HC Deb 04 July 1977 vol 934 cc1074-88

Motion made and Question proposed, That this House do now adjourn.—[Mr. Stoddart.]

12.31 a.m.

Mr. Malcolm Rifkind (Edinburgh, Pentlands)

My debate has been slightly more accelerated than I had expected it to be a few seconds ago, and I ought to be grateful to my hon. Friend the Member for Burton (Mr. Lawrence).

During the past 30 years the Arab States in conflict with Israel have pursued a policy of economic boycott against that State. In furtherance of that policy, substantial pressure has been brought upon British business men, as well as business men in other countries, to cease to trade with Israel to make that boycott more effective. There has been no doubt about the policy of successive British Governments. They have condemned and deplored the economic boycott against Israel. There has been much criticism of this Government and their predecessor, in that while they have condemned the boycott they have been prepared to tolerate it and have not taken action to make sure that British firms are relieved of the pressure that is being applied to them.

I wish tonight to concentrate on a limited area where the present Government do not merely tolerate the boycott against Israel by Arab States, and its effect on British firms, but act in such a way as to further—however unintentionally—the application of the boycott. I refer particularly to the Foreign Office, which permits its officials to authenticate the discriminatory and negative certificates of origin that are required by certain Arab Governments, particularly Iraq.

Certificates of origin are a perfectly innocuous and normal part of trading relations and in many respects they are essential to the whole business of trade between countries. The particular point with which I am now concerned is not to do with certificates of origin as normally applied where an exporter has to certify the origin of the goods—the country from which the goods he wishes to export originated. However, there are also negative or discriminatory certificates of origin, in other words, certificates that are required only for the Arab boycott. Exporters must certify not where the goods came from; this must certify the goods to ensure or guarantee that they in no way directly or indirectly originated in Israel.

Normally the British chambers of commerce, as well as those in other countries, deal with the authentication of trading documents. However, to their credit, the British chambers of commerce have refused throughout the controversy to authenticate discriminatory or negative certificates of origin, on the ground that they have nothing to do with the limited objectives of trade but are to do only with a boycott that is not part of the policy of the British Government.

Given that honourable decision, it is all the more regrettable that the British Foreign Office should permit its officials to authenticate discriminatory certificates of origin and to ensure thereby the success, or partial success, of this form of economic boycott. It is, perhaps, important to recognise the scale of the operation. When I first asked the Foreign Office through a parliamentary Question, about the number of discriminatory certificates of origin on which the signatures were authenticated by the Foreign Office I was told that the information was not available. However, when I conducted correspondence with the Minister of State and the Foreign Secretary, I was told that among a random sample of 2,000 export documents in 1976, 286 referred to export documents for Iraq of the nature of those that we are discussing tonight.

Given that I was informed at the same time that the random sample of 2,000 documents represented 5 per cent. of the total number of such documents authenticated by the Foreign Office, it is not unreasonable to assume—I am sure that the Minister of State will correct me if I am wrong—that we are talking of approximately 5,000 to 6,000 documents required for the purpose of export to Iraq—documents authenticated by the Foreign Office, as required by the Government of Iraq. Therefore, we are not dealing with an insignificant number of export documents, we are talking of between 5,000 and 6,000 documents per year, simply with regard to exports to Iraq—discriminatory certificates of certain origin which the Foreign Office authenticates as to the signatures on the documents.

I understand from the replies that I have received that the Foreign Office in no way disputes the facts as I aver them. What it insists upon is that in authenticating the signature of the notary public that appears on a discriminatory certificate of origin it is in no way approving or condoning the purpose of the document. The Minister of State, in correspondence with me, has assured me that in no way is the signature of the Foreign Office official on such a document to be taken as approving of the contents of the document. He goes on to say that the Foreign Office does not look into the background of the document, and that its sole concern is with the signature that appears on it and whether it is in order for the Foreign Office to authenticate that signature.

