While France and Germany must coordinate their arms export policies under the new Franco-German treaty, Berlin is playing a strange game with Saudi Arabia.

German arms exports are suffering. The value of individual licences for equipment authorised for export fell sharply in 2018, from €6.2 billion to €4.62 billion, according to a federal government estimate in January in response to a question asked in December by Agnieszka Brugger (Green) MEP. That is a drop of nearly 30%. However, should we blame this sharp decline on a much more restrictive policy towards Saudi Arabia and its allies, who have been waging war in Yemen since 2015? Not sure….

Among the top 15 countries benefiting from these licences in 2018, Saudi Arabia is in fourth place with 416 million euros, ahead of Pakistan (7th with 174.38 million) and Qatar (13th with 96.38 million). Algeria is in first place among the countries where German industrialists are allowed to export (818 million euros) while France is in 15th position (85.76 million).

Hardening of the German position but…..

However, it is undeniable that since the Khashoggi case, the German government has hardened its position towards Saudi Arabia in mid-November by freezing any new export licences to that country. On the other hand, Berlin did not prohibit the delivery of the equipment, which had already received an export licence. In theory, manufacturers could therefore continue their deliveries, but without government support, they do not want to take the risk of doing so. As a result, €2.5 billion worth of equipment, including patrol boats from Lürssen, would remain on standby. Patrol boats that Lürssen is trying to rebuild with the German maritime police.

Industrialists could take the government to court, but Berlin is preparing very important tenders (frigates, corvettes, submarines, ground-to-air defence, etc.). Hence the lukewarmness of industrial protests… except in Rheinmetall, where one of its former senior executives is CEO of SAMI (Saudi Arabian Military Industry), which coordinates the Saudi arms industry. According to the German weekly Der Spiegel, Rheinmetall intends to claim compensation.

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How Rheinmetall bypasses the ban

German groups, including Rheinmetall, are circumventing the German government’s ban. For example, the Al-Kharj ammunition factory in Saudi Arabia, built by Rheinmetall through its South African subsidiary, Rheinmetall Denel Munition (RDM), continues to produce ammunition. Inaugurated in March 2016 by South African President Jacob Zuma and Saudi Crown Prince Mohamed bin Salman, this plant specializes in the manufacture of shells and airborne bombs weighing up to 2,000 pounds, continues to operate… It has the capacity to produce 300 artillery shells and 600 mortar shells per day.

According to Stern magazine and Report München TV magazine, Rheinmetall continues to supply arms to Riyadh through its foreign subsidiaries in Italy and South Africa despite an explicit ban by the German government.