US Places Temporary Hold on Several Pending Foreign Military Sales

29.01.2021 North America
US Places Temporary Hold on Several Pending Foreign Military Sales

US Places Temporary Hold on Several Pending Foreign Military Sales

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The Biden administration has put a temporary hold on several major foreign arms sales initiated by former US president Donald Trump, including the deal to provide 50 F-35 advanced fighter jets to the United Arab Emirates (UAE), which was fast-tracked by Washington after Abu Dhabi agreed to normalize relations with Israel.

In addition to the massive $23 billion transfer of stealth F-35 fighters to UAE, another deal being paused is the planned major sale of munitions to Saudi Arabia.

“The department is temporarily pausing the implementation of some pending US defense transfers and sales under Foreign Military Sales and Direct Commercial Sales to allow incoming leadership an opportunity to review,” the State Department said in a statement.

“When it comes to arms sales, it is typical at the start of an administration to review any pending sales, to make sure that what is being considered is something that advances our strategic objectives and advances our foreign policy,” Secretary of State Antony Blinken said later Wednesday at a press briefing.

The Trump administration’s announcement on the F-35 sale came shortly after the Republican President lost the November 6 election to now-President Joe Biden and followed the signing of the Abraham Accords between Israel, Bahrain and the UAE, under which the Arab states agreed to normalize relations with Israel.

Israel and the UAE signed the US-brokered normalization deal in September. The Trump administration formally notified Congress of its planned weapons sale to Abu Dhabi two months later.

Israel announced in October that it would not oppose the sale, an about-face from its previous opposition to the deal on the grounds that it would harm the Jewish state’s military edge in the region. That decision came after meetings held between Defense Minister Benny Gantz and his US counterpart at the time, Mark Esper, at the conclusion of which the sides signed an agreement further codifying Washington’s commitment to maintaining Israel’s federally-protected military edge in the region, The Times of Israel reported.

Gantz is also believed to have secured an American commitment to a substantial military package to compensate for the weapons that the Pentagon was preparing to sell to one of Israel’s neighbors.

Because the transfer of such weapons takes years to come about, the Biden administration could block the deal, but there’s little precedent for a President to scrap such agreements made by a predecessor.

Meanwhile, Raytheon dropped the sale of an offensive weapon system to an unnamed Middle Eastern country due to concerns that the new President Joseph Biden administration would not grant it a direct commercial sales export license.

The company disclosed the change in its 2020 fourth quarter earnings call on 26 January. “Raytheon Missiles & Defense’s reported sales and operating profit were adversely impacted by an adjustment related to direct commercial sales contracts for munitions with a Middle East customer, which are subject to regulatory approval,” said Neil Mitchill, Corporate Vice-President and Financial Planning, Analysis and Investor Relations with Raytheon. Raytheon did not disclose the type of munition or the potential customer.

The company said the sale could still happen, perhaps via the US government-run Foreign Military Sales process. However, in order to conservatively reflect the lower likelihood of approval Raytheon decided to update its accounting.

Raytheon believes defensive weapons will likely have an easier time being sold to foreign militaries under the Biden administration.

“If you think about Patriot and some of the other defensive systems, we have no issues with getting licenses. But offensive weapons are a little bit more difficult,” says Greg Hayes, Raytheon’s Chief Executive.

“As we go forward, what we’re going to do is we’ll work with the Department of Defense. We’ll try and do these through Foreign Military Sales as opposed through direct foreign sales to make sure we’ve got alignment with the Department of Defense and the administration before we book any of these,” he added.

There are not any other large contracts likely to be withdrawn, he noted.

 
 



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