By Colby Goodman

This post first appeared in the March 2020 edition of The Export Practitioner. 

 

Sometimes good intentions are just good intentions. In the push for major changes to the U.S. arms export control system from 2010-13, the Obama administration often said the U.S. government was not effectively preventing harmful arms exports. One major culprit was “an overly broad definition of what should be subject to export classification and control,” according to then-Defense Secretary Robert Gates.

Placing “higher walls around fewer, more critical items” would solve the problem. Seven years later, however, there are serious questions about whether there are higher walls around military technologies important in modern warfare.

Push for Higher Walls

Gates’s concern about the overly broad definition of arms was based on his time as deputy director for intelligence at the Central Intelligence Agency. In his April 20, 2010, speech, Gates said, “it soon became apparent that the length of the list of controlled technologies outstripped our finite intelligence monitoring capabilities and resources. It had the effect of undercutting our efforts to control the critical items.”

A few State officials also told me at the time that they had been requested to do investigations (post-export end-use checks) on U.S.-approved exports of items such as washers for certain weapons systems, which they thought was a waste of time.

The Obama administration in fact frequently stated that the U.S. arms export control system was harmful because “we devote[d] the same resources to protecting M1A1 tank brake pads as we do to protecting the M1A1 tank itself.”

According to Gates, “many parts and components of a major piece of defense equipment – such as a combat vehicle or aircraft – require their own export licenses. It makes little sense to use the same lengthy process to control the export of every latch, wire, and lug nut for a piece of equipment like the F-16, when we have already approved the export of the whole aircraft.” Instead, the U.S. government should focus on the five percent of cases that are riskier.

While the administration often exaggerated these points – M1A1 tanks had always received much more vetting than their brake pads – many parts and components did require a separate license. In 2011, the Government Accountability Office (GAO) also published a report that highlighted clear gaps in State post-export end-use checks for sensitive night vision goggles to countries in the Middle East.

In response, the Obama administration led an effort to move an estimated 30,000 munitions-related items from State’s more strictly controlled U.S. Munitions List (USML) to Commerce’s more loosely controlled Commerce Control List (CCL). This effort included up to 90 percent of the items controlled under the USML’s military vehicle category.

For the military aircraft category, “missile launchers, radar warning receivers, and laser/missile warning systems” would continue to be controlled under the USML. However, items such as F-16 wings, rudders, fuel tanks, and landing gear would move to the CCL. The administration would also move some items formerly classified as significant military equipment.

But, did the Obama administration simultaneously elevate reviews or checks on key U.S. military technologies that stayed on the USML? It certainly was not enough for the Obama administration to just move tens of thousands of munitions off the USML. There was also a risk that the move would likely result in a dip in State revenue and personnel for examining arms exports.

Gaps in Implementation

In a recently published report entitled Holes in the Net: U.S. Arms Export Control Gaps in Combatting Corruption, I argue that there are a number of gaps in State’s efforts to place higher walls around arms on the USML. These gaps are in State’s Directorate for Defense Trade Control’s (DDTC) basic review of arms export licenses and in their more detailed pre- and post-export end-use checks. The problems appear to have been widened under the Trump administration.

In July 2018, for instance, State’s Inspector General (IG) found several weaknesses in the way DDTC reviews arms export applications in an audit. Specifically, the IG found that DDTC had “approved 20 of the 21 applications (95 percent) [IG] reviewed despite lacking required information…” (see The Export Practitioner, March 2019, page 15).

In eight cases, the IG found inconsistencies within the application on the quantities, types of arms, or values, which are indicators of a possible diversion of U.S. weapons or bribery. The IG audit also found 17 cases in which DDTC should have notified Congress for additional scrutiny, but DDTC did not.

State is no longer increasing the number of its end-use checks in a year. In the department’s annual report on end-use checks for fiscal year (FY) 2016, DDTC said there was an increase in the percentage of end-use checks they initiated compared to the total export applications for the year from 1.3 percent in FY 2015 to 1.75 percent in FY 2016.

DDTC seemed to indicate that this increase showed it was beginning to elevate its reviews of more sensitive military items. However, the most recent end-use report for FY 2018 under the Trump administration shows a drop in the percentage of end-use checks to 1.3 percent, which is similar to percentage levels before the reform started.

