Control of Exports Bill 2023: Committee Stage
I thank members, the Minister of State and his officials for participating in today's meeting to consider Committee Stage of the Control of Exports Bill 2023. I remind the committee that all members are to participate in the meeting either within the meeting room or remotely from within the Leinster House complex only. Should a division occur, any members participating remotely will be required to make their way to the meeting room within the normal division time to vote and to return to their original location. There have been no apologies so far. The Bill was referred to the select committee by order of the Dáil on 11 May 2023. The purpose of the Bill is to provide for control of the export of items that can be used for civil or military purposes and for control of the provision of brokering services or technical assistance in respect of, or control of transit of, those items; to give full effect to Council Regulation (EU) No. 2021/821 of 20 May 2021 setting up a Union regime for the control of exports, brokering, technical assistance, transit and transfer of dual-use items (recast); to provide for control of the export of military items and for control of the provision of brokering services in respect of, or control of transit of, those items; to provide for the Minister to grant authorisations to undertake certain activities relating to dual-use items and military items; to provide for a process for appealing certain decisions of the Minister with due regard to the potentially sensitive nature of the subject matter of the appeal, and for those purposes to establish a panel of persons to deal with appeals; to provide for enforcement; to provide for information sharing; to provide for the repeal of the Control of Exports Act 2008; and to provide for related matters.
I welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Dara Calleary, who is accompanied by his officials.
Gabhaim buíochas leis an gCathaoirleach agus le rúnaíocht an choiste as ucht an chruinnithe seo.. I thank the Chair and secretariat for facilitating our meeting today. I am delighted to be joined by my colleagues: Dr. Eamonn Cahill, principal officer; Ms Carol Toolan, assistant principal officer; and Mr. Matthew Geoghegan, administrative officer. They put all the work into the Bill. We appreciate that. As I said on Second Stage, the Bill will repeal and replace the Control of Exports Act 2008 and ensure that Ireland continues to operate a robust framework for regulating the export of controlled items, particularly dual-use and military items.
Export controls are a multilateral, global mechanism that contribute to international peace and security and seek to prevent the proliferation of weapons of mass destruction. Controls take the form of a legal obligation on exporters to obtain prior authorisation, that is, an export licence, to export designated items to other countries. The current Act must be updated to reflect the significant advances in technology, new developments in business practices, updates to EU instruments and the evolving and evolved geopolitical risk landscape.
Deputies will recall from Second Stage that the Bill aims to ensure that Ireland has a sound legal basis for administering export controls by providing for controls related to dual-use items; controls related to military items; the establishment of a national military export control list; rules and conditions for obtaining and using authorisations; establishment of an independent adjudication panel to hear appeals and disclosure requests; an effective enforcement capability for authorised officers; the establishment of a comprehensive set of offences for infringements of the controls; and proportionate, graduated and dissuasive penalties for breaches.
I acknowledge the broad support for the Bill thus far in the Dáil and look forward to today's meeting. My amendments are predominantly technical, typographical or punctuation corrections. I thank Deputy O'Reilly for her amendments.
I advise members that groupings will apply to amendments Nos. 1, 2, 4 and 9 to 14, inclusive, Nos. 3 and 6, and Nos. 7 and 8. All other amendments are not grouped and will be discussed individually. I propose that we try to complete our consideration of Committee Stage of the Bill today. Is that agreed? Agreed.
Section 1 agreed to.
SECTION 2
Amendments Nos. 1, 2, 4 and 9 to 14, inclusive, will be discussed together.
I move amendment No. 1:
In page 10, line 1, to delete “Export” and substitute “Exports”.
These are primarily technical amendments and clarifications to language.
Amendment agreed to.
Section 2, as amended, agreed to.
Section 3 agreed to.
SECTION 4
I move amendment No. 2:
In page 12, line 17, to delete “military items,” and substitute “military items, and”.
Amendment agreed to.
Amendments Nos. 3 and 6 will be discussed together.
I move amendment No. 3:
In page 12, to delete lines 20 to 24.
I will address why I have included this. The Minister of State is correct that there is broad support. Amendments Nos. 3 and 6 are broadly similar. All my amendments relate to transparency. I do not know whether there has ever been a more important time for us to address transparency, since everybody is talking about transparency. It was not always very trendy but apparently it is very trendy at the moment. Perhaps I was a bit ahead of my time when I was drafting this.