I believe that such a justification, or attempted justification, is disingenuous at best and naive at worst. I do not believe that the Foreign Office or, indeed, any Government Department, can legitimately argue that it is appropriate to provide Government facilities irrespective of whether the purpose for which those facilities are required is in the public interest or in pursuit of Government public policy. Let me give one example. A few months ago we had some controversy about a sporting link with South Africa. Having failed to dissuade British citizens who wished to indulge in such sporting activities, the Government announced that they would not provide any official facilities that might be used during the sporting occasion in question. In other words, despite a lack of any illegality or any unconstitutionality in the activity taking place, because the Government reckoned that this activity was contrary to public policy they refused to provide Government facilities for the activity.

All we are arguing is that, given that the Government deplore and condemn the boycott, the least that can be expected of them is that they withdraw the use of Foreign Office facilities for authentication of these documents. We can go beyond this because the Minister of State and other Ministers in the Foreign Office suggested that in no circumstances would the Government ever look beyond the signature on a document and in no circumstances would they ever consider the purposes for which the document was required or the nature of the document. However, in a letter dated 28th March of this year the Minister of State, who is to reply to the debate, said: Foreign and Commonwealth Office officials only refuse to certify the signature and seal of a document in rare cases when illegality or fraud is suspected or the document has been signed by a person whose official capacity is not recognised by Her Majesty's Government, for example, an official of a régime which has not been recognised de jure." That paragraph is of considerable importance, because it accepts, for the first time as far as I am aware, that the Government do apply certain criteria before they are prepared to append the signature of a Foreign Office official to discriminatory certificates or any certificate of origin or other documents presented to them.

According to the Minister of State in his letter, if it is believed that fraud or illegality may be involved, the Foreign Office will refuse to authenticate the signature, even if the signature is not fraudulent or believed to be illegal in any way. In other words, in certain circumstances the Government are prepared to look beyond the signature, to look at the nature of the document and, if it is believed to be or suspected of being illegal or fraudulent, to refuse to provide Foreign Office facilities. If the Government are prepared to look beyond the signature on these matters it would be a simple matter of practical convenience that they should also look to discover whether the business of the document is to pursue a policy or objective acceptable to them and, if it is not, to deny the facility requested at that time.

I must say, again, that in correspondence with me, the present Foreign Secretary, who was then Minister of State, on 25th January this year, in defending the policy of the Foreign Office and in explaining that it was not approving of the contents of these discriminatory certificates of origin but merely authenticating the signatures on them, went on to say that this procedure of legalising documents for presentation in a foreign country is fully in accordance with international practice. The implication in that statement was that the present policy of the Foreign Office, far from being objectionable, was a policy that may be found in many other Western countries and is perfectly normal and perfectly unobjectionable. I am afraid that in so far as that implication was made it was incorrect and unjustified, because a number of countries refuse to allow officials of their Foreign Offices or State Departments to provide this sort of facility.

The Dutch Government, for example, not only refuse to allow their officials to authenticate such documents but refuse to allow notaries in the Netherlands to participate in any way in discriminatory certificates of origin.

Even more significant, the State Department of the United States of America has been very explicit in this matter. Perhaps I may quote from the regulation of the State Department with regard to authentication of documents. The regulations state as follows: The Department will not certify a document when it has good reason to believe that the certification is desired for an unlawful or improper purpose. It is therefore the duty of the Authentication Officer to examine not only the document which the Department is aked to authenticate, but also the fundamental document to which previous seals or other certifications may have been affixed by other authorities. The Authentication Officer shall request such additional information as may be necessary to establish that the requested authentication will serve the interests of justice and is not contrary to public policy". It goes on to say, In accordance with section 3 … of the Export Administration Act of 1969 … documents which have the effect of furthering or supporting the restrictive trade practices or boycotts fostered or imposed by foreign countries against countries friendly to the United States shall be considered contrary to public policy for the purposes of these regulations". In other words, the United States, as well as the Netherlands and one or two other countries, has explicitly forbidden its officials to participate in the authentication of documents when those documents are required for discriminatory purposes, for purposes in no way concerned with the legitimate interests of trade, and indeed, where those documents are required for a purpose contrary to the Government's official policy.

