Defense cos lose $200m on Venezuela arms ban
The US-requested ban was prompted by anti-Israeli declarations by President Chavez.
Ran Dagoni, Washington 7 Jan 07 13:35
Israel has imposed a ban on the sales of arms and military equipment to Venezuela, an important customer of Israeli defense companies. The ban, which has received little media attention, was imposed at the explicit request of the US, and because of anti-Israeli declarations by Venezuela President Hugo Chavez.
“Defense News” reports in its latest issue that the embargo was imposed in August 2006. Israeli defense sources estimate the cost of the ban on Israeli defense companies at over $200 million in the immediate term. The ban led the suspension of negotiations for a contract to upgrade Venezuela Air Force F-16s, which would have also involved the sale of weapons, avionics, navigation pods, and training and support equipment. Excluding this contract, Israeli defense officials in December estimated Israeli arms sales to Venezuela at $50 million a year.
The ban has also led to the suspension of sales of air control radar, naval radar systems, a follow-on order for the Barak Ship Point Defense Missile System, advanced artillery, and unmanned aerial vehicles (UAV) for monitoring the country’s oil pipelines and energy installations.
The Israeli arms ban followed a US arms embargo against Venezuela imposed on May 15, 2006. The US ban not only bans direct sales by US defense contractors, but also equipment and technologies that include US-made components. In May 2005, the Ministry of Defense banned Israeli companies from upgrading US-made military systems used by the Venezuela armed forces. At the time, Israeli officials did not consider Venezuela as a direct threat to Israeli national security, and the Ministry of Defense tended to approve the sale of communications equipment, avionics, naval systems and other equipment that was based on Israeli technology. Each deal was carefully reviewed on its own merits before being approved.
However, during 2006 Venezuela tightened ties with international organizations with suspected terrorist ties, and returned its ambassador to Israel because of the second Lebanon war, began to publicly supporting Iran’s nuclear ambitions and signed strategic cooperation agreements with it.
Published by Globes [online], Israel business news - www.globes.co.il - on January 7, 2007
