Document - Dead on Time - arms transportation, brokering and the threat to human rights

Table of Contents

TABLE OF BOXES AND MAPS 1

DEFINITIONS 2

1. Introduction 3

Facing the squeeze - export south 5

States failing to address the chain 7

2. The problem of delivery – some illustrations 11

Chinese and US arms to Nepal – by truck and by air 11

Brokering logistics for US clandestine operations 14

Arms brokers and trafficking to the Colombian paramilitaries 16

The Karin Cat – helping prepare a major invasion 18

Arms from Brazil seized in South Africa 20

International shipping network for arms from China to Liberia 22

3. Organizing military supply chains and arms transfers 28

Arms transfers by sea 32

Arms transfers by air 35

The arms logistics chain – Who’s who? 38

4. The logistics revolution and its military consequences 41

Military Logistics 41

Outsourcing defence logistics 44

The creation of "grey" defence logistics markets 47

The case of Ukrainian Cargo Airways 50

US quest to control international transport after September 11, 2001 52

Container Security and the US "War on Terror" 53

5. Arms brokerage and the risk of diversion 58

The case of Leonid Minin and its outcome 60

National laws on arms brokerage activities 63

Weak definitions 64

The American and European approach 65

Other approaches 68

Extra-Territorial Applicability 70

Licensing systems and ethical criteria 71

Registration and other controls on brokering, including government personnel 73

6. Arms transfers and routes in Africa 78

Africa’s arms routes to conflicts and repression 81

Africa’s transport networks and arms transfers 86

Sea-borne trade 86

Air-borne trade 89

Land routes 92

7. The logistics of major military operations 93

"Operation Allied Force" in the Balkans 94

"Operation Enduring Freedom" in Afghanistan 97

"Operation Iraqi Freedom," the early phases 100

8. Brokering a covert arms supply operation 104

"Peeling the skin of an onion"– establishing accountability 107

US sponsored arms brokering and freighting network 109

Croatian, Swiss and UK brokers 111

Air carriers and the lack of delivery verification 113

Israeli, Swiss and UK firms and exports from Serbia & Montenegro 118

Airline companies involved in Serbian arms exports 119

What happened to the arms deliveries and stockpiles in Iraq? 121

9. The current UN framework – too slow and limited 122

The UN consultations on brokering in small arms and light weapons 123

UN discussion of arms transportation 126

The forthcoming Group of Governmental Experts 132

10. Conclusions and Recommendations 133

National legal reform 135

Global Standards 136

Key recommendations: 138

To all states 138

To the International Community 141

The transport industry: 142

Appendix 1 144

Global Principles for International Arms Transfers 144

Principle 1: Responsibilities of states 144

Principle 2: Express limitations 144

Principle 3: Limitations based on use or likely use 145

Principle 4: Factors to be taken into account 146

Principle 5: Transparency 146

Principle 6: Comprehensive Controls 147

Dead on Time – arms transportation, brokering and the threat to human rights

The authors of this report are Amnesty International and TransArms, Research Centre for the Logistics of Arms Transfers.(1)

TABLE OF BOXES AND MAPS

Definitions……………………………………………………………………………………………2

The world at war and the North-South divide………………………………………………………..4

Amnesty International’s position on the arms and security trade…………………………………..10

Global scales means that military cargo do not move in empty spaces……………………………..31

Main military and civilian cargo planes…………………………………………………………….37

Containerisation and defence logistics……………………………………………..……………….43

The 44 ports currently operational in the Container Security Initiative…………………………….55

Selected main arms fairs organized in 2005……………………………………….………………..76

Map of Africa mining and conflicts…………………………………………………………………80

Countries supplying arms, ammunition and parts to African countries, 1991-2002…….………….81

Markets in Africa for Egyptian heavy military industries…………………………………………..83

Number of shipping lines serving trade routes to and from Africa………………….………..…….87

Africa’s Antonov aircraft fleet………………………………………………………………………91

Map of Africa’s railroads……………………………………………………………………………93

Map of the route of Il-76, ER-IBV from Tuzla to Baghdad………………………………………..118

DEFINITIONS

Terms

Definition
Arms	All conventional military and civilian weapons, ammunition, parts thereof, and military support services, if not otherwise indicated
Arms transfers	Transfers of military equipment and services of any nature from a country to another country, irrespectively of the legal or illegal nature of transfers.
Arms transfers, types	Government-to-government: transfers of military equipment and services directly arranged between two governments Commercial: transfers of military and non-military arms, weapons, and ammunition between either a manufacturer or a broker and a foreign entity
Arms trade	Transfers of military equipment and services of any nature. The "legitimate" arms trade is that trade which does not violate national and international laws and agreements at the date of transfers
Arms trafficking	Arms trafficking: transfers of military equipment and services of any nature that violate national and international laws and agreements at the date of transfers
Arms carriers	Transport and logistics companies that carry out or organize arms transfers
Arms dealers	Corporations or individuals whose activities consist of buying and selling arms. Corporations or individuals in command of large stock of arms are often involved in brokerage activities.
Logistics	Activity to plan, implement, control, and forward goods between the point of origin and the point of consumption, including related documentation and storage.
Logistics, Just-in-time	The principle of production and inventory control that prescribes precise controls for the movement of raw materials, component parts, and work-in-progress. Goods arrive when needed (just in time) for production for use rather than becoming expensive inventory that occupies costly warehouse space.
Transport documents: the Bill of lading, B/L	In the shipping industry, it is a document that serves three main functions: a) it is a receipt for goods shipped on board; b) it is a document of title for these goods; and c) although not a contract, it is evidence of a previous contract. There are various types of B/L, the most common being: "order bill of lading" and "straight bill of lading" (the latter in two forms: regular and short, the latter not including the contract terms on the reverse side). The aviation industry use a similar document, the airwaybill.

1. Introduction

Growing state-sponsored out-sourcing and the increasing private mediation of international arms distribution and procurement is adding to the risk of arms being delivered, diverted and used for grave human rights violations. Yet current government efforts to improve the monitoring and regulation of such intermediate activities in the arms trade are weak and faltering.

This report examines the role of private contractors in arms transfer logistics, brokering and transport. The role of such intermediaries is increasingly integral to the global arms trade, especially to the 35 countries whose exports make up roughly 90% of the world’s arms trade. Intensified competition resulting from globalisation has been increasing arms manufacturers’ dependency on the global freight transport industry and on brokering activities. Brokering, logistics and transport firms and networks now span the globe helping service the arms trade, while the established freight industry also provides logistical support for the military operations of states, itself a conduit for the proliferation of arms.

The report shows how, partly as a consequence of the "export rush" that followed the end of the Cold War, arms trade routes are becoming more complex, requiring even more differentiated logistical, transport, brokerage, and financial arrangements. The use of private transport contractors and brokers for arms transfers is not adequately covered by national legal and regulatory frameworks, and the responsibility of states for the shipment of hundreds of thousands of tons of weapons and other military and security equipment, ammunition and spare parts to armed forces and law enforcement agencies around the world can be easily obscured by complex supply chains. The resulting lack of transparency, monitoring and effective control of such arms supply chains are contributing to the diversion and easy availability of arms by those perpetrating serious violations of human rights during armed conflicts and law enforcement operations. Examples in the report also show how arms are destined or diverted to arms-embargoed countries, criminal organizations and armed groups, including those believed to engage in terrorism, and are paid for with cash or bartered for narcotics, precious stones, metals, oil, timber and other natural resources.

During the last fifteen years, the world witnessed either the continuation or the outbreak of 50 or more armed conflicts.(2) None of these conflicts could have lasted long without one or both of the opposing forces commanding and replenishing sizeable arsenals, usually relying on brokers and logistics agents to fix deals for the constant supply of ammunition and other military-related equipment, and the hiring of a functioning network of carriers able to deliver them. Frequently, one or more parties to such conflicts have perpetrated gross human rights abuses(3), disrupted essential economic activities, and destroyed human habitats. With few exceptions, all of these conflicts have taken place in "developing countries" located in the "South" - as defined by the Brandt Report (1980)(4)- whereas most of the arms and ammunition used in these conflicts have been manufactured by more developed countries in the "North".(5)

PICTURE A AND CAPTION: "WORLDWARS" 1990s AND 2000s

In many countries not suffering armed conflict, governments nevertheless conducted and condoned violations of human rights using armed force, relying upon an international network of transport companies, brokering agents and arms dealers to renew their weapons and munitions. "Non-lethal" or "less-than-lethal" weapons and other security equipment have widely been traded, brokered and delivered to security and law enforcement agencies, many of which have regularly committed serious violations of human rights, including the suppression of dissenters and demonstrators, as well torture and other cruel, inhuman or degrading treatment or punishment (ill-treatment) of prisoners.(6)

Moreover, evidence suggests that some transport companies and brokering agents have also been involved in the unauthorized or illegal delivery of military equipment to embargoed recipients. Such cargoes have included infantry weapons and other small arms and light weapons, as well as ammunition, explosives and other conventional arms, such as armoured vehicles, helicopters, howitzers and even sophisticated aircraft and dual-use equipment. Seizures of such arms shipments, as well as inquiries and reports on arms embargoes, show that a significant amount of what was transported came from the sale of surplus stocks, as illustrated below.

In a significant number of situations, arms are brokered and transported where laws and regulations are ill defined or not enforced. This trade is sometimes called the "grey" market. Arms brokers, transporters, traders and unscrupulous officials deliberately exploit lax controls on arms stockpiles, loopholes in export-import regulations, and corrupt officials. Measures to improve international transport security were initiated by the US government following the attacks of September 11. These have included checks on containers, ships and aircraft in an increasing number of international gateways. These post 9/11 security initiatives for international transport operators have shown that strict regulation of cargo is entirely feasible – the only problem is that these initiatives are primarily designed to protect the US rather than having a wider remit of helping prevent human rights abuses, both by armed groups and by governments, worldwide.

