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US gov may forbid BAE Eurofighter sale to Saudis

Brit kit contains significant US tech. Whoops

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Clearly, the Justice department believes there is reasonable cause to think US law has been violated by the Bandar payments. Since the money actually came from a British government account, it could be argued that the UK state - rather than BAE as such - was the actor, and thus should be denied the export permit it is asking for.

According to the FT's informants, Justice officials in Washington certainly aren't happy to let State bureaucrats say they are "unaware" of BAE having broken any US laws. This follows requests for clarification by the US attorney-general from senators on the relevant oversight committees.

But the State people need to be unaware of American laws broken or they can't OK the sale.

A "senior administration official" hinted to the FT that the Feds' position might shift in the event of Blighty cooperating with them on the al-Yamamah probe. Repeated requests for the SFO's files have thus far been met with obstruction and delay in London.

Meanwhile, the British government faces trouble on the issue at home, as it appears all too likely that the courts will explicitly order the SFO probe re-opened. BAE has said all along that everything it did with relation to the Saudis was in concert with the UK government. Given the fact that BAE more or less controlled DESO until its closure last year, that's probably entirely true. If BAE's dirty-laundry hamper gets opened up, it seems fairly certain that every British administration back to 1985 will be implicated.

All that to one side, today's news at the very least appears to have finally destroyed the concept of "appropriate sovereignty" which underpins the current British Defence Industrial Strategy (DIS). The thinking here is that Blighty will pay increased prices for less-capable military kit made partly in the UK, rather than buying cheaper and better gear from abroad. Equipment such as Eurofighter may cost more and do less, but - so goes the reasoning - at least we won't have to ask the Yanks for tech support all the time.

Except that it turns out we will. So the horrendous extra cost of Eurofighter (and Future Lynx, Type 45, A400M etc etc) looks less and less worthwhile.

Read the FT article here. ®

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