Q74.

Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?

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SCORE: 0/100

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The 2016 Public Procurement Law requires the publishing of aspects of the financing package. According to Art. 65, the call for tenders, specifying the price and the time limit for performance where possible. The tender should be published in the BOMOP and at least two national daily newspapers (1). The assessor was not able to check whether tenders on arms deals were published in the BOMOP in recent years (2). No public information on finance packages for defence deals could be found.

Under the 2016 Public Procurement Law, arms deals can be declared secret and are thus exempted from the application of the law (Art. 7, 1, b) (1).

Most defence purchases are made through single-sourced procurement contracts, which raises many concerns on transparency, democratic oversight, value for money, and corruption risks (2). There is no open competition taking place for purchases in the defence sector, whether it is restrictive or single-sourced (3). The Executive Secretary of the National Anti-Corruption Network (REN-LAC) says, “most high ranking officers have no idea about how the arms purchase is made” (3), which means that the information is not made available internally either. The government, including the defence ministry, does not provide the public with access to its information (4), and no law provides the citizens with a right to request government’s information either (6). Indeed, the financing package surrounding major arms deals probably falls under the provisions of Article 6 of Law N° 039 (2016) relating to the purchase of ‘secret defence’ items, which do not comply with the publicity requirements under Article 21. Pyman, Wilson, and Scott (2009) state that, “defence tended to be treated as a special entity within government, often appearing exempt from the usual rules of scrutiny, oversight and procedures to ensure competition in its procurement processes, often justified with reference to national security concerns” (5), (6).

There is no evidence that financing packages are made public as defence and security procurement is confidential [1] [2] [3] [4].

Most information detailing the financing of major arms deals is not publicly disclosed in Côte d’Ivoire. Such information is considered a state secret (secret défense) and the public procurement laws prohibit public disclosure. Article 8 of the 2009 Code of Public Procurement exempts the Ministry of Defence from disseminating information about items subject to state confidentiality provisions. Since a major arms deal would fall into this category (protection of the essential State interests), no aspects of financing are disclosed by MoD (1):

“Art. 8 – Exemptions
This Code does not apply to operations, supplies and services contracts related to national defense and that are subject to security and secrecy requirements, or for which the protection of the essential interests of the State is incompatible with public dissemination” (1).

There is no evidence that finance packages and the identity of the suppliers are made public by Ivorian institutions or media. However, information on major procurement plans may be leaked by international media once the contracts have been signed. For example, as in 58B, the Strategic Bureau of Information on Defence Systems published a news piece in September 2018 about the delivery of eight armoured vehicles to the government of Abidjan. The 7-ton armoured vehicles first appeared in public during a military parade on August 7, 2018, and were assigned to the Gendarmerie Nationale and to the Ivorian special forces. No details about the procurement cycle were provided (2). Afrique sur 7 published an article on August 11, 2018, stating that the government had embarked on a purchasing frenzy after the lifting of the UN arms embargo on Côte d’Ivoire. According to the reporter, the Forces Armées de Côte d’Ivoire (FACI) acquired Mi-24 helicopters, heavy airlifting Antonov aeroplane models and battle tanks from several countries, including Belarus. The reporter added that no information on the purchases had been disclosed because of the classified status of such acquisitions (3):

“This information, long classified as a defense secret, has just been disclosed during the Independence Day. A Russian news agency published in June an article indicating that an African country – without naming it – was going to receive these 4 × 4 Cayman armored vehicles” (3).

The principal aspects of the financing package surrounding major arms deals, (e.g. payment timelines, interest rates, commercial loans or export credit agreements) are never made publicly available before the signing of contracts nor after the contracts are signed. This secrecy is protected by several legal clauses. For example, Law no. 182 of 2018 which allows the MoD and MMP to make procurement processes closed, limited or single-sourced with no bidding process (1). With regards to arms procurement, it is not subject to any form of monitoring by the MoF or the CAA as per Law 204 of 1957 (2). Moreover, Law no. 14 of 1967 prohibits the publishing or broadcasting of any information or news about the armed forces and its formations, movement, armaments and personnel, and other things related to the military and strategic issues unless written approval from the director of the military intelligence department is obtained (3).

Details of financial packages that include vital issues like payment timelines, interest rates, and so on are not made public (1), (2). Mid-term expenditure framework publications from the Ministry of Defence do list itemised procurements, such as vehicles, furniture, etc. However, they do not list specific item type and cost.

There is no transparency of defence decisions, budgets, expenditure, procurement and contracting. In fact, the only defence institution that publishes its tenders is Royal Jordanian Airforce [1, 2]. There are rare occasions during which the armed forces publish their tenders through the Directorate of Defence Procurement for the Jordanian Armed Forces [3]. However, the number of available competitions does not match with the armed forces’ needs, given that it is the largest public sector employer in the country. There is rarely any information about defence procurement, and there are also no details of the financing package which are available to the public. There is no information on whether a financing packages exist at all. Besides that, it is very hard to access information about financing, budgets, expenditures or loans. There are some cases in which the US army publishes information about donations to the defence forces, which constitute the only occasions where the public are informed about weapon or military expenditures in Jordan in the press [4,5].

No information about the financial packages are made public. Sometimes even the auditors and lawmakers fail to access this information, officials and activists said (1, 2, 3, 4, 5 and 6).

The existence of a financing package and the identity of the provider are normally made public. The majority of arms deals come in the form of donations by foreign countries. Basic information on a deal and the entity providing it usually make headlines without providing many details. For example, in March 2018, the UK announced $13m assistance to the LAF without indicating more details about the contracts (1). In February 2019, the US announced the delivery of laser-guided rockets APKWs worth more than $16m (2).