On the withholding of information under the reporting on the operation of the Act, will the Minister of State outline why this is necessary? This is important legislation. The purpose is to protect human rights, to prevent arms from falling into the wrong hands and to assist in peace and stability. There is a need for some secrecy; I get that. With the exclusion of important elements from reporting, the secret appeals system and the withholding of information under the guise of commercial sensitivity or the security of the State, surely in such important legislation, we should focus on transparency and clarity and not hiding behind secret appeals or the redaction of information. Regardless of where equipment ends up or if items are refused to be sent to states or businesses, the public and Oireachtas should know about it, given that it could be related to state sanctioning or denying companies the ability to contribute to the military-industrial complex.
Amendment No. 6 relates to section 42, on the rules of conduct of appeals before adjudicator. Will the Minister of State outline why powers are being granted under section 42(p) to allow for "restrictions in relation to disclosure, publication or reporting, during or after the hearing of an appeal"? I understand the necessity for some secrecy and the rationale behind it but there could be more transparency in the legislation.
I thank the Deputy. We are all together on the need for transparency. We all agree that transparency ensures accountability and public trust. We try to strike a balance here. The team has carried out extensive consultations with the Office of the Attorney General in developing the Bill to get the balance correct between transparency and fairness, and the need to protect sensitive information. We believe the provisions in the Bill have reached a delicate balance between the public interest and the protection of sensitive information. My concern with the Deputy's amendment is that it will tilt the balance too far the other way. It may not assist in building confidence in the Bill. The Bill more or less replicates the Screening of Third Country Transactions Bill 2022, which has passed Committee Stage. The Deputy proposes to remove commercially sensitive information, personal data and information, the disclosure of which would create a risk to the security of the public order of the State. It is finely balanced. We have worked hard with the Attorney General to get the appropriate balance so, unfortunately, I cannot accept the amendment.
The Minister of State spoke about the necessity to protect certain sensitive information. As I am now referring to sensitive information, I ask the Minister of State for an anonymised example of what that information that would not be disclosed would be. To be serious, will he give an example of what type of information we are talking about that might reasonably be held back?
Some of these applications or export licences would affect the security of the State. There could instruments or State security related to those. In the broader sense, obviously there are State agencies with views on some of these licences that need to be able to give those views frankly, particularly in a commercial area, where we need to be able to protect their right to give frank views regarding the State and protection of the State's interest-----
-----as opposed to what you might think of the State.
That should never be held back. I understand the point but I believe there is potential to strengthen it somewhere between the Minister of State's position and what I have proposed. I note confidence in the legislation is really important. I do not want to get into it now and would be content to withdraw this amendment - although we may reintroduce it - were the Minister of State to provide an information note about the type of information we are talking about.
That is really relevant. I will ask the Deputy's team to engage with the officials here. I am more than happy to do that to give a sense of what we are doing.
I thank the Minister of State.
I think we are both on the same page regarding the balance; it is just a question of measuring the balance.
We will absolutely get the officials to engage with the Deputy and her team.
That is fantastic. I thank the Minister of State.
Is the amendment being withdrawn?
I will withdraw both of these amendments on the basis of the commitment given by the Minister of State.
Amendment, by leave, withdrawn.
Question proposed: "That section 4, as amended, stand part of the Bill."
I would have liked Deputy O'Reilly to have kept her amendment down because I would have voted for it. I will take this opportunity to register some issues and concerns about the Bill. I noted the comments of Jan Pie, head of the AeroSpace and Defence Industries Association of Europe, who last November stated, "I would like to congratulate Ireland for the increased interest on the defence side towards the EU and the EDF [European Defence Fund]". Despite the way it is couched in terms of defence, and who can be opposed to defence, what is being indicated there is that this State and companies within this State are beginning to play an increased role in the international arms race we see unfolding before us. The Minister, Deputy Coveney, has noted that even though the perception is that Ireland does not have a defence industry, in terms of the contribution many Irish companies make as regards dual-use goods, we have an extraordinary capacity in this country. I think the Minister is underlining, from the Government and State's point of view, the importance of dual-use goods regarding this.
I will not go down through all the details I have in my paper in front of me here in terms of dual-use goods but I will just cite two as examples. In a two-year-old statistic from 2021, it was noted that since 2011, Ireland had exported €6.5 million worth of military or dual-use hardware to Israel. What is that military or dual-use hardware used for? We have seen the scenes on our television screens of the deaths and injuries that have rained down on Palestinian people. Can we be given a guarantee that material exported from Ireland to that state is not used in that regard? It is, in part, clear, direct military hardware.
