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Intel: US rescinds ban on British defense firm implicated in Saudi weapons fraud

The US State Department is rescinding a 9-year-old policy that barred it from doing business with the Saudi subsidiary of a British defense firm, which pled guilty to fraud in a multibillion-dollar arms deal in 2010.
People enter the State Department Building in Washington, U.S., January 26, 2017. REUTERS/Joshua Roberts - RC1D48272C00

The US State Department is rescinding a 9-year-old policy that barred it from doing business with the Saudi subsidiary of a British defense firm, which pled guilty to fraud in a multibillion-dollar arms deal in 2010.

Assistant Secretary of State for Political-Military Affairs R. Clarke Cooper rescinded the policy today at the request of BAE Systems Saudi Arabia, according to a notice published in the Federal Register. The Barack Obama administration implemented the policy of denial in 2011 after BAE Systems’ pleaded guilty to fraud in the 1985 al-Yamamah arms deal with Saudi Arabia.

 “The Department has determined that it is in the national security and foreign policy interests of the United States to rescind the policy of denial concerning” BAE Systems Saudi Arabia, Cooper wrote in the notification.

Why it matters: A State Department official told Al-Monitor that BAE Systems has fulfilled the terms of its 2011 consent agreement to settle its 2,591 violations of the Arms Export Control Act and Washington’s International Traffic in Arms Regulations.

“BAE Systems … made significant improvements to its compliance program throughout the entire organization while the consent agreement was in force and has continued to cooperate … on compliance matters,” the official said.

The rescission of the policy of denial for BAE Systems comes as Secretary of State Mike Pompeo finds himself in hot water over an unrelated arms deal to sell Raytheon-made precision guided missiles and combat aircraft to the Saudis and Emiratis. Pompeo convinced President Donald Trump to fire State Department Inspector General Steve Linick after the watchdog began investigating the Raytheon deal, which relied on an emergency declaration that cited Iran. Pompeo, who refused to do an interview with the inspector general, acknowledged seeking Linick’s removal but denied that it was an act of retaliation during a press conference today.

What’s next: With the policy of denial gone, the Trump administration is now free to conduct arms deals with BAE Systems Saudi Arabia without restrictions. Under the policy of denial, such deals would have required the State Department to conduct a case-by-case review.

Know more: Be sure to read the original memo that the State Department used to justify last year’s emergency declaration to sell arms to Saudi Arabia.

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