Select Committee on Defence Minutes of Evidence

Supplementary memorandum submitted by UK Working Group on Arms



i.  Otokar/LandRover—Turkey

  1.  Since 1987 a Turkish company Otobus Karoseri Sonayi AS (Otokar) has assembled Land Rovers under licence for sale to military and civilian markets in Turkey. In 1994 production began in Turkey of a new type of light reconnaissance armoured vehicle—the Scorpion. It is based on the Land Rover Defender 90/100 and is designed for transporting troops for counter-insurgency and light attack. The licenced production deal involves the export of 70 per cent of the component parts from the UK, which are listed as civilian transfers, and therefore do not require an export licence. The parts are then assembled at the Otokar factory and machine guns and night vision surveillance cameras added. These vehicles can be formidable weapons and there are documented cases where light reconnaissance armoured vehicles have been used for facilitating human rights violations in Turkey. Approximately 2,500 vehicles are assembled each year for use by the Turkish army and security forces.

Exports of Otokar

  2.  There is concern that these armoured and armed vehicles produced in Turkey under licence will be exported to countries that would not currently be granted an export licence if the vehicle was for direct export from the UK. In 1995 it was reported that Otokar had a $200 million deal to provide Algeria with 700 Scorpion vehicles and a $100 million deal with Pakistan for Scorpions[9]. In 1998 there were reports of the company negotiating the provision of between 30-40 vehicles to Israel[10].

ii.  GKN Defence Ltd/Asian Armoured Vehicles Technologies Corp—Philippines

  3.  GKN Defence Ltd in Telford has established an agreement with the company Asian Armoured Vehicle Technologies Corp, in Subic Bay in the Philippines, to produce Simba vehicles. It was reported in 1994 that the first seven Simba 4x4 Armoured Personnel Carriers had been delivered to the Philippine Armed Forces. 150 vehicles had been ordered and fitted with a 12.7 mm Browning Machine Gun turret. Eight Simbas would be supplied from the UK, several as kits and the rest to be assembled at the Subic Bay plant operated by the Asian Armoured Vehicles Technologies Corp. A number of variants would probably be developed.

  4.  This case was raised in Parliament:

  Ann Clwyd: To ask the President of the Board of Trade what control she has over the transfer of (a) armoured vehicles and (b) armoured personnel carriers to (i) Indonesia and (ii) other countries from the GKN Defiance [sic] licensed production facility in the Philippines. [3639]

  Mrs Roche: The control of exports from the Philippines is a matter for the Philippine Government. Any export of licensable goods from the UK to the Philippines would be subject to UK export controls.[11]

  5.  The Government answer illustrates the inadequate control of UK licenced production agreements results in the establishment of new centres of production of military/security equipment over which the UK government has little or no control. There is a danger that vehicles produced in the Philippines could then be used by the country's security forces for human rights violations or could be exported to sensitive destinations, where a direct export from the UK of such vehicles would not be permitted. The dangerous use of the vehicles being used in this way has recently been highlighted[12]. For example, two Muslim male residents suspected of being MILF (Moro Islamic Liberation Front) commanders were abducted by government forces in May 2000, taken on board a British Simba armoured personnel carrier (made under licence in the Philippines), and later found "salvaged"—summarily executed.


  6.  In the United States, licenced production (or manufacturing license) agreements are treated as physical exports and require prior approval from the US State Department. If such licenced production agreements value more than $50 million, the US State Department must notify the Congress before the agreement is approved. The US licensed production contracts usually limit production levels and prohibit sales or transfers to third countries without prior US Government consent.[13]

  7.  The relevant sections of the US International Traffic in Arms Regulations (ITAR) are highlighted below:

  Sect. 124.1 Manufacturing license agreements and technical assistance agreements

    (a)  The approval of the Office of Defense Trade Controls must be obtained before the defense services described in 120.9(a) may be furnished. In order to obtain such approval, the US person must submit a proposed agreement to the Office of Defense Trade Controls [in the State Department].

  Sect. 120.9 Defense service

    (a)  Defense service means:

      (1)  The furnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarisation, destruction, processing or use of defense articles;

      (2)  The furnishing to foreign persons of any technical data controlled under this subchapter (see Sect. 120.10), whether in the United States or abroad;

  Sect. 124.8 Clauses required both in manufacturing license agreements and technical assistance agreements

  (5)  The technical data or defense service exported from the United States in furtherance of this agreement and any defense article which may be produced or manufactured from such technical data or defense service may not be transferred to a person in a third country or to a national of a third country except as specifically authorized in this agreement unless the prior written approval of the Department of State has been obtained.[14]


  8.  At the end of October 1999 there were 134 brokers registered in the US[15].

UK Working Group on Arms

April 2001

9   Independent on Sunday, 26 May 1995, Defense News, 26 June 1995. Back

10   Turkish Daily News, 25 May 1998, Agence France Press, 25 December 1998. Back

11   Hansard 15 July 1997, Col 134. Back

12   Oxfam report "Reaching for the Gun" February 2001. Back

13   Abel, Pete. Running Guns. "Manufacturing Trends-Globalising the Source". Back

14   ITAR (International Traffic in Arms Regulations) on the State Department site. Back

15   "Casting the Net" Fund for Peace 2001, (p.28 footnote 81, quoting an official from the Office of Defense Trade Controls DTC). Back

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