Facing the squeeze - export south

Intensified competition resulting from globalisation has been increasing arms manufacturers’ dependency on the global freight transport industry and on brokering activities. After the dissolution of the Warsaw Pact in the early 1990s and the end of the Cold War, traditional arms-producing countries experienced a visible decline of military expenditure and government defence procurement for new weapons systems. In 1999, the cumulative military expenditures of industrialized countries amounted in real terms to only 55% of the 1989 value while the personnel of the industrialized countries’ armed forces declined from 11.6 million in 1989 to 6.5 million in 1999.(7)

Faced with falling domestic markets, arms manufacturers started to seek solutions through mergers, consolidation of core business activities, and a focus on exporting to foreign markets, often regardless of the ethical consequences.(8) Governments favoured these policies in order to maintain the viability of military production lines and lower the cost of domestic arms procurements (the higher the exports of military products, the lower the cost per unit produced). Other methods used by arms manufacturers to adapt to the post-Cold War conditions included the establishment of joint ventures and licensed production facilities in countries with low operational and labour costs. As a result, however, the number of arms manufacturing countries grew and has expanded to include the more developed of the ‘developing countries,’ many of which lack the political will, legal frameworks and enforcement capacity to effectively control arms transfers.

The collapse of the Soviet Union in 1991 and the crisis of East and Central European countries also resulted in large and loosely controlled stockpiles of conventional weapons being offered for sale on the international market.(9) Smaller but more determined arms traders and brokers with access to cheap transport networks challenged the export markets of West European and North American arms manufacturers by exploiting these massive surplus stockpiles and aggressively targeting the most promising markets, often located in conflict-ridden ‘developing regions’.

The major arms producers also exported large quantities of arms which required well-established transport and logistic networks. The hope was expressed by some that this period would open the world to the "peace dividends" brought by the end of the Cold War – redirecting the world’s resources away from military expenditure. However, between 1989 and 1999, the major arms producers and suppliers exported and delivered worldwide no less than 16,000 main battle tanks; 43,000 artillery units; 30,000 armoured vehicles; 1,600 military ships and submarines; 5,200 combat aircrafts; 5,100 military planes; 3,200 helicopters; 47,700 surface-to-air missiles; 3,300 surface-to-surface missiles; and 3,200 anti-ship missiles.(10) In the same period, ‘developing countries’ absorbed on average 54% of world imports of defence articles and services.(11)

More recently, in the eight-year period 1997-2004, ‘developing countries’ (European ‘developing countries’ excluded) imported from the major arms suppliers at least 5,502 tanks and self-propelled guns; 4,685 artillery units; 6,658 armoured vehicles; 609 military ships and submarines; 1,591 combat aircrafts; 979 other military planes; 1,291 helicopters; 13,547 surface-to-air missiles; 60 surface-to-surface missiles; and 1,493 anti-ship missiles.(12) In addition, ‘developing countries’ imported hundreds of thousands of infantry weapons and security devices, millions of land mines and other lethal ordnance, and billions of rounds of ammunition. In the same period, the ‘developing countries’ share of world imports of defence articles and services grew to 68.5%.(13)

A general lack of restraint in the official and corporate promotion of arms exports has corresponded with failures to improve arms control laws and regulations in the face of the growing scale and complexity of arms supply chains. The number of items exported and imported needs to be measured against the number of destinations. In 2001, for example, the world’s top eleven arms exporting countries (by value of exports) - United States, Russia, United Kingdom, Israel, France, Germany, China, Ukraine, Italy, Sweden, and Canada - delivered military equipment and services to 163 other states and 15 dependent territories. The only countries in the world that did not officially receive arms and military services from the world’s top eleven exporters in 2001 were Iraq, Liberia, Somalia, Swaziland, and Tajikistan.(14) According to their official arms trade statistics and declarations for the same year, the United States delivered military equipment and services to 136 countries and territories; Germany to 122; France to 86; United Kingdom to 69; Russia to 67 (2002); Italy to 66; Canada to 57, Sweden to 51. An even larger geographical distribution can be observed at the level of commercial transfers (which include so called "civil" arms and ammunition): for example, during 2001 Germany exported military and non-military arms and ammunition to 124 countries; Italy to 114, France to 111, United Kingdom to 104, China (including Hong Kong and Macao) to 89, Russia to 73, Canada to 56, Israel to 43.(15) Similar patterns can be observed in the following years.

As a consequence of the "export rush" that followed the end of the Cold War, arms trade routes have become more complex, requiring even more differentiated logistics, brokering, finance and regulation: the "North-North" routes serving the NATO and the former Warsaw Pact countries, and the "North-South" routes for arms transfers from ‘industrialized’ to ‘developing’ countries, were supplemented by the "South-South" routes, established by emerging arms producers in ‘developing’ regions such as Brazil, Israel, Singapore and South Africa. Significant changes in the global transport industry and in defence logistics(16) have facilitated this process. For example, the radical privatization of the transport industry in the East European and former-USSR countries helped extend their reach beyond the boundaries of the habitual customers of the former Soviet Union, in Africa in particular, to support the expanded arms trade. This radical privatization and the growth of "South-South" routes(17) make the task of controlling and curbing arms transfers to conflict zones even more difficult. This is compounded by the occurrence of arms brokering activities, especially in countries where these activities are poorly regulated or not regulated at all.

States failing to address the chain

The wider geographical distribution of the arms trade and the significant amount and diversity of articles traded worldwide have had important consequences on the way arms shipments are organized and delivered. Governments and commercial entities involved in arms transfers have increasingly used the services of (a) brokers and financial firms able to deal with the diverse political, economic, and military contexts of potential buyers and sellers; (b) transport companies able to organize and deliver arms shipments worldwide by using their global networks of commercial routes and their large fleet of container and ro/ro(18) ships or cargo planes; and (c) air transport companies specializing in serving difficult destinations as well as cargoes that require particular types of aircraft.(19) Arms transfers have consequently become more integrated in the broader context of the international trade and in the business and logistic practices that are used to ship other manufactured products. Moreover, military supply chains are now being increasingly sheltered in a web of other trade flows and outsourced services.

It is clear that robust regulation and restraint based on a consistent international legal framework to protect human rights has not kept pace with the number of actors and locations in the global supply chain. One indicator of this shortcoming is the pervasiveness of "grey markets" in arms and other military and security equipment. Another is the ability shown by arms traffickers to deliver arms to areas with active conflicts, even where these are subject to international arms embargoes. In effect, illegal arms cargoes have been detected in various world regions, from the Balkans to the Middle East, from Africa to Latin America and Southeast Asia.

Evidence suggests that using the commercial methods of the supply chain management is not a practice limited to defence logistics and legal arms trade. Shippers, brokers, and importers involved in illegal arms transfers have adopted similar methods and have established a certain degree of networking and cooperation in order to ensure that the volumes of cargo and cash flow are sufficient to maintain the economic viability of the "specialized" carriers, port facilities and agents they utilize. This enables some of them to mix as much as possible legitimate business (sometimes humanitarian aid to conflict zones) and "grey market" business with illegal trafficking, in order to minimize the risk of seizures and law enforcement actions. In addition, such brokers and shippers have exploited the failure of the international community to effectively regulate the international offshore banking system(20) and are able to maintain a network of "shell" or front companies engaged - directly or through offshore subsidiaries - to support illegal arms transfers.

To date, about 35 states have enacted more or less stringent laws and regulations for controlling the business of arms brokerage - including or excluding related financial and transport services or extra-territorial provisions.(21) Even these existing laws include loopholes and exemptions that weaken their hold on arms brokers’ business practices.(22) Recent agreements aimed at enlarging the number of states that regulate arms brokerage according to international standards(23) have yet to be fully implemented. Moreover, neither the existing laws and international agreements nor the most recent initiatives address the role of government agencies and personnel in de facto brokerage activities that, on behalf of the national defence and security industry, go in many cases far beyond the institutional role of the these agencies and personnel.(24) For example, specialized personnel of government agencies, as well as government-sponsored brokers, have used security assistance and arms surplus programs, offers of financial credits and offsets policies, as well as barter trade, bribes and corruption(25) to induce other countries to acquire armaments and military-related services well beyond their reasonable defence needs.(26) Such activities have steadily increased since the beginning of the "export rush" and often take place at the defence industry’s international promotional events worldwide.

Overall, global arms markets and conflicts are being significantly changed by the application of methods used in commercial logistics and by the growing dependency of buyers and sellers on arms brokering activities. In particular, the methods used in commercial logistics chain together - wherever located - various actors, functions, and communication systems in order to rationalize and monitor the flow of "goods", personnel, services, information, and finances. For example, "supply chain integrators"(27) and "brokers networking services,"(28) have already entered the domain of arms brokering and transfers.

The application of modern commercial logistics and largely-uncontrolled brokering practices to international military supply chains has contributed to the heavy toll of innocent lives in present armed conflicts - from Congo to Sudan, from Chechnya to Afghanistan and Iraq. As illustrated below, these practices have greatly enhanced the mobility of troops, the lethality and speed of military operations and number of points of diversion in the global arms transfer process, thereby undermining the protection of civilians and the prevention of human rights abuses. A range of new measures are urgently required, as outlined in the final chapter of this report.

AMNESTY INTERNATIONAL’S POSITION ON THE ARMS AND SECURITY TRADE(29)

Amnesty International takes no position on the arms trade per se, but is opposed to transfers of military, security or police (MSP) equipment, technology, personnel or training - and logistical or financial support for such transfers – that can reasonably be assumed to contribute to serious violations of international human rights standards or international humanitarian law. Such violations include arbitrary and indiscriminate killing, "disappearances," torture and other ill-treatment.

To help prevent such violations, Amnesty International campaigns for effective laws and agreed mechanisms to prohibit any MSP transfers from taking place unless it can reasonably be demonstrated that such transfers will not contribute to human rights violations. Amnesty International also campaigns for MSP institutions to establish rigorous systems of accountability and training to prevent such violations.

Amnesty International is concerned about the role of intermediaries - arms brokers, logistic firms, transport and other companies - in delivering arms to those who use them for violations and abuses of human rights and international humanitarian law. Although such actors often engage in a servicing role between the sellers and buyers of arms, that servicing role is usually unregulated, secretive and unaccountable. Moreover, the increasing tendency for states to sub-contract the delivery of arms and use the services of brokers can enhance their power considerably under certain circumstances while blurring the primary responsibility of states to strictly control the arms trade. As an increasing volume of arms are marketed and distributed internationally by private commercial agents and operators, the potential for abuse is heightened.

