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Saudis sending Canadian-made LAVs to combat Yemeni Rebels

Good2Golf

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Colin P said:
On the bright side, we can argue that the Saudi's are not really using them for fighting, but running away, generally unsuccessfully.

Touché.
 

MilEME09

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it's unfortunate but we may never know how much damage the saudi contract may cause to us since the deal is mostly secret. The loan and the 360 LAVs I firmly believe are trying to cover up and compensate GDLS and the saudi contract falling to pieces. I welcome more kit for us, but at what cost?
 

CBH99

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Should it really a secret anymore though?


The original contract had quite a bit of confidential information included in it. 

However, the Saudis have since breached that contract and have fallen a whopping $3.4B behind on payments, possibly for vehicles that were already delivered, possibly for the next batch - who knows. 

Since the contract has now been breached by the Saudis - and seriously breached at that, as $3.4B isn't exactly a mild accounting error - do the confidentiality clauses still exist if a contract was blatantly breached by the other party?



Under the circumstances, Canadians who are curious do have a right to to know the details. 

The Saudis breaching the contract and not paying $3.4B has affected government coffers in a way that they wouldn't have been affected if the contract was honoured.  The Saudis were the ones who breached the contract.

The government may, or may not, have been forced to spend additional money purchasing vehicles for the CAF that it may not have planned to spend.  (Makes sense to have a common fleet of vehicles, and the older support vehicles needed to be replaced anyway - so this may have just happened to be lucky for the CAF.)

So between the Saudis not paying $3.4B that was already agreed to, and the Government of Canada in turn spending billions it may not have planned on - the consequences of the breached contract were serious enough that I believe any confidentiality clauses would cease to be in effect.



The GoC should do a press release about the broad details.  Even something as simple as "The Saudis breached the contract and stopped making payments, so we in turn purchased the vehicles ourselves ahead of the 2022 planned timeframe in order to keep GDLS plugging along."

Whats the worst case scenario?  The Saudis try to sue the GoC for breach of contract?  Good luck with that...

Relations with the Saudis becomes testy & goes negative for a while?  Oh wait...
 

Spencer100

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https://www.defensenews.com/industry/2019/11/06/general-dynamics-is-missing-billions-due-to-a-canadian-saudi-spat/
 

daftandbarmy

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Slightly tangentially, there are some good articles out there regarding ethics and the arms trade.

My overriding impression? Use caution because 'there be dragons'....

The Ethics of the International Arms Trade

Gavin Maitland

Unless one is a pacifist there is little difficulty in theory in ethically justifying a country's
entitlement to produce or to purchase, or even to market, weapons for the preservation of
internal order or external peace. In practice, however, the international arms industry gives
considerable cause for ethical misgivings, which are here explored. It is difficult to escape
from the notion that the primary factor behind the international sale of arms is the generation
of profits. If companies are left unchecked, there is considerable evidence that companies
will exploit commercial opportunities to the detriment of ethical considerations.''

https://www.law.upenn.edu/live/files/4214-maitland-g-the-ethics-of-the-international-arms
 

Jarnhamar

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If Saudi doesn't want to pay up just sell the remainder to the Yemeni Rebels.

 

MarkOttawa

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Recent big LAV deal for GDLS London to compensate for Saudis not paying?

General Dynamics is missing $1.5 billion due to a Canadian-Saudi spat
By: Aaron Mehta

An ongoing diplomatic battle between Canada and Saudi Arabia is hitting American defense firm General Dynamics hard, to the tune of about $1.5 billion in missing payments for land vehicles sold to the kingdom.

During the company’s Oct. 23 quarterly earnings call, officials from General Dynamics revealed the roughly $1.5 billion in payments Saudi Arabia currently owes for a light armored vehicle contract run through General Dynamics Mission Systems–Canada.

More specifically, that figure stems from vehicles delivered to Saudi Arabia that have not been paid for, and the amount has grown quarter by quarter in the last year, according to General Dynamics filings. The number could grow as large as $2.6 billion given production that is already underway on vehicles not yet delivered, the company added.

