Comments on Consultation Paper on the Intra-Community Circulation of Products for the Defence of Member States

European Network Against Arms Trade, March 2006 -- This paper by the Directorate General Enterprises and Industry of the European Commission proposes a specific legislative instrument for defence markets, thereby paving the way for EU Member States to come to an agreement to weaken, or even abolish, the principle of prior authorisation with regard to the circulation of all defence-related products within the European Union.

With this it builds further on the precedent of the Farnborough Framework Agreement, in which the defence ministers of six EU Member States committed themselves to applying simplified export procedures to transfers of defence-related equipment between them. The paper focuses mainly on two aspects of the export of defence-related products: business interests and guarantees for the protection of the national security of EU Member States. We think it is worrisome that the EU Code of Conduct is hardly mentioned in the paper at all. From the viewpoint of adherence to this Code of Conduct we call your attention to the risk of re-exporting, the risks of company certification and the negative effects on transparency that the proposal in this paper will cause.

Re-exporting
One of our main concerns regarding the proposal in the paper is the risk of re-exporting defence-related products to countries outside the EU. Although it is said in the paper that, if it is considered necessary, "each Member State should [therefore] explicitly authorise any export to any third country of any product freely transferred within the Community", in practice this will not work. It has to be expected that most countries will leave the decision to the country that the products are exported to within the EU. Given the demonstrated reluctance of governments to voice disagreement with the export policies of other countries regarding weapon systems that include components coming from their countries, it is hardly imaginable that they are willing to interfere with such export policies when authorisation policies within the EU are weakened or abolished. For exactly the same reasons a safeguard clause which would allow a Member State to temporarily interrupt transfers to another Member State would be unlikely to be invoked. With this in mind, there is of course a severe risk that companies will use the Member State(s) with the least strict export policies to export their products to countries outside the EU. Given the diverging implementations of the EU Code of Conduct this will easily reduce the EU arms export policies to a lowest common denominator and undermine the sovereignty of individual countries to use stricter export policies. Assigning a reference number to each transfer of defence-related products, as is proposed in the paper, might strengthen the possibilities to trace these products. However the remark that declaring the final destination of the product shouldn't be required before such a number should be assigned,, makes these reference numbers a mere palliative, which in no way meets the above mentioned objections.

Certification
Certifying companies to trade in defence-related products at Community level without prior authorisation of individual transfers carries within itself the presumption that companies will restrict themselves. In our opinion this will only lead to business interests prevailing over the strict observation of the EU Code of Conduct, furthering the risks mentioned in the paragraph about re-exporting. Government controls leading to individual export licences are the only means to guarantee acceptable transfers of defence-related products, even within the EU. Especially the advised recognition of certifications of companies established in other Member States leaves hardly any room for Member States to create their own (stricter) policies.

Transparency
Although the paper mentions 'transparency' several times as one of the objectives of the proposal, it is more likely that transparency from the viewpoint of parliamentary and civil society controls will severely decrease. Especially when components go from one country to another it is hardly possible for the country of origin to keep track of what happens with the end-use of weapon systems that incorporate these components. Without licenses parliamentary control will loose much of its significance, as it can't be expected that MPs, or even NGOs, will be able keep track of what is the final destination of defence-related products which are originally from their country. It doesn't even become clear if there will be a record of transports of defence-related equipment within the EU at all, especially for exports by companies with special certifications. Moreover it will become increasingly unclear for parliaments and NGOs whom they can hold responsible for questionable exports: their own government or the government of the country that grants permission for the export to a country outside the EU, which they can't even directly address.

In the consultation paper defence related-products are regarded to be just another product, for which the principle of free movement of goods and services and commercial policy should be applied. This idea doesn't do justice to the incomparable characteristics of defence equipment, in that the consequences of its use are deadly and destructive. Accordingly, unwanted exports should be prevented. The best guarantee for this is a transparent, verifiable and strict export policy of each EU Member State, so that each state can be held responsible for the export of its own defence-related products. Therefore we urge the European Commission to uphold the right of Member States to maintain export authorisation and controls for the transfer of defence-related products within the EU.