Czech arms companies are losing billions

 23. 02. 2020      category: Events

The Ministry of Foreign Affairs vetoed a number of export licenses. In practice, this means a significant disadvantage compared to foreign competition. One example speaks for all. Explosia is not allowed to export gunpowder to Turkey, which shows that the Czech Republic adheres to the agreement with a number of European countries after Turkey occupied the Syrian border areas. Explosia thus loses at least 20 % of its annual turnover. The major problem, however, is that many other countries, including Italy, Spain and France, are neglecting the agreements and deliver not only gunpowder but also ammunition to Turkey without scruples.

“Some countries have a way with interpreting the restrictions and rules in their favour, but in the Czech Republic, the Ministry began to interpret them in favour of our competitors. In a very short time our companies can be replaced by Western European producers and never return to this market. It can be said that the state is harming itself,“  
says Jiří Hynek, the chairman of DSIA (Defence and Security Industry Association of the Czech Republic)

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Picture: “Some countries have a way with interpreting the restrictions and rules in their favour, but in the Czech Republic, the Ministry began to interpret them in favour of our competitors. In a very short time our companies can be replaced by Western European producers and never return to this market. It can be said that the state is harming itself,“ says Jiří Hynek, the chairman of DSIA (Defence and Security Industry Association) (pictured). | DSIA

And what is the situation with export licenses? They are granted by the Licensing Administration of the Ministry of Industry and Trade, but the Ministry of Foreign Affairs, the Ministry of the Interior and the Ministry of Defence have the right of veto. STV GROUP company, together with the Czechoslovak Group concern, also point out the absurd moves. Both companies have been equipping the Ugandan army with refurbished Russian technology for several years. Last year, for example, the export of 31 modernized T-55 tanks to Uganda was approved, but at the same time the export of BVP-2 infantry fighting vehicles to this country was rejected. The actions of the Ministry and the Licensing Administration are thus more than strange.

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Picture: Last year, for example, the export of 31 modernized T-55 tanks to Uganda was approved (illustrative photo) | STV GROUP

The arms industry makes the world go round and it is not a secret that there are almost always ways to reach certain interests. And they are often found by those who are proclaiming the loudest that they strictly adhere to all the rules and criticize others for their non-compliance. Thus, the US government and its armaments companies, as well as companies from France, Italy and Spain, happily export arms all around the world, including the countries where import embargoes are imposed.

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Picture: It is important to realize that supporting the domestic defence industry does not lie just in domestic purchases of the Defence Department. (illustrative photo) | Shutterstock

With regard to our home defence industry, this in practice means that we are just idly looking at how someone may and others may not export arms to certain countries. It is important to realize that supporting the domestic defence industry does not lie just in domestic purchases of the Defence Department. After all, these have been going on for years anyway, and it is necessary to have a regular income in the cash box of the Czech arms manufacturers. Of course, I do not approve of the violation of the embargo, but I would very much appreciate it if the rules applied equally to all states and I do not agree with unnecessary bans and vetoing already approved exports.

 Author: Patrik Beran