In the quarterly earnings call, General Dynamics CEO Phebe Novakovic acknowledged that “the payments on our international program out of Canada have remained slow,” but stressed that “there no dispute on the fact that it is owed. It’s simply a question of timing, and we are still hopeful that we resolve that by the end of the year.”

Several industry analysts said that amount of delayed payments is unusual, with one analyst, speaking on condition of anonymity, saying the issue is having real impacts on the defense firm.

“It is doing great damage to GD. Most defense primes are up 30 to 60 percent year to date, while GD is only up 11 percent,” the analyst said. “This will be a nail-biter right to the very end.”

Technically Saudi Arabia doesn’t owe General Dynamics anything; military sales are run through the Canadian Commercial Corporation, which acts as a middle man. However, General Dynamics effectively is taking the hit, as CCC can’t pay for the vehicles if the kingdom doesn’t hand over the cash. Notably, the Canadian government last summer moved up its plans to buy its own light armored vehicles, or LAV, handing over a large advance payment to General Dynamics with that contract; while officially unrelated to the Saudi situation, this move was seen by many in Canada as CCC trying to do right by its industry partner [emphasis added]...



The LAV deal is the second of its kind signed between General Dynamics Land Systems-Canada and Saudi Arabia, with an estimated 1,400 LAVs going to Riyadh over the previous two decades. Those vehicles are equipped with a variety of weapon systems, ranging from 25mm cannons to 90mm guns.

Frozen relations

In 2014, Canada agreed to a roughly CA$14.8 billion (U.S. $11.3 billion) deal to sell to Saudi Arabia hundreds of the light armored vehicles; the exact quantities of the deal, along with many other aspects of the contract, remain secretive, but media reports suggest finalized deal may be for about 700 vehicles, with more than 200 already delivered. Despite some domestic opposition to Canadian arms sales to Saudi, the deal was upheld by the Trudeau government due to the impact on jobs.

But in August 2018, relations between Riyadh and Ottawa crumbled when Canadian officials issued statements of support for human rights activists that had been detained in Saudi Arabia. In a shockingly fast escalation, Saudi government officials quickly moved to kick out the Canadian ambassador and announced the suspension of any potential new business with Canadian firms, as well as recalling all Saudi students from Canadian universities.

That relationship remains “frozen,” said Thomas Juneau, a professor at the University of Ottawa who previously worked as an analyst with the Canadian Department of National Defence.

That’s important, he added, because of how Saudi Arabia views its defense expenditures. Certainly, there is a national defense aspect to it, but the kingdom also views large defense purchases as a key tool in creating diplomatic ties with nations.

If those diplomatic ties remain frozen, Juneau noted, spending “those billions doesn’t make sense anymore.” In fact, giving a Canadian firm all that money — and the roughly 3,000 jobs associated with it — could even be “counterproductive, to some extent,” he said.

“Given that context, it’s very, very likely to me that the main reason for that delay is the political context of Canadian-Saudi relations,” he added. “I have a very hard time conceiving of any other dominant reason why Saudi [Arabia] would be so late in the payments. It has to be because of the bilateral relationship context [emphasis added'.”..
https://www.defensenews.com/industry/2019/11/06/general-dynamics-is-missing-billions-due-to-a-canadian-saudi-spat/

Mark
Ottawa


 

Shrek1985

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There was no way in hell the Liberals were going to do anything to hurt GDLS, even slightly before the election; now that it is over?

Canadians have ably demonstrated the willingness to forgive any Liberal misdeeds to a greater degree than ever before. If they are going to slap some wrists any do something that forces the best employer in Liberal Stronghold London to lay off some employees; now is the time.
 

Ping Monkey

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Canada to resume approving military-goods exports to Saudi Arabia


https://www.theglobeandmail.com/politics/article-canada-to-lift-ban-on-export-of-military-goods-to-saudi-arabia/


The Canadian government is lifting a moratorium on approving new permits for military exports to Saudi Arabia after renegotiating some terms of a controversial $14-billion deal to sell light-armoured vehicles to Riyadh.