All that I am suggesting in so far as the United Kingdom Government are concerned is that as a Government who have, quite rightly, deplored and condemned the boycott themselves, even if they are not prepared to take action to protect British business men from the boycott, as is presently being taken by the Governments of the United States, the Netherlands, Canada and France, the very least that we can expect of the British Government is that they do not positively facilitate the furtherance of the boycott. Indeed, in this one area, we can say, I am afraid, with absolute justification, that the Government do not merely fail to act but positively act in such a way that can only help the furtherance of an economic boycott against a country with which we have friendly relations and which is at present at the sharp end of an economic boycott that we deplore.

I hope that the Minister of State will not simply go over the assurances about the Government's dislike of the boycott. I do not doubt that the Government dislike it. What we are concerned with is whether the Government are prepared to follow the example set by our Western allies and ensure that in no way will the facilities of the British Foreign Office be used in any way to continue a boycott which we deplore and condemn.

12.44 a.m.

Mr. Greville Janner (Leicester, West)

I am grateful to the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) for this debate and I thank both him and my hon. Friend the Minister of State for sparing me a moment of the time.

I rise to express the support of a very considerable number of hon. Members on the Government side of the House for the views that have been so eloquently put forward. This is not a party matter. Unfortunately, the policy that the present Government have pursued is one that they inherited from their predecessors.

I have lobbied a series of Foreign Secretaries, of successive Governments. Each in turn has trotted out the same ridiculous rubbish about the authentication of a document being merely an authentication of a signature and having no effect in so far as the approval of the document is concerned. The authentication of this document is active connivance in a disgraceful activity which has been roundly and frequently condemned by the Foreign Secretary. The Government are regarded as active accomplices by both the proponents and the opponents of the boycott. They are not merely clapping a telescope to a blind eye but holding it clearly in place.

Rubber stamps have their uses but they are dangerous weapons in a trade war. In this case they are used to put an imprimatur on an international impropriety. They should be burned.

I hope that my hon. Friend will take this opportunity not merely to condemn once again the Arab boycott but also to say as a start that the Government will cease giving any seal of approval to these thoroughly improper and disgraceful documents.

12.47 a.m.

The Minister of State, Foreign and Commonwealth Office (Mr. Frank Judd)

I should like to compliment the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) on initiating the debate. I have been aware for some time of his deep and real anxiety about this matter. Matters relating to the Arab boycott are a subject of genuine and widespread public concern. However, misconceptions about the boycott and in particular about the Government's attitude towards it still exist. I shall give an example. To judge from the correspondence that I see, many firms and individuals seem to believe that the very act of trading with Israel may in itself render a company liable to be blacklisted by the Arabs. On the contrary, the boycott does not appear to interfere with exports—other than of war or strategic materials—to Israel by firms in non-Arab countries. But firms which misunderstand the position may needlessly be denying themselves the chance of doing valuable business in Israel.

Another widespread misconception concerns the Foreign and Commonwealth Officer's certification service. I shall deal with this in a moment. I welcome this evening's short debate as an opportunity to put the record straight.

First, I should like to make two small observations on the subject of the debate as the hon. Gentleman has set it down. He referred to the "Foreign Office". I hope he will not mind my pointing out that there has been no separate Foreign Office since October 1968 when it merged with the Commonwealth Office.

That is a matter about which we feel strongly.

The hon. Member refers to the Foreign Office's policy on the boycott. The Government's policy towards the boycott is indivisible. Various Departments of State assume primary responsibility for different aspects of that policy. But there is no separate Foreign and Commonwealth Office policy or Department of Trade policy. There is only the Government's policy. In practice there is close contact and co-ordination between the Foreign and Commonwealth Office and the Department of Trade which assumes primary responsibility for matters concerning the impact of the boycott on British companies, both individually and in general. The two Departments do not differ in their approach to the problems with which the boycott faces us.