Amnesty International recognises that the peaceful resolution of conflicts is a prerequisite for the realization of human rights, and that armed conflicts inevitably produce human rights violations but it generally takes no position on the desirability or otherwise of particular military interventions or other forms of armed conflict, other than to demand that all participants must respect international human rights and humanitarian law, and that the military and security transfers related to such interventions do not contribute to violations of such law.

For a general introduction, see Amnesty International and Oxfam, Shattered Lives: the case for tough international arms controls, October 2003 (AI index: ACT 30/003/2003)

2. The problem of delivery – some illustrations

Chinese and US arms to Nepal – by truck and by air

In 2005, the major suppliers of military aid to Nepal - India, the United Kingdom, and the United States - temporarily suspended their arms shipments to Nepal under pressure from human rights activists and organizations that exposed the grave violations perpetrated as a consequence of the arms build-up in Nepal’s long-standing civil war with the Communist Party of Nepal (Maoist), and in particular after Nepali King Gyanendra had seized absolute power in February.(30) King Gyanendra and his officials had responded to this halt of military aid with a quest for arms in international markets especially from Pakistan and China whose arms export policies do not in practice involve human rights considerations.(31) Prior to 2005, China had not been a major provider of military assistance to Nepal, which historically has received the bulk of its supplies from India.

Despite international concern at the grave human rights abuses being perpetrated by both sides of the conflict in Nepal, the Chinese government decided to provide further arms, but reportedly used one of the world’s most difficult highways to deliver them. In contrast, just before the King’s takeover of absolute power, the US government sponsored a covert arms delivery by air using a Bulgarian private sub-contractor and an extremely circuitous route, during the time that it was "reviewing" the possibility of suspending supplies.

As the conflict in Nepal escalated, the government in 2001 created a paramilitary police force, named the Armed Police Force (APF). After the collapse of the cease-fire in August 2003, the APF and police were brought under the unified command of the Royal Nepalese Army, RNA, and in 2003, an elite Rangers’ Battalion was formed to carry out offensive operations.(32) The Nepalese security forces have been responsible for thousands of "disappearances", a rise in unlawful killings, and continuing arbitrary arrests and widespread torture.(33) The CPN (Maoist) armed opposition abducted civilians, recruited child soldiers and committed torture and unlawful killings. There has been a culture of impunity and disregard for the rule of law among the security forces, which systematically obstructed the courts and the National Human Rights Commission (NHRC).

On November 25, 2005 a Kathmandu-based newspaper(34) reported that during the previous two days 18 Chinese military trucks had arrived at the Nepal-China border in Kodari accompanied by People’s Liberation Army officials. At the border, the trucks, loaded with Chinese arms, had been taken into the Nepalese territory by "plainclothes Royal Nepal Army personnel."(35) The choice to use such a difficult land route – the 910 km-long "friendship highway" that connects Lhasa, the capital of the autonomous region of Tibet, with Kathmandu – could indicate that either the truckloads of arms - possibly 70 to 90 tons - came from deposits near the China-Nepal border that are under the Chengdu Military Region command, or that the partners wanted to avoid the publicity entailed in Chinese military flights directly arriving at Kathmandu airport.

In October 2005, following earlier diplomatic contacts(36), the chief of army staff of the Royal Nepalese Army (RNA), General Pyar Jung Thapa, returned from a visit to China and announced that he had secured a commitment from the Chinese government for military aid worth 72 million Nepali rupees (just over US$ 1 million). In June, China had reportedly shipped military equipment including six armoured personnel carriers to Nepal(37) and by 2006 China was apparently authorising further military supplies to the RNA despite its ongoing violation of human rights.(38)

Earlier, in September 2004, before the King had seized total power, an Antonov 12 cargo plane operated by the Bulgarian Vega Airlines had been held up at the Indian airport of Ahmedabad (Gujarat) and carefully inspected by Indian customs and secret services agents.(39) The plane was reportedly ferrying military equipment sent to Nepal by the U.S. Department of Defense. Further research reveals that the Vega cargo plane had departed from Baltimore (Maryland, USA) on a route that included stopovers in Gander (Canada), Shannon (Ireland), Plovdiv (Bulgaria), Muscat (Oman) and Tribhuvan airport (Ahmedabad). After an intervention by the US Embassy in India, the Vega Airlines plane was released.(40)

According to the Times of India, a US embassy spokesman in Delhi had clarified that "the plane was carrying simulated ammunition and arms for Police’s training exercises and arms intended for training and equipping the Nepalese anti-terrorist police unit."(41) On September 28 the Vega plane eventually reached Kathmandu, where the US Embassy spokesperson declared that the delivery consisted "of training equipment and it is part of the (US government’s) regular training assistance to the Nepal Police. The US has already provided assistance worth $22 million to Nepal in the last three years to fight terror but, as far as today’s delivery is concerned, it is not military assistance."(42)

However, the "training equipment" reportedly included, as set out in a document released on September 16, 2004 that granted Vega Airlines permission to transport highly dangerous goods:(43) explosives "blasting, type D" (plastic explosives such as Semtex, used in many terrorist attacks) up to a maximum amount of 910 kg, and detonating cords (high-speed fuses which explode and are suitable for detonating high explosives). Both "items" are normally forbidden in air transport and require complex documentation and special transport permissions.(44) If such items were needed in explosive charges for simulating attacks, they could easily have been procured in commercial markets nearby Nepal, instead of being loaded in a large cargo plane along a route of 14,546 km with five stopovers. The U.S. Department of Defense statistics show that Nepal received military equipment worth $6.7 million in 2003 and had additional sales agreements with the U.S. Department of Defense for $15.3 million.(45)

Early in 2005 the US President also requested $4million for Foreign Military Financing (FMF) and $650,000 for International Military Education and Training (IMET) for Nepal for 2006. According to his budget request, the priorities for this funding were small arms, grenade launchers for the Rangers Battalion, night vision goggles, body armour, secure communication equipment, spare parts for mobility platforms and armour plating. However, due to US Congressional opposition led by Senator Leahy to such proposals for military aid to Nepal, the US government said it was stopping lethal U.S. military assistance to Nepal. At the end of March 2006, the US quickly denied reports that it was planning to resume assistance. A senior US state department official also publicly said that "the Leahy amendment prohibits financing security assistance to Nepal until Nepal has returned to democracy and certain conditions on human rights have been fulfilled."

There had been a few improvements in the conduct of the Nepalese security forces in 2005, including a drop in reports of further ‘disappearances’ and unlawful killings. Some observers told Amnesty International that these improvements were due to the human rights conditions that were attached to U.S. military assistance to Nepal, and also to the recognition that Nepalese troops implicated in human rights violations could be kept out of UN peacekeeping operations. Increased scrutiny provided by the establishment of a field presence of the UN Office of the High Commissioner for Human Rights in Nepal also led to some changes, though the fundamental problem of impunity for human rights violations was not addressed.

Brokering logistics for US clandestine operations

Hundred of thousands of small arms and light weapons from the Bosnia and Herzegovina’s (BiH) war-time stockpiles together with tens of millions of rounds of ammunition were reportedly shipped - clandestinely and without public oversight - to Iraq by a chain of private brokers and transport contractors under the auspices of the U.S. Department of Defense, DoD, between July 31, 2004 and June 31, 2005, according to sources within the European Union Force in Bosnia and Herzegovina (EUFOR), the Organisation for Security and Cooperation in Europe (OSCE) and the Office of the High Representative (OHR).(46) However, whether these weapons and ammunition reached or remained in Iraq remains in doubt. Even if they remained in Iraq, Amnesty International and TransArms are concerned that such arms are likely to have been used for human rights violations and abuse.

As shown in the chapter below, some of the transport and brokering companies currently engaged with the US government in transferring weapons from Serbia & Montenegro to Iraq and Afghanistan have reportedly been involved in arms smuggling in the past. The firms have operated from a private apartment building in Zagreb, Croatia, and a gun shop in a provincial Swiss town, as well as locations in Bulgaria, Kyrgyzstan, Russia, Serbia and the Ukraine.

While such deliveries to the Iraqi security forces at this time would pose a threat to human rights in Iraq, West European officials say that some of the weapons to Iraq "may have been siphoned off". In fact there is no proof that the weapons flown out of BiH in August 2004 actually arrived in Iraq. The US and local authorities in Iraq and BiH, when questioned, cannot or will not account for the deliveries. Private arms brokers claim that the situation in Iraq – chaos, poor coordination, multiple government agencies, poor record- keeping, and high staff turnover rates heightens the possibility that "things" can "get lost or confused". However, private contractors have been unable or unwilling to supply documents relating to the flights that could certify whether the aircraft arrived at their intended destination.(47)

New documents gathered for this research relate to a case of arms and ammunition transfers approved by the BiH and US authorities from Tuzla to Rwanda in December 2004 despite reports by the United Nations implicating the Rwandan authorities in aiding armed groups in the eastern part of the Democratic Republic of the Congo (DRC). The actual delivery the BiH government reportedly cancelled or postponed at the last moment on 10 December.(48) These documents record that, on 18 November 2004, SFOR approved a notification of the BiH authorities to export a large quantity of small arms and light weapons to Rwanda using the services of a Croatian broker and a company which is part of Unis Promex arms manufacturing company, owned by the Bosnian government. EUFOR then approved the transport of four consignments of arms and ammunition on December 8 to leave from Tuzla airport on the following evening.(49) On 9 December, SFOR approved the transport of a consignment of almost 47 tonnes of arms and ammunition from Tuzla airport in BiH to Rwanda(50), while on the same day the BiH government announced publicly that arms and ammunition transfers to Rwanda would not proceed.(51) It should be noted that SFOR had ceased its controlling authority in BiH on December 2, 2004, when EUFOR took over the overseeing of the military implementation of the Dayton Agreement. The question of whether one or more of these consignments was delivered to Rwanda remained in doubt and could have been related to one or more of the outbound flights of Ilyushin 76 cargo aircraft observed in Tuzla between December 10 and 22. The BiH authorities and SFOR had previously approved the export of large quantities of small arms, light weapons and ammunition from late 2001 to mid 2003 to Uganda using a brokering firm in Cyprus, at a time when Ugandan armed forces were aiding armed groups committing human rights abuses in eastern DRC, and to Guinea in 2003 using a broker in the UK. (See further in Chapter 8)

The security situation in Iraq continued to be extremely serious in 2005 and 2006. US-led forces were responsible for gross human rights violations against Iraqi civilians, including excessive use of force, often resulting in deaths; torture and other ill-treatment, long-term detention without charge or trial and arbitrary arrests. Thousands of civilians were killed and thousands more injured in attacks by armed groups. Some died or were wounded in attacks aimed primarily at US-led or Iraqi forces but others were victims of direct attacks intended to cause the greatest possible civilian loss of life. While most of the violence reported in the media has been taking place in Baghdad and in the areas west and northwest of the capital, killings, revenge-killings, and abductions do take place in the Kurdish areas in the north and in southern Iraq, but they rarely receive media coverage.(52) The ready availability of guns has facilitated a rise in violent attacks, and in particular abductions, by criminal gangs. Following the fall of the government of Saddam Hussein in April 2003, an estimated seven to eight million firearms were looted from military and police premises, many of them automatic and semiautomatic assault weapons.(53) The chaotic security situation only heightens the need to ensure that the weapons are secured and inventoried, and that only properly trained forces receive them.

