This briefing was released as a background document at a press conference held jointly with Amnesty International Canada and The Inter-Church Committee on Human Rights in Latin America (ICCHRLA) on March 20, 2001 in Ottawa.
The transfer of surplus Canadian military helicopters to Colombia via the United States exposes a significant loophole in the Canadian export control system. A separate deal through which a Canadian company has contracted to repair and overhaul Colombian military aerospace equipment exposes a second loophole.
Canadian law, through the Export Import Permits Act, requires that the Minister of Foreign Affairs issue a permit for the transfer of any military equipment from Canada to any foreign destination other than the United States. The two “loopholes” described below, however, make it possible for Canadian exporters to avoid that requirement in certain circumstances.
Canadian military goods that are refurbished or used in manufacturing in another country do not require a Canadian permit for transfer to their final destination.
The intent of the Canadian military export control system is to control the transfer of Canadian military goods to their final destination, the point at which they enter into military use. If the CH-135 helicopters sold to the US had been immediately transhipped to Colombia, a Canadian export permit identifying Colombia as the final destination would have been required. Under such circumstances, the US would have been regarded only as a trans-shipment point and Colombia would have been regarded as the end destination.
In this particular case, however, the CH-135s were refurbished in the United States before being shipped to Colombia, and under Canadian regulation, the point of manufacture or substantial overhaul is accepted as the final destination – even when it is known that the final destination in terms of its actual military use is a third country. In other words, Canadian responsibility and the intent of the law, which is ensure Canadian military goods do not find their way to unacceptable destinations, are undermined by the provision which regards the point of manufacture as the final destination. Canadian military export guidelines are designed to avoid the shipment of Canadian military goods to locations of ongoing armed conflict and serious human rights violations. Thus, in recent years Canada has not exported military goods to Colombia. In other words, according to current guidelines Canada would not have granted a permit for the direct transfer of the CH-135s to Colombia, but because of the refurbishing/manufacturing loophole it was possible to ship the Canadian CH-135s to Colombia without any requirement for a Canadian permit.
This loophole is a major one, since significant levels of Canadian military exports are of components and subsystems used in the importing country for the manufacture of weapons systems which are in turn sold to third countries. For example, the export of Canadian-built engines for military aircraft require Canadian export permits only for shipment to the country of manufacture, not to the countries where the aircraft (and their engines) will actually enter military inventories. In this manner Montreal-based Pratt & Whitney Canada supplies PT6 engines to Korea Aerospace Industries (KAI) in South Korea to power the KT-1 military trainer aircraft which according to company information can be “lightly armed.” KAI has recently announced the export of seven of the aircraft to the Indonesian Air Force, as well as negotiations for the sale of the aircraft to other countries, including Colombia. A Canadian export permit is required only for shipping the engines to Korea, even though their final destination is Indonesia. If, however, Indonesia wanted to purchase additional replacement engines for the KT-1 aircraft from Pratt & Whitney, then a Canadian permit for shipment to Indonesia would be required. In both cases the engines are destined for Indonesia, but only in one case is an export permit for Indonesia required.
The Canadian government argues that to extend its export controls to third countries under such circumstances would be an application of “extraterrioriality” to which it is opposed. Yet US government export controls include exactly this requirement – non-US built weapon systems containing as little as five percent US content require the approval of the US State Department before the system can be transferred to a third country. Ironically, because the CH-135s were originally purchased from the US under its “Foreign Military Sales” program, this condition applied to the surplus helicopters Canada was looking to sell after 1996. Built into the contract with the private sector agent selling the aircraft on behalf of the Canadian government was a clause stipulating that approval of the US State Department was required for any sale outside of Canada.
Canadian equipment exported for military use, but classed as civilian, is not subject to export controls.
St. John’s-based Vector Aerospace Corporation has contracted with the Colombian military to overhaul and supply components for aircraft owned and operated by the Colombia armed forces, but military export permits were not required because the specific aircraft and parts are designated as civilian.1 Similarly, when Bell Helicopter Textron Canada shipped 12 Bell 212 helicopters from Mirabel to the Colombian police and military between 1994 and 1996, the transfers did not require export permits because the 212 helicopter, a model based on an earlier military design, has received commercial certification by Transport Canada. Both contracts, for repairs and components as well as the helicopter exports, contribute directly to the operational capability of the Colombian military and thus should come within the basic intent of the Canadian military export control system.