There are also some key gaps in the way DDTC conducts its end-use checks. In 2016, State developed a new framework for reviewing arms sales, which recommend asking several key questions about corruption. These questions include whether or not the intended recipient of U.S. arms is “permitting illicit trafficking across borders, buying and selling positions or professional opportunities, stealing government assets and resources, engaging in bribery, or maintaining rolls of ghost personnel.” However, DDTC does not regularly look at the above defense sector corruption indicators when conducting its pre-export end-use checks.

It also appears there have been some challenges with DDTC’s post-export end-use checks. In the department IG’s audit of DDTC in 2018, they noted serious delays, from 77 to 300 days, in conducting post-export end-use checks. In FY 2018, DDTC had also only conducted around nine pre- or post-export end-use checks for all arms exports to the Middle East and North Africa despite the ongoing risks of diversion in the region.

What could be done to elevate State checks on key military technologies and weapons systems? DDTC has said one of the key reasons for some of the above gaps has been staff turnover and an overall staff reduction. DDTC told the department’s IG that its licensing office had a 28 percent reduction in staffing as of July 2018, and some licensing officers were finding it difficult to keep up with their workload. Staff turnover also made it difficult for DDTC to conduct end-use checks in the Middle East in FY 2018.

Fixing the Gaps

While DDTC has hired some staff to help address the gaps in end-use checks for the Middle East, they still have not been able to add enough staff to address all of the above concerns. The Trump administration’s hiring freeze and reductions in State funding have also impacted DDTC’s efforts to hire new staff. Congress, however, could address this gap by elevating funding for DDTC personnel, which would also help speed up DDTC’s review of arms export applications generally.

It also appears that the Trump administration’s focus on increasing the number of U.S. arms sales to key U.S. partners and allies around the world has impacted some State focus on enhancing risk assessments. There, however, are continuing efforts to enhance these risk assessments at State, including related to defense sector corruption indicators.

In some ways, Gates was right when he said there was a need to place higher walls around key U.S. military technologies and weapons systems to prevent them from reaching the wrong hands. If the United States does want to make good on one of its initial reasons for the reform, there are still opportunities to do so. Without these improvements, however, the United States will be back where it started at the beginning of the reform, not effectively preventing harmful arms exports.

 

(c) 2020 Gilston-Kalin Communications LLC. Reprinted with permission.

January 14, 2020 – Sweeping reforms to controls on American arms sales abroad are increasing holes in checks to identify and curb corruption – measures that can also be used to assess whether sales may help or hurt efforts to address terrorist threats and attacks – according to new research by Transparency International Defense & Security.

Launched today, Holes in the Net assesses the current state of US arms export controls by examining corruption risk in three of the most prominent sales programs, which together authorized at least $125 billion in arms sales worldwide for fiscal year 2018.

Across all three different arms sales programs, which are managed by the Defense, State, and Commerce Departments, there is a clear gap in American efforts to assess critical, known corruption risk factors. This include the risks of corrupt practices – such as theft of defense resources, bribery, and promoting military leaders based on loyalty instead of merit – weakening partner military forces.

The United States is one of the biggest arms exporters to countries identified as facing ‘critical’ corruption risk in their defense sector, including Egypt, Jordan, Oman, Qatar, and Saudi Arabia, according to recent analysis by Transparency International – Defense & Security.

Steve Francis OBE, Director of Transparency International – Defense & Security, said:

“Given the corrosive effect corruption has on military effectiveness and legitimacy, it is deeply concerning to see that these reforms to American arms export controls have made it easier for practices like bribery and embezzlement to thrive.  In order to ensure American arms sales do not fuel corruption in countries like Egypt, Qatar, and Saudi Arabia, it is imperative to understand and mitigate the corruption risks associated with countries receiving US-made weapons before approving major arms deals.”

Of the three programs assessed in the report – Foreign Military Sale, Direct Commercial Sale, and the 600 Series – the 600 Series was identified as having the biggest gaps in its anti-corruption measures. Overseen by the Commerce Department, sales through this program do not require declarations on a series of major corruption risk areas, including on certain arms agents or brokers, political contributions, company subsidiaries and affiliates, and any defense offsets. These areas are common conduits used for bribery and political patronage.

