Topic: Go-Ahead For £20Bn Typhoon Sale To Saudis

Financial Times
October 23, 2008

The US has given Britain the green light to sell Typhoon fighter jets to Saudi Arabia by approving the transfer of sensitive American technology on the aircraft after months of internal debate.
The Bush administration told Congress this week that it would approve the transfer, which paves the way for the UK to proceed with the £20bn ($32.4bn) deal to sell 72 Eurofighter Typhoons to the Gulf kingdom.
The state department has wanted to approve the transfer for some time, but was resisted by the justice department and Congress, both of which were concerned that approval could impact a probe into BAE Systems, the British defence company.
The justice department is investigating BAE, which is the prime contractor to the UK on the Typhoon deal, to see if it broke any US laws by allegedly bribing Saudi officials over a previous arms deal known as al-Yamamah. BAE has denied any wrongdoing.
People familiar with the issue said the debate was resolved after the US state department agreed to include language in the Congressional notification to underscore that the approval did not signify that Washington had concluded that the UK, or any company associated with the Typhoon deal, had not broken US law.
Greg Suchan, a former state department official on arms transfers, said: “In 10 years of doing arms transfers I have never seen anything like that as part of a section 36 [congressional] notification.”
News of the US approval is a boost for Britain’s largest defence contractor and prepares the ground for the export of the 72 Eurofighter Typhoons to the Gulf kingdom as part of a deal signed last year called Project Salam, or Al-Salam, meaning “peace”.
The initial order value was £4.3bn but the contract will be supplemented with a further order for armaments and weapons systems estimated to be worth £5bn. The Saudis are expected to spend a further £10bn on maintenance, training and support for the aircraft.
The first 24 Typhoons will be built at BAE’s factory at Warton, Lancashire. The remaining jets are likely to be assembled in Saudi Arabia. The company already employs about 5,000 people in the kingdom.
The contract was held up amid concerns that an investigation by the UK’s Serious Fraud Office into BAE’s earlier dealings with the Saudis could derail a sale. The SFO was looking into allegations of corruption and bribery in the al-Yamamah contract.
The Saudis threatened to cancel the Typhoon order and withdraw anti-terrorism co-operation with the UK if it pursued the investigation. The SFO ended its investigation into al-Yamamah in December 2006.