BAE Not Currently Finalizing Saudi Jet Deal

[Herman Hum]

BAE Not Currently Finalizing Saudi Jet Deal
By REUTERS, LONDON
DefenseNews (http://www.defensenews.com/story.php?F=2386951&C=europe)

BAE Systems, Europe’s largest defense firm, said on Nov. 28 it was not moving forward on finalizing a deal to supply Saudi Arabia with 72 Eurofighter Typhoon jets.

In an interview in the Financial Times, the company’s chief executive, Mike Turner, was quoted as saying BAE could not speak on behalf of the two governments.

"But I do know we are not currently moving forward on finalizing the Typhoon contract," Turner was quoted as saying.

A BAE spokeswoman said the sentiment of Turner’s comment was that "since Ramadan negotiations between the two sides had not exactly moved apace".
She added: "Regarding the precise situation on the status of the negotiations, that really is a matter on which only the UK or Saudi governments can comment."

The comments came a day after BAE shares fell 3.1 percent on reports it might lose the Eurofighter deal to French aerospace group Dassault if a fraud probe was extended to the Saudi royal family.

The UK Serious Fraud Office (SFO) launched its investigation of suspected accounting irregularities related to BAE in 2004. The probe has focused on the relationship between BAE and two small travel firms which made arrangements for Saudi Arabian officials on behalf of BAE.

Saudi Arabia and Britain signed an agreement in August for the Gulf state’s purchase of 72 Typhoon aircraft in a deal analysts said could be worth more than 6 billion pounds ($11.6 billion).

Turner reiterated in the Financial Times that his firm had done nothing wrong. "We don’t want to interfere with the judicial process, and politicians clearly cannot do that, but we do want to see a resolution of the SFO investigation. It is damaging for our business," he said.

BAE said it would be inappropriate to comment further about the investigation.

Shares in BAE were trading 1 percent lower at 387-1/4 pence by 1558 GMT on Nov. 28.

The Sunday Telegraph said the Saudi government was set to tear up its Eurofighter Typhoon agreement with Britain and give the jets contract to France if the SFO opened Swiss bank accounts allegedly linked to members of the Saudi royal family as part of a long-running investigation.
Dassault said on Nov. 27 it was unaware of any Saudi decision.

Saudi defense ministry officials were not available for comment on Nov. 28.
Commenting on the news reports, a spokesman for Britain’s Foreign Office said: "We are committed to ensuring that existing bilateral trade agreements with other countries, including Saudi Arabia, are implemented effectively and smoothly."

"With regards to the Serious Fraud Office inquiry, the SFO is an independent government department and part of the criminal justice system. Other parts of the government cannot and would not interfere in or prejudice its investigations," he said.

British Prime Minister Tony Blair’s office and the Ministry of Defence declined to comment.

The multinational Eurofighter consortium that makes the jets includes BAE Systems, European aerospace group EADS and Italy’s Finmeccanica.

[Hertston]

BAE Systems, Europe’s largest defense firm, said on Nov. 28 it was not moving forward on finalizing a deal to supply Saudi Arabia with 72 Eurofighter Typhoon jets.




They will now, the SFO investigation has now just been dropped. BBC (http://news.bbc.co.uk/1/hi/business/6180945.stm).

Odd, that. ;)

[Herman Hum]

Blair Defends Ending BAE-Saudi Probe
By AGENCE FRANCE-PRESSE, BRUSSELS
DefenseNews (http://www.defensenews.com/story.php?F=2426535&C=europe)

British Prime Minister Tony Blair defended the decision to ditch a fraud inquiry into a weapons deal with Saudi Arabia, insisting here Dec. 15 it was vital to protect Britain’s national interests.

Blair said the decision was crucial for Britain’s relationship with Saudi Arabia, its interests in the Middle East and the counter-terrorism fight, not to mention the British jobs potentially at stake.

Blair said he took “full responsibility” for his advice to Attorney General Lord Peter Goldsmith, who announced Thursday that the investigation into the Al-Yamamah BAE Systems deal from the 1980s was being stopped after two years.

And Blair’s official spokesman added that the prime minister made “no apology” for acting in what he saw as the national interest.

The Serious Fraud Office had been probing claims that defense giant BAE established a slush fund for some Saudi royals, which allegedly provided perks including luxury cars to keep them doing business with BAE.

“I think it’s a very important issue for our country,” Blair said on the sidelines of a summit of European leaders in Brussels.

“Leave aside the effect on thousands of British jobs and billions worth of pounds for British industry.

“Our relationship with Saudi Arabia is vitally important for our country in terms of counter-terrorism, in terms of the broader Middle East, in terms of helping in respect of Israel-Palestine.

“My role as prime minister is to advise on what is in the best national and strategic interest of our country and I’ve absolutely no doubt at all that the right decision was taken in this regard.”

BAE earlier this year agreed to a 10 billion-pound (14.8-billion-euro, $19.8 billion) deal with Saudi Arabia for 72 Eurofighter jets, and the deal was reportedly under threat due to the investigation.

The “slush fund” was allegedly linked to an estimated 50-billion-pound Al-Yamamah deal involving the supply and support of Tornado and Hawk jets as well as the construction of an airbase.

Goldsmith said it was unlikely that there would be a successful prosecution even after a further period of investigation, Blair’s spokesman stressed.
“Saudi Arabia, given its position in the world, is a very important ally in the fight against terrorism,” he added, saying that he was not aware of the issue being raised at the meeting of European leaders.

Blair is about to leave for Turkey at the start of a wider tour to the Middle East, where international efforts to combat terrorism are bound to feature.

[Herman Hum]

Looks like the issue is still in doubt.