My eyes are also drawn to a note I have to hand stating there are 25 dual-use licences for export to Egypt, including one military-grade contract worth €112,000, the category of which is bombs, torpedoes, rockets, missiles, other explosive devices and chargers, related equipment and accessories, and specially designed components therefor. What is Ireland doing exporting military-grade material to a dictatorship that has blood on its hands? I felt that Deputy O'Reilly's amendments did not go far enough but I thought they were useful and intended to vote for them. They have been withdrawn now, and we are where we are. If I do not have the opportunity to vote for them I will be registering my opposition, and I think I would have been doing this in any case, to the Bill because essentially this industry is something to which I am fundamentally opposed.
The whole basis of this Bill is to control, and put controls in place, around dual-use items. Nobody is ever hiding from the dual-use industry and this Bill is about updating legislation that has been there since 2008 to reflect modern day trends in terms of technology and geopolitics. This is about controls. As for the Deputy's query about Israel, there are no military exports to Israel from Ireland. The officials assure me of that and I can provide that to the Deputy in writing if he wishes. We are updating this Bill to reflect 2023 realities in this space, which are completely different from those in 2008. In fact, I would even say that they are completely different from when this Bill began this process through this committee in pre-legislative scrutiny in 2021. Yes, nobody is standing back and nobody is saying we do not have a dual-use industry. Nobody is trying to hide from that. This Bill is about regulating it.
On that, I would support the implementation of regulations on dual-use items. The problem I am highlighting here is that the Government and the State plan not just to increase exports of dual-use items but see that as a growth industry and something to be promoted in a serious way. Because of precisely the points that have been highlighted by Deputy O'Reilly in her original amendments, I would have question marks as to the effectiveness of this Bill in properly monitoring what is going on here and I wanted to register those points.
We note Deputy Barry's objections.
Question put and agreed to.
Sections 5 to 10, inclusive, agreed to.
SECTION 11
Question proposed: "That section 11 stand part of the Bill."
We are moving into an era of cyber-surveillance and I do not see artificial intelligence mentioned anywhere in the Bill. We had a very interesting committee meeting two weeks ago about artificial intelligence so the Minister of State might not have a note now on it yet but this is a whole new area. The committee was told two weeks ago that artificial intelligence is developing faster than legislation can keep up with. It is the fastest growing technology on the planet and in history. I wonder whether we have captured the artificial intelligence material in this Bill in any way or whether it was considered when the Bill was being put together, because this is absolutely powerful. Further on we talk about the use of drones and weaponry and so on and obviously then whole cyber issue comes into it. This stuff is pretty scary. Has that been taken into account in this particular Bill and in this section?
The Deputy is right. The artificial intelligence, AI, side of things is developing very strongly and by the time we get to this time next year the committee will have dealt with a lot of AI-related legislation. We are working with our EU colleagues. As the Deputy knows, the AI Bill has gone into the trilogue process. That will govern the use of AI on a common basis across the EU.
The Minister of State, Deputy Ossian Smyth, and I have both invited members to a briefing from the national AI ambassador in the audiovisual room on Tuesday, 11 July so that we can answer people's queries on that, and many members have accepted. The incoming Spanish Presidency of the EU has indicated the development of an AI Act is its priority. Pending that legislation, it would be premature for us to insert this provision in this Bill. However, we may have to revisit the matter in the context of what is decided. I want to ensure we will have robust protections against threats from AI but that we will also be open to the opportunities it offers, of which there are many. The country's guide map on AI is based in our national AI strategy, which was published in August 2021.
I thank Deputy Stanton for raising this matter. Is it the Minister of State's position that this legislation will most likely have to be amended when the AI development-----
We may not have to insert amendments because the new AI Act will control all of these matters. The AI Act will have an impact on the equipment cited in this Bill. We want to work together in the EU on AI and have robust AI legislation across the EU.
The one difficulty with that, which the committee heard about last week, is that to get things right sometimes the slowest movements move as fast. I understand that there are a lot of moving parts in this but I also understand that the area of AI has potential for negative consequences. It is not all positive and there is a substantial risk involved. AI moves much faster than we thought and faster than the EU moves. Does the Minister of State envisage that at any stage we will have to make this legislation more robust to respond to the threat of AI? Is he satisfied that things will move quickly when the AI legislation eventually comes from the EU?
