CO129-552-6 Traffic of arms to China 2-1-1935 - 27-12-1935 — Page 97

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1.

ANNEX I.

EXPORT BY THE TRADE OF AIRCRAFT, AERO ENGINES

AND ARMAMENT.

The primary concern of the Air Ministry in dealing with

exports of aircraft, and aero engines is to balance the

advantages to the industry and to national defence of a

healthy export trade against the necessity of retaining the

advantage of whatever lead British research and inventive

genius give us over other nations.

2.

No individual licence is required for the export of

unarmed aircraft and nero engines, except in the single case

(until recently) of Ethiopia. To ensure that exports are not

made which would be contrary to public policy an agreement

has been made with the industry which ensures that the firms

notify the Air Ministry whenever a foreign order is in

contemplation. Owing to the good relations that exist

between the Department and the industry and also by reason

of the fact that in the main the firms depend on Air Ministry

orders for their livelihood, and that in an extreme case the

powers of the Official Secrets Acts might be invoked, the

firms invariably conform with the wishes of the Air Ministry

in their dealings with foreign customers, notwithstanding that

the licensing system does not apply (except to the extent

stated) to unarmed aircraft and engines. For example, in

the later stages of the Chaco war, the firms loyally observed

the request of the Air Ministry not to supply aircraft to

Bolivia and Paraguay.

3.

In order to assist the firms in gauging beforehand

what aircraft or engines are likely to receive approval for

export, and at the same time to indicate to the Press what

degree of publicity is permissible, a system has been devised

whereby aircraft and engines are assigned to three categories.

Secret, Part Publication and Open. Aircraft and engines on

the Secret List are not allowed to be described or even

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