The Shadowy Arms Trade: A Look Back at a Questionable Tank Deal

 An intermediary received a commission of almost $200 million for the sale of battle tanks to United Arab Emirates. Some of that money, though, may have been used to bribe government officials.

French-made Leclerc tanks in Yemen

Saleh Al-Obeidi / AFP

French-made Leclerc tanks in Yemen

The tanks were first deployed in combat three summers ago. In early August 2015, they rolled along Yemen’s N1 highway, heading north to Al Anad Air Base. Their orders were to help government troops beat back the rebels.

The battle for the base only lasted a few days, after which the Sunni government declaredvictory over the Houthi rebels. The success came partly due to its foreign backers, most notably the United Arab Emirates. Abu Dhabi had sent a brigade of Leclerc tanks to rout the Houthi rebels from the air force base.

The Emirates once shelled out more than $3 billion (2.6 billion euros) for 436 Leclerc tanks and other armored vehicles. The motors were from Germany, manufactured by the Motoren und Turbinen Union (MTU) in the city of Friedrichshafen on the shores of Lake Constance. The transmissions were from a company called Renk AG in Augsburg. The tanks were assembled by Giat, a state-owned enterprise in France that is now a part of the French-German joint venture Nexter.

Abu Dhabi is a party to Yemen’s civil war, which has left thousands of people dead. It’s unclear how many of those deaths were because of the tanks the Emiratis sent, but it is possible to reconstruct just how the machines found their way to the Arabian Peninsula. The whistleblowing platform WikiLeaks has published a rare document that pulls the curtain back on the international arms trade. DER SPIEGEL, along with the French online investigative journal Mediapart and the Italian newspaper La Repubblica, were given early access to this document.

It describes an arms deal of immense proportions: The commission alone amounted to a whopping $235 million. Of that, $195 million flowed from Giat, through a letterbox company in the British Virgin Islands, and on to the enigmatic Arab businessman Abbas Ibrahim Yousef Al Yousef.

Bribes in Germany?

He is considered one of the Emirates’ richest men. There are some indications that Yousef didn’t keep all the money from the commission for himself, but that he passed some of it on to Arab officials. The documents also raise the question of whether bribes were paid to anyone in Germany to ensure the export of the motors and the transmissions went smoothly. In 2009, Yousef said: “I undertook the lobbying of the German authorities and was instrumental in ensuring that the necessary approval or waiver was obtained.”

That’s according to a ruling handed down by one of the International Chamber of Commerce’s arbitration courts, which met secretly in Paris. When a deal was reached on the sale of Leclerc tanks to the UAE, Giat and Yousef agreed on a commission of 6.5 percent, the equivalent of $235 million. The managers of the French state-owned company sent regular payments to Yousef until March 2000, but they stopped after about $195 million. This didn’t sit well with the businessman. He turned to the arbitration court and demanded he be paid the remaining $40 million. While pleading his case, he included some highly sensitive details. These are reflected in the ruling handed down by the arbitration court, which was anonymously provided to WikiLeaks.

Arms deals tend to have a long lifecycle. Fighter jets, battleships and tanks are ordered and delivered over a period of several years and must be kept in good repair. The beginning of the billion-dollar deal with the Leclerc tanks can be traced back to an era in which the French socialist Francois Mitterrand was in charge in France and Helmut Kohl, a Christian Democrat, was chancellor of Germany.

In the 1980s, French generals dreamed of a modern battle tank. The main gun — a 120-millimeter caliber weapon — should automatically reload itself, they thought, making it possible for a three-man crew to operate the tank, rather than the conventional four. The tank should be lighter, smaller and nimbler than the German Leopard or the American M1 Abrams.

Categories: Arab World, Asia, Europe

Tagged as: ,

1 reply

Leave a Reply