Despite military embargo, India sells Dutch radar technology to Myanmar

An arms embargo is the strongest measure of arms control. And thus must be taken very seriously. In 2013, Stop Wapenhandel published on its website about a possible breach of the embargo against Myanmar by re-export of Dutch defence technology from Thales through the Indian company Bharat Electronics (BEL). Defence company Thales responded immediately by proving that it had explained to BEL its objection to the delivery, as this would breach the EU arms embargo against that country. Based on information from an Indian defence website however, we know that military radar technology originating in the Netherlands is still exported to Myanmar despite an European Union embargo on arms, munitions and military equipment, which is including all military technology and will be in force at least until 30 April 2016.

It is high time to clarify how military equipment, built on a Thales Nederland license, can be sold to embargoed Myanmar. Thales is extending its relations with India and more navy ships with of the same kind of technology will be built. How is arms export regulations applied to re-export of Dutch technology on Indian built ships and what is the authority of the Dutch government?

The military technology in case are systems from Indian defence company Bharat Electronics, meant for six to eight Aung Zeya-class/Kyan Sittha-class guided weapon frigates which Myanmar is building domestically with Chinese help. India is delivering also other technology for these vessels. The ships cost approximately € 175 million. With Chinese help Myanmar is quickly developing a blue water navy, a navy with the potential to operate outside its own coastal waters.

The frigates are fitted with a range of weapons and weapon systems including radar produced by Indian firm Bharat Electronics (BEL), the so-called RAWL02 Mk III military early warning air radar. However Thales itself informed BEL March 2013 that it estimated the chance for the grant of an export license – of the deliverance of this radar built on a license of Thales Nederland - below twenty per cent, even when the EU arms embargo would be lifted. Thales warned BEL not to deliver and thus prevented the sale of this state-of-the-art radar to Myanmar.

Shortly after this however, Scoop.it reported that: “(frigate) Aung Zeya (pennant number F11), is fitted with what appears to be an older variant of the RAWL.” In some sources this radar is still wrongly identified as the 3rd generation radar.

So, Bharat did sell radars to Myanmar. Not the ones Thales told them not to deliver, but an older version of the same radar, the RAWL02mkII instead of RAWL02mkIII. Expert sources which have been consulted by Stop Wapenhandel confirmed that this version is based on an ealier version of the LW-series. The mkIII version is based on the LW08, a long range radar of the 3rd generation and produced on a 100% license, according to a Thales email received June 26, 2015, and several are delivered to India. The major military handbooks underwrite the Dutch origin of the mkII variant. World Naval Weapon Systems (5th edition, p. 240) of the Naval Institute – independent but close to the US Navy – e.g. makes clear the majority of BEL's radar systems originates at Thales (Hollandse Signaal Apparaten, HSA). Thales confirmed in the email of June 26, 2015, that the radar delivered to Myanmar is based on LW04 technology of Thales Nederland. The LW-04 is the first one of the second generation long range air surveillance radars produced by Thales. In 1969 a license was provided by HSA to BEL to build the radar in India. BEL developed the radar into the RAWL02 MK IIAP/N-112110340676. This is advertised by BEL for its salient features and still in use by India as can be concluded by a manual for naval officers. Thales however states in an email of June 30, it is sixty years old and no new parts where deliverd. Although this is an old system, even the previous 1st generation LW03 radar system is still in use. There is also other HSA naval technology from that time presently equiping navies around the world, from Spain to Thailand and from Finland to Egypt or Argentine. It is not new, but also far from obsolete.

Moreover, military deliverances are prohibited by the embargo, new or old. And very clearly this is military technology. The RAWL02mkII is designed for use onboard large and medium naval ships for long range air warning and target detection. “He who sees the most, and sees it before anyone else does, has the advantage,” as Thales itself describes the use of the LW03. It is one of many projects between BEL and Thales Nederland (and its predecessors Hollandse Signaal Apparaten (HSA) and Thomson CSF). Bharat Electronics was largely set up by Signal, according to Stuart Slade, annalist on radar in military magazine Naval Forces. Thales itself states on this cooperation: “In the past, BEL built under license Flycatcher Mk1 Thales systems and naval radars LW04, DA08 and ZW06 and the system ground Reporter.”

The latest major development is a joint venture between the two companies, dedicated to the design, development, marketing, supply and support of civilian and defence radars for the Indian and global markets. That is exactly what is happening in the Myanmar deal.