The government said Thursday it would begin reviewing export permit applications on a case-by-case basis, ending a ban on new permits for shipments of controlled goods to Saudi Arabia imposed in the fall of 2018. Controlled goods include military equipment such as light-armoured vehicles (LAVs) made by General Dynamics Land Systems in London, Ont., under a long-term contract brokered by the Canadian government.


The federal government also revealed for the first time that it would have been on the hook for up to $14-billion if it had cancelled the LAV contract or disclosed its terms to Canadians.


In the fall of 2018, after news broke that the Saudi government had ordered the murder of dissident journalist Jamal Khashoggi, the Trudeau government announced a review of all Canada’s existing arms sales to Saudi Arabia. Ottawa also put a moratorium on new export permits for shipments of controlled goods destined for Saudi Arabia. These measures were made as Riyadh was facing mounting condemnation for the costly war it is waging in neighbouring Yemen.


This November, 2018, ban on new permits did not affect already-approved permits, so this meant shipments of greenlit military exports continued.


In late 2018, Mr. Trudeau even publicly talked about trying to find a way to end shipments of armoured vehicles to Saudi Arabia.


On Thursday, however, Foreign Affairs Minister François-Philippe Champagne and Finance Minister Bill Morneau announced the suspension of approval of new permits for Saudi Arabia is now lifted. They cited a government review made public last September to tell Ottawa it had found no credible evidence linking Canadian exports of military equipment or other controlled goods to Saudi Arabian human-rights violations. The same report also advised the government that 48 export permits were ready to be signed should the government lift its moratorium.


"Following the conclusion of the review of export permits to Saudi Arabia conducted by officials from Global Affairs Canada … we have now begun reviewing permit applications on a case-by-case basis,” Mr. Champagne announced, adding later that there would be no “blank cheque” approvals.


“As always, we will ensure that they comply with the aforementioned legal requirements under Canadian law and the [global Arms Trade Treaty].”


Mr. Champagne said General Dynamics will require extensions of export permits to complete the $14-billion deal with Saudi Arabia, a transaction he said is now about 50-per-cent complete. That’s one way this resumption of permit approvals could help the company


“The company will have to submit [applications for] extensions of existing permits to be able to continue to perform under this contract,” he told reporters.


The General Dynamics factory in London is still producing LAVs. “Following critical infrastructure and essential service guidelines of the governments of Canada and Ontario we remain open and operational,” spokesman Doug Wilson-Hodge said in an e-mail.


Mr. Champagne and Mr. Morneau also announced that after a renegotiation of terms with Saudi Arabia, the Canadian government is able to be more transparent about the contract and can reveal it would face penalties of up to $14-billion, or the full value of the agreement, if it were to cancel or discuss terms of the LAV deal. The 2014 deal was signed by the Harper government but it was the Trudeau government that gave the crucial approval of the first export permits for the LAVs.


The ministers said negotiations have also secured a change ensuring that Ottawa’s “exposure to financial risk will be eliminated where future export permits are delayed or denied" if it’s ever forced to suspend, cancel or deny export permits because the LAVs are found to be used for reasons other than their defensive purpose.


The announcement Thursday was made as Canada struggles with an economic crisis caused by COVID-19, but Mr. Champagne denied the timing of Ottawa’s move on export permits to Saudi Arabia was linked to the pandemic or the volatility in oil prices related to a feud between Moscow and Riyadh.


He said he’s informing Canadians about developments because the Saudis signed the amendments to the LAV contract March 31.


The Foreign Affairs Minister rejected the notion that this represents an improvement in Ottawa-Saudi relations. “I am not sure about that. Suffice to say the human-rights’ record of Saudi Arabia remains troubling, particularly when it comes to social and political rights and women’s rights, so we will continue to advocate for human rights.”


Under Canadian law, Ottawa must deny export permits “if there is a substantial risk that the export would result in a serious violation of human rights.”