Arms brokers and trafficking to the Colombian paramilitaries

Most states have no laws that specifically ban or control arms brokering. In the minority of states where laws have been enacted, the definition and treatment of "illegal brokering" by private individuals and security forces can take contrasting forms. The following cases from the USA and Colombia show the different approaches to controlling private individuals, including foreigners, and state employees involved in arms brokering and trafficking.

In May 2005, two US soldiers, reportedly a sergeant and a lieutenant-colonel, as well as several Colombians, including a retired Colombian army officer, were arrested in the municipality of Carmen de Apicalá, department of Tolima, on suspicion of arms smuggling following a raid in which over 30,000 rounds of ammunition were confiscated.

Colombian police allege the munitions were destined for Colombian paramilitary groups, known as the Autodefensas Unidas de Colombia(AUC) or United Self-Defense Forces of Colombia, an army-backed paramilitary umbrella organization.(54) The AUC groups are supposedly engaged in demobilization talks with the Colombian government. For decades, paramilitaries operating under the coordination and with the support of the Colombian army have been responsible for most killings and "disappearances" of civilians. Several thousand killings and "disappearances" have been attributed to paramilitaries since they announced a "ceasefire" in December 2002.

The US soldiers reportedly claimed to be weapon instructors at the Centro Nacional de Entrenamiento del Ejército, National Army Training Centre, in nearby Tolemaida. The US Embassy in Bogotá confirmed that two US soldiers were detained and held in the custody of the Office of the Attorney General, Fiscalía General de la Nación. The two soldiers were reportedly handed over to the US Embassy in line with a 1974 agreement signed between Colombia and the US which grants immunity to US military personnel stationed in Colombia. AI understands that the soldiers were subsequently sent back to the US. According to reports received, the US Embassy had allowed Colombian criminal prosecutors to interview the two soldiers but AI has received no information indicating that criminal proceedings against the two soldiers have advanced or any effort to establish the possibility of chain-of-command responsibility.

It is of particular concern that criminal investigations into the possible collusion between US military personnel and paramilitaries have not been pursued especially since this is not the first time that US security forces have been linked to paramilitary activity(55) and the role the US has played in funding Colombia’s counter-insurgency strategy against left-wing guerrillas. This strategy has been characterized by the systematic and widespread violation of human right committed by the Colombian security forces and army-backed paramilitaries. Guerrilla forces have responded to this strategy with serious human rights abuses and breaches of international humanitarian law.

In a separate contrasting case, on 14 April 2005 Fanny Cecilia Barrera de Amaris, a/k/a "Rachel", from Colombia, pleaded guilty(56) to charges of conspiracy to provide material support, resources and a huge arsenal, including two surface-to-air missiles, to the AUC. She was arrested in the northwestern city of Medellín - Colombia's second largest city - by the Departamento Administrativo de Seguridad (DAS) intelligence police force and then extradited to US authorities on December 1, 2004.

"Rachel" was an arms inspector for an international arms-for-cocaine trafficking network involving Colombians and a Danish arms broker who were caught in the US FBI "Operation White Terror" investigation. FBI agents impersonated arms dealers in Puerto Rico and Panamá to get evidence. The trail led to clandestine meetings in Mexico City, London, St. Croix, Panama City and San Jose, Costa Rica.(57)

A former Danish member of parliament living in Fort Bend County, Texas, had pleaded guilty on June 24, 2003 to charges that he and a partner had conspired to ship arms to the AUC in return for $25 million in cash and cocaine. Uwe Jensen, 67, who served from 1977 to 1979 in the Danish Parliament and in the European Parliament in 1977-78, and later became a naturalized U.S. citizen, was the second person to plead guilty in the plot.(58)

After 50 detailed recordings by the FBI, seven accused in the illicit brokering network pleaded guilty to charges of conspiracy to provide material support and resources to the AUC. In mid 2002, FBI agents in Costa Rica captured three Colombian nationals who were arranging the arms smuggling deal. Carlos Ali Romero Varela, Elkin Alberto Arroyave Ruiz and Edgar Fernando Blanco Puerta were arrested in October 2002 and subsequently extradited to the United States.(59) Jensen met an undercover FBI operative and introduced the FBI source to Romero in Texas who then arranged to have a copy of a CD-ROM displaying samples of Russian-made weapons delivered to Barrera in Colombia.(60) The brokered deal would involve an exchange of $25 million in cash and cocaine for an arsenal consisting of "53 million cartridges for AK-47 rifles, grenade launchers, grenades, pistols and two SA-7 anti-aircraft missiles" that were packed inside five sea freight containers and procured from the U.S. illicit market in the FBI sting operation, according to the court papers.(61)

The agents discussed transporting the weapons in an Ilyushin 76 cargo plane. On 28 April 2002, the FBI agents moved a cache of Warsaw Pact weapons to St. Croix, United States Virgin Islands, where "Rachel" introduced herself as a weapons inspector for the AUC. Inside an undercover warehouse, during a consensually recorded meeting, Romera and Barrera were shown the weapons. During the inspection, "Rachel" handled many of the weapons presented, and she asked detailed questions about the effectiveness of various weapons, about ammunition, and about other technical aspects of the weapons. She had apparently been impressed with the weapons and indicated she would compile a report to be forwarded to higher-ranking members of the AUC.

Arming of the AUC has undermined efforts to stop human rights violations in Colombia. Negotiations between the Colombian government and members of the AUC have led to the reported "demobilization" of more than 25,000 paramilitaries. But Amnesty International continues to receive reports of grave human rights abuses committed by paramilitaries in areas where they had supposedly demobilized sometimes operating under new names, while evidence of links between paramilitaries and sectors of the security forces remains compelling.

Serious concerns have remained about aspects of the process, principally over the issue of impunity not only for paramilitaries but their security force and other backers and even guerrilla forces who enter into future processes of demobilization, violations of the AUC ceasefire, government initiatives that threaten to "recycle" paramilitaries into the conflict, and continuing serious and widespread human rights violations by paramilitaries which continue to operate with the support of the security forces. The easy availability of arms is one important factor adding to fears that paramilitary activity in Colombia will be re-engineered into private security firms or into new paramilitary groups. Similarly, the smuggling of weapons to guerrilla forces is also fuelling the on-going Colombian human rights crisis.

The Karin Cat – helping prepare a major invasion

On February 19, 2003 a general cargo ship - the "Karin Cat" - foundered in rough conditions in the Mediterranean Sea midway between Malta and the Island of Crete. The ship had departed on January 27 from Antwerp (Belgium) bound to Doha (Qatar), a major U.S. military hub for operations in support of the Iraq invasion, where it was expected to arrive on March 6.(62) One day before the foundering, seven members of the crew had abandoned the ship and had later been rescued by the Malaysian ship "Bunga Pelangi Dua".(63) The foundering of Karin Cat was caused by a shift of the cargo, insufficiently secured to withstand the movement of the vessel during rough sea. The ship’s Danish owner, Anders Poulsen, announcing the foundering of the Karin Cat, declared that it was carrying equipment for the oil industry.(64)

However, this was not the only cargo that the Karin Cat was transporting to the Persian Gulf. The inquiry by the Danish Maritime Authority(65) that followed revealed that, in addition to 205 tons of equipment and pipes for a natural gas company, the cargo was made up of 158 tons of ammunition, a sophisticated man-portable short-range missile system, and a radar truck. The equipment destined for the Ras Laffan Liquified Natural Gas Co., based in Qatar,(66) was loaded in Antwerp, but the military cargo - part of which was destined to the Omani Ministry of Defence, according the inquiry - was loaded during three stopovers in different ports. However, the ship’s voyages and history cast doubt on the real destination of part of its military cargo and its owner’s activities.(67)

PICTURE C AND CAPTION OF KARIN CAT

The Karin Cat was a general cargo ship(68) and belonged to the Odense-based company K/S Puma (Denmark), a subsidiary of the Danish group J. Poulsen Shipping, based in Kørsor.(69) The ship had a history of carrying military cargo and a document of compliance with the special requirements for a ship carrying dangerous goods. Its name appeared in a 1997 list of ships chartered by the U.K. Ministry of Defence(70) for military logistics support. Allegedly, "pirates" had attacked the ship in July 1999 while it was anchored near the port of Chittagong, Bangladesh, with a military cargo on board.(71) The Karin Cat was not the only ship of J. Poulsen involved in the transport of military equipment: the "Sarah Poulsen," had also been used along with other Danish ships for the transport of various arms cargoes to South Africa during the apartheid regime, in violation of the UN arms embargo.(72)

The routes followed in 2002 by the Karin Cat before reaching Antwerp were complex, calling at many ports with military-related activities, such as La Spezia (Italy), Gdynia (Poland), Poti (Georgia), Bar (Serbia) and Lymassol (Cyprus). The ship had also docked at St. Petersburg (Russia) and Tor Bay (Devon, U.K.) a small port near the Plymouth U.K. Naval base, before going to West Africa ports and Nigeria with, again, a cargo destined to the oil industry. On January 25, 2003 the ship arrived in Antwerp and started to load the equipment for Ras Laffan. The owner, according to the casualty report,(73) had given instructions to let space for additional cargo.

