EN Official Journal of the European Union C 328/1

SEVENTH ANNUAL REPORT ACCORDING TO OPERATIVE PROVISION 8 OF THE EUROPEAN UNION CODE OF CONDUCT ON ARMS EXPORTS

(2005/C 328/01)

INTRODUCTION

The European Code of Conduct on Arms Exports was adopted on 8 June 1998. The Code sets up eight criteria for the export of conventional arms and a denial notification procedure requiring Member States to consult on possible undercuts. Since its adoption the Code has contributed significantly to the harmonisation of national arms export control policies.

In the seventh year of operation of the European Code of Conduct significant progress has again been achieved with respect to the implementation of the Code. A number of important new developments have contributed to further strengthening and expanding the application of the Code. These developments reconfirm the Code's status as the most comprehensive international arms export control regime. Bosnia and Herzegovina, Bulgaria, Canada, Croatia, the Former Yugoslav Republic of Macedonia, Iceland, Norway and Romania have officially aligned themselves with the criteria and principles of the Code.

In the interest of transparency, attention is drawn to the User's Guide, an essential tool summarising agreed guidance for the implementation of the operative provisions of the Code, which has been published, and is regularly updated. The User's Guide is intended primarily for use by export licensing officials and is available in the EU Code of Conduct on Arms Exports chapter of the ‘Security Related Exports Controls’ webpage in the Common Foreign and Security Policy section of the Council internet site (http://ue.eu.int). It gives an extensive view of the Code and the way it is applied by Member States.

I. REVIEW OF THE SEVENTH YEAR OF IMPLEMENTATION OF THE CODE

1. Enlargement of the Union

The accession of the 10 new Member States to the European Union on 1 May 2004 saw the criteria and procedures of the Code of Conduct, notably the notification and consultation mechanism, become fully applicable to them. These newly acceded Member States submitted figures for their arms sales in 2004 as can be seen from the tables included in the present report. Bulgaria and Romania, as Acceding Countries, began attending meetings of the Working Party on Conventional Arms Exports (COARM) as from May 2005.

2. Review of the Code of Conduct

COARM has conducted in-depth discussions for the first review of the Code of Conduct since its adoption in 1998. Discussions have taken place not only between Member States, but also through meetings with interested third parties, notably international NGOs. Under the Irish and the Netherlands Presidencies a number of constructive meetings on the review took place in which both Member States and NGOs participated. The Luxembourg and United Kingdom Presidencies have brought the review close to completion. Review discussions at technical level are complete. The resulting draft constitutes a significantly updated and upgraded Code. Several new elements are to be included in the Code, thereby deepening and widening its scope of application. These elements include the extension of controls to brokering, transit transactions and intangible transfers of technology, as well as the implementation of strengthened procedures in order to harmonise Member States' export policies. It is envisaged that the new Code will be adopted in the form of a legally binding Council Common Position.

3. User's Guide

As of 1 January 2004 the User's Guide, the first version of which was adopted in 2003 and is available on the ‘Security Related Export Controls’ webpage in the Common Foreign and Security Policy section of the Council internet site (http://ue.eu.int), became fully applicable. It contains procedures to improve the denial notification and consultation system and clarifies Member States' responsibilities in this respect. The latest revised version of the Guide published in October 2005 contains chapters on licensing practices, best practices for interpretation of criterion 8 and requirements for submission of information for the EU annual report.

4. Best Practice for interpretation of criteria

Best practice for the interpretation of criterion 8 of the Code of Conduct for inclusion in the User's Guide was agreed by Member States in September 2005. Work on best practice for criteria 2 and 7 is underway.

5. Temporary measures upon lifting an arms embargo

Member States continue to discuss a set of temporary procedures which could be applied vis-à-vis countries for which the EU has decided to lift an existing arms embargo. These procedures would be based on specific mechanisms for notifications of licences issued for exports of military equipment by Member States, for a review of notified denials which were related solely to the embargo and for consultations in the event of a major change in a Member State export policy. This so-called ‘toolbox’ would complement the Code of Conduct.

6. Outreach

(i) In accordance with the agreed mechanism to improve the coordination of outreach activities undertaken by Member States in order to promote the principles and criteria of the Code among third countries: — in November 2004 COARM drafted and despatched letters (signed by the Personal Representative to the High Representative for non-proliferation) to the authorities of Albania, Belarus, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia, Iceland, Moldova, Serbia and Montenegro, Switzerland and Ukraine, reminding them of the contents of the Code, and enquiring to what extent their national rules and legislation mirrored the requirements of the Code, and whether they were interested in discussing the practical implementation of the Code with the European Union, — all the above countries except Albania, Bosnia and Herzegovina and Iceland have replied to the letters, and expressed interest in discussing the practical implementation of the Code with the European Union, — the Presidency and a number of Member States, as well as the Office of the Personal Representative on on-proliferation, have organised joint outreach seminars with some of the above countries, as well as with Georgia and China.

(ii) Troika meetings have been held with the United States, Canada, the Russian Federation, Ukraine and Norway in the framework of the political dialogue of the Common Foreign and Security Policy of the European Union. Fruitful discussions have taken place with these countries on arms export controls in general and the Code of Conduct in particular. During the meetings with Norway information on each side's denials has been shared in accordance with an agreement reached with Norway in November 2004.

7. Updating of the Common Military List of the European Union

The Common Military List of the European Union has the status of a political commitment in the framework of the Common Foreign and Security Policy. On 25 April 2005 the Council adopted an updated version of the list (1) which takes into account changes agreed in the Wassenaar Arrangement's Munitions List at the December 2004 Plenary meeting. Member States have agreed that future amendments of the Wassenaar Arrangement Munitions List will not automatically entail amendment of the Common Military List of the European Union.

