Airbus May Sue German Government Over Export Blockage
(Source: Defense-Aerospace.com; posted May 06, 2019)
PARIS --- The dispute over arms exports to the Kingdom of Saudi Arabia goes into the next round, as Airbus wants to take the Federal Government to court for blocking export licenses, Der Spiegel reported May 4.

By withholding export licenses, Berlin is preventing Airbus from delivering helicopters and a border security system to Saudi Arabia, and given that no other solution seems to work Airbus may see legal action as the only way to resolve the problem. “Airbus reserves all legal options in the dispute,” Dirk Hoke, head of Airbus Defence and Space, told Der Spiegel.

Since the murder of journalist Jamal Khashoggi in the fall of 2018, the German government has refused to allow any weapon deliveries to Saudi Arabia. At the time, Chancellor Angela Merkel spontaneously announced a stop all supplies of German weapons, Der Spiegel said.

Under pressure from France and the UK, Germany is now allowing German parts to be delivered for joint European armaments projects such as Eurofighter, but finished products may not be delivered to Saudi Arabia.

This means that the two Airbus contracts with Saudi Arabia cannot be fulfilled, and the company is beginning to feel the financial consequences. For the company, the export restrictions are already biting financially, and in its first quarter financial statement, issued April 30, Airbus said it had taken a charge of 190 million euros “as a consequence of the prolonged suspension of defence export licences to Saudi Arabia by the German government.”

“We are in communication with the German government concerning outstanding export licences for defence equipment and how the situation is impacting our business. The companies in the defence industry naturally view the current situation with concern,” Dirk Hoke, the chief executive of Airbus Defence and Space, told Der Spiegel.

For Airbus, the two projects are legitimate because they are not classic weapons of war like tanks or fighter jets, and furthermore cannot be used against civilian populations. The helicopters are to be used to support the pilgrimage to Mecca, while the border security system is to protect the Saudi-Yemen border. Together, these contracts are worth over a billion euros, Der Spiegel said.

But Saudi Arabia is internationally criticized for the brutal Yemen war, and the CDU and the SPD had actually stated in their coalition agreement they would not deliver arms to parties in the conflict, which has been going on for years.

Dirk Hoke is urging for a quick solution for the dispute over the helicopters and the border security system. “The decisions of the German government hinder Airbus from fulfilling existing contracts with customers. That is not only harmful to our business, it is also inexplicable behavior on the part of an Airbus shareholder like the German government,” he said, adding that “Therefore, Airbus reserves all legal options in the dispute.”

While not a direct threat, it appears that Airbus is upping the stakes to force the issue, especially at it could be held liable by Saudi Arabia for its inability to provide the equipment it has contracted to deliver.

However, given that the ultimate decision regarding German arms exports rests with the German government, it is unclear what legal arguments Airbus could use to support a hypothetical suit.

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