More recently, the Trump administration has proposed moving many types of semi-automatic firearms and sniper rifles to Commerce Department oversight. The proposal calls for additional controls for firearms, but also reduces overall oversight of small and light weapons exports.

 Colby Goodman, Transparency International – Defense & Security consultant and author of the report, said:

“Over the past 30 years, America has established some of the strongest laws to prevent bribery and fraud by defense companies engaged in arms sales. However, defense companies selling arms through the 600 Series program no longer have to comply with key anti-corruption requirements. As a result, US officials will likely find it harder to identify and curb bribery and fraud in sales of arms overseen by the Commerce Department.”

The report analyzed five priority corruption risk factors for American arms sales programs: 1) Ill-defined and unlikely military justification; 2) Undisclosed or unfair promotions and salaries in recipient countries; 3) Under-scrutinized and illegitimate agents, brokers and consultants; 4) Ill-monitored and under-publicized defense offset contracts, and 5) Undisclosed, mismatched or secretive payments.

The report makes a series of policy recommendations that would help strengthen anti-corruption measures in these prominent arms sale programs, including:

• Creating a corruption risk framework for assessing arms sales through programs managed by the Defense, State, and Commerce Departments. These assessment frameworks must examine key risk factors identified in our report, including theft of defense resources and promoting military leaders based on loyalty instead of merits, among others.
• Strengthening defense company declarations and compliance systems for sales of arms overseen by the Commerce Department, including declarations of any defense company political contributions, marketing fees, commissions, defense offsets, and financiers and insurance brokers of arms – all clear conduits for corruption.
• Increasing transparency on arms sales and actions to combat arms trafficking overseen by the Defense, State, and Commerce Department. Critically, the Defense and State Departments need more details on defense offsets in order to properly review proposed arms sales. There is virtually no information on Commerce Department approved arms sales.
• Legislation requiring for firearms and associated munitions to remain categorized as munitions to ensure further relaxing of export controls do not adversely impact US national security or foreign policy objectives.

Notes to editors:

Interviews are available with the report author.

Holes in the Net is available to download here.

Saudi Arabia, a major importer of US-made arms, failed to defend against an attack on its oil facilities in September 2019. Reports have suggested that corrupt ‘coup-proofing’ measures designed to shield the ruling family likely contributed to the ineffective response.

Contact:

Harvey Gavin

harvey.gavin@transparency.org.uk

+44 (0)20 3096 7695

+44 (0)79 6456 0340

Last week, Transparency International Defence & Security (TI-DS) attended the Fifth Annual Conference of States Parties (CSP5) to The Arms Trade Treaty (ATT), where delegations of the 104 signatories gathered to review the status of the Treaty and set the agenda for the year ahead. 

Five years since the introduction of the Arms Trade Treaty, there are plenty of reasons for gloom. This year’s Conference focused on two topics in particular: diversion and gender-based violence. Despite being covered under the ATT – articles 7 and 11 respectively – states have been struggling to address these illicit arms flows and reduce gender-based violence. Any advances made by new states ratifying the treaty – most recently Canada and Botswana – have been countered by the lack of representation from some of the world’s largest arms exporters such as Russia, China and now the US, which withdrew its signature from the treaty.

Meanwhile transfers of weapons continue to increase, and implementation challenges are becoming obvious. However, at this point the question is not one of giving up, but rather one of what can we do to make the Treaty more effective?

The CSP is open to civil society, encouraging participation in side events and lively debates. Only one panel discussion was restricted to state signatories – out of 20 in total. While this shows the role and importance of civil society participation in the ATT process, more can be done to foster this cooperation during the rest of the year.

TI-DS has an important contribution to make to this movement. By working together with Transparency International’s national chapters and other local partners we can do more to support national adoption and implementation strategies.

What does that mean in practice? Here are five learnings from the CSP5 that point the way:

1. Provide the evidence-base for arms control decisions

When deciding whether to approve an arms export application, state licensing bodies must consider a wide range of factors about the importing country – from the internal security situation to regional stability and risk of diversion from the stated end-user. Most states will assess these factors through an in-depth risk assessment of the viability of the export, using both classified and open source information.