On January 27, the Karin Cat left Antwerp and on January 28 docked at Ridham Dock, near the mouth of the River Thames, a port of the U.K. Ministry of Defense utilized for "for shipping abroad armaments and explosives."(74) At Ridham, the Karin Cat loaded 141 tons of ammunition on pallets "destined for the Omani Minister of Defense". On January 29, the ship left the British port and anchored near the French port of Cherbourg, where it was admitted to dock February 4. At Cherbourg - one of the four military arsenals of the French Navy - the ship loaded 35 tons of cargo, described by the inquiry report as "Mistral Air Defence System" and a truck for the radar, more likely a Matra-BAe Dynamics’ ALBI anti-air defence system that fires Mistral 2 missiles.(75) The ship left Cherbourg the same day, bound for the Mediterranean and arrived at the port of Talamone on February 13. At Talamone, a small port in central Italy widely used for military shipment,(76) the Karin Cat loaded 17 tons of ammunition on 18 pallets and left the following day, bound for the Suez Canal. The secretive and irregular way these arms were collected in various ports casts many doubts about Oman defence forces as the real destination of the military cargo some weeks before the start of "Operation Iraqi Freedom" on March 19 – see further below for details of that Operation.

Arms from Brazil seized in South Africa

Between May 29 and June 3, 2005 South African Police Service seized three ships transporting a huge arsenal of ammunition en route from Santos in Brazil to Mauritius and Saudi Arabia. The ships’ operator was accused of violating South Africa’s National Conventional Arms Control Act [No. 41 of 2002] because the ships made stopovers in the harbours of Cape Town and Port Elizabeth and the Act required that the representative of the shipping company, P&O Nedlloyd,(77) first register as a trader in conventional arms and also apply in advance for a separate permit for each individual consignment of conventional arms. These progressive provisions in the Act were established to control and monitor arms transfers in transit through South Africa, especially to control transhipments to other African countries given a previous history of arms trafficking to embargoed destinations.

The three containerships operated by the Dutch-based company P&O Nedlloyd - P&O Nedlloyd Surat(Germany-flagged), Mol Miracle(Panama-flagged), and P&O Nedlloyd Dejima(Germany-flagged) – were carrying a large quantity of explosives and ammunition. This included 12,7×99 mm armour-piercing incendiary ammunition, one million rounds of 38 Special LRN 158 GR, 173,000 rounds of 7,62 x 51 mm ammunition, 210,000 rounds of 9 mm Luger ammunition, 145,000 rounds of 38 LRN ammunition, 5,000 rounds of 32 Auto ammunition, 25,000 22 LR LRN rounds, 75,000 357 Magnum rounds and 54,000 12/70 Shot 7 rounds.

The huge quantity of ammunition was manufactured by the Brazilian company "Companhia Brasileia de Cartuchos", and was apparently destined for the General Directorate for Military Affairs, Weaponry and Explosives in Riyadh, Saudi Arabia, as well as to the Commissioner of Police in Port Louis, Mauritius.(78) Despite a possible maximum sentence for this offence of 15 years’ imprisonment, the representative of the London-based shipping company in South Africa was only fined R50,000 (about US$4,000) and the court ordered all the ammunition on the three ships to be ‘disposed of" in July 2005.(79)

It appears that the problem started because Brazil does not have an arms export law preventing the transfer of arms to those who would most likely use them to commit grave human rights violations, such as the Saudi Arabian security forces. In contrast, South Africa does have such a law. The Guiding Principles and Criteria in Section 15 of South Africa’s National Conventional Arms Control Act requires that when considering a request for a permit to trade in conventional arms, the committee authorised under the act to issue such permits, must amongst other things, "(c)avoid contributing to internal repression, including the systematic violation or suppression of human rights and fundamental freedoms; (d) avoid transfers of conventional arms to governments that systematically violate or suppress human rights and fundamental freedoms." However, the South African Government’s record of compliance with this law has been criticised for allowing arms exports to states that persistently violate human rights, and in 2003 it did approve the export to Saudi Arabia of small arms and light weapons worth nearly R33 million and other major conventional arms worth R18 million.(80)

In Saudi Arabia killings by security forces and armed groups escalated during 2004, exacerbating the already dire human rights situation in the country. Scores of people, including peaceful critics of the state, were arrested and over two dozen suspected in connection with the "war on terror" were detained following their forcible return by other countries. Allegations of torture by the state were reported and flogging remained a routine practice.(81)

International shipping network for arms from China to Liberia

On January 1, 2006, the South China Morning Post(82) reported that "evidence that could lead to the conviction of a suspected international war criminal has been unearthed by Hong Kong authorities. Investigators have handed prosecutors in the Netherlands a file detailing the Hong Kong business connections of a man suspected of having been a key accomplice of exiled African tyrant Charles Taylor." The man, Gus (or Guus) van Kouwenhoven, had been arrested in Rotterdam, Netherlands, March 18, 2005(83) and the Dutch authorities have charged him to stand trial for aiding war crimes and crimes against humanity committed in Liberia. Van Kouwenhoven has been president of the Oriental Timber Company (OTC), a Liberia-based firm that owned the largest logging concessions in Liberia during the late 1990s and early 2000s and was reported by the UN to be owned by Singaporean interests.(84)

According to the South China Morning Post, the Hong Kong authorities have in particular provided the prosecutor’s office in Rotterdam with information on the connection between van Kouwenhoven and Hong Kong companies that were linked to OTC’s logging and arms business: a company called Global Star (Asia), a ship ("Antarctic Mariner," presently the "Raffles") that allegedly transported arms (in particular Chinese-made AK-47s, machine guns and rocket-propelled grenade launchers) to Liberia between 2001 and 2003,(85) when Liberia was under a UN arms embargo,(86) and a list of crews who served on the same ship. Along with other companies variously connected to arms traffickers, such as the Ukrainian arms trafficker Leonid Minin(87) and Victor Bout’s business partner Sanjivan Ruprah,(88) OTC and Global Star (Asia) had served as a conduit for arms shipments that fuelled Liberia’s and Sierra Leone’s bloody conflicts and were responsible for severe human right abuses.

In 2004, Amnesty International reported that in Liberia, "as armed conflict worsened, government forces and armed opposition groups were responsible for widespread abuses against civilians including killings, torture, rape and other forms of sexual violence, and forcible recruitment of children. Hundreds of thousands of civilians were forced to flee their homes. Despite cease-fire and peace agreements, hostilities and human rights abuses continued […]. Those responsible for human rights abuses enjoyed almost total impunity."(89) In 2001, Amnesty International had reported that in Liberia "torture, ill-treatment and other human rights violations continued to be carried out by the security forces. Human rights defenders and journalists were arrested, assaulted and forced into exile. Political prisoners were sentenced to prison terms after trials which failed to meet international standards for fair trial. There was no progress in investigating past human rights abuses. The international community continued to accuse the Liberian government of assisting rebel forces responsible for atrocities in neighbouring Sierra Leone."(90) Van Kouwenhoven is the first person to stand trial on a charge of crimes against humanity committed in Liberia.

The role played by Kouwenhoven and OTC in supporting the regime of Liberia’s former president Charles Taylor(91) was first exposed by inquiries carried out by the magazine, The Perspective, and by the non-governmental organization, Global Witness.(92) The role of Liberia’s logging industry in providing the financial means and transport routes for weapons destined to support Liberia’s warring parties was the subject of several reports dating back to the late 1990s.(93) Reports by UN Security Council panels of experts on Liberia and Sierra Leone(94) and by other official inquiries(95) confirmed the accusations and exposed the network of logging companies that spoiled Liberia’s rain forests and were variously connected with Taylor’s schemes to circumvent the UN arms embargo. According to these reports, China and France were the main importers of wood logs exported by Liberia, but the list of Liberia’s trade partners included another 17 countries.(96) Early in 2001, the governments of China and France objected to the inclusion of timber in the UN sanctions on Liberia(97) and a U.N. Security Council report argued that timber companies were playing …an essential role in Liberia’s economic and social development.(98)

Reports published in 2000 and 2001(99) had already exposed Global Star (Asia), the Antarctic Mariner and other ships to Taylor’s and OTC’s logging and arms business and the U.N. Security Council’s Expert Panel Report on Liberia (S/2001/1015, October 26, 2001) stated that "OTC is linked to the Hong Kong-based Global Star Holdings, which is part of the Djan Djajanti group of Indonesia, with offices in Singapore and Hong Kong and major investments in Indonesia and China. Djan Djajanti has taken responsibility for 70 per cent of the capital investment of the concession. Gus Kouwenhoven remains the chairman although he owns, according to documentation he showed the Panel, only 30 per cent of the capital and Joseph Wong Kiia Tai, son of Djajanti’s chairman, was made the manager. The Djajanti group has invested some US$ 110 million in the project. President Taylor has publicly defended OTC calling it his "pepper bush", a Liberian phrase for something important and personal."

Documents from the trials of Leonid Minin(100) and Sanjivan Ruprah(101) established links between Charles Taylor, OTC and Gus van Kouwenhoven. For example, Fernando Robleda, Minin’s business partner in Liberia, stated in an interview to Belgian inquiring authorities: "Gus is a good friend of mine. President [Charles Taylor, ndr] has a partnership in OTC (Oriental Timber Company). The president has a stake in every company."(102) Ruprah, in one of the seized documents entitled "Liberia, Key Figures of Taylor inner Circle," stated that: "Gus/OTC[apparently in error, Ruprah spelled the acronym as Overseas Trading Company, ndr]belongs to a wealthy Malaysia family with interests in Logging and Timber processing in Malaysia, France and Spain. They started a new Logging Company in the early part of 2000 with a declared investment of $110 million, they are very successful with a export revenue exceeding investment in the first 14 months of operations, they have been providing funding to Taylor who is a 40% shareholder in that venture."(103)

A U.N. report in 2000(104) stated that Van Kouwenhoven was "responsible for the logistical aspects of many of thearms deals" to Liberia and the travel ban list drawn up by the United Nations(105) summarized Kouwenhoven’s activities in the following terms: "Owner of Hotel Africa[base for his gambling business in Liberia, ndr](106) and President of the Oriental Timber Company; Arms dealer in contravention of UNSC resolution 1343. Funds purveyor to the Taylor regime; Close associate of Taylor.Supported former President Taylor’s regime in effort to destabilize Sierra Leone and gain illicit access to diamonds and funds." On July 23, 2004, Van Kouwenhoven was also put on the U.S. Denied Person List.(107)

According to Global Witness, various ships related with the OTC business unloaded military equipment in Liberia while waiting for their cargoes of wood logs. For example, on April 5, 2001, the "MV Senorita, owned by OTC’s associate company Global Star arrived in the port of Buchanan amid tightened security[…]. In early July 2001, the Antarctic Mariner arrived at Buchanan having left China via Singapore, and was unloaded amidst heightened security, mostly at night, by armed troops and OTC personnel, rather than by the usual stevedores. The vessel was then loaded with over 30,000 mc of OTC’s logs, an enormous cargo, for shipment to China."(108) In addition, an investigative report published by the Washington Post in June 2002(109) stated that ships chartered by OTC delivered weapons to Taylor’s forces at the port of Buchanan on September 28, October 28, and November 16, 2001. According to the article, the shipments contained 7,000 boxes of ammunition for AK-47 assault rifles, 5,000 rocket propelled grenades, 300 howitzer shells and other equipment. Global Witness in another report,(110) listed five more ships suspected to have delivered arms to the OTC’s controlled port of Buchanan and at port of Harper in the first part of 2002: the PanormosPride (January 9); the Rubin(January 15); the Sea Liberty(January 16); the Dimitrios Nanios(January 28); and the Arktis Fighter(May 8).