I am satisfied that the AI Act within the EU is moving at pace. The Spanish Presidency will prioritise it. At this phase in the EU calendar, things get challenging but every country has agreed on the importance of legislating on AI and everybody accepts the points the Deputy and Deputy Stanton have made. It is moving so quickly and we need to have guard rails in place but, on a broader issue, those guard rails cannot choke innovation in Europe either. We cannot be innovation takers when it comes to AI. Let us acknowledge the risks and protect against them but we should be ambitious in Europe's role in developing it as well. I am confident that when we get to this time next year, we will have had a lot of discussions in this committee on AI legislation.
Question put and agreed to.
Sections 12 to 21, inclusive, agreed to.
SECTION 22
I move amendment No. 4:
In page 19, line 14, to delete “Treaty of the” and substitute “Treaty on the”.
Amendment agreed to.
Section 22, as amended, agreed to.
Sections 23 to 31, inclusive, agreed to.
SECTION 32
I move amendment No. 5:
In page 25, to delete lines 17 and 18 and substitute the following:
“(4) An applicant shall, in relation to an application, give notice to the Minister as soon as practicable, but in any event not later than 30 days from the date the matter comes to the knowledge of the applicant, of any material matter.”.
This amendment seeks to provide clarification. Our intention is to make it easier for people to understand the obligations that arise from this particular section.
Amendment agreed to.
Section 32, as amended, agreed to.
Sections 33 to 41, inclusive, agreed to.
SECTION 42
I move amendment No. 6:
In page 33, to delete lines 28 to 33.
Amendment, by leave, withdrawn.
Section 42 agreed to.
Sections 43 to 45, inclusive, agreed to.
SECTION 46
Amendments Nos. 7 and 8 are related and may be discussed together.
I move amendment No. 7:
In page 36, lines 25 and 26, to delete “to the appellant subject to such redactions”.
This amendment is on transparency. I thank Deputy Barry for his support and remind him that it is entirely possible for him to submit his own amendments rather than to be disappointed in me deciding to withdraw mine but we can talk about that another day.
Amendments Nos. 7 and 8 are broadly similar. They are about sparking a discussion and debate on transparency, which, as I said, is very much in vogue. Section 46 is on the treatment of certain material of relevance to security or public order of State in appeal against decision under section 4. On the treatment of evidence in appeals against the decision of an adjudicator specifically, will the Minister of State outline why the information in question would be redacted? How does that square with the commitments he is giving on transparency, bearing in mind that we are not immune to what is going on outside the Houses? I understand that this may not be the most-watched committee proceedings of the day but people are talking about transparency. A report has just been published. While I will not refer to it in detail, significant annoyance was expressed by Members of the Dáil and others outside because substantial chunks of relevant information had been redacted. The proposal in this section is that some of this information would be redacted. Parts of the Bill are specifically designed to include transparency and remove secrecy. All I am seeking to do is put that into this section. There should be no secrecy around the appeals process. It strikes me this process, of all the measures, should be the most open and transparent. Why would the information I have referred to be redacted and how does that square with the commitment to transparency?
I thank the Deputy again for tabling the amendments and her team for preparing them. It comes back to my original point on how we have tried to strike a balance in making sure the Bill is as robust as possible. In this redaction will be the exception, not the routine. The adjudicator is independent. When we are briefing the Deputy on the previous amendments we will go through the adjudication process with her. The Minister will be bound by the outcome of the decision.
We are concerned that deleting the text, as proposed in the Deputy’s amendment, would introduce an ambiguity to the subsections. We are also concerned that we have to be able to protect secure information and State security information from third-country security services and people who may not even be looking at it with a commercial eye but for other reasons. These people may use information that comes in some of these applications for other reasons. It has always been an effort to strike a balance between transparency and making sure the legislation is effective and fair. We also want to make sure we do not inadvertently do something that weakens our State security.
Nobody wants to do that. We are all at one on that issue. The Minister of State has just said the Minister will be bound by the decision of the adjudicator. If the Minister is to be bound by something about which he or she does not have full information because some of it will be redacted, that is problematic. I welcome the offer of a briefing on this and we will take the Minister of State up on that because it is helpful to have a discussion in any event.
