As to ground (iii), it would have been simple to have added at the foot of the list a warning that the grant of an export licence did not necessarily imply that the goods in question had been exported. It is, in my opinion, an impelling inference that the substantial reason of those given by Mr Young was ground (ii). It may very well have been correct that the publication of the list would have exposed the Government to domestic criticism, as well, perhaps, as criticism from Iraq and from Washington. But the avoidance of domestic criticism is, in my opinion, an unacceptable reason for withholding from Parliament information about the activities of Government. On the other hand, the possibility of adverse reactions from foreign countries, with repercussions damaging to British trade and political interests, is a matter that Government would be expected to take into account. But it is a striking feature of Mr Young’s submission that no specific reference was made to the public interest in Parliament being fully informed. Mr Young has told the Inquiry that he did not consider it necessary to “spell out” the obligation to inform Parliament in each submission because it was an “important, continuous factor in our work.” *629 Whilst there is some force in this point, I consider that specific reference should have been made to the obligation in this particular submission since Mr Young was recommending that Mr Steel should not be provided with the information that he had requested. And the reasons given in paragraph 4 for refusing to supply a list “in aggregated form” - which would, in my view, have adequately met Mr Steel’s request - seem to be nothing more than reasons of convenience. In my opinion, Mr Young’s recommendation ought not to have been accepted. Sir Charles Powell’s suggestion in the contrary sense in his letter of 21 January 1987 was consistent with the generally accepted obligation on Ministers, when faced with requests from Members of Parliament for information about the activities of government, to be as forthcoming as possible with the information requested except where important national interests require the information to be withheld. The failure of Ministers to give substantive replies to such PQ’s as those asked by Mr O’Neill and Mr Dafydd Thomas and to such requests for information as had been made by Mr Steel was not, in my opinion, consistent with that obligation.

D2.435 Second, although the public statements of Ministers regarding British exports to Iraq were, broadly, consistent with the manner in which applications for licences to export goods to Iraq were dealt with, a serious question arises regarding exports to Iraq via other diversionary countries. The manner in which applications for licences to export to these diversionary countries were dealt with is an important topic that I must deal with at some length later. It suffices for the moment to say that arms, ammunition and defence equipment exported from the UK may well have reached Iraq via other Middle East countries and that the MODWG and IDC procedures instituted to deal with applications for licences to export to Iraq (or Iran) were not designed to deal with, and did not deal with, the problem posed by the diversionary routes.

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