Global Star (Asia) Holdings Ltd was said to be the parent company of OTC and part of the Global Star Group in a year 2000 article published by the Perspective. The article stated that "the Director of OTC is named Joseph Wong (or Joseph Wong Kiia Tai) and his father said to be the owner of Global Star Group. They are based at 4212-5, Hong Kong Plaza, 186-191 Connaught Road West, Hong Kong. They are ethnic Chinese, perhaps with Malaysian passports. However, the workers are mostly, if not entirely, Indonesian. Many if not all were recruited from Sumatra[…]. Another report is that the logs are being exported to the Djan Djanti Group which makes plywood from the logs, although this company is not listed as one of Global Star’s direct holdings."(111)

It is not known what the documents provided by the Hong Kong authorities have revealed, but further research carried out for this report has revealed the complexity of OTC’s and Gus Kouwenhoven’s network of transport companies and ships. In 2004, a business intelligence company(112) carried out an inquiry on Global Star (Asia) Holdings Ltd, at that time domiciled in Room 4211, 42/F Hong Kong Plaza, 186-191 Connaught Road West, Hong Kong. According to the report, the senior company personnel were listed as "Enlightenment Incorporated" (Director), Global Star (Asia) Holdings Limited (Director), and "S.A.T. Services Limited Company" (Secretary). The firm was defined as an offshore company and, as such, not allowed to engage in local business in Hong Kong and not required to submit accounts and financial information. The company was incorporated in Hong Kong July 22, 1998 (C.R. number 650409), with an authorized capital of HK$10,000, divided into 10,000 ordinary shares of HK$1 each and a paid up capital of HK$2. The company shareholders had 1 share each and were listed as "Enlightenment Incorporated, P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands," and Global Star (Asia) Holdings Limited, P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands." The Company Secretary was listed as the "S.A.T. Services Limited (CI#079046), 15/F, Blissful Building, 247 Des Voeux Road Central, Hong Kong."

The business report on Global Star added that "from local enquiries it has not been possible to determine the exact nature or the extent of the company’s operations and where they are actually conducted." The company’s name did not appear on the directory of the building it was located. The inquirer visited Room 4211 and found that it was actually vacant and interviewed a member of staff from management office, who divulged that he has never heard of that company, which was not a registered tenant there. In addition, the report stated, there was no telephone listing for either the company or its directors and the company itself did not appear in local trade directories or reference books. In fact, a certified public accountant, S.B. Chow & Co, domiciled at the same address and suite of the company’s Secretary (the S.A.T. Services Limited) acknowledged that the company was one of its clients, but declined to disclose any other detail.

Further research with Lloyd’s Register-Fairplay,(113) has shown that a Global Star (Asia) Ship Management (ID number 1755511) is domiciled in Hong Kong, Pacific Plaza, 410 Des Voeux Road West, room 1803. The same company instead appeared in a directory(114) for the year 2000 as domiciled at the same address and room that hosted Global Star (Asia) Holdings (Room 4211, 42/F Hong Kong Plaza, 186-191 Connaught Road West, Hong Kong, as stated in the Perspective’s article in the same year 2000. The Lloyd’s Register-Fairplay lists thee other companies under Global Star: a Global Star Overseas Inc. (ID 1834386), registered in Panama, without a known address; a Global Star Shipping Ltd (ID 4080740), registered in Hong Kong; and a Global Star Shipping Ltd (1767663), registered in Hong Kong and domiciled c/o Global Star (Asia) Ship Management Ltd.

Regarding the ships reportedly used by OTC for arms shipments, research carried out for this report has unveiled a web of companies and ships managers based in Hong Kong, Singapore, Bahamas, and Panama,(115) as well as a significant amount of inspections and detentions carried out on those same ships by various Port authorities during the last ten years.(116)

3. Organizing military supply chains and arms transfers

In the last two decades, the world of the freight transport industry experienced a sea change that has helped make the arms trade very different from the past. Central to this change is the new role of transport companies in facilitating an increasingly differentiated world trade. Transport companies have gradually applied new techniques that significantly cut transfer times and the costs to move goods. But, more importantly, most of them have increasingly offered to organize and manage all the processes involved in the chain that starts at the production point and end up in the consumer markets.(117) A significant proportion of transport companies have moved up from the role of carrier to the role of "manager" of the whole physical supply chain, or logistician, a role that entails far more complex functions and responsibilities than simply carrying goods.

These techniques have deeply affected the way civilian goods move around the world(118) and have been increasingly applied to arms transfers, military supply chains, and military operations. The direct involvement in military deliveries of transport companies with significant experience in supply-chain management has helped facilitate this process. Organizing arms transfers or a military supply chain is a complex operation in which several factors are involved. These factors need careful consideration especially as regards:

· timing (ordinary, urgent, emergency);

· characteristics of the goods and type of packaging needed;

· atmospheric conditions during transport and storage;

· sensitivity of the equipment to external factors such as corrosives and collisions;

· most appropriate type of documentation and rights to information access;

· land routes available to reach the facility from where the goods are shipped;

· availability of inter-modal platforms allowing for easy changes of mean of transport;

· availability of sea port and airport facilities for loading and unloading operations;

· land routes available to reach the location where the goods are finally received;

· risks related to transiting difficult areas or reaching conflict zones

Each of the above factors can strongly influence the type of actors and means involved and the final operating costs. Some of these factors are inelastic. Spare parts, small arms, light weapons and ammunition do not present particularly onerous technical problems for experienced logisticians, making it easy for unscrupulous operators to divert such cargoes on the illicit or "grey" markets. In contrast, heavy armaments, armoured vehicles and large weapon systems are often "over-size" cargo and need peculiar handling techniques and special transportation,(119) but are more difficult to conceal and divert.

Tanks, armoured fighting vehicles, military trucks and self-propelled artillery may be shipped in either dedicated railcars or special trucks and then loaded directly or by roll trailers in roll-on/roll-off ships (a dedicated ro-ro ship of 25,000 Deadweight Tonnes (DWT)(120) is able to carry up to 150 tanks or 400/600 vehicles for ship unit); in containerships, when dimensions allow for the use of standard or open-top containers, or in containerships that are configured to accept special 35-foot containers or 40-foot Heavy Duty Flatrack. When circumstances require fast delivery, as in the case of special forces deployment, they may also be shipped in medium or large cargo planes - such as Antonov-22, Antonov-124, C-5AC Galaxy, C-17A Globemaster, Ilyushin-78MD, and C-130 Hercules aircraft (see Table), that can carry heavy equipment up to 60-120 tonnes. Where international rail networks are available, heavy military equipment is also directly shipped to destinations in dedicated railcars. Often, the manufacturer’s facility includes rail tracks connected with the major networks. The equipment is usually Customs-precleared and may be directly forwarded to military deposits of other countries.

In contrast, spare parts for military equipment, small arms, light weapons, ammunition, and explosives are often shipped in cranes and boxes, palletized and then containerized, and may travel alongside with shipments of other manufactured goods on commercial ships and aircraft, provided certain rules and packaging dispositions for the transport of hazardous materials are observed. This type of military equipment is usually shipped in large quantities and its relative flexibility allow for different types of containers.

Military aircraft and helicopters are usually shipped partially or entirely disassembled, or at least with wings and rotors folded or removed, more frequently by ship, but also in cargo planes. These can therefore be concealed from unsuspecting customs authorities. For example, when a giant Antonov-124 Ruslan cargo plane landed in Baku on March 18, 1999, the first statements of the crew and subsequent declarations by the director-general of the Kazakhstan-based Metallist plant claimed that the plane was en route from Kazakhstan via Bratislava to Bosnia. However, Azeri customs authorities discovered that the plane was loaded with six disassembled MiG-21 jet fighters and seized it on the grounds of a national law that does not allow unauthorized arms cargo to over-fly the national territory. It was later alleged that the cargo was the fourth similar shipment of old jet planes that the Czech firm Agroplast had illegally arranged to supply to North Korea. The planes were possibly still air-worthy but more probably destined to provide spare parts.(121)

Of course, various other factors need to be considered. If the military cargo is part of a covert or illegal consignment, the shipping "requirements" may focus on the possibility of concealing the equipment amongst other shipments and/or disguising the equipment by falsely invoicing and mislabelling it.(122) Sometimes, the means of transport itself can serve as a cover as for example when illegal military cargoes were shipped in oil tankers, refer ships (carrying refrigerated goods and in particular fish), v.i.p. planes,(123) and in cargo planes or railcars assigned to relief and humanitarian missions.

Nevertheless, after all such factors are taken into consideration arms transfers and military supply chains follow procedures similar to those applied to the supply chain of civilian cargoes. Once ready to be shipped, even large military articles enter the general trade flows and routes, often making them difficult to detect. In this sense, the transport and logistics services relating to arms transfers, military supply chains, and military operations are not really a special or separated part of the freight transport industry. Rather, the companies that transfer arms and other military equipment and supplies are mostly those firms involved in other commercial freight transport operations. This makes monitoring their military-related activities difficult and thus requires special measures.