The Government's basic approach to the boycott has frequently been stated. It is that we oppose and deplore all trade boycotts which do not have international support and authority. Ministers have repeatedly stressed this in the most categorical language in the House and elsewhere. I apologise if I am telling the House something it already knows. But if I am to explain clearly the Government's attitude towards the boycott, it is important that there should be no misunderstanding about this basic and fundamental principle.

None the less, the boycott is a fact of life which has been with us now for nearly 30 years and with which British exporters must deal. How companies act in specific cases must be a matter for their commercial judgment. This has been the accepted policy of successive Governments. The Government's role it seems to me is—while making clear its abhorrence of the boycott—and I underline that word—to do nothing that would further increase the difficulties of British firms dealing with the Middle East. Our aim as a Government is and must be to help expand British exports throughout the world. The boycott is an obstacle, a highly objectionable obstacle, to this, but one which we must help companies to surmount.

We wish it were possible for British exporters to trade entirely freely with all countries of the Middle East and we hope that negotiations for a lasting and just peace in the area will bring this about. But until that hoped-for goal is achieved, the Government's efforts must be directed to ensuring that British firms can conduct their trade with the minimum of hindrance.

I now turn to the subject of the Foreign and Commonwealth Offices certification service, and I know that many hon. Members are uneasy about this. Certification is a common international practice, and the procedures which the Foreign and Commonwealth Office follows in certifying signatures or seals on public documents are laid down internationally. There may be some variation from country to country in how these procedures are applied to various categories of document, but the procedures are, as I have said, internationally established and are set out in the 1961 Hague Convention for the Abolition of Legalisation. The Foreign and Commonwealth Office conforms to these procedures.

Because the process of certification may be unfamiliar, it may help if I explain in rather more detail what it is and why it should be necessary. In many foreign countries, export and other documents are not acceptable unless they are signed by an official. These countries include many Arab States, but the Arabs are not the only people to require documents to be officially certified; nor are they the majority of such countries. In order to prepare documentation for its exports to such a country, a British firm arranges for the signature of a competent employee on the documents in question to be attested by a notary or chamber of commerce official. The Foreign and Commonwealth Office then certify the authenticity of the signature of the notary or chamber of commerce official, the capacity in which he has signed the document, and where appropriate the identity of the seal or mark which the document bears. This is necessary because the notary or chamber of commerce official's signature is not known in the foreign country in question. Indeed, in the case of Iraq and a number of other Arab States which are not parties to the Hague Convention, the Foreign and Commonwealth Office's certificate is itself not recognised until it has been countersigned by the appropriate Arab consul in London.

Hon. Members may consider this a very bureaucratic and time-consuming procedure. I agree with them. It is our policy to try to reduce the need for certification of documents wherever possible. But we have to recognise that if we wish to do business with other countries, we have no alternative but to conform to their requirements in this matter of export documentation.

Mr. Rifkind

The Minister talks about certificates of origin. Will he accept that the only discriminatory certficates of origin are those required in pursuit of the Arab boycott and that the British chambers of commerce have refused to associate themselves with authenticating these documents? If that is the view taken by the chambers of commerce, why do the Government take a different view?

Mr. Judd

I was coming to the question of the chambers of commerce. I am afraid that the hon. Gentleman is misinformed. I have double-checked on this, and I have here at the Dispatch Box cases showing direct evidence that chambers of commerce have in fact signed such documents. So it is not true that chambers of commerce do not do it.

Mr. Rifkind rose—

Mr. Judd

Will the hon. Gentleman allow me to continue? I shall deal with the matter. I have so far described the process of certification as it applies to all documents and all countries.

It is the practice of most Arab States to require firms which do business with them to provide documents to show that they are not in breach of the boycott regulations. Such documents may be presented to the Foreign and Commonwealth Office for certification When this happens, it is only the authenticity of the signature of the notary or chamber of commerce official which is then certified by the Foreign and Commonwealth Office, in accordance with our standing procedures. I have some here signed by chambers of commerce. The Foreign and Commonwealth Office takes no account of or responsibility for the content of the document in question. We do not discriminate between documents of different classes, origins or destinations. Thus, the performance of this service is basically a technical measure to facilitate the flow of exports and in no way implies that the Government or the Foreign and Commonwealth Office condone or endorse the boycott.