The Colombian military’s use of equipment with a civilian designation reflects a growing trend of military forces procuring “commercial off-the-shelf” (COTS) equipment, at less cost than the same equipment built to military specifications. As a result, there is a growing trend of military forces acquiring equipment outside of the scrutiny of supplier military export control systems, and many Canadian companies producing military-specified equipment, produce essentially the same equipment to commercial specifications.
There is also a major exemption to Canadian military export controls that is highlighted by the transfer of surplus Department of National Defence helicopters to Colombia.
Canadian military goods exported to the United States do not require export permits.
Overall, transparency in Canadian military commodity exports is undermined by the provision which exempts all military exports to the United States from the official scrutiny of the military export system. When the 40 Canadian CH-135 Huey II helicopters were sold to the US State Department between September 1998 and February 2000, the transfers (in three batches) did not require export permits. Under the terms of the Defence Production Sharing Arrangements (DPSA) between Canada and the US in place since 1959, there exists a form of free trade in military goods across the Canada-US border, military trade that does not require export permits.2 This exemption in turn means that Canadian military sales to the US are not reported, as are military exports to all other countries.
Military exports are tabulated by DFAIT on the basis of compulsory reporting by exporters of all shipments made against export permits. Since no export permits are required for sales to the US, there are also not reporting requirements. (Similarly, the exports of civilian equipment to military forces, referred to above, that are exempt from permit requirements, are also not reported for the same reasons). In fact, Canadian officials do not know the true volume of military exports to the US, even though all agree that the US is the single largest destination for Canadian military goods, outranking all other recipients combined. As a result, Canada’s military export trade is far from transparent. Indeed, Canada cannot even meet its obligations to the United Nations to report imports and exports of major conventional weapon systems to the UN Register of Conventional Arms Transfers.3
The two loopholes described above could be closed by two straightforward changes to Canadian military export regulations.
Canadian military export permits should be based on end-use certificates that identify the final destination of the goods in question, and that define the final destination as the point at which the military goods enter the inventory of a military force.
Canadian has argued against such a provision on grounds that it would constitute a form of “extraterritoriality.” By requiring, in the case of the helicopters destined for Colombia, the United States to seek permission from Canada to forward the helicopters to Colombia after the refurbishing work was complete, would in effect mean subjecting Americans to Canadian law inside their own country. But in fact, end-use certificates are a normal part of military trade. End-use certificates are simply a condition of sale which says that the military commodity in question will and may be shipped only and exclusively to the country identified as the final or end-user, and that any change in destination requires the consent of all the parties to the original deal.
The exceptional nature of military exports requires exceptional measures, which is the point of there being special export control requirements for military commodities in the first instance.
Canada has also argued that end-use certificates are not required because “the vast majority of Canadian military goods exports go to countries that apply similar criteria to their own controlled goods exports. This provides a level of comfort that substantially ‘like-minded’ countries will review military goods exports that contain Canadian-built components.” 4 The sale of Canadian helicopters to Colombia after refurbishing in the US is not the only counterexample to the government’s argument. Because military export controls are based on national interests and conditions, and because standards vary dramatically even among “like-minded” nations, there are many examples of Canadian military equipment going indirectly to recipients that would not likely qualify as direct recipients. Until there is genuine effort to harmonize export controls standards via international agreements, Canada cannot assume that its standards apply to other nations.
All equipment destined for the inventories of military forces should be regarded as military equipment subject to military export control regulations. In other words, military equipment should be defined not only by its characteristics and specifications, but also by who the end-user is.
