Loopholes allow arms to be sold to blacklisted regimes

European arms makers are using loopholes in a code of conduct to send weapons to countries that abuse human rights, according to a report published today.

The document shows how Europe's armaments industry has helped supply helicopters to Nepal, armoured vehicle parts to Burma and China, and rifles and pistols to Malaysia.

The EU is about to lift anarms embargo on Libya, and is considering whether to end another ban on weapons sales to China. One argument in favour of ending these embargoes is that, even without them, the EU's code of conduct on arms sales provides an effective guarantee that weaponry will not fall into the wrong hands.

That assertion is challenged by today's document from a coalition of 55 European non-government organisations (NGOs), including Amnesty International, Saferworld and Oxfam. They have called for changes to the code.

"Tighter language would help prevent member states from making irresponsible export licensing decisions," the NGOs say in a statement.

They claim that, between 1994 and 2001, the EU exported nearly $10bn (£5.6m) of arms to developing nations - about one-third of all the arms deliveries to these countries.

One concern is that arms firms are licensing the production of weapons to overseas countries which do not fall under the EU's code. Another is that weapons components are slipping through the net. The report also calls for more openness from EU member states, which are supposed to publish an annual report on arms sales.

The document shows diesel engines from the German firm Deutz AG were incorporated into the WZ 551 armoured personnel carriers in China, despite the fact that tighter arms restrictions are in force for exports to Beijing following the Tiananmen Square massacre of 1989.

The same components feature in Ukrainian BTR-3U armoured vehicles, usually equipped with a 30mm gun, a 7.62mm machine gun, a 30mm automatic grenade launcher and a anti-tank guided weapon system. In 2003, Ukraine was reported to have signed a contract to supply Burma with 1,000 BTR-3U over 10 years.

The French firm Eurocopter co-operated with Indian manufactures to produce the Lancer light-attack helicopters and Advanced Light Helicopter. The Lancer, fitted with two rockets as well as machine-gun pods, was subsequently exported to Nepal, where helicopters have been used against civilians and insurgents.

And the Austrian gun maker Steyr-Mannlincher has signed an agreement with the Malaysian government to manufacture weapons, including a new assault rifle. Malaysia - not subject to the EU code of conduct - said it will export Steyr's AUGA3 rifle to 40 countries.

Dick Oosting, director of Amnesty International's EU office, said: "The EU code is a first step, but clearly it is not meeting its objective of ensuring responsible export controls across Europe. EU states are still supplying arms to countries that abuse human rights."

Roy Isbister, head of export controls for Saferworld, said the EU should "err on the side of caution" in its push to lift arms embargoes, given the problems with the code of conduct.

A British government official said: "The code of conduct, which is under review, is not perfect but it is an important and valuable tool in controlling arms exports, and we will look to improve it further."