Trade etc. in Dual-Use Items and Firearms etc. (Amendment) (EU Exit) (No. 2) Regulations 2019

Motion to Approve

Moved by

That the Regulations laid before the House on 4 April be approved.

My Lords, I am pleased to be able to open this debate on these regulations, which are made in exercise of the powers conferred by Section 8(1) of the European Union (Withdrawal) Act 2018, and correct errors in an earlier instrument— the Trade etc. in Dual-Use Items and Firearms etc. (Amendment) (EU Exit) Regulations 2019. They are an important part of our preparation for a no-deal EU exit.

The earlier regulations had been debated and approved by both Houses. They amend two retained EU regulations. The first is the dual-use regulation. This controls the export, transfer, brokering and transit of dual-use items. Dual-use items can be goods, software, technology, documents or diagrams that can be used for both civil and military applications. The second is the firearms regulation. This lays down rules on exporting, importing and transporting of firearms and their parts, components and ammunition. These are not military firearms, but the kind used by hunters and sports shooters.

The error—I must apologise for this—was the removal of annexe IV of the dual-use regulation. Annexe IV establishes authorisation requirements for certain intra-Community transfers. It was deleted because in a no-deal scenario, the UK will not be party to intra-Community transfers. However, annexe IIg of the dual- use regulation relies on the list of goods in annexe IV. This list includes various stealth technologies, crypto- graphic equipment, missile technologies, detonators and chemical weapons, so annexe IV needs to be retained, even if we have no use for authorisation requirements for certain intra-Community transfers.

These regulations were made on 4 April 2019 using the urgent procedure because of the importance of ensuring that annexe IV was reinstated for a no-deal exit, when exit day was anticipated as 12 April 2019. It had initially been prepared prior to 29 March 2019. Without reinstating annexe IV, existing European Union law would not be effective in UK domestic law on the day we exit the European Union.

Let me be clear: the error has not caused any harm given that the regulations were due to take effect only in a no-deal scenario. I know that it should not have occurred in the first place, but we spotted it in good time and are taking the necessary steps to rectify it.

In correcting this, we have also taken the opportunity to make other minor changes. When this House debated the original regulations, my noble friend acknowledged that the Joint Committee on Statutory Instruments had reported the instrument for defective drafting in three respects. My noble friend said that we would correct these errors and we are now doing so. I am grateful to the Joint Committee for pointing out these issues, which we have taken the opportunity to correct.

By making these regulations, the Department for International Trade will have completed the legislative part of controlling the export of strategic goods in preparation for no deal. If these regulations are no longer required on exit day, we expect to revoke or amend them. Alternatively, commencement could be deferred to the end of the implementation period.

My Lords, there may be a slight feeling of “mea culpa Wednesday” when people read through today’s proceedings in Hansard. However, we are grateful to the noble Earl for picking up this issue at the first opportunity since his noble friend Lady Fairhead stepped down. She sent me a very kind email yesterday, indicating that she was stepping down. I wish to put on record how much all of us across the House enjoyed working with her on the Trade Bill and on these issues of international trade. I hope that the noble Earl can forward those remarks to her.

This issue is necessary, and there will be no opposition from these Benches to what the noble Earl has indicated. We are very grateful to him for clearly outlining the actions taken by the Government in correcting the errors in the original drafting and in ensuring that there is no gap in the annexe that he outlined would need correcting. However, in terms of preparedness, this continues to damage our reputation for good governance. There was the botched deadline of 29 March; it was known that defective legislation would be on the statute book and that further legislation would have to be put forward to correct it, which this does; advice to businesses was published and then withdrawn; and, to some extent, continuing concerns on operability were not addressed.

Given that this issue impacts on defence and security industries, and is linked to organised crime and non-state actors, as well as human rights and our adherence to international obligations, while it is reassuring that there would be no gap because we have not yet left the European Union—and will not do so without any agreement —there are people who will look for any gap in any legislative coverage, including those within who do not have the best interests of our country at heart. Therefore, the prospect that there could have been gaps is quite alarming. In the other place, the Minister, Graham Stuart, said when he moved this measure that any gap in competent legislation would put us in breach of international obligations. I accept the seriousness with which the noble Earl has brought this forward.

My Lords, like the noble Lord, Lord Purvis of Tweed, I put on record our thanks to the noble Baroness, Lady Fairhead, for her work and for the excellence of her contributions during her time as Trade Minister. We are sorry to see her go but obviously delighted to see such a wonderful substitute in her place before us, beautifully adorned as the noble Earl is with the White Rose of York. I see nothing in that; I simply make that comment in case it would not be picked up in Hansard.

In his contribution, the noble Earl made it clear that he offered his apologies on behalf of the Government for the mistakes made in the original drafting and took full responsibility for them. What we are left with is the Government taking the opportunity to pick up drafting errors drawn to the attention of your Lordships’ House by the Joint Committee on Statutory Instruments. These have been worked into the draft before us and resolve the problem referred to by the noble Earl and the noble Lord, Lord Purvis. I have very little to add to that. We covered the original drafting in some detail but did not pick up the mistake, which is one of those things. I do not think there are any further issues to raise. The points largely concerned how this fitted into the overall scheme for the control of goods which could be used by others to whom they are sold for suppressing civil rights, et cetera, in other countries. We are clear that that is happening.

There was one thing I meant to ask at that time. I am sure the noble Earl does not want me to go on to this but I offer it to him as a question to which we may need an answer in some sense. The change on page 2 of the statutory instrument to Regulation 3(22)(h)(ii) is a substitution. The change made is,

“for ‘either non-EU Member States or Wassenaar’ substitute ‘non-Wassenaar’”.

My Lords, I thank both noble Lords for their contributions on these regulations. I also thank them in particular for their kind words about my noble friend Lady Fairhead. I will pass on their comments and make sure she is aware of them.

The noble Lord, Lord Purvis, raised two points, one of which relates to the Charter of Fundamental Rights. Section 5 of the EU withdrawal Act specifically provides that the charter will not form part of UK law on or after exit day. However, we will continue to assess export licence applications against a robust framework, and we will not grant a licence if there is a clear risk that the items might be used for internal repression. I will look further at the question he posed on this issue and if I can add anything more to this, I will write to him. The noble Lord also mentioned the dual use co-ordination group. In particular, he said that technology moves fast and he is quite right. As far as the group is concerned, I recognise the importance of continued co-operation with the European Union. This is of course a matter for negotiation in the future relationship but we hope very much that we will maintain a close co-operation with the EU and individual member states. This would of course cover such items as the group that he mentioned.

The noble Lord, Lord Stevenson, mentioned a number of double negatives and the Wassenaar arrangement. I had a look at that arrangement when I first saw the regulations, as I thought it would be a good idea to have a little knowledge about this. What I can tell him, which I know will be followed up by what I cannot, is that there are 42 countries in the Wassenaar arrangement and that many are former Comecon countries. I will have to write to him on the details relating to the double negatives and the actual meaning of where we are going on it because, as he said, it is important to get a bit of clarity on this issue.

Motion agreed.