8. An Arms Trade Treaty

The European Union in 2005 endorsed the principle of an arms trade treaty and in October Foreign Ministers agreed conclusions to this effect, committing the European Union to work towards the negotiation of an arms trade treaty.

II. STATE OF PLAY CONCERNING THE IMPLEMENTION OF PRIORITY MEASURES INDENTIFIED IN THE SIXTH ANNUAL REPORT

1. Harmonisation of national reports

Although differences in national reporting still remain, a number of steps have been taken to further the harmonisation of reporting procedures, and to achieve fully comparable statistical data. Member States have agreed to include references to the Military List numbers in their contribution to the EU annual report (if available). Furthermore consensus has been reached on the principle of providing national data on the value of licences issued (if available). Due to the fact that some Member States are presently unable to provide additional data on actual exports, it has been agreed that these figures will be made available by those Member States which are able to do so.

2. Arms brokering

The Working Party has agreed that the information sharing commitments set out in Common Position 2003/468/CFSP of 23 June 2003 (2) on the control of arms brokering should be implemented via the mechanism laid down in the Code of Conduct. This is to be expressly stated in the relevant paragraph of the revised Code of Conduct. At the time of writing, 19 Member States and Acceding Countries have legislation in place which fully implements the Common Position; the notification and consultation system operates on a mandatory basis only for those Member States that have the required laws.

3. Full implementation of the User's Guide

As stated in Chapter I of this report, the User's Guide, the first version of which was adopted in 2003, became fully applicable as from 1 January 2004. It contains procedures to improve the denial notification and consultation system and to clarify responsibilities of Member States in this respect. Throughout 2004 and 2005 national notifications and bilateral consultations have taken place via the EU's electronic coreu system almost on a daily basis; information is circulated in a clear and timely manner, ensuring transparency of the arms exports policies of Member States vis-à-vis specific countries of final destination and specific end-users.

Member States continue to update their national denial notification lists on a regular basis. These lists as well as the results of bilateral consultations are included in a central electronic EU database of denials. The database, which is managed by the EU Council Secretariat, is developing into a dynamic system reflecting Member States' arms exports control policies.

Other chapters in the User's Guide describing agreed practices on licensing procedures, best practice for interpretation of criterion 8 and requirements for submission of information to the EU annual report provide useful guidance for national authorities.

4. End-use controls and post-shipment verification

Member States agree that end-use controls and post-shipment verification are an important facet of responsible arms export policy. Such controls are carried out by Member States as appropriate.

5. Development of best practices for the interpretation of criteria

As stated in Chapter I, paragraph 4 above, best practice guidelines for the interpretation of criterion 8 have been developed and included in the User's Guide. Work on developing best practice for the interpretation of criteria 2 and 7 is ongoing.

6. Coordination of the policy of promoting the principles and criteria of the Code among third countries

Fruitful COARM Troika meetings were held by the Luxembourg and United Kingdom Presidencies respectively with the United States, Canada, the Russian Federation, Ukraine and Norway in the framework of the political dialogue of the Common Foreign and Security Policy of the European Union. At these meetings the Presidency informed interlocutors about new developments with respect to the EU Code of Conduct, in particular the review process. Furthermore matters of mutual interest were discussed such as arms exports compliance and control issues and membership applications for the Wassenaar Arrangement of six new EU Member States, five of which were admitted to the Wassenaar Arrangement in 2005.

7. Practical and technical assistance to acceding countries and new neighbours

As stated in Chapter I of this report, throughout 2005 Member States have been implementing the mechanism agreed in 2004 to improve the coordination of outreach initiatives undertaken by them in order to promote the principles and criteria of the Code among candidate countries and other third countries. This mechanism consists, amongst other things, of a database containing information on national activities with such countries, which helps Member States to better prioritise and plan their efforts in this field and promote joint activities.

8. Dialogue with the European Parliament

The United Kingdom Presidency is due to meet with the European Parliament Sub-Committee on Security and Defence and exchange views on the Sixth Annual Report on the European Code of Conduct of Arms Exports and related arms exports issues with members of the Sub-Committee.

III. PRIORITY GUIDELINES FOR COARM FOR THE NEAR FUTURE

Seven years of application of the Code of Conduct have shown that the fundamental elements of a common approach to the control of conventional arms exports by the Member States is well and truly in place. However, there is still work to be done in certain areas that have not been addressed in the past, or where further work is necessary to consolidate and build on the results achieved.

Member States have identified the following priority guidelines for the near future:

1. continuation of the process of harmonisation of national reports in order to promote more homogeneous statistical data for inclusion in the European Union annual report, so as to produce clearer, more transparent summary tables;

2. follow up of the implementation of the Common Position on arms brokering, taking into account the different situations of the national legislation and establishing an appropriate information-sharing mechanism;

3. development of best practices for the interpretation of criteria, moving on from criterion 8 to criteria 2 (human rights) and 7 (end use controls);

4. continued work on promotion of the principle of an arms trade treaty;

5. continuation of the policy of promoting the principles and criteria of the Code of Conduct among third countries, specifically those that have aligned themselves with the Code of Conduct;

6. provision of practical and technical assistance, when requested, for the Acceding Countries, and new neighbours in order to ensure the harmonisation of policies on arms export control and the full implementation of the Code of Conduct principles and criteria;

7. further development of dialogue with the European Parliament;

8. continued close cooperation and consultation with interested third parties, including international NGOs and the defence industry.

(1) OJ C 127, 25.5.2005, p. 1.

(2) OJ L 156, 25.6.2003, p. 79.