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UK MPs raise alarm about secret arms export fines

LONDON — MPs from across the political divide are piling pressure on the U.K. government over the secretive punishment regime for British firms that breach weapons export rules. 

One exporter was fined an astonishing £2.7 million in February — the biggest sanction ever handed out — but the sum was part of a deal that allows the firm to remain in the shadows. 

The export controls regime stops businesses from sending military goods or certain products that could be used in combat overseas or for other violent purposes. Exporters need a license to send out items on the controlled lists. Some export destinations are also banned.

On top of the £2.7 million sanction, seven fines amounting to tens of thousands of pounds were handed out in just three months to companies that breached rules when exporting arms or goods that could be used in warfare, according to the government’s latest figures. But no information about who sent or received the goods, how the rules were broken or what was in the consignments is revealed. 

The Conservative chair of the committee on arms export controls and the Labour frontbench are now raising the alarm about the lack of transparency, in particular over the £2.7 million penalty, which government officials leveled to avoid dragging the breach through the courts. 

“A sum of such magnitude suggests a severe breach, ​and one that may have a serious impact on national security,” said committee chair and former trade minister Mark Garnier. “The ongoing war in Ukraine has only highlighted the importance of airtight regulations that ensure British weaponry does not end up in the wrong hands.”

He said he would be taking the issue of arms export control enforcement and transparency up with ministers at their next committee appearance. 

Shadow Trade Minister Ruth Cadbury said the enormous fine was “extremely concerning.”

“Ministers repeatedly claim we have one of the strongest export regimes in the world, yet this fine suggests serious breaches continue to occur,” she said. “Ministers need to be transparent about the reason for this fine, and whether they will be taking further action to ensure the highest standards in our arms export regime.”

In a letter to Garnier, fraud and customs chiefs at British customs office HMRC said they could not reveal the export destination or the items exported for fear of risking identification of the firm. As part of the settlement that prevented the case being flagged to the criminal courts, HMRC agreed not to name the firm in exchange for the fine.

The letter said avoiding a criminal prosecution saves time and cash for taxpayers, but stressed that a settlement deal would not usually be offered where there is “clear evidence of deliberate intent to circumvent export controls.”

The goods were split over two consignments, which also contained some licensed items. The firm had made applications for the unlicensed items for past shipments, which the trade department had approved. None of the goods this time were intercepted.

An HMRC spokesperson said: “We publish the information that we are legally able to provide.”

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