Decision To Drop Saudi-BAE Probe May Face Legal Challenge
By SOPHIE WALKER, REUTERS, LONDON
DefenseNews (http://www.defensenews.com/story.php?F=2433473&C=europe)

Anti-bribery campaigners said Dec. 19 they would take the British government to court over its decision to drop a corruption probe into dealings between Saudi Arabia and BAE Systems BA.L as part of a huge arms contract.

The legal challenge comes as the opposition Liberal Democrats are preparing a request for a debate in parliament that could force the government to publish a long-buried report about the multi-billion-dollar deal.

The Serious Fraud Office said last week it had dropped its investigation into dealings between Saudi officials and BAE representatives in relation to the so-called Al Yamamah contract after “representations” from the British government about the need to safeguard national security.

Blair said he took full responsibility for stopping the probe and that Britain’s relationship with Saudi Arabia was crucial for counter-terrorism and Middle East peace.

Campaign groups The Corner House and Campaign Against Arms Trade said on Dec. 19 the government’s action was in breach of the Organisation for Economic Co-operation and Development’s Anti-Bribery Convention.

Judicial Review

The convention came into effect in 1999 and requires signatories to criminalize the payment of bribes to foreign public officials in international business transactions.

“The decision was based on considerations of potential damage to relations with Saudi Arabia. This is expressly forbidden under the OECD’s Anti-Bribery Convention,” the campaign groups said in a statement.

“The advice given by the prime minister amounted to a direction to discontinue the investigation, which is an unlawful interference with the independence of prosecutors under domestic and international law.”

Lawyers for The Corner House and Campaign Against Arms Trade wrote to Blair, Attorney-General Lord Goldsmith and Robert Wardle, director of the Serious Fraud Office, saying the groups would formally seek a judicial review unless the government reversed its decision by Jan. 2.

Separately, a Liberal Democrats spokesman said the party was finalizing a demand for a vote to force the government to publish a 1992 National Audit Office (NAO) report on the Al Yamamah contract. It is the only NAO report never to have been released in public, he said.

“It’s our belief that this report was commissioned in the name of parliament and parliament has a right to see what it says,” the spokesman said.

The original Al Yamamah deal was struck in the mid-1980s between the British and Saudi Arabia governments, when BAE was appointed prime contractor. The Liberal Democrats said BAE and its predecessor British Aerospace had earned 43 billion pounds ($84.40 billion) in 20 years from the contracts.

[Herman Hum]

British Watchdog Urges Reopening of Saudi Corruption Probe
By AGENCE FRANCE-PRESSE, LONDON
DefenseNews (http://www.defensenews.com/story.php?F=2488247&C=europe)

The head of a British weapons exports watchdog urged the government Wednesday to reopen a corruption probe into an arms deal with Saudi Arabia, saying a decision to drop it harms Britain’s image abroad.

Roger Berry, who chairs parliament’s Quadripartite Committee, said Tony Blair’s government had broken its own anti-bribery laws by pulling the plug on a Serious Fraud Office’s investigation of the contract with BAE Systems.

“It is going to cause irreparable damage to the UK’s reputation as an anti-corruption champion and I think the government ought to re-open the investigation into this very important case,” he told BBC radio.

Britain’s Serious Fraud Office (SFO) had been looking at whether BAE Systems operated a slush fund for some members of the Saudi royal family while they negotiated a defense contract in the 1980s.

But government’s most senior legal advisor, Attorney General Lord Peter Goldsmith, announced last month that the probe had been shelved because of its potential to harm national and international interests.

Anti-bribery experts from the Paris-based Organisation for Economic Co-operation and Development (OECD) began questioning SFO investigators and officials from Goldsmith’s office Tuesday as to why the probe had been halted.

Britain is a signatory to Article 5 of the OECD anti-bribery convention, which states that bribery probes should not be influenced by considerations of national economic interest or potential effects on bilateral relations.

Berry said Wednesday: “I think we have got to press for clarification as to whether or not the government, as I believe is the case, are in breach of their own laws in relation to tackling bribery.

“To sign the OECD convention and then effectively turn a blind eye to it is not the way people expect governments to behave,” he added.

The Quadrapartite Committee is a joint sitting of the House of Commons Trade and Industry, Defence, Foreign Affairs and International Development committees.

[Herman Hum]

BAE woes never seem to end.

Sweden Probes Saab, BAE Over Alleged Corruption in Czech Republic
Agence France-Presse
DefenseNews (http://www.defensenews.com/story.php?F=2582287&C=europe)

STOCKHOLM — Sweden’s chief prosecutor said Monday he had opened an inquiry into bribery allegations against Saab and British defence manufacturer BAE Systems over their dealings with the Czech Republic. “Christer van der Kwast, director of public prosecution, has initiated an investigation concerning bribe allegations in connection with the leasing of JAS Gripen jetfighters to the Czech Republic,” a statement said.

Saab, in which BAE Systems holds a 20-percent stake, said in a statement that it would cooperate with the prosecutor, but would not comment further.

The probe is part of a wider investigation conducted by Britain’s Serious Fraud Office into a 2001 contract worth 2.13 billion euros (2.8 billion dollars) to sell 24 Gripen combat aircraft to the Czech military, a deal which was later cancelled.

The deal was replaced several years later by a leasing contract.
Saab and BAE teamed up on a 50-50 joint venture for the deal in the Czech Republic, a joint venture now fully owned by Saab.

Britain’s Serious Fraud Office is investigating BAE’s dealings in the Czech Republic and five other countries — Romania, Chile, Qatar, South Africa and Tanzania.

Van der Kwast told Swedish news agency TT his inquiry would primarily examine dealings surrounding the leasing contract, but could be widened to look at the cancelled sales deal.

He said he would decide at a later date whether to investigate allegations of bribery in connection with the sale of JAS Gripen fighters to South Africa.