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US gov may forbid BAE Eurofighter sale to Saudis

Brit kit contains significant US tech. Whoops

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A controversial British deal to supply Eurofighter jets to Saudi Arabia may have hit an obstacle. It appears that the Eurofighter - long touted as proof that the UK and its continental partners can make serious combat kit without American help - actually contains significant amounts of US technology, and that Washington may not permit the Saudi sale.

The revelations come in an article in today's Financial Times. It appears that the British government's application to export American tech on 72 Eurofighters to the desert princes is the subject of some debate both among Capitol Hill politicos and at the Departments of State and Justice.

The British part of Eurofighter is produced by global multinational BAE Systems, headquartered in the UK but nowadays with most of its operations overseas - especially in America. BAE is handling the UK-negotiated Saudi Eurofighter sale, and the company has been under investigation by Justice feds since last year following revelations that allegedly corrupt payments to the Saudi Prince Bandar had moved via US banks.

The Bandar payments, totalling more than $1bn - which the Prince insists were completely legitimate - are linked to a previous UK gov/BAE deal with the Saudis dating from the 1980s. This deal - known as al-Yamamah - was being investigated by the UK Serious Fraud Office (SFO) until the end of 2006. At that point the SFO investigation was shut down, effectively on the orders of Tony Blair.

The SFO decision was recently excoriated in damning terms by British judges following a legal review, saying that Blair had "surrendered" in "abject" fashion to terrorism-related threats delivered in person at Downing Street by Prince Bandar - who was "allegedly complicit in the criminal conduct under investigation, and, accordingly, with interests of his own in seeing that the investigation ceased".

Following the Blair surrender, angry SFO investigators leaked the fact that some of Bandar's money had passed from British government accounts (controlled by the former armsbiz-run MoD sales office, DESO) to an American bank. This triggered the ongoing US Justice investigation, with which the British government has completely refused to cooperate.

Now the US State Department needs to decide whether to grant a tech-export licence allowing the British government to permit BAE's proposed sale of (as it turns out) partly-American Eurofighters to the Saudis. US export regs say such licences may be denied where there is "reasonable cause" to believe that the applicant has violated US law.

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