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UNCLAS SECTION 01 OF 02 BERLIN 000166 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL MARR PARM GM
SUBJECT: GERMANY: ONE OF EUROPE'S LEADING ARMS EXPORTERS SEES NO 
CONFLICT WITH ARMS CONTROL AGENDA 
 
 
¶1. (U) Summary:  Germany exported 7.7 billion Euros worth of arms in 
2006, making it one of the largest arms exporters in the European 
Union.  Almost half of these sales were to other NATO and EU member 
states in support of cooperative multinational projects like the 
Eurofighter.  But critics point out that a significant portion of 
Germany's arms sales -- more than 1 billion Euros worth -- was to 
countries that have dubious human rights records or which are 
located in unstable regions.  German officials insist that Germany 
gives due consideration to human rights concerns in its arms export 
licensing policy, noting that German policy guidelines are even 
stricter than the EU Code of Conduct.  Despite the negative media 
attention, German policymakers see no contradiction between 
Germany's status as a major arms exporter and its foreign policy 
positions eschewing the use of military force and prioritizing arms 
control.  End Summary. 
 
Exports to Countries with "Human Rights Concerns" 
--------------------------------------------- ----- 
¶2. (SBU) According to the 2006 German Arms Exports Report 
(R|stungsexportbericht 2006), Germany exported 7.7 billion Euros 
worth of arms in that year, of which 4.2 billion Euros was sold to 
non-allied (NATO, EU, and the "like-minded" group of Australia, New 
Zealand, Japan and Switzerland) nations.  This makes Germany the 
leading arms exporter in the EU and the sixth largest arms exporter 
in the world according to some statistical measures.  The German 
media has criticized the government's arms export record for 
delivering arms to countries with dubious human rights records or 
countries that are situated in unstable regions where arms imports 
could stimulate armed conflicts.  Of course, a number of the 
countries listed as "problematic" by the media were key allies in 
the fight against terror.  German media and human rights NGOs 
criticized, for example, arms exports to nations such as Israel, 
Egypt, Indonesia, Saudi Arabia, Turkey and the United Arab 
Emirates. 
 
¶3. (SBU) German Economics Ministry officials note the media 
controversy was, in part, provoked by media interpretation of arms 
export statistics compiled by the Stockholm International Peace 
Research Institute (SIPRI), which calculate the "strategic value" of 
arms exports, rather than their actual financial value.  Ministry 
officials stress that human rights considerations play a key role in 
arms export licensing decisions.  License requests for exports to 
non-EU and non-NATO countries are decided on a case-by-case basis, 
using both the EU Code of Conduct and "even stricter" German policy 
guidelines.  In difficult cases, the Economics Ministry seeks policy 
guidance from the MFA. 
 
¶4. (SBU) Economics Ministry officials indicate that Pakistan remains 
a major concern, noting that arms exports (and dual-use exports) to 
Pakistan have been suspended -- and all export licensing decisions 
deferred -- pending the results of parliamentary elections.  Even 
after the elections, human rights considerations may prompt the 
Ministry to maintain the suspension.  Ministry officials hastened to 
add that the German Government would also factor into its 
decision-making both counterterrorism concerns and Pakistan's 
importance as a strategic partner.  Economics Ministry officials 
also note the "necessity" of using arms sales to build a closer 
strategic partnership with India. 
 
¶5. (SBU) Although the German Government does not unilaterally impose 
arms embargoes, Ministry officials claim that Germany generally 
adopts a stricter interpretation of UN and EU embargoes than other 
EU member states.  For instance, German implementation of the EU's 
embargo on arms sales to China restricts the entire range of 
Wassenaar-listed munitions, going far beyond the EU embargo on sales 
of lethal weapons and open platforms.  Ministry officials speculated 
that, even if the EU embargo were lifted, the German Government 
would not permit exports of arms to China. 
 
