The Progressive Unionist Party, recognised as the UVF's political wing, welcomed the decision.
Specified basically means that an organisation is recognised as being involved in violence and crime.
Being de-specified means that it is now judged to have ceased that activity and is now moving towards engaging in more normal political activity
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The decision to de-specify the UVF and RHC comes after the International Monitoring Commission essentially gave the two groups a clean bill of health in its latest report.
Secretary of State Shaun Woodward made the announcement that the two groups are to be de-specified in the House of Commons yesterday.
Mr Woodward made his announcement as part of a review of all paramilitary organisations.
Mr Woodward said: "Under legislation I am obliged to review the status of all specified and other paramilitary organisations and I have today laid an order before Parliament seeking approval to despecify the UVF and RHC.
"Their statement of last May committed the organisation to assuming 'a non-military civilianised role'.
"Government undertook to review the position at that time and we have now taken a careful look at the organisation's position.
"In the light of this and in acknowledgement of their commitment and additional factors, I have therefore concluded that there are sufficient grounds to de-specify the UVF/RHC.
PUP Leader Dawn Purvis said: "I would like to welcome this step by the Secretary of State.
"This is recognition of the work carried out and progress made since the statement of intent of May last year.
"This is further evidence of Northern Ireland's strides towards normality."
Mr Woodward also told the house he is to specify the dissident republican grouping, Oglaigh na hEireann.
The Secretary of State's announcement to specify ONH comes after a car-bomb attack on an off-duty Catholic PSNI officer in Co Tyrone.
The officer was seriously injured in the attack which is being blamed on one of the dissident republican groups.
"Based upon my review, informed by the recent assessment from the IMC of ONH, it is my intention to specify this organisation."
The order to despecify the UVF and RHC and specify ONH will be made under the terms of the Northern Ireland (Sentences) Act 1998, and will now be debated in both houses of parliament.
There are no changes to the status of other specified organisations, the Continuity IRA, Real IRA, LVF, Orange Volunteers and Red Hand Defenders.
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