Sanctions, ownership and related issues

Sanctions and Export Control Update: High Court reviews legality of UK arms exports to Saudi Arabia: Q&A

Published on 23rd Feb 2017

On 7, 8 and 10 February 2017 the High Court heard a judicial review into the UK government’s decision to continue to issue licences for the export of strategic military items to Saudi Arabia. 

The judicial review could have wide implications for on-going trading relationships between UK defence businesses and end-destinations where concerns about internal repression and other human rights violations have been raised.  

The timing is particularly sensitive for the UK government.  An unfavourable judgement could influence its approach to both using the defence industry to strengthen the UK economy pre-Brexit, and securing ambitious free trade relationships across the world post-Brexit – a guiding principle of its Brexit negotiation strategy.

Faced with these challenges it is highly likely that the UK government would look for a quick solution in the event of an unfavourable decision – for example, by updating the Consolidated Criteria (explained below) to grant itself greater discretion when assessing licence applications to minimise disruption to UK-Saudi Arabia trading relationships.

Why are UK arms exports controlled?

UK export control laws (primarily the Export Control Act 2002 and orders made under it) limit the transfer of strategically controlled military items (and related technology) identified on the UK Military List from the UK to certain end-destinations, end-users and for certain end-uses.

This is principally due to reasons of national security, foreign policy, non-proliferation (e.g. of missile delivery systems) and concerns about internal repression and other human rights violations.

How does the UK government control arms exports?

Export control licences are the primary tool for controlling items on the UK Military List.  The export control organisation, which is part of the Department for International Trade (DFIT), has primary responsibility for controlling and, where applicable, making final decisions about specific applications for, those licences.

How are arms licensing decisions made?

As part of the decision-making process the DFIT will:

  • consult with the Foreign and Commonwealth Office, the Ministry of Defence and the Department for International Development; and
  • consider the application on a case-by-case basis against the Consolidated EU and National Arms Export Licensing Criteria (available here), (the “Consolidated Criteria“).  This includes, for example, an assessment of whether:
    • the exports contravene the UK’s international obligations and commitments;
    • there is a “clear risk” that the items might be used:
      • in the commission of a serious violation of humanitarian law (“Criterion 2(c)”); and/or
      • to provoke or prolong armed conflicts or aggravate existing tensions in the destination country.

What are the key issues before the High Court?

The Campaign Against the Arms Trade is the claimant responsible for bringing the judicial review.   It has claimed that in granting (and continuing to grant) licences for the export of a wide range of military equipment to Saudi Arabia, despite mounting concerns about use of those items to violate humanitarian law in the on-going conflict in Yemen, the Secretary of State for International Trade, Liam Fox MP, has acted unlawfully under three core grounds:

  • Ground 1: Failure to ask correct questions and make sufficient enquiries;
  • Ground 2: Conclusion that there was no “clear risk” under Criterion 2(c); and/or
  • Ground 3: Failure to trigger the suspension mechanism for licences of arms to Saudi Arabia.

 What next?

The High Court has a range of powers in the event that it decides that the UK government has acted unlawfully. For example, it could:

  • set aside the validity of existing licences granted by the UK government permitting exports to Saudi Arabia; and / or
  • restrict the UK government from issuing new licences for exports of strategic military equipment to Saudi Arabia.

Any unfavourable decision of this type would come at a particularly sensitive time for the UK government for two key reasons:

  • First, it could affect the UK government’s use of the UK defence industry to strengthen the UK economy pre-Brexit. For example, despite mounting concerns about the abuse of human rights Turkey remains a priority market for the UK defence industry and only last month Theresa May announced a multi-million pound defence deal to build a new generation of Turkish fighter jets.
  • Second, any resulting political and media scrutiny of the UK’s trading relationships with countries with poor human rights records could influence the UK government’s approach to securing ambitious free trade relationships post-Brexit, one of the key 12 principles which will guide the UK government’s Brexit negotiations (as outlined in the UK government’s white paper on exiting the European Union).

Faced with these challenges it is highly likely that if the UK government wins the case, we can expect business as usual.  If it loses, there is a strong possibility that the UK government will vary the Consolidated Criteria to give itself greater flexibility on the export licence decision making process in similar scenarios.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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