Project Ploughshares estimates that tens of millions of dollars of Canadian commercial equipment – prominently commercial aircraft or aircraft engines – is transferred to the military forces of foreign governments every year.5
Canada’s military export control system relies, as do many other countries, on the “International Munitions List” agreed by arms supplier members of the Wassenaar Arrangement. That list includes equipment specifically designed for military purposes, as well as certain dual-use equipment. Commercial goods, including commercial helicopters, are not included, and Canada argues that “it would hurt a legitimate world trade” to restrict commercial equipment destined for military use and that “governments are not prepared to erect such wide-ranging barriers to trade in commercial goods.” 6
The objective of the military export control system, however, is to enable suppliers to exercise discretion over, and take responsibility for, the supply of equipment that enhances the military capacity of the recipient state. Arbitrary exemptions for some engines or helicopters, for example, because of technical distinctions that don’t alter their essential roles or capabilities, undermines the intent of the regulatory system. A requirement for permits on the basis of the end-user would not impose any additional difficulty on the export control system and would better serve the intent of the system.
All military exports to the United States should be subject to the same export controls and permits that are required for transfers to all other states.
Canada fears that the regulation of military exports to the United States “would simply result in the movement of this production to the United States or the replacement of Canadian suppliers with suppliers from other countries….The only impact would be a loss of jobs for Canadians, with no benefit to global peace and security.” 7 Unrestricted trade in military goods across the Canada-US border is viewed to be a competitive advantage, and while the extension of the export control system to the trade with the US could inhibit Canadian military exports, the main point would simply be to treat the US the same as all other states. The main benefit would be in transparency and enhanced public and governmental scrutiny and accountability.
2) Canadian exemptions under the US International Trade in Armaments Regulations (ITAR – which provided for permit-free military exports to Canada) were lifted by the US State Department in April 1999. After recent changes to Canadian domestic regulations, the exemptions are expected to be reinstated in May.
3) See Ploughshares Monitor, March 1999, p8.
4) “Answers to Questions about Canada’s Export Controls in Military Goods,” Department of Foreign Affairs and International Trade (DFAIT), p19.
5) See Ploughshares Monitor, March 2000, p. 7.
6) DFAIT, p8.
7) DFAIT, p20.
Between September 1998 and February 2000, 40 twin engine CH-135 Huey helicopters (US designation UH-1N) were sold from surplus stocks of the Canadian Department of National Defence (DND) to the US State Department. (The helicopters were part of a fleet of 50 twin Hueys manufactured in the United States, sold to Canada in 1971-72, and declared surplus by DND in December 1994.) The sale of the surplus helicopters took place at the same time as the US was negotiating a massive and controversial military aid package to Colombia which included the delivery of helicopters to Colombia’s armed forces.
After being refurbished in the United States, 18 of the helicopters were shipped for use by the First Counter-Narcotics Battalion of the Colombian Army, based in Tres Esquinas (on the border between Putumayo and Caqueta) in November 1999.1 An additional 15 upgraded helicopters are to be sent to Colombia during the first quarter of 2001. The 33 refurbished Canadian helicopters are part of a $1.3 billion contribution from the United States to an aid package known as “Plan Colombia.” Three quarters of the US aid will be in the form of military aid.
The initial phase of Plan Colombia which began in January 2001 includes a two-year “Push into Southern Colombia” carried out by the Colombian Army. The operation establishes three batallions, two of which are in place with a third to receive training from January to April 2001. Each battalion of about 900 soldiers will receive helicopters, logistical support, intelligence, training from US Special Forces and other aid. According to an October 2000 White House report, the refurbished Canadian helicopters will be used to “establish the security conditions necessary” for police and anti-drug activities, including aerial fumigation.2 The helicopters will also provide interim “air-mobility” for the counter-narcotics battalions so as “to access this remote and undeveloped region of Colombia.”
Human rights organizations fear that “establish security conditions” will involve major armed confrontations between the new US-aided military units and FARC guerrillas who live in the area. Indeed, in a March 18, 2001 interview published in El Espectador, Rand Beers, Assistant Secretary of State of the US Bureau for International Narcotics and Law Enforcement Affairs, stated that “the government of Colombia and the United States do not distinguish between drug trafficking and insurgency. They are the same thing.” 3 Human rights groups also are concerned that through their use by the Colombian Armed Forces – forces which have demonstrated a pattern of gross and systematic human rights violations – the helicopters will contribute to a worsening human rights situation in Colombia.
1) Statement of Rand Beers, Assistant Secretary of State for International Narcotics and Law Enforcement Affairs, October 12, 2000.
3) El Espectador, March 18, 2001.