Boost for SA Arms Trade as US Lifts Embargo
Graeme Hosken, Peter Fabricus
Pretoria - Trade in million of rands' worth of military hardware and integrated weapons and military communications systems is set to sky-rocket with the lifting of a US arms embargo.
The embargo was placed on SA parastatal defence companies Denel, Armscor and the private firm, Fuchs Electronics, in 1991 after they violated US export control laws between 1978 and 1989 during the height of apartheid.
The three firms contravened the US export control laws by establishing extensive networks of front companies aimed at acquiring arms of US origin, munitions and weapons technology without obtaining required licences or other approval from the US Department of State.
Following the discovery of the illegal trade, the Department of State barred trading between the US defence industry and the three South African companies.
Asked what difference the finalising of the Armscor/Denel case would make to defence trade co-operation between the US and SA, US ambassador to SA Cameron Hume, who made the announcement about the lifting of the embargo yesterday, said it was a "green light" that would remove uncertainty and open the field for co-operation.
US companies have been inclined to hesitate about doing business with SA companies out of concern for possible legal, or administrative problems.
"They would have been inclined to say: 'What about that Malaysian engineering corporation instead of the South African corporation?' "
Hume said the agreement would probably most benefit SA defence companies involved in fibre optics and high tolerance engineering especially for small production runs.
These were SA's most competitive areas.
He said Denel was already involved in providing fibre-optic equipment for US Marine Corps helicopters and the US Army was testing South African artillery ammunition.
Speaking about the lifting of the embargo, Denel spokesman Sam Basch said they would finally be allowed to go ahead with several military agreements with US companies.
"One of these agreements is the exclusive teaming agreement with General Dynamics Land Systems, part of the giant General Dynamics company in the US.
"The aim of this is to develop long-range and lightweight 105mm artillery systems for domestic and international customers," he said.
Commenting on why Armscor had been slapped with an embargo, Armscor spokesman Bertus Celliers said the company had been buying military technology and systems relating to electronic warfare.
"Now that we have shown that we are a responsible company we can begin expanding into the international defence arena ..." he said.
Len le Roux, of the Institute for Security Studies Defence Programme, said the embargo had been an impediment on the post-1994 relationship between the US and our country.
"Although from the South African side the lifting of this embargo will not mean that we will now begin exporting an entire military hardware system such as a fighter aircraft, the opportunities for the exporting of sub-components and components within niche areas in the defence industry are likely to increase," he said.
Le Roux said South Africa had highly competitive niche areas when it came to military systems and the sub-component industry especially where systems using electronic warfare, military communication, command and control and air-to-air missiles were involved.
With acknowledgements to Graeme Hosken, Peter Fabricus and the Cape Times.