Individual- vs. Blanket-Approval 
--------------------------------- 
¶6. (U) Germany's arms export report distinguishes between 
individually-approved arms exports (Einzelausfuhr-genehmigungen) and 
blanket-approval items (Sammelausfuhr-genehmigungen).  The first 
category (4.2 billion Euros in 2006; 4.2 billion in 2005; 3.8 
billion in 2004) requires German government approval for the export 
of every individual item.  Blanket-approval items (3.5 billion Euros 
in 2006; 2 billion in 2005; 2.4 billion in 2004) are only allowed 
for certain items exported to EU and NATO member states and are 
issued for cooperative projects, such as the Eurofighter, Medium 
Extended Air Defense System (MEADS) and others. 
 
Breakdowns for Individually-Approved Items 
------------------------------------------- 
¶7. (U) The Report (published yearly) distinguishes between three 
main categories of recipients, listed below with the value of goods 
exported: 
 
BERLIN 00000166  002 OF 002 
 
 
 
     A) EU Member States:  1.9 billion Euros (2005: 1.4 
     billion; 2004: 1.9 billion); 
 
     B) Non-EU NATO allies and "like-minded":  1.2 billion 
     Euros (2005: 1.1 billion; 2004: 800 million); and, 
 
     C) Other countries: 1.1 billion Euros (2005: 1.7; 
     2004: 1.1 billion).  The "controversial" portion of 
     exports falls under this category. 
 
¶8. (U) The largest categories of individually-approved exports are 
vehicles (such as tanks and armored vehicles), military electronics, 
and warships (30.5%, 17.9%, and 13.5% respectively) with a smaller 
percentage of total sales including small arms and munitions. 
 
Sale of Used Bundeswehr Equipment 
---------------------------------- 
¶9. (U) The German military is currently transforming into an 
expeditionary force and is discarding much of its Cold War era 
weapons systems.  As a result, the Bundeswehr's sale /Q}iuct_Q= U#Q 
or 9.2% of all exports of military weapons.  These include tanks, 
submarines and other military hardware.  The largest recipient of 
those goods is Greece (54%), likely due to that country's ongoing 
purchase of submarines and other military hardware from Germany. 
The Bundeswehr also contributed to exports in other sectors by 
exporting tanks and armored vehicles although specific destination 
countries are unfortunately not listed in the report. 
 
Exports to Countries Receiving Development Aid 
--------------------------------------------- -- 
¶10. (U) The value of Germany's arms exports to countries receiving 
development aid has declined from about 900 million Euros in 2005 to 
400 million Euros in 2006.  This is generally in line with the 
belief of many politicians in Germany, who believe nations in need 
of development aid should spend their money for humanitarian and 
development purposes rather than on arms.  Of the 400 million Euros 
worth of individually-approved items exported, Pakistan accounted 
for 36%, India for 29%, Brazil for 7.1% and Jordan for 5.6%. 
 
Comment: Political vs. Economic Gain 
------------------------------------- 
¶11. (SBU) While Germany's status as the EU's leading arms exporter 
may seem incongruous with its pacifistic tendencies in foreign 
policy and preoccupation with arms control, German MFA officials 
argue that the percentage of arms exports to developing countries is 
much smaller than from other arms exporting countries, and that the 
goods exported to such countries are carefully reviewed prior to 
export.  Because they see no contradiction between their arms export 
record and their arms control rhetoric, we can expect the Germans, 
without a hint of self-consciousness, to keep pursuing an aggressive 
arms control agenda at NATO and in other international fora. 
 
¶12. (SBU) The main impetus behind German arms exports is, of course, 
economic -- the Bundeswehr's procurement budget is simply 
insufficient to fully occupy the productive capacity of the German 
arms industry.  Without overseas markets, the arms industry would 
have to downsize and lay off German employees -- something that no 
German politician, regardless of party, wants to see. 
Notwithstanding the economic impetus behind German arms exports, 
government officials insist on the basis of their rigorous 
case-by-case consideration of arms export license applications and 
close attention to human rights concerns that there is no 
contradiction between their foreign policy rhetoric and arms export 
record. 
 
TIMKEN