Research reports and studies conducted by civil society can provide valuable sources of information for states. TI’s Government Defence Anti-Corruption Index (GI) provides an analysis of the corruption risks within the defence establishments of 90 countries worldwide. Government export control agencies can use this data to consider the risk of corruption in importing countries to inform the likelihood of diversion or misuse of weapons.

2. Raise awareness of the ATT and its relevance to national governments

As organisations with a particular national, regional or thematic focus, civil society organisations (CSO) are well-placed to provide expert insight into the arms control issues facing a country. In states that have not yet adopted the ATT – or are working towards ratifying it – CSOs can work with government agencies, industry and think tanks to facilitate a national debate on the importance and benefits of compliance with the treaty. They can build coalitions of interested parties to work towards a common goal, as shown by the continued contribution made by the Control Arms Coalition.

Moreover, civil society – unlike governments, industry or think tanks – often have the grassroots networks and community buy-in needed to build pressure and hold states to account for their promises when it comes to international obligations such as the ATT.

3. Assist parliaments and governments in implementing the treaty

CSOs working on arms control issues are in general able to develop a broader knowledge base than parliamentarians and other actors whose day jobs only touch upon this complex topic. The potential for cooperation between the two was illustrated by an example presented at this year’s conference which highlighted the role of the Small Arms Survey NGO, who assisted Japan by conducting a gap analysis of its ATT implementation progress.

From giving evidence to a parliamentary committee to providing MPs with research to inform parliamentary questions, CSOs can work directly with concerned parliamentarians to maintain the political will and internal pressure needed to support proper implementation of the treaty.

4. Monitor ATT progress and violations

As third-party stakeholders, CSOs are often able to raise and address controversial topics.

CSOs working in-country may encounter evidence of a violation of treaty obligations and report it to the government. Many CSOs also have the ability and expertise to synthesise these cases into national and regional trends, thereby providing governments with a tool to develop mitigation strategies and improve their progress in implementing the ATT. 

By providing a solid evidence base with clear policy recommendations, CSOs can help states reflect on the progress they have made and highlight areas that need strengthening.

5. Achieve universalisation through improved reporting and transparency

The substantial differences in the way that states submit their ATT reporting obligations constitute a barrier to universalisation. Although 83 per cent of states used the reporting template, some are still submitted incomplete or in non-readable format or indeed in a completely different format that is difficult to consolidate. On top of this, 25 per cent of states failed to submit an annual report at all.

CSOs can work with national governments and industry to promote transparency and common reporting standards, which in turn allows for comparability and more effective implementation of treaty obligations.

The future of the ATT may be uncertain, but states can’t do it alone and nor should they. Civil society can help national governments bridge the gap between policy and practice by providing hands-on insight and analysis into arms control issues worldwide.

7^th March 2019, London – A resolution, passed in the Dutch Parliament, calling on the Dutch Government to support the inclusion of anti-corruption measures as a separate criterion in EU arms exports, is an important move that we hope will see further action, according to Transparency International Defence and Security Programme and Transparency International Netherlands.

On Tuesday, Dutch MPs voted to support a resolution that called for the strengthening of EU arms export criteria and noting that corruption occurs in major arms deals, contrary to both the law and the principle of fair competition.

The current EU Common Position on arms exports control, which dates from 2008, makes no reference to corruption in its 8 criteria, despite the very high risk of corruption in this sector. Introducing a corruption criterion would open the possibility of an export licence for military technology or equipment being denied where there is a clear risk that the deal might involve a significant level of corrupt practices. 

Steve Francis, Director of Transparency International Defence and Security said:

“We welcome this step by the Dutch Parliament as it calls the Government to take a leading role within the EU to carve out a new and explicit anti-corruption criterion in the EU’s arms export regime. We now hope the Dutch Government will use its influence in the European Council to push for the inclusion of this criterion as part of the Common Position review.”

“Big steps and strong leadership from member states is vital in tackling the risks posed to citizens, as well as the unfair playing field created by defence companies that engage in corrupt activity. We therefore hope other member states will adopt similar approaches to ensure anti-corruption provisions are properly considered ahead of arms deals.” 