The government generally does not disclose financial information relating to large defence purchases even after purchases have been made, let alone in advance. Major arms deals are generally exempt from the Code des Marches Public therefore it is unlikely that the government would disclose related information. In fact, most of the limited information revealed about such procurements comes from the companies that have won the contracts rather than the MDAC.
The LOPM outlines that between 2015 and 2019, the MDAC will have a budget of:
– 200 billion CFA to purchase aircraft and technical support equipment for the armed forces
– 100 billion CFA to buy combat vehicles and modern transport vehicles
– 70 billion CFA for equipment specifically for the security forces, notably for the national guard and the national gendarmerie.
– 20 billion CFA for intelligence and communications equipment.⁸
Beyond the re-publication of the LOPM in its full form on a Malian news website (it is not available on either the government’s website, the FAMa website, nor in the Journal Officiel database), no further breakdown is provided. But the LOPM at least shows that money for these subsequent purchases is included in the defence budget over the coming five years.
In February 2016, Airbus announced it had received an order for a C295W from the Malian government, the first public record of this contract.¹ The aircraft was delivered In December 2016.² Similarly, MDAC’s purchase of Russian attack helicopters in September 2016 was not revealed by the government, but was reported in November 2016 thanks to a source within the Russian company Rosoboronexport.⁴ The company delivered two attack helicopters to Bamako in October 2017.⁵ But again the government has still not disclosed how much it paid for these helicopters, let alone gone into the precise details relating payment schedule, interest rates etc.
Another major defence purchase was reported in June 2015. Brazilian company Embraer Defense & Security announced that Mali had ordered six A-29 Super Tocano combat planes.⁹ An unpublished report by the BVG notes that the Malian government agreed to pay USD 88.7 million (51.7 billion CFA) for the six planes.⁹ The BVG shows that the Malian state had paid two of the three instalments of the contract by 2016 (the third was scheduled for 2017), but Embraer is now set to deliver only four of the six planes.⁶ In none of the cases above has the government publicly revealed what it has paid for the aircraft, although the unpublished BVG audit does contain these details.¹ ² ³ ⁴ ⁵ ⁶ ⁷ ⁹

There is no evidence that the existence of a financing package and the identity of providers is usually made public (1,2). However, some major procurement plans may be made public through international media after the contract has been signed. Furthermore, purchases and in-kind donations by Niger’s international partners are often lumped together, and these financial aspects may sometimes be disclosed by the international media.

Details of defence procurement transactions are not made public. In discussions with a source, details were described as “highly confidential” and unlikely to be disclosed as they are not generally considered to be subject to disclosure in the public interest (1). Section 37 of the PPA 2007, provides for interest on delayed payments but this must be assessed in the overall context of Section 16 of the PPA 2007, which provides a wide exception for defence and security contracts from the ambit of the Act unless the presidential discretion is exercised. The recent purchase of Tucano planes by the government is subject to secrecy as far as the detailed terms of the agreement are concerned (2). For example, the basic unit cost has not been disclosed to the public, which has increased speculation that the contract cost has been inflated. Further, the information available in the public domain was only released after the deal was signed and not before the agreement was concluded (3).

The government does not publish any information about defence purchases or arms deals. The data published by the media is either via western media or is speculation (1). There is no verified information available on major arms deals before or after contracts are signed from the government. There is also no information available detailing principal aspects of financial packages surrounding deals, such as payment timelines, interest rates, commercial loans and export credit agreements on the MoD or the Secretary-General of the MoD websites (2), (3). The lack of government transparency around issues of defence and security is justified on the ground that national security is considered sensitive information (4), (5). There is no information on whether a financing package exists at all.

There are no financing packages within the national forces sector. All ammunition, weapons, and needs are provided through donations from foreign countries (USA, EU). If acquisitions are needed urgently, a request would be sent to the USA, and the EU police, to coordinate with Israel to allow the arms, ammunition or equipment that are needed (1).

There are no details available to the public about financing packages surrounding arms deals, and there is no evidence whether a financing package exists at all. [3] It has already been established that there is a general lack of transparency in defence decisions, budgets, expenditures, procurement and contracting. [1,2] The Ministry of Defence does not have a web-presence other than a Twitter account.

According to our sources, arms deals occur in the Crown Prince’s office and not through the MoD. Therefore, the MoD is unaware of the financial planning and details of such deals( not before, and not after)(3,4). The Saudi government does not release any financial details surrounding major arms deals prior to the signing of contracts. Neither does the government publish such information after contracts are signed. Broad financial details are typically released by thw selling country, for instance in parliamentary filings, or in industry-specific journals and publications. However, these usually only cover the overall value of the deals and do not address issues such as payment timelines, interest rates, commercial loans or other aspects of the financial package (1). Since 2017, Saudi has been reforming its military procurement procedures, including with the establishment of two military industry bodies partly intended to regulate and streamline the procurement process – Saudi Arabian Military Industries and the General Authority for Military Industries. No evidence was found in the public domain that these reforms have or will lead to increased transparency surrounding financial packages of major arms deals negotiated between Saudi Arabia and international contractors (2).

According to our sources, the MoD and the armed forces publish no data on the financing packages (1,2). Other sources argue that this aspect needs to be developed within the MoD( 3). Details of the financing packages are not publicly available. A review of official sources of information confirms that the Ministry of Defence does not officially communicate principal aspects of the financing packages surrounding major arms deals (1).

There is no available information about financing packages for arms deals. Moreover, the topline figure representing the defence budget is available via media platforms, rather than on official government websites. No details or any information about the financing packages of major arms deals are available, even though there are these kinds of packages according to sources (1), (2), (3).

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With thanks for support from the UK Department for International Development and the Dutch Ministry of Foreign Affairs who have contributed to the Government Defence Integrity Index.

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