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 Two
Section D Arms and Defence-Related Exports to Iraq
Chapter 6 Specific Export Licence Applications After the Cease-Fire

Excerpt:
(IX) THERMAL IMAGERS AND NIGHT VISION EQUIPMENT

United Scientific Holdings Plc

D6.290 In a letter dated 24 October 1988 *554 United Scientific Holdings Plc asked the relevant desk in the Regional Marketing branch of MOD/DESO for confirmation that there were no objections to their exporting equipment which included Night Vision Equipment for exhibition at the Baghdad International Arms Exhibition. The full list of equipment was attached to an AWP application submitted at the same time.

D6.291 On 23 November 1988 Lieut Colonel Glazebrook wrote a memorandum to Mr Hextall (DESS2a) *555 stating his view of the application, namely, that the export of some of the Night Vision Equipment should be refused on security grounds but that other Night Vision Equipment, although in the ‘LETHAL’ category, could be recommended for “promotion now, but no supply before the end of hostilities”. In respect of the non-lethal 1st or 2nd generation Night Vision Equipment included on the list he recommended that export be allowed, any enhancement being insignificant. This recommendation was consistent both with the Howe Guidelines and with the special security criteria that applied to image intensifiers. *556 Actual supply in the future would be subject to the grant of an export licence on the basis of whatever regulations and criteria might apply at the time of the export licence application.

D6.292 On 26 January 1989 Mr Barrett wrote a minute to APS/Minister (DP) *557 reporting on an IDC meeting on 18 January and asking for Minister (DP)’s approval of the recommendations of the IDC. Mr Barrett drew the Minister’s attention, in particular, to the application by United Scientific Holdings Plc as follows:

“....g. Annex D1 Iraq. United Scientific plc have sought AWP clearance to participate with their full product range (some fifty items) at the Baghdad military production exhibition in March. This is an international exhibition and will provide a shop-window for Iraq and other Middle East countries. We do not therefore imply any willingness to agree supply of any item to any country attending, but because exhibited equipment has been “lost” in the past, we must treat any item going to the exhibition as being supplied to Iraq, and must therefore use the guidelines. On this basis, 13 items should be refused on security grounds. The remainder are regarded as either insignificant and could be supplied now, or would be significant but could be promoted now with no supply before formal cessation of hostilities. It is recommended that Minister (DP) agrees in principle to all but the 13 being exhibited, subject to export licences being obtained.”

D6.293 In a minute dated 2 February 1989 *558 to Mr Barrett from APS/Minister (DP) it was recorded that Lord Trefgarne had discussed the minute dated 26 January with Mr Barrett and Mr McDonald and that Lord Trefgarne had made the point that he “was content with the recommendation that United Scientific Holdings Plc should be granted clearance in principle for all but 13 of the requested items being exhibited at the Baghdad Military production exhibition in March, subject to export licences being obtained”. It was recorded also that “Lord Trefgarne however wished it to be made quite clear to USH that these licences were solely for the purpose of the exhibition and the equipment must come back to UK....” *559 Lord Trefgarne later agreed that companies ‘should be allowed, in principle, to exhibit equipment, subject to the granting of the relevant export licences, which both the [IDC] and subsequently Ministers would have to approve on a case by case basis’. *560

D6.294 In a minute dated 21 March 1989 from Mr Barrett to APS/Minister *561 headed “Iraq: Baghdad International Exhibition for Military Production 28 April to 2 May” Mr Barrett drew the Minister(DP)’s attention to the application by United Scientific Holdings for approval to participate in the Exhibition with their full product range. The company had submitted a fresh list and the MODWG recommended that “with the exception of 19 items refused on security grounds, their application to exhibit is approved”. The minute was copied to the members of the IDC. On 22 March Lord Trefgarne approved the recommendation. *562

Vinten Military Systems and Ferranti International

D6.295 On 16 October 1989 the IDC considered an AWP application by Vinten Military Systems for the export to Iraq for promotion of their “Vicon90 forward looking infra-red (FLIR) pod..... with a view to keeping a foot in the door against possible future requirements of the Iraqi Air Force to equip their Mig 21 and PR7 aircraft with FLIR” *563 and an application by Ferranti for “preliminary clearance to supply line scan thermal imager scanner modules to Belgium for incorporation into an observation system to be supplied in quantity to Iraq for fitment into ‘tracked military vehicles’.” *564