***ENDS***

Contact:
Dominic Kavakeb
+44 20 3096 7695
+44 79 6456 0340
Dominic.kavakeb@transparency.org.uk

Transparency International Defence & Security would like to announce the initial phase of the 2019 edition of the Defence Companies Anti-Corruption Index (DCI).

Update: Following a thorough review of the company feedback, we will now begin the assessments in May 2019 to account for company reporting periods.

What is the Defence Companies Anti-Corruption Index (DCI)?

The DCI sets standards for transparency, accountability and anti-corruption programmes in the defence sector. By analysing what companies are publicly committing to in terms of their openness, policies and procedures, we seek to drive reform in the sector, reducing corruption and its impact. The DCI will assess 145 of the world’s leading defence companies across 39 countries. The Index was first published in 2012 with a second edition in 2015, and the latest edition is set to be published in 2019.

The upcoming index will apply a revised methodology and will include some key differences from previous editions. The draft Questionnaire and Model Answer document can be found here.

The 2015 DCI can be found here.

How will the 2019 Index be different?

After a comprehensive review, the new DCI assessment has evolved and should be read alongside our recent report ‘Out of the Shadows: Promoting Openness and Accountability in the Global Defence Industry’ – which provides greater insight into the theory behind our methodology. Based on consultations with anti-corruption and defence experts, TI DS have identified ten key areas where higher anti-corruption standards and improved disclosure can reduce the opportunity for corruption.

In one the most significant changes to the methodology, TI DS will this year base the research only on what companies choose to make publicly available. The decision to exclude internal information from the evaluation reflects our increased focus on transparency, public disclosure of information, incident response and the practical implementation of anti-bribery and corruption programmes.

How have companies been selected?

Companies for the 2019 DCI have been selected on the basis that:

• The company features in the 2016 edition of SIPRI’s Top 100 Arms-Producing and Military Services companies.
• The company features in the 2016 edition of Defence Industry Weekly’s Top 100 defence companies.
• The company is the largest national defence company headquartered in a country exporting at least £10 million, as identified by SIPRI.

To see the list of companies selected for assessment in 2019, click here.

How will data on companies be collected?

Our assessment of a company’s individual anti-bribery and corruption record is based entirely on publicly available information. In particular, we will review the company’s website, including any available reports, for evidence of robust anti-corruption systems, as well as any functioning hyperlinks to other relevant online materials. In reviewing your company’s materials, we will assess the completeness and accessibility of the information, in particular:

• The amount of information a company publishes about its internal anti-corruption programmes, incident response systems and interactions with third parties;
• Evidence that these systems are used by employees and made available to all employees;
• Evidence that the company monitors and reviews its anti-bribery and corruption processes.

Researchers from TI DS will conduct assessments of each company’s public information starting in May 2019, giving companies an opportunity to make any alterations to their publicly available information before the research process begins. The initial results will be shared with your company, after which you will have the opportunity to review the initial findings and suggest any corrections. The final assessments will be published on our website.

Where can I find the assessment criteria?

A draft version of the 2019 Questionnaire and Model Answer document is available here. Companies, governments, and civil society alike were invited to provide feedback on the methodology. To view an anonymised version of this feedback, click here. 

We are currently reviewing this feedback and aim to publish a final version of the Question and Model Answer document by early February 2019.

Our recent report ‘Out of the Shadows: Promoting Openness and Accountability in the Global Defence Industry’ provides greater insight into the theory behind the changes to the 2019 methodology.

What is the timeline for the Index?

The draft questions and model answers for the 2019 assessments are now available at staging.clearhonestdesign.com/tids/dci.

We are currently reviewing the feedback received from companies, industry bodies and subject-matter experts and we will aim to publish a final version of the Question and Model Answer document early February 2019. Research will begin in May 2019 once companies have had some time to make improvements, should they wish to.

What do companies have to do next?

We are currently reviewing the feedback received from companies, industry bodies and subject-matter experts and we will aim to publish a final version of the Question and Model Answer document early February 2019. Research will begin in May 2019 once companies have had some time to make improvements, should they wish to.

Will we have an opportunity to give feedback on the methodology before the assessments start?

Yes – companies, industry groups and experts were able to provide feedback during a dedicated consultation period in November 2018. A document containing the entirety of this feedback in the form that it was submitted, with company names anonymised, is now available here.

