FILE PHOTO: The European Union and German nation flags are pictured before a debate on the consequences of the Brexit vote at the lower house of parliament Bundestag in Berlin, Germany, June 28, 2016. REUTERS/Fabrizio Bensch

BERLIN (Reuters) - Germany will ban exports of small side arms to most countries outside NATO and the European Union, government sources told Reuters on Monday, confirming an earlier report from the Funke media group.

A small number of traditional allies - Australia, New Zealand, Japan and Switzerland - will be exempt from the ban, the government’s latest attempt to implement the tightened arms export rules it promised in last year’s coalition agreements.

Earlier restrictions on exporting weapons systems to countries involved in the Yemen war prompted howls of protest from Britain and France, since the presence of German components in many joint projects risked harming lucrative export deals with Saudi Arabia and the United Arab Emirates.

But this ban, which is much smaller in scale, is expected to have fewer international repercussions, since pistol, gun and rifle manufacture tends not to be transnational in nature.

While German side-arm manufacturers, including companies like Mauser and Walther, are major suppliers to armed forces and police around the world, the government expects the financial implications of the ban to be limited: export licences were issued to a value of 39 million euros last year.

The Funke media group also reported that the government was also planning on introducing tougher rules on technology transfer, since small arms are often built under licence in the country in which they are to be sold.

(This story has been refiled to restore words cut from final paragraph).