§ 251. Mr. Ashdownasked the Secretary of State for Defence (1) if any of the airborne warning and control system offset work being offered by the Boeing company will be carried out under the terms of the Export Administration Act of 1985 of the USA; and if he will make a statement;
(2) if he has received any guarantees regarding application of the United States of America Export Administration Act to offset orders in connection with the Boeing airborne warning and control system contract; and if he will make a statement.
§ Mr. Archie Hamilton[pursuant to his answers, 18 December 1986 c. 693 and 12 January 1987, c. 93–4]: As my right hon. Friend the Secretary of State said in the House on 18 December 1986 at column 1350 the order for AWACS was subject to satisfactory completion of contractual negotiations with Boeing. The purchase also involves an element of direct acquisition from the United States Government, and is the subject of a memorandum of understanding between the two Governments. As is normal in projects of this size and complexity, negotiations took place for some weeks after the initial announcement of our intention to purchase.
We have now reached agreement with Boeing on a contract which has been negotiated against the 458W background of existing United Kingdom and US law. The agreements reached with Boeing and the US Government are free from any acceptance by the United Kingdom Government that US laws can be applied to encroach on United Kingdom sovereignty. Equipment exported from the USA forming part of the United Kingdom AEW system or needed for its subsequent through-life support will, of course, be subject to controls on its export from the USA. Control of re-export from the United Kingdom will be enforced exclusively by the United Kingdom Government, and this will also apply to the defence articles and services forming part of the United Kingdom AEW system arising from contracts placed by Boeing or its US subcontractors in the United Kingdom.
The other individual work packages to be generated by the procurement will not be fully identified for a number of years, and will be the subject of separate contracts placed on United Kingdom companies. Her Majesty's Government have long stated their rejection of any claims that US laws and regulations can be applied to encroach upon United Kingdom jurisdiction, and United Kingdom companies will negotiate these contracts in this light.