To ask the Secretary of State for Defence what recent discussions he has had with European partners on the simplified licence system to facilitate the circulation of components and defence equipment between EU countries; and when he expects such a licence system to come into effect. [130794]

I have been asked to reply.There is already in place the Letter of Intent (LOI) arrangements that provide a simplified licensing system to facilitate the transfer of defence equipment for joint projects involving the LOI Partners that the UK supports. In addition, the European Commission in its Communication, "Towards an EU Defence Equipment Policy" (COM 2003 113 final of 11 March 2003), has proposed an impact analysis to establish the value of any Community-level legislative initiative to simplify intra-community transfers of defence-related goods. Work on this will start at the end of 2004.