In general, the growing role of commercial organizations and agents in arms supply chains, arms transfers and military operations contributes to lower transparency and makes the implementation of arms control policies more difficult. It tends to blur the responsibilities of the firms and their governments for the human rights consequences of their activities.

GLOBAL SCALE MEANS THAT MILITARY CARGO DO NOT MOVE IN EMPTY SPACES

Maritime transport

● In 2004, the world fleet had a transport capacity of 857 million dwt, of which about 399 million were under flags of convenience.

● In 2004, there were about 16,600 general cargo ships moving in international trade, of which 3,054 containerships.(124)

● In 2004, the world top container ports (Hong Kong and Singapore) handled 21.9 million and 21.3 million TEUs, respectively.(125)

● In 2004, a typical container ship able to carry 3,500 TEUs had daily charter rate of US$30,000.(126)

● In 2004, the revenues of the ocean container transport services approximately reached US$139 billion.(127)

● In 2003, general cargo ships (including containerships and ro/ro ships) moved goods for 1.65 billion tons, a major share of which transported in containers.(128)

● In 2003, world ports moved (loading and unloading) about 266 million TEUs,(129) 39% of which at ports in Developing Countries.

● In 2003, despite being a small fraction of the world port traffic, African ports loaded (exports) of more than 63 million tons of dry cargo and unloaded (imports) 136 million tons.(130)

Air cargo transport

● In 2004, international air cargo handled at Hong Kong, the world top cargo airport for international traffic, totalled 3.1 million tons. In total, the top ten airports for international cargo traffic(131) handled 18.8 million tons. (132)

● In 2004, the total cargo handled at Africa’s top 15 airports(133) totalled 1 million tons.(134)

● In 2003, the number of Western-type freighter planes in service totalled 1,766 units.(135) To this figure should be added more than 300 freighters based in former USSR countries (CIS) and hundred of former Soviet cargo planes in service outside the CIS, in Africa in particular.

● In 2004, the cargo fleet (all-cargo and combi) registered in 37 African countries by 140 airlines totalled 262 all-cargo and 103 combi planes. Most of them were old Soviet-built Antonov and Ilyushin freighters.(136)

● In 2002, freight tonnes transported by air in international scheduled (regular) services totalled more than 27 million, including 9.7 million tons transported by all-cargo planes.

● In 2002, charter (non-scheduled) services transported about 18 million tonnes.

Arms transfers by sea

The main part of international trade travels by sea, where structural changes are quite slow. Over the last few decades, the role of the leading countries has increased and in 2004 the top thirteen countries controlled more than 70% of the world merchant fleet.(137) Leading the top two positions, Greece and Japan held 31% of the total cargo capacity, followed by Norway, Germany, China, the United States, Hong Kong, Korea, Singapore, Taiwan, the United Kingdom, Russia, and Denmark.

All the world top thirteen countries have at least 50% of their tonnage registered under flags of convenience ("open registries"),(138) since the "open registries" of Panama, Liberia, Bahamas, Malta, Cyprus, etc., allow the ship-owners to substantially avoid the levels of taxation and the kinds of safety standards required by major registries, and to shelter the real ownership of the ships in an array of shadow or shell companies. The role and "weight" of the countries whose companies control large ship fleets but register them under flags of convenience (the ship-owners based in Greece, for example, maintain 68% of their fleets under open registries) would therefore be far more prominent if the real nationality of those fleets were taken into consideration. Moreover, the countries where the open registries are located regularly and grossly under-report, or do not report at all, their accounts to international financial organizations such as the International Monetary Fund.(139) In fact, in 2004, the major open-registry countries (Panama, Liberia, Bahamas, Malta, Cyprus, and Bermuda)(140) "controlled" 46.6% of the world fleet’s transport capacity.

In maritime transport, which is the main modality of the international freight transport system, the typical vessels that carry military cargo are "general cargo" ships, the largest component of the world fleet that include containerships (60% of the general cargo traffic), reefer (refrigerated) ships, "ro/ro" (roll on/roll off) vessels, car/truck carriers, specialized ships, and combined ships (general cargo/containers).

For a single large transfer of arms or other military and security equipment, in particular if directed to a developing country, the most common method is to use companies that operate tramp ships, i.e. ships that take the cargo when and where it is offered. "Tramping" is a traditional non-specialized service, a declining niche market constantly eroded by the improving specialization of other general cargo markets. This segment of the maritime transport may include well managed and modern commercial fleets, such as the general cargo branches of the Chinese colossus COSCO and the Iranian national-owned shipping company IRISL, but more frequently tramping markets use ships that have been in service for 30 or even 40 years but are still profitably involved. These ships have been usually registered in less than accountable open-registers, or "flags of convenience"(141) - such as Bahamas, Bermuda, Bolivia, Cambodia, Cyprus, Honduras, Liberia, Malta, Marshall Islands, Panama, and St. Vincent & Grenadines - or in countries with loose maritime controls.(142)

For regular international transfers of large consignments of arms and other military or security equipment the companies of choice are usually shipping lines, whose regular services have state-of-the-art technologies for tracking and controlling the delivery and are integrated with other modalities of transport (by rail, road, air etc.). The most requested ships are the ro/ro (roll-on roll-off) vessels, where wheeled vehicles (trucks, trailers, armoured and tracked vehicles, etc.) can drive straight on and off the ship. The world merchant ro/ro fleet amounts to about a thousand ships with an average age of 20 years. The most modern of them, about one third of the total fleet, are large "pcc/pctc" (pure car carriers/pure car truck carriers), managed by companies with a global networks of routes and services.(143) However, due to the large number used in civilian commercial traffic flows, ro/ro ships available for defence transportation are chronically scarce and neither the civilian conversion of the former Soviet Bloc’s ro/ro fleet, nor the recent efforts of the specialized shipyards,(144) have made up for this scarcity.

Also in high demand for regular shipments of military equipment are containerships. These are the most advanced segment of the maritime transport industry, usually operated by major maritime companies capable of meeting their high maintenance costs. Containerships that can carry thousands of containers in each voyage may easily become a conduit for unauthorized arms shipments organized by unscrupulous brokers and shippers or for covert operations by unaccountable government agencies.

For example, on June 28, 2003, U.S. Department of Homeland Security officers(145) seized a container on board the Cyprus-flagged 2,280 TEU containership "Nordstrand"(146) that had arrived in Portland, Oregon, the previous day from Vancouver. The cargo on the non-refrigerated container had been labelled "chilled rainbow trout" and had been transferred to the Nordstrand in Vancouver from another containership, the then Liberia-flagged and 2,100 TEU "Lykes Voyager"(147) that had departed from Shanghai, China, on June 6. The transferred cargo included 450 shotguns, 780 handguns, 950 ammunition magazines, 150 pistol-grip shotguns, and 300 pump shotguns, destined, according to the DHS officers, to an El Salvadorian arms dealer. The shipper was a Chinese arms manufacturing company already in the Office of Foreign Asset Control’s list of companies denied the right to conduct business with the United States. The container was scheduled to pass through Oakland and Long Beach ports, California, before arriving in El Salvador.

Arms transfers by air

International air cargo transport(148) is usually limited either to parcel services and high-value-added products, or to support expeditionary military operations and the delivery of arms into difficult areas. International air cargo traffic, in which U.S. and European companies hold a dominant position, accounts for about 16% of the total air traffic and 25% of total air cargo revenues. The most dynamic growth is in time-sensitive goods (like perishable goods) and intra-regional (intra-American, intra-European) connections. However, some world regions, namely Africa and Central Asia, make a higher than average use of air transport, because of the great distances and poor condition of railroads and roads, particularly, in the case of Africa, during the rainy seasons. The transport of arms and other military equipment by air is usually reserved for:

· Rapid deployments of military equipment and troops;

· Authorized shipments to destinations far from ports or difficult to reach by land;

· Deliveries that need as little attention as possible - such as illegal arms shipments.

Currently, there are 5,930 active aviation companies worldwide - including more than 600 main cargo airlines - flying with their own or leased aircraft (both planes and helicopters) under 204 aviation registries, plus 69 major aircraft leasing companies. Dozens of other small airlines - in particular cargo charter companies - have a business life too short or shadowy to be recorded.(149) The failure of the international community to closely track the latter companies makes the monitoring of arms embargoes extremely difficult, as numerous UN and other reports testify.(150) A large number of air operators that can offer cargo space favour the outsourcing of arms transfers by air. These operators may be graded in three main groups:

· Large airlines with all-cargo, "combi" (passenger/cargo), and passenger aircraft with substantial cargo space in their bellies;

· Express air companies or "integrators," such as Federal Express, DHL, UPS, TNT;

· Small charter companies that offer their planes by a pre-determined period or by trip.

Major airlines and integrators, under the supervision of government authorities, carry the main portion of arms and other military and security equipment that is legally transported by air. With few exceptions,(151) major airlines and integrators usually accept business involving the transport of weapons, ammunition and other military and security equipment, provided they are accompanied by proper official authorizations. For the safety of passengers, restrictions apply to the transport of ammunition, classified by ICAO and IATA as "dangerous goods" of Class 1,(152) There are 9 classes of dangerous cargo and Class 1includes explosives such as substances or devices having an explosive effect, e.g. toy caps, detonators, igniters, grenades, fireworks, and cartridges and, because of the special precautions required, such items may nowadays be only transported on cargo planes. Since air cargo is a market in expansion, where advanced logistics techniques and security rules converge, the major aviation operators are rarely interested in breaking the aviation rules or being involved in transfer not approved by governments or state agencies. However, sometimes the close relationships entertained by these carriers with government agencies may lead to their involvement in covert or blatantly irresponsible transfers, as shown in Chapter two above.