D6.296 In respect of the Vinten application the MODWG view was stated to be that:

“the supply of this equipment to Iraq would, by providing a day and night surveillance and reconnaissance capability, be of direct and significant assistance to the Iraqi Air Force to carry out offensive operations in breach of the ceasefire. Moreover, there was a high risk of compromise of the technology to the Warsaw Pact if promoted or supplied to Iraq...”

and

“since there was, in their view, no prospect of agreeing to supply to Iraq within a reasonable timescale the MODWG and IDC recommended that promotion should not be approved.”

In respect of the Ferranti application the MODWG view was that:

“The supply of these modules [would be] a major enhancement for the Iraqi Army, giving them a night operations capability, which would be of direct and significant assistance in the conduct of offensive operations in breach of the ceasefire. The risk of compromise of the thermal imager technology was also assessed as high”

and again

“The MODWG and IDC therefore agreed to recommend refusal.”

The use of the language of revised guideline (iii) is to be noted.

D6.297 In a minute dated 19 October 1989 to APS/Minister DP Mr Barrett drew the Minister’s attention to the applications and asked for his endorsement of the recommendations. *565 On 25 October 1989 Mr Clark’s APS wrote to Mr Barrett and said that Mr Clark was content with the recommendations of the IDC which were outlined in Mr Barrett’s 16 October minute. *566 It is clear that both these applications were considered by reference to both the Howe Guidelines (as revised) and the special criteria on security grounds relating to Image Intensifiers.

D6.298 On 13 December 1989 the IDC considered an application by Ferranti for the export to Iraq of scanner modules and on 11 January 1990 Mr Barrett wrote a minute to APS/Minister (DP) advising him of the IDC recommendations. He said that Minister (DP) would wish to note particularly, inter alia, the following:

“1A/9560/89 - Iraq

The Ferranti Scanner Modules are part of thermal imaging equipment. These are recommended for refusal on security grounds. ACDS OR (Land) could provide further briefing on this if Mr Clark wishes.” *567

D6.299 Mr Barrett requested the Minister (DP)’s endorsement of the IDC’s recommendations and on 16 January 1990 Mr Clark’s APS wrote to Mr Barrett and said that the Minister (DP) was content to endorse the IDC’s recommendations. *568 The application was refused and the company was advised of the refusal. *569 The refusal was on the basis of the special criteria on security grounds appropriate to Thermal Imagers. *570 Once the equipment had been refused on security grounds there was no need to consider the Howe Guidelines.

GEC Sensors/Plessey Naval Systems

D6.300 In October 1989 GEC Sensors Limited submitted an AWP application to promote and supply a ‘Commercial Grade Infra-red Surveillance System’ to the Commission for Dams in Iraq. The application was considered at the MODWG meeting on 6 December and was refused on security grounds. *571 On 12 December, having been advised of the MODWG’s decision, a representative of GEC Sensors Ltd telexed an appeal to Miss S Greaves of MOD/DESO. *572 The company stated that the ‘V3800 Thermal Imager’ was being offered as part of a joint GEC Sensors/Marconi Underwater Systems venture and that failure to offer complimentary infra-red equipment would prove prejudicial to Marconi’s chance of success. They stated that the V3800 system was the lowest grade of equipment and that they considered the equipment unsuitable for “normal” military use. The MODWG’s refusal of the original AWP application was endorsed at the meeting of the IDC on 13 December 1989. *573

D6.301 On 3 January 1990 Miss Greaves wrote to DESS 2a, *574 to advise that the company had lodged an appeal. She attached a copy of the appeal, together with an AWP application completed by the company on 18 December and the Supplementary MOD Form that she had completed on 21 December. The forms, completed in the new name of ‘ PLESSEY NAVAL SYSTEMS LIMITED’ , described the system simply as an “Intruder Detection System.” *575

D6.302 The appeal was raised at the MODWG meeting on 10 January and the recommendation was that it be refused on security grounds. *576 On 22 January the IDC approved that recommendation. *577

D6.303 On 26 January 1990 Mr Barrett wrote a minute to APS/Minister (DP) in which he recorded the recommendations of the IDC. He drew to the Minister’s attention, inter alia, the application by Plessey and said that:

“....e. Annex B-2, Plessey Naval Systems - Iraq.