Arms control advocate Cesar Jaramillo, with Project Ploughshares, criticized the removal of the moratorium on new export permits.


“It is utterly disappointing that only days after Canada endorsed the UN Secretary-General’s call for a global ceasefire in the context of the COVID-19 pandemic, Canada decides to continue arming one of the world’s worst human-rights pariahs, who is also the chief instigator of the catastrophic humanitarian crisis in neighbouring Yemen – now in its fifth year,” Mr. Jaramillo said.


“It is hard to understand how or why the prospect of economic penalties would override the Canadian government’s obligation to uphold the law, including as it relates to denials of export permits when there is a clear and present risk of misuse, as is undoubtedly the case with Saudi Arabia.”


Ottawa announced it would create an advisory panel of experts to help strengthen Canada’s arms export approval process and will push for an international inspection regime for arms sales.


This announcement was made seven months after Global Affairs told the Trudeau government it didn’t believe that Canadian exports of military gear to Saudi Arabia were being used unlawfully. This review also warned the government that a moratorium on approving exports of this sort was further damaging already depressed trade relations with the desert kingdom. In a Sept. 17, 2019, memo published on Global Affairs’ website, public servants told the government that while Saudi Arabia’s human-rights record “remains problematic,” with unlawful killings, forced disappearances and torture, Ottawa has no information or evidence linking Canadian military exports to unlawful conduct.


NDP foreign affairs critic Jack Harris panned the decision to reopen export permits. “The Conservatives started this but the fact remains, the Liberal government is sending armoured vehicles to an undemocratic authoritarian regime with a terrible human-rights record. This contract should have been cancelled. Period.”.
 

MilEME09

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NDP foreign affairs critic Jack Harris panned the decision to reopen export permits. “The Conservatives started this but the fact remains, the Liberal government is sending armoured vehicles to an undemocratic authoritarian regime with a terrible human-rights record. This contract should have been cancelled. Period.”.


They also haven't paid their bill in awhile last i checked
 

Jarnhamar

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Sell LAVs to both sides.

Follow up on AARs after both sides clash.

Could provide valuable information if we ever find ourselves.......fighting Canadian made LAV3s.
 

tomahawk6

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Jarnhamar said:
Sell LAVs to both sides.

Follow up on AARs after both sides clash.

Could provide valuable information if we ever find ourselves.......fighting Canadian made LAV3s.

If the Saudi's abandon their paid for LAV's and the other side uses them I would rather see a remote self destruct capability like a thermite grenade on the engine block.
 

CBH99

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MilEME09 said:
They also haven't paid their bill in awhile last i checked


As of 2 weeks ago, apparently the Saudis started sending payments again.  (I'm at work right now, but will hunt down the link a bit later tonight)
 

daftandbarmy

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tomahawk6 said:
If the Saudi's abandon their paid for LAV's and the other side uses them I would rather see a remote self destruct capability like a thermite grenade on the engine block.

It would make better economic sense to send a sales and tech support team :)
 

FSTO

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The Sunday Morning CBC Radio program had Bob Rae on. He's the new Canadian UN Ambassador. Good old Bob, a loyal foot soldier to the end perpetuating the myth of the Canadian supplied "Jeeps" to the Saudis

https://www.cbc.ca/listen/live-radio/1-57-the-sunday-magazine/clip/15798965-bob-rae-stephen-lewis-united-nations-75-canadas

Go to the 17:00 minute and hear Bob talk again about Jeeps.
 

Halifax Tar

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FSTO said:
The Sunday Morning CBC Radio program had Bob Rae on. He's the new Canadian UN Ambassador. Good old Bob, a loyal foot soldier to the end perpetuating the myth of the Canadian supplied "Jeeps" to the Saudis

https://www.cbc.ca/listen/live-radio/1-57-the-sunday-magazine/clip/15798965-bob-rae-stephen-lewis-united-nations-75-canadas

Go to the 17:00 minute and hear Bob talk again about Jeeps.

Oh my god, that is so cringy lol  He obviously has no idea about what he talks.
 
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