Two things do not sit well with me. On the one hand, the Minister of State is saying the Minister will be bound by the decision, and I understand the reasons for that, but then, on the flipside, substantial parts of this Bill are about transparency, openness and an end to secrecy, and I acknowledge that.
Substantial parts of it are about transparency, openness and safety. I get that. On the one hand, the Minister is bound by the decision and on the other hand, things are going to be withheld. That is where my difficulty is.
The intention is genuinely that redaction will be the exception. There will be very few cases where it will have to be used. In those cases where it will have to be used, the provision is tight. It is generally to do with State security. It is not to do with protecting commercial or corporate interests. It is to do with the security of the State, particularly in this sphere. The team has engaged extensively with the Office of the Attorney General to come up with a balance. It is a very delicate balance. I get that concern but I am confident that we have achieved the right balance around it. I am happy to discuss the matter on Report Stage after members have had the briefing on the process. Those briefings are available to any Deputy who wishes to attend. It is about striking a balance. I agree with the Deputy that it is a very fine balance but I am comfortable enough with what we have.
I have one specific question. The Minister of State said that this reflects his thinking and that of the Department. I should have started by thanking the Minister of State's officials for all their work on this. I appreciate them coming in. Nobody is picking holes in this except to try to be helpful. That is all. I understand the amount of work that goes into it and I thank the officials for that. On the one hand, the Minister of State is saying that in nearly all cases it will be related to State security. What about the small amount of redaction he envisages that will not relate to State security? Will that be for reasons of commercial sensitivity?
For the Deputy's information, since this legislation was introduced in 2008, there have been six appeals. That is the kind of number we are looking at. It is very small. I do not have details of the cases here but we can try to give the Deputy a flavour of them without breaching confidentiality. Predominantly, they would have been related to State security but we will give the Deputy a flavour of them.
For the ones that were not about State security, did they relate to commercial sensitivity? I cannot think of another reason. What would the other reason be?
I do not have knowledge of the cases but we will get the detail to the Deputy.
That is fair enough. I am not trying to trick anyone; I am just trying to understand that.
Generally, they relate to State security.
It would generally be State security.
It is always State security.
I am hearing that is it nearly always State security, but not quite.
It is always State security.
That is fair enough. I have a bit more to engage the Minister on in relation to this. I am content to withdraw my amendments. I may submit them again on Report Stage, pending that interaction if we can get some of the points clarified. I take the Minister of State's assurance in relation to State security.
Amendment, by leave, withdrawn.
Section 46 agreed to.
Sections 47 to 51, inclusive, agreed to.
SECTION 52
I move amendment No. 8:
In page 40, lines 17 and 18, to delete “to the appellant subject to such redactions”.
Amendment, by leave, withdrawn.
Section 52 agreed to.
Sections 53 to 57, inclusive, agreed to.
SECTION 58
I move amendment No. 9:
In page 45, line 35, after “authorised”, to delete “person”.
Amendment agreed to.
I move amendment No. 10:
In page 46, line 24, after “Part”, to delete “to”.
Amendment agreed to.
Section 58, as amended, agreed to.
Sections 59 to 61, inclusive, agreed to.
SECTION 62
I move amendment No. 11:
In page 49, line 24, to delete “may” and substitute “may,”.
Amendment agreed to.
Section 62, as amended, agreed to.
Section 63 agreed to.
SECTION 64
I move amendment No. 12:
In page 50, line 33, to delete “State be deemed have been” and substitute “State, be deemed to have been”.
Amendment agreed to.
Section 64, as amended, agreed to.
Sections 65 to 67, inclusive, agreed to.
SECTION 68
I move amendment No. 13:
In page 54, line 2, to delete “section 62” and substitute “section 62,”.
Amendment agreed to.
Section 68, as amended, agreed to.
Sections 69 to 71, inclusive, agreed to.
SECTION 72
I move amendment No. 14:
In page 56, line 2, to delete “office” and substitute “officer”.
Amendment agreed to.
Section 72, as amended, agreed to.
Sections 73 and 74 agreed to.
Title agreed to.
Bill reported with amendments.
That completes our consideration of the Bill. I thank the Minister of State and his officials for attending today's meeting and I look forward to the Bill being enacted and implemented ad soon as possible.
I thank the members, the committee secretariat and the officials from my Department for their work. We look forward to further engagement.