Plessey have appealed against an earlier refusal on security grounds of their application to promote and supply an infrared surveillance system to Iraq. The system is based on the [V3800] thermal imager, currently in RN service, which employs MOD’s thermal imaging common modules (TICM 2). The MOD maintained its recommendation to refuse the application on security grounds. The IDC concurred.” *578

The refusal was on security grounds. There was no need to apply the Howe Guidelines.

D6.304 Mr Barrett attached lists of the ELA and AWP applications marked with the MODWG and IDC’s recommendations. The lists attributed a second AWP application to Plessey Naval Systems. The application, related to the promotion and supply of “Swimmer Detection Sonar and fibre optic transducer equipment”. It was also dated 21 December 1989 (the date given for the company’s appeal) and had been marked with the MODWG and IDC recommendations “A(I)” and “A”.

D6.305 On 31 January 1990, Mr Devlin of DESS 2a circulated the lists of applications to be considered at the MODWG meeting on 7 February. *579 The lists included a single AWP application in the name of Plessey Naval Systems, the date of which was given as 29 January 1990 and the goods described as “Intruder Detection System”, for promotion and supply. Lieut- Colonel Glazebrook annotated his copy with the comment “Brochure is Restd [Restricted]. Pend for DOR(Sea) but thermal imaging part is not to be released”. Lieut-Colonel Glazebrook also made a note of actions outstanding at the top of the covering minute. Under the heading “Items from last IDC” he wrote “2. AWP’s a. Plessey IR”.

D6.306 At the MODWG meeting on 7 February 1990 Lieut-Colonel Glazebrook undertook to expand on the reasons why the Working Group refused the AWP application for clearance of the Infrared Surveillance System. On the same date he sent a memorandum to Mr Barrett headed “MODWG on Iran/Iraq - Queries from Minister (DP)” which said:

“INFRARED SURVEILLANCE SYSTEM. The title 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.”

Lieut-Colonel Glazebrook went on to outline the circumstances surrounding two other refusals and in the final paragraph he 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) (D/MIN(AF) JS/2/1/7 dated 22 Dec 86, which, last month, you confirmed was still in force).” *580

This was a reference to a request in a minute dated 22 December 1986 from the APS/Minister (AF) to PS/VCDS [Vice Chief of Defence Staff], which had been copied, inter alia, to PS/Minister (DP) in which the Minister (AF) had set out the extent to which he would like to be involved in the AF aspects of defence sales decisions. The Minister had requested that “Where the operational, logistic, personnel or security consequences of a given sale are likely to be materially adverse... [the Minister] would be grateful if the approval of the US of S(AF) or himself as appropriate could be obtained before clearance of the sale by the AF side of the house is given.” *581 The note was later annotated to the effect that it had been seen by Mr Hextall.

D6.307 On 15 February, Mr Barrett and Wing Commander Morris, the desk officer in the Directorate of Commitments (Rest of World) with responsibility for Iraq, attended a meeting with the Minister (DP) and on 16 February 1990 Mr Clark’s APS wrote to Mr Barrett. *582 He referred to the meeting and recorded that Mr Barrett had:

“2... explained to the Minister that his [Mr Barrett’s] remit was to maximise exports within the constraints of the existing guidelines. Mr Barrett had also noted that there was likely to be a review of these guidelines in the near future.”

and

“3. In the light of these considerations, the Minister asked for matters to be taken forward as follows:

b. Thermal Imagers The Minister was inclined to agree that this application should be denied on national security grounds. Before he makes a final decision, however, he would like to know whether other countries possess similar capabilities.

...

On a general level, Mr Clark was keen that some understanding should be reached with our competitors on the interpretation of possible threats to western interests by the promotion and sale of certain equipment in particular markets. In due course, he would be grateful for advice on how this might be taken forward.”

