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CONFIDENTIAL
7.
Moral Consultants and the companies they represent have made a number of representations to Defence Export Services Organisation (DE SO), the body in the MOD which handles AWP applications.
FEB
Ltd, one of the companies involved, have approached the MOD, both through Gary Titley MEP who wrote to the Secretary of State on 18 March, and to whom a reply was sent on 9 April and through Dame Peggy Fenner MP who wrote to the Minister for Defence Procurement,
and to whom a reply has not yet been sent. DE SO ha ve now asked FED to reconsider the application.
ARGUMENT
8.
I
>
While this equipment does fall outside the guidelines, those guidelines are designed to bring the greatest possible commercial benefit to the UK, without arousing unmanageable Chinese reaction.
n cases where sales can be made and the UK can profit without undue risk to UK interests it therefore makes sense to interpret the guidelines reasonably flexibly. "Grey area" cases, of which this
case i s one,
crop up occasionally and need careful thought, to
ensure that we are not being excessively restrictive towards UK
when other Governments may (not proven) be
(not proven) be less restrictive towards their firms.
firms,
9.
•
of
The equipment concerned here is largely civilian in character, consisting mainly of fairly standard construction equipment (similar to that used on motorways) which can be exported without a licence. The system is only made licenseable for export because there are a few licenseable components incorporated into it, but even these are close derivatives commercial systems. I see minimal risk of the Chinese hearing of the deal or, if they did, objecting to it strongly. If they were
to do so, we could tell them firmly that the equipment is basically civilian in character. Additionally, we could argue that the system was in no way offensive
(though the distinction between offensive and defensive is deliberately not made in our guidelines, neither are our guidelines in the public domain). The minimal risk of a serious Chinese
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