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Last Updated: Tuesday, 9 September, 2003, 11:58 GMT 12:58 UK

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Q and A: Arms sales and the law

Europe's largest arms fair is taking place in London with some 1,000 companies involved and governments visiting from around the world.

But how do sales work - and where does the law come in?

I'm an arms manufacturer - how can I sell my wares?

Until very recently, the UK's entire arms business was effectively governed by a law passed in the very different world of 1939. But although the system is now changing, the basics remain the same.

Companies producing arms or related technologies negotiate with clients, either freely or with official government support.

If they strike a deal, the company asks the government for a licence to export. The Department for Trade and Industry, the Ministry of Defence, the Foreign Office and the Department for International Development can all have a look at the proposals.

In theory, ministries have the power to stop the export of arms or technology to regimes involved in internal oppression or external aggression.

Once a licence is granted, a special government department may also guarantee to cover the seller's losses should the buyer default.

But it's more complicated than that?

Only in the last decade has much of the detail of the arms export system come to light, much of it revealed in the Arms-to-Iraq scandal in 1992.

In his report into the affair, Lord Justice Scott detailed how ministers of the then Conservative government concealed the arms sales from Parliament to protect an attempted spying operation.

The affair only made the headlines when the businessmen accused of dealing with Saddam Hussein were found to be actually working for the intelligence services.

Lord Justice Scott said export controls were so lax they allowed any government to use them for whatever purpose it so wished. Labour promised in opposition that it would reform arms controls.

So what happened next?

On coming to power, Labour said it would operate an "ethical foreign policy" and introduce legislation - but to the anger of many, it took more than five years for it to do so. The reforms reached the Statute Book as the 2002 Export Control Act.

The Act:

Tightened up the criteria for arms sales from the UK

Placed controls on the activities of British nationals, wherever they sold arms

Placed controls on the sale/transfer of technologies that could lead to weapons

Required an annual report on sales

Increased maximum sentences for illegal sales

The government said it had created one of the most transparent systems in the world. But campaigners say the legislation was watered down.

Why did they criticise the legislation?

They say the act leaves the government room to manoeuvre on sales to suspect regimes.

For instance, campaigner group Saferworld has warned a side consequence of the so-called "war on terror" is that the UK may relax export controls to countries which are "on side", such as Pakistan.

Campaigners have also said the legislation does little to stop British companies arming both sides in a conflict; in theory both India and Pakistan, thought to be attending the 2003 London arms fair, could buy weaponry and use it against each other.

So can arms companies effectively sell anything they want?

The government says no, but campaigners disagree.

The government is also a signatory to the Treaty banning anti-personnel landmines and has stiff penalties in place against any British company involved in their trade.

But campaigners have reacted angrily to what they believe is a failure to follow through on the law, not least after a BBC investigation found one British salesman offering the weapons.

They also claim that proliferation controls remain weak, meaning a buyer could sell the arms on again to another regime.

But providing a country does not have a poor human rights record, can anyone buy arms?

One of the late amendments forced into the Export Control Act was a sustainable development test.

Many organisations, including the largest aid agencies, say arms sales to developing countries fuel instability and hinder the fight against poverty.

The government's 2001 annual report showed that it granted export licences to 31 of the 41 poorest countries of the world.

One of the most controversial sales was of a �28m BAE Systems military air traffic control system to Tanzania, a deal the World Bank branded a waste of money.

So Labour still faces criticisms over arms?

For many arms trade campaigners it fell at the first hurdle in 1997 and never really got up because it allowed the sale of tanks, water canons and hawk jets to Indonesia.

Since then, ministers have faced questions over sales to other trouble spots including Colombia, Sri Lanka (prior to the peace agreement), Algeria and Zimbabwe's intervention in the Democratic Republic of Congo.

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