D6.308 On 28 February Miss Greaves sent a minute to DESS 2a. *583 She referred to the discussion at the 7 February MODWG meeting and to the concern expressed by MODWG members over the inclusion of any thermal imaging equipment in the proposals. She attached a memorandum from the ‘Projects Executive MCM Group’ dated 21 February *584 headed “IRAQ SDS/IDS PROSPECT - DESO INFORMATION” which confirmed that the systems under consideration were the MUSL (Marconi Underwater Systems LTD) ‘360’ and ‘PNS Mirror SDS Sonars’. It also stated that no information or analysis of either above or below water thermal imaging techniques, or related optical concepts, had been provided. The heading ‘SDS/IDS’ (Swimmer Detection Sonar/Intruder Detection System) appears to apply equally to both applications on the AWP list attached to Mr Barrett’s minute of 26 January. Miss Greaves asked that the information be brought to the MODWG’s attention before their next meeting on 7 March.

D6.309 In a minute dated 1 March 1990 *585 Mr Barrett replied to Mr Clark’s request for further information as to the capabilities of other countries:

“b. Thermal Imagers for Iraq. As Minister (DP) will recall from our meeting, the Soviets have not made the progress that we had expected in this area. Also, UK [TICM1 and 2] systems, based on TI technology development at MOD expense, have suffered from serious delays in the UK production programme and planned ISDs have therefore been delayed. The MOD can therefore keep TICM1 and 2 systems in service longer than expected and save money on updating or replacing the systems. We therefore need to continue to protect the technology.

Only the USA produces comparable TI systems, but these are based on different technology. The French produce a relatively primitive system. The Belgians manufacture TI sights for an AFV under licence from MOD but with strict control over third party sales.”

Apart from the reference to the guidelines in the minute of 16 February there is no indication that the application was considered by reference to the Howe Guidelines. There was no need to do so as the objection to the application was on security grounds.

D6.310 On 2 March Mr Devlin, DESS2a circulated the 21 February memorandum from Plessey Naval Systems to the MODWG members. On 6 March 1990 APS/Minister (DP) wrote to Mr Barrett that

“...2. Mr Clark is... persuaded by your argument against the promotion and supply of thermal imagers to Iraq by Plessey.” *586

Mr Barrett passed the letter through Mr Hextall to Mr Devlin. Mr Hextall annotated the letter to the effect that Mr Devlin already had action in hand to notify Plessey of the refusal.

D6.311 The MODWG next met on 8 March. The appropriate entry on the AWP list was marked with the MODWG’s recommendation A(I) and the qualifying remark “Underwater System only approved on basis of Plessey letter 21/2/90”. *587

Endnotes:

*554 - MOD/24.1.115

*555 - MOD/24.1.123

*556 - see paragraph D2.202 supra

*557 - MOD/24.1.193

*558 - MOD/24.1.295-7, and see D6.36 supra

*559 - see also paragraph D3.169 supra

*560 - MOD/24.2.91, MOD/24.2.95 and MOD/24.2.133, see paragraphs D3.171 and D6.36 supra

*561 - MOD/24.2.133-135

*562 - MOD/24.2.157

*563 - MOD/30.2.169 at 171

*564 - MOD/30.2.169 at 171 and 173

*565 - MOD/30.2.169 at 171 and 173

*566 - MOD/30.2.205

*567 - MOD/31.1.331-333

*568 - MOD/31.1.367

*569 - DTI/843.9

*570 - see paragraphs D2.200 to D2.205 supra

*571 - MOD/31.1.55 at 71

*572 - MOD/31.1.301 at 303

*573 - MOD/31.1.331 at 341

*574 - MOD/31.1.301

*575 - MOD/31.1.301 at 307

*576 - MOD/31.1.227 at 241

*577 - MOD/31.1.371 at 381

*578 - MOD/31.1.371-3

*579 - MOD/31.2.7

*580 - MOD/31.2.49-51; see also paragraph D1.113 and D1.114 supra

*581 - MOD/78.177

*582 - MOD/31.2.113-115; see also paragraph D6.354 infra

*583 - MOD/31.2.211

*584 - MOD/31.2.213

*585 - MOD/31.2.203-205

*586 - MOD/31.2.215

*587 - MOD/31.2.219 at 249

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