Feedback is welcome from all users of the index including governments, civil society, journalists and companies.

Resources

• DRAFT Question and Answer Document 2019
• Full List of Companies Selected for Assessment in 2019
• Company Feedback, November 2018
• Report: ‘Out of the Shadows: Promoting Openness and Accountability in the Global Defence Industry’
• Past editions: Defence Companies Anti-Corruption Index 2015

11^th June 2018, London – Today, NGOs in France, Indonesia, Sri Lanka, Tunisia, the UK and the US are calling upon the agencies investigating Airbus to ensure that the company and its senior executives are properly held to account.

Airbus is under investigation in several jurisdictions for allegedly paying bribes in order to win billions of dollars of contracts. The allegations are egregious and widespread, covering multiple countries and involving several divisions within Airbus including commercial aircraft, helicopters and aerospace and defence.

In February 2018, Airbus reached a €81.25million settlement in Germany to end a corruption investigation into the 2003 Eurofighter deal with Austria. Over the coming months, prosecutors will be weighing up their options, with more settlements as one possible outcome, allowing the company to continue winning government contracts without prosecution.

Today the NGOs in a letter to the heads of the Serious Fraud Office, Parque National Financier and Department of Justice urged the authorities to ensure that:

• National economic interest, relations with foreign states or the importance of Airbus as a national industry must not affect the investigation or prosecution of alleged bribery by the company;
• Individuals responsible for the wrongdoing must face prosecution including those at senior levels;
• No immunity deals should be included in any action taken against Airbus;
• A settlement should only be given if prosecutors have high confidence that Airbus has fully cooperated and revealed the full extent of wrongdoing, and if it has fully signed up to genuine corporate change including through disciplining of employees responsible for wrongdoing;
• Countries where it is proven that Airbus has paid bribes must be fully compensated for harm caused; and
• Any enforcement action must be fully transparent with details of the wrongdoing made publicly available.

Susan Hawley, Director of Policy at Corruption Watch, said:

“The Airbus case is a test of the resolve and independence of the prosecuting bodies and their ability to bring widespread and egregious wrongdoing to justice. Airbus and individuals implicated must not be let off lightly if these global allegations are confirmed by law enforcement investigations.”

Andrew Watson, Head of Industry Integrity at Transparency International Defence and Security said:

“If proven, these extensive cases of corruption will have had a significant impact on the public, state institutions and the industry. With such wide-ranging and complex allegations, it will be will be vital for prosecutors to co-ordinate closely if they are to account for the full scale of alleged offending; because individual cases, serious as they may be, won’t tell the whole story.”

“For the punishment to be proportionate to the crime, prosecutors should consider the full range of offending across all jurisdictions when reaching their decisions.” (more…)

View letter

Dear Director

Ensuring any enforcement action against Airbus meets fair justice standards

We are writing as concerned anti-corruption organisations that have seen the effect of corporate bribery on democracy, good governance, economic progress and security across the world.

We are aware of extensive media coverage about allegations of bribery involving Airbus. The allegations are egregious. They span over a decade and include at least 14 countries including Sri Lanka, Kazakhstan, Austria, Tunisia, India, Poland, China, Greece, Saudi Arabia, Turkey, Indonesia, Kuwait, Mauritius and Mali as well as implicating all business segments within Airbus, including aerospace and defence, commercial aerospace and helicopters. The media coverage has indicated that the SFO, PNF and DOJ are all investigating alleged wrongdoing. Other authorities around the world are also investigating these allegations, including in Austria, Kuwait, Poland and Sri Lanka.

We welcome the fact that the SFO and the PNF have set up a joint investigation team in this case with close coordination with the DOJ. The co-ordination of law enforcement activities in such cross-border and global alleged wrongdoing is essential. It helps to maximise use of law enforcement resources and ensure that investigators and prosecutors are aware of the full facts of potential wrongdoing when making enforcement decisions.