Critics of the Foreign and Commonwealth Office's practice in this respect sometimes claim that it may nevertheless be widely misinterpreted as officially condoning or conniving at the boycott. Although I do not question their sincerity of purpose, I ask such critics to consider at least the possibility that they themselves may be partially responsible for giving currency to this misconception. Certainly, Ministers and officials take every opportunity to make clear that this is, indeed, a misconception and that we in no way support the boycott.

As I have already said, we have repeatedly stated our opposition to the boycott in categorical terms. I have done so tonight. I have also noted numerous instances when Ministers have stated the position on certification in reply to Questions in the House. Most recently my right hon. Friend the Foreign and Commonwealth Secretary stated it in reply to a supplementary question from the hon. Member for Pentlands on 15th June.

In many countries this process is referred to as "legalisation". Because we want the public to be quite clear that our service adds nothing to the validity of the documents in question, and since the word "legalisation" might in English imply that some validation has taken place, we preferred to use the term "certification" instead.

Certification is carried out in respect of some 40,000 documents a year. These cover a wide variety of subjects apart from the boycott. The Foreign and Commonwealth Office does not keep copies of these documents, nor records of their contents. Those who are concerned about economy in Government will be relieved to hear this. Since the Foreign and Commonwealth Office takes no responsibility for the content of the documents in question, it would hardly be appropriate to keep such records. But a statistical sample of 2,000 of these documents last year revealed that 60 per cent. of them related to exports to some 62 countries, including Israel. Of this 60 per cent., less than half—in other words, less than 30 per cent. of all the documents processed—related to exports to the Arab states.

As I said earlier, countries vary in the application of certification procedures to various categories of documents. There is no common practice, even within the European Community on the certification of boycott documents. However, our practice is broadly the same as that of most other Western European countries, including France, the Federal Republic of Germany and the Netherlands.

Having heard the report of a broadcast this morning, I was sufficiently concerned, because of my respect for the hon. Gentleman, to check today the situation with our embassy in the Netherlands. Our embassy has confirmed that the Netherlands Foreign Ministry still authenticates signatures on Dutch chamber of commerce boycott documents. In other words, Dutch practice is exactly the same as ours. In Canada, the Department of External Affairs countersigns signatures on export documents, including boycott documents.

Foreign and Commonwealth Office officials refuse to certify a document only when they do not recognise the signature or the appointment of the official who signed it or when they suspect some fraud or illegality. In fact, since within the legal system as it operates it would be totally inappropriate to scrutinise them in detail, fraud or illegality can prove difficult to detect, though some cases have come to light.

It is, of course, not illegal for British companies to provide the boycott-related declarations required under the import regulations of Arab States. Nor, with one exception, is it illegal, so far as I know, anywhere else in the world for firms to decide their response to the boycott in the light of their own commercial judgment. The one exception is the United States of America. We shall naturally study the practical effects of the recent United States measures, in due course, with close attention. But to be realistic about it, they do not necessarily provide a model for us. It is important to bear in mind that the United States economy is far less dependent on exports than our own or that of any Western European country. Were we convinced that it would be desirable to refuse to signatures on boycott-related documents, there would be administrative problems, but they would not in themselves be allowed to stand in our way.

However, our practice in certifying the vast number of documents constantly presented to us is based on principle rather than expediency. We see ourselves as performing a technical legal service for British firms in their export drive. To refuse certification in certain cases would simply make life more difficult for them in dealing with important markets. It is impossible to make any meaningful assessment of the likely consequences of such a refusal for our exports to the Arab world, now running at an annual rate of £2½ billion, but they would hardly be likely to be beneficial to this country. We would not be justified in assuming that Arab States would simply agree to bend their import documentation requirements to accommodate us. If British firms found it difficult or impossible to comply with those requirements, there would be few sectors in which Arab States could not obtain substitutes for British exports from other suppliers.

Question put and agreed to.

Adjourned accordingly at One o'clock.