Until recently, there has been a buzz about lifting of the arms embargo against Myanmar, because the position of opposition leader Aung Suu Kyi has been normalised and political reforms in Myanmar improved democratic rule. But this year the situation has been deteriorated fast. The fight against the Rohingya population in the west of Myanmar is the best documented example of erupting violence in the country, but there are also ongoing clashes between the Buddhist and Muslim populations. “The growing violence against the Muslim population is a tragic reminder that Myanmar is still far from fully relinquishing the problems stemming from decades of military rule,” states journalist Harrison Akins at the website of Al Jazeera. Because of the fighting, many Rohingya are fleeing the country. In the North, fighting between the army and ethnic Han Chinese forced tens of thousands of civilians to flee from the border region. An overview of armed conflict in Myanmar is outside the scope of this blog, but the picture is black. In June Indian commandos crossed over the border into Myanmar to strike separatist bases in retaliation against an ambush in Indian Manipur state early this month. The elections in June were won by the military.

In December 2014, Dutch minister of Foreign Affairs Koenders replied (see Parliament minutes, in Dutch) to questions by MP Van Dijk (SP) that no Thales technology has been used for the deliverance to Myanmar. According to the minister, anything delivered is developed by India itself. But he offered to look in further detail into the question. Unfortunately so far no MP used this offer to proceed with investigation into the role of Dutch technology in the Indian export to Myanmar.

Fokker: “a company with a long track record of deceit and illegal behavior”

In his Opinion of February 5, 2015 U.S federal judge Richard Leon refused to approve a settlement for sanction violations by the Dutch aerospace firm Fokker Services, daughter of Fokker Technologies Holding B.V with the US Government. Fokker is a key Dutch defence company.
The company was accused of more than 1,100 illegal shipments worth $21 million to Iranian customers, including the military, and to embargoed customers in Sudan and Burma in the period 2005-2010. Fokker agreed to forfeit $10.5 million and pay a civil fine of $10.5 million as a settlement.

But according to judge Leon, this settlement, made in June last year, was too lenient: “It would undermine the public’s confidence in the administration of justice and promote disrespect for the law for it to see a defendant prosecuted so anaemically,” he wrote. He especially referred to the deliverances to Iran to underpin his words.

Fokker cooperated in the investigation and promised to better its life. The US-government left the verification of these promised improvements however to self-reporting of the company. “The [Deferred Prosecution Agreement] DPA does not call for an independent monitor, or for any periodic reports to be made to either this Court or the Government verifying the company’s compliance with U.S. Law” wrote judge Leon, making clear his discomfort: “One can only imagine how a company with such a long track record of deceit and illegal behaviour ever convinced the Department of Justice to agree to that!”

The facts which made judge Leon deny the settlement came from information filed by the US Government. According to these, Fokker Services withheld or falsified tail numbers of planes. Falsely indicated parts were presented as “stock parts” to conceal its customers' affiliations with U.S. sanctioned countries. The Dutch company deleted references to Iran in materials sent to US companies. Employees were directed to hide activities and documents relating to Iran from US officials. Etc. This policy was at least partly known and approved by the senior management of the Dutch aeronautic company.

US Attorney Machen said: “Fokker treated U.S. Export laws as inconveniences to be 'worked around' through deceit and trickery.” In 2008, Fokker had already been warned by Dutch customs that they would not be able to defend the company “if it encountered problems with United States authorities regarding export compliance.”

Although the Attorney gave lip service to strong punishment of companies seeking “profit from violating and circumventing US trade laws” in the end Fokker has hardly been punished. Fokker Services fired a president, reassigned the duties of some of its personnel and promised to train employees in US export controls and economic sanctions. A program which is e.g. available every year in Amsterdam. The company had to pay a fine which was only as high as the value of its illegal transactions, “not a penny more than the revenue it collected from its illegal transactions,” judge Leon stated in his Opinion. The statement by Fokker that the figures are “speculative assumptions and amounts, not based on facts” is clearly inadequate. According to the Washington Post, punishment was minimal because more massive financial penalties would have severely hurt the health of the company and would have been a disproportionate penalty for its conduct. What will happen now must be awaited. Judge Leon remains open to approving a modified plea agreement. Fokker itself decided to file a Notice of Appeal.

Fokker is not just any company. It is part of the Dutch defence establishment, and is strongly linking the US to the Dutch military market. This provides another logical explanation for the fact that, despite the severe violations of US export law, punishment was so minimal. When searching the website of the US Department of Defence on Fokker, one finds as many as 351 results. Fokker is participating in major US weapon programs, such as the F-16, F-35 Joint Strike Fighter, Chinook helicopters, Sea Sparrow and PAC-3 missiles, and is thus part of the Atlantic bond between the US and the Netherlands. In January, it signed its most recent public contract with Lockheed Martin on wing components for the Joint Strike Fighter. Thus a company to handle with prudence.