We are writing to ask you to ensure that any enforcement action against Airbus, whether a settlement or other form of action, meets standards that would ensure justice is achieved and that the harm caused by any wrongdoing is properly assessed and compensated for. We would encourage you to give careful consideration to the full range of enforcement options available, including prosecution. In particular, we ask you to ensure that: (more…)

6th June 2018, London – New allegations made by Corruption Watch U.K.  that British intermediaries took corrupt payments from an Italian defence company, to secure defence contracts in South Korea, must be fully examined by the UK’s  Serious Fraud Office and where wrong-doing is established prosecutions should follow.

Robert Barrington, Executive Director Transparency International UK, said:

“’These are strong and long standing allegations about significant crimes having been committed, and need to be properly examined by the authorities in the jurisdictions concerned, which means the Serious Fraud Office in the UK.  We also encourage UK MoD to fully consider the use of their procurement exclusion powers and whether the company should be temporarily suspended from MoD bidding while these matters are investigated. If wrongdoing is found to have occurred, the full weight of the law should be used against the individuals involved, any senior officers of the company who were complicit, and the company itself.”

“The use of third parties in defence deals has long presented a significant corruption risk and this case demonstrates the need for more consistent transparency requirements in export policies around the use of payment of agents.” 

Transparency International’s. “Licence to Bribe? Reducing corruption risks around the use of agents in defence procurement” highlighted the profound risks of using middlemen in defence deals and showed that 90% of companies assessed by TI, fail to provide evidence of regular due diligence over the use of agents.

***ENDS***

Contact:
Dominic Kavakeb
+44 20 3096 7695
+44 79 6456 0340
Dominic.kavakeb@transparency.org.uk

 20^th March 2018, London – The re-opening of corruption charges against former South African President  Jacob Zuma, relating to a 1999 arms deal, are a welcome step and should mark the beginning of justice finally being served, according to Transparency International Defence & Security.

Research from Corruption Watch UK into the scandal known as the ‘Arms Deal’ suggests billions of taxpayers money was squandered – at a time when the South African government claimed that there were insufficient funds to treat thousands of citizens for AIDS.

Andrew Watson, Head of Industry Integrity at Transparency International Defence & Security, said:

“We warmly welcome the news that Jacob Zuma may now finally face justice for his crimes. It’s a shame that these charges took him to leave office for a prosecution to take place – but it is encouraging that his crimes may now finally be catching up with him.”

“Jacob Zuma and the companies alleged to have paid bribes to him have escaped justice for many years. These charges must now finally shed some light on one of the largest defence corruption scandals ever seen and result in robust prison sentences for those found to have been involved.”

***ENDS***

Contact:

Dominic Kavakeb
020 3096 7695
079 6456 0340
dominic.kavakeb@transparency.org.uk

19^th January 2018, London – Commenting on an announcement by the Serious Fraud Office that it is investigating Chemring Group PLC, a British Defence Company, for corruption, money laundering and bribery, Andrew Watson, Head of Industry Integrity at Transparency International Defence and Security, said:

“It is disappointing to see another British defence company facing fresh allegations of systemic and widespread corruption, highlighting the very real challenges facing this unique sector.”

“Once again, intermediaries – long established as one of the highest corruption risks in defence commerce – are at the heart of these allegations.”

“Whilst it is encouraging that the company reportedly discovered the allegations themselves during an internal audit and that it was then self-reported to the SFO, we call for the company to fully cooperate with investigators and conduct an internal review of its anti-bribery procedures to discover what went wrong and why it wasn’t discovered before now. It’s vital that this investigation is thorough and perpetrators are brought to justice, no matter how high-up in the company they may be.”

Chemring scored a C in the Transparency Internationals most recent Defence Companies Anti-Corruption Index, meaning there is “moderate evidence” that they have anti-corruption measures.

Transparency International’s 2016 report “License to Bribe” identified the significant risks in the use of third parties and agents in arms deals, one area reported to be the subject of this investigation.

***ENDS***

Contact:

Dominic Kavakeb
020 3096 7695
079 6456 0340
dominic.kavakeb@transparency.org.uk

Increase transparency in the security sector to defeat corruption.

18th May, Abuja – An opaque and secretive security sector will jeopardize President Buhari’s ambitious anti-corruption drive and is derailing the fight against Boko Haram, according to a new report by Transparency International. (more…)

The world’s major arms exporters have a conflicted approach when it comes to dealing with what are effectively kleptocratic governments. (more…)