H, R. v

Article 4(3) of the Trade in Goods (Control) Order 2003 is not confined to acts preceding the initial conclusion of a contract. A contractual variation or assignment involves a further agreement and may fall within the prohibition on acts calculated to promote the arrangement or negotiation of a contract for controlled goods.

Where the documentary evidence is capable of supporting an inference of later variations and relevant acts in the United Kingdom, the issue is fit for a jury. A terminating ruling based on the narrower construction cannot stand.

A fresh trial may nevertheless be fair if the prosecution clearly amends and particularises its case, the trial is actively managed, and the defendant may provide a fresh defence statement.

The Crown appealed against a terminating ruling by the Crown Court at Southwark on 19 January 2012. The ruling held that H had no case to answer on two charges arising from alleged breaches of regulations made under the Export Control Act 2003.

H was alleged to have acted in the United Kingdom in connection with proposed sales of controlled arms from China to Nigeria. The Crown relied on Article 9(2) of the Trade in Goods (Control) Order 2003, alleging that he was knowingly concerned in activity intended to evade Article 4.

The central issues were whether Article 4(3) extended to later variations or assignments of contracts, and whether the available documents provided evidence fit to be considered by a jury.

1. The Crown’s appeal was allowed. The judge had erred in construing Article 4(3) of the Trade in Goods (Control) Order 2003 as confined to the initial conclusion of a contract.

2. The structure of Article 4 did not support a sequential division between preparatory activity, negotiation, and performance. Articles 4(2) and 4(3) overlapped considerably. On its ordinary meaning, Article 4(3) covered acts calculated to promote an agreement varying or assigning an existing contract, as well as acts connected with an initial agreement.

3. The documents could support an inference that contracts made in April 2006 were later varied. They could also support an inference that relevant activity concerning those variations occurred in the United Kingdom. That evidence was fit to go before a jury and fell within Article 4(3) on its correct construction. The terminating ruling was therefore one which could not reasonably have been made after applying the law correctly.

4. The court would not decide the appeal on a new-contract case which had not been fairly advanced below. It held, however, that a fresh trial could fairly permit the Crown to advance a case based on new contracts or an assignment, provided that the indictment was amended to track Article 4(3), detailed particulars were supplied, a case-management hearing was held, and H could serve a fresh defence statement.

5. The court also observed that Article 4(1)(a) covered an agent arranging a transfer of controlled goods between third countries. Official guidance which suggested otherwise was wrong. The Crown had properly not relied on an intention to evade that provision because of that guidance.

• Court of Appeal (Criminal Division) — in [2012] EWCA Crim 1113, granted leave and allowed the Crown’s appeal against the terminating ruling. A fresh trial was ordered subject to procedural safeguards.

• Crown Court at Southwark — on 19 January 2012, Judge Loraine-Smith upheld a submission of no case to answer and made a terminating ruling in H’s favour.