In any debate on arms exports in the Dutch Parliament it is at least stated once that Dutch arms exports are according to the rules and that Dutch companies are behaving according to the law. This story shows a major Dutch defence company using tricks an deceit to trade its products. A bit more professional scepticism on the side of the Dutch parliament according to the spotlessness of Dutch defence companies would be wiser.

Late February, Fokker Elmo (also a daughter of Fokker Technologies) announced to start to market defence products in a Joint Venture with the Indian company SASMOS HET Technologies Ltd. India is known for its endemic corruption in the defence business. And there is another issue at stake too. As part of the joint venture deal, Fokker Elmo will transfer technology to its Indian partner as and when required. The question is if the end use of this technology will be controlled seriously, and if the Dutch parliament will be critical enough to monitor this.

Written for Stop Wapenhandel

Nederlandstalige versie Ravage-webzine

Illegal arms trade legalised

The fallout caused by the war in Libya has yet to settle, while the next military intervention is already planned. The Maghreb and Near East are flooded with heavy arms, smuggled out of Libyan arsenals. Syria is an important destination.

The BBC cites the UN Security Council's Group of Experts, which monitors the arms embargo imposed on Libya during the 2011 uprising. In April 2013 the Group points at illicit transfers of "heavy and light weapons, including man-portable air defence systems, small arms and related ammunition and explosives and mines. (…) The significant size of some shipments and the logistics involved suggest that representatives of the Libyan local authorities might have at least been aware of the transfers, if not actually directly involved." In reality, the situation is even worse.

Three cases give proof of the sheer seize of the deliveries; the involvement of Qatar as an important supplier; and more governments, also Western, involvement in the illegal arms shipments.

Case one
In April 2012 a vessel, the Letfallah II, was stopped by the Libanese authorities. “The ship left Misrata, Libya, on a date prior to 11 a.m. on 14 April 2012.” The UN Group of Experts confirmed that advanced weapon systems and components were aboard, such as SA-7b air defence systems and Milan missiles. When questioned during the shareholders meeting of EADS, Tom Enders, CEO of this big European arms producers and a major partner in MBDA – the producer of the Milan missiles – wavered away any suggestion that the company could help the Group by informing them to which countries the missiles were exported. Enders, with his known arrogance, stated that governments not companies are responsible to provide this kind of information. But the French government did not give the information either, when the Group requested it. Arms export and ethical policies are easily forgotten by governments and companies when they want to cover the murky world of arms trade.

Case two
In December 2012, the UN stated that Libya, Qatar and Saudi-Arabia were the most important sources of arms shipments to Syria (see). Let us focus on Qatar: The latest case of Qatar arming Syrian fighters is reported on August 28, 2013 by Jane's Defence Weekly which writes that Qatar is supplying FN-6 portable guided missiles against planes (MANPADS) to the Syrian rebels. (For more on MANPADS in Syria see the Rogueadventurer.) There are many more cases of Qatari involvement in (illegal) shipments of arms to Syrian fighters. E.g. the Group of Experts found that a box of .50 ammunition in the Letfallah which was sent to the armed forces of Qatar. The Group also found Belgium FN assault riffles on their way to Syria, originally sold to Qatar around 1980 (the Panel was told by FN from Liege, Belgium). Of course the Qatari authorities denied everything. Governments can be very unhelpful to trace illegal arms shipments.

Case three
One last explosive piece of information about illegal arms smuggling to Syria comes from the US embassy in Benghazi. CNN unveiled that at the time the embassy was targeted in August 2012 (four people were killed, including U.S. Ambassador Stevens), CIA-personnel was smuggling SA-7 missiles to Syria, it was speculated on Capitol Hill. The deliverances where already mentioned in May this year by several sources.One of the numerous twitter reactions to this covered illegal arms trade by a government body was: “So instead of Iran-Contra, we have Libya-Syria gun running.” (If you are too young to have heard about the Iran Contra scandal, just Gooogle it.)

On September 6, the United Kingdom implemented a new arms export policy concerning Syria. This so-called Export Control (Syria sanctions) Order 2013 removes Syria from the list of controlled destinations. This will enable the government to arm the Free Syrian Army and other groups under the arms export control regime. It opens a new and this time legal channel to arms Syrian opposition groups. (For the cons on this policy and the things to do see.) Making legal what was illegal changes the situation de jure but not de facto. Arms are still traveling from conflict to conflict and fanning the flames of violence. And the war in Syria will only add more weapons to the stream. Up to the next war or reason for a more cautious approach.

Research supported by Fonds Vredesprojecten
Geschreven voor Campagne tegen Wapenhandel