For example, in July 2004, the Sudanese government announced the import of 12 MiG-29 jet fighters to Sudan at the same time as the Sudanese government was being accused in the United Nations Security Council of supporting Sudanese militia in a campaign of ethnic cleansing in Darfur.(153) On August 21, 2004, in response to Amnesty International’s expression of concern, the Russian government dismissed any connection between the delivery of fighter planes to Sudan and the escalating conflict in Darfur. The Russian envoy to the UN said that the sending of Russian fighters to Sudan was to fulfil an agreement signed between the two countries in December 2001.(154)

Illegal, covert or questionable arms transfers are however more likely to be transported by smaller and sometimes shadowy cargo companies operating in the charter segment, an equivalent of the maritime "tramping." These companies generally use old cargo aircraft ("freighters") such as Boeing 707s, DC-8s, Hercules C-130, Antonov-12 and -24s, Ilyushin-18 and -76s, Yakovlev-40s. These aircraft are considered the workhorses of military transport to conflict zones for their ability to operate in difficult conditions. They are often used to transport small arms and light weapons and the corresponding ammunition, explosives and shells, as well as basic military transport and other equipment. Based in airports where economic or political factors have made the scrutiny of cargoes a rare event, such as in Sharjah (UAE) and Ostend (Belgium),(155) the planes are frequently registered under the aviation equivalent of the maritime "flags of convenience," moving like a flock of birds from one flag to another when the authorities change.(156)

In early 1990s, large fleets of ex-military transport planes of the former Warsaw Pact suddenly became available for commercial use. This led to the creation of dozens of cargo charter companies headquartered in, or controlled by, interests located in Eastern and Central European countries. These aircraft and cargo companies have been used to exploit for commercial use – sometimes with authorization and sometimes illegally - the huge military arsenals that the Soviet and Warsaw Pact armies decommissioned and sometimes abandoned. The planes have been also used in "expeditionary" logistics for recent major military operations in the Middle East and South Asia, as well as for numerous questionable arms transfers to war-torn and highly repressive countries – and even used for peacekeeping and relief operations in those same countries. This gave these companies the opportunity to "demonstrate" the market value of their fleet and gain growing portions of the air cargo markets.(157) Today, major Western oil and heavy construction companies, as well as NATO countries and the United Nations (from Sudan to D.R. Congo to West Africa), routinely use former Soviet Antonov-124s and Ilyushin-76s cargo planes operated by companies whose base is located in the former-USSR countries. Many of the companies now conduct their business from offices in the Middle East, Asia, Africa and other regions.

MAIN MILITARY AND CIVILIAN CARGO PLANES – PAYLOAD LB/TON
Designation ManufacturerPayloadDesignation ManufacturerPayload
An-225 Antonov 550,000/249 Il-78M Ilyushin 105,820/48
An-124 Mil.Antonov 330,000/150C-141B Lockheed 94,508/43
An-124 Civ.Antonov265,000/120 B-757-200 FBoeing85,900/39
C-5A/B/C Lockheed 265,000/120 An-70T Antonov 77,150/35
B-747-400 FBoeing 242,290/110KC-135A/E Boeing 50,000/23
MD-11 FBoeing MD202,100/91An-12 Antonov 44,000/20
rdrs	C-17A Boeing 172,200/78 C-130H/J Lockheed 42,574/19
KC-10A Boeing/MD 169,409/77 C-9B Boeing 32,444/15
An-22 Antonov 132,000/60 C-130T Lockheed 30,860/14
Il-76MF/TFIlyushin 132,263/60Il-18 CargoIlyushin 30,000/14
A-300-600 FAirbus121,000/55KC-130 Lockheed 25,049/11
B-767-300 FBoeing119,000/54C-27J Lockheed/Alenia22,000/10
Il-76MD/TDIlyushin 110,219/50An-72/74 Antonov 22,045/10
A-300B4Airbus110,000/50An-32 Antonov 14,700/7
DC-8-70Boeing MD109,000/50An-26 Antonov 12,100/6
Designation Load
AN-12436 pallets 463L (88"x100", h. 96"); or any kind of heavy weapon (tanks, helicopters, missiles, 67 t mobile bridges)
C-5A/B36 pallets 463L (88"x100", h. 96"); or any kind of heavy weapon (tanks, helicopters, missiles, 67 t mobile bridges)
B-747-400 F39 pallets (96"x125") + 15 m3 in bulk; or 30 pallets (96"x125") + 32 containers LD1
C-171 heavy tank; or a special truck with 60 t; or 2 rows of 5 t trucks; or 2 HMMWV rows; or 18 pallets 463L
A-300-600 F25 pallets 88"x125"; or 21 pallets + 23 containers ld3
B-767-300 F24 pallets 88"x125" in the main deck + 7 pallets, 2 containers and bulks in the lower deck
A-300B425 pallets 88"x125";or 21 pallets + 23 containers ld3
C-141B1 missile Minuteman (41 t in modified versions)
B-757-200 F15 pallets 88x125"
C-130J/J305/7 pallets 463L (88"x100", h. 96"); or ¾ HMMWV
C-27J AML90 + HMMWV; or Perentie 6x6; or M113 APC; or 3 pallets (88"x100", h. 88"); or 2 pallets (88"x125"x88")
SOURCE: MANUFACTURER SPECIFICATIONS

The arms logistics chain – Who’s who?

The arms logistic chain usually starts at the manufacturer’s facility, a military warehouse or a dealer’s deposit. There, the equipment is packaged, consolidated and "unitised". Trucks and railcars carry the equipment to the international embarkation points, where it is often temporarily stored in customs or military warehouses. Handled and embarked onto military or commercial ships and aircraft, the equipment is forwarded to the debarkation point, where it may be stored or directly shipped to a destination through a second leg by land that may include the use of inter-modal carriers. Where international rail networks are available, the equipment may be directly shipped from the origin to the destination facility.

In commercial sales of military equipment in particular, all these operations configure a logistics chain that may include all or part of the following actors: manufacturer; buying agent; banking institutions for the Letter of Credit; freight forwarders or consolidators; origin Customs officials and ports/airports authorities; Non-Vessel Operator Common Carrier (NVOC); asset-based carriers; officials of destination Customs and other governmental regulatory agencies; customs brokers; rail lines/trucking or inter-modal companies (third parties entities); destination warehouse/distribution entities; and the importer’s representatives. Each actor has core functions and roles in the logistics chain as follows:(158)

· The manufacturer: is mainly responsible for compliance with the importer’s specifications, the Letter of Credit, and export license from its government.

· The buying agent: if present, interfaces directly with the importer or the foreign buying office or representative, negotiates the terms of sale and the Letter of Credit terms, prepares export licenses, and provides payments to the manufacturer and other actors in the country of origin.

· The freight forwarder/consolidator: is responsible for the preparation of the document packet to be forwarded to the authorities of the country of origin and customs in the foreign country, banks, and the importer; as well as for coordinating truck/rail, booking space on vessels and dispatching containers to the manufacturer, supplying and distributing all information and documents necessary for compliance with the Letter of Credit or sales agreement.(159)

· Origin customs’ authorities: are responsible for issuance of quota, export license control, document control, coordination with manufacturer, and shipping companies.

· Banking institutions: are responsible for assisting the manufacturer and importer with all financial documents, the compliance to all Letter of Credit’s terms and conditions, and timely payments after compliance with the Letter of Credit requirements.

· Origin and destination ports’ authorities: are responsible for running ports efficiently and for complying with the normal conditions under which its services are priced.

· Non-Vessel Operator Common Carriers(NVOCCs): usually non-asset based companies, these ship the cargo under their own rate structure and may substitute certain functions performed by the freight forwarders.

· "Steamship operators": are asset-based companies and are mainly responsible for vessel availability, schedule integrity, space and equipment on the vessels, all landside operations, in addition to the costs of operating the vessels; they too may derive additional income from consolidation, rail/truck and other inter-modal and logistics operations.

· Destination customs: are responsible for enforcement, tariff compliance, collection of duties, and assistance to the importer on what can and cannot be imported and at what duty rates, under what quota requirements, etc.

· Customhouse brokers:are responsible for documentation and direct interface with customs and other governmental agencies.

· Destination warehouse/distribution entitiesare responsible for coordination with rail/truck, direct interface with importer, proper storage, adequate inventory and record keeping for all goods received and dispatched/distributed, equipment control and return on a timely basis of rail/truck/ocean carrier equipment.

For the chain to function legally, a series of documents are required that precede and accompany the shipments. These are intended to address national and international general provisions, regulations, and voluntary agreements:

· Documents related to the transaction: commercial invoices; enquiry/request for quote/offer; invitation; offer/quotation; pro-forma invoice; despatch advice.(160)

· Documents related to payments: documentary credit application and documentary credit (ICC), such as the Letter of Credit.(161)

· Documents related to forwarding and cargo-handling:(162) Standard consignment instructions; FIATA forwarding instructions; Forwarder’s certificate of receipt; FIATA warehouse receipt.

· Documents directly related to transport: Government Bill of Lading (GBL); Standard Bill of Lading (International Chamber of Shipping)(163); International rail consignment note (CIM);(164) International road consignment note (CMR);(165) Universal Air Waybill (IATA);(166) Negotiable FIATA multimodal transport Bill of Lading; Non-negotiable FIATA multimodal transport Way Bill; FIATA Forwarders certificate of transport; FIATA Shippers intermodal weight certificate.

· Documents related to the official controls sector: Dangerous goods declaration; Goods declaration for export (Kyoto Convention); Goods declaration for transit (Kyoto Convention); Single Administrative Document (SAD).(167)

Most of this documentation is actually hidden from public scrutiny. Amnesty International urges governments to make this documentation available to international agencies monitoring the arms trade.

4. The logistics revolution and its military consequences

Military Logistics

The word "logistics" usually means "the practical arrangements that are needed in order to make a plan or activity successful,"(168) but in the modern technical sense it means activity to plan, implement, control, and forward goods between the point of origin and the point of consumption, including related documentation and storage. This is the basic framework of activity that lies behind the functioning of the present world transport system and it supports the expansion of international trade.

As an applied science, logistics was born at the same time when modern armies were conceived, in the middle of the 19th century. It owes its modern beginning to the creation of national military academies and to the role of experts like A.H. de Jomini, a Swiss baron who was a general in Napoleon’s army and later one of the founders of the military academy in St. Petersburg. At that time, logistics became a separate part of the art of war, after strategy and tactics, focusing on the scientific planning of communications, troops’ movements, and the transport of supplies. In the same period, scientific methods were also applied to industrial production, leading in a few decades to the type of industrial organization that is known as Fordism. Hence, the military logistics underwent several important developments, mostly in connection with the application of new technologies, the creation of large technical systems (such as railways and telegraphs), and the introduction of motor vehicles and aircraft.

World War II saw an intense exchange of experience and skills between industrial sectors and military logistics. This cooperation allowed the military to solve problems of extreme difficulty and resulted in the ability to supply an average of seven tons of cargo for each soldier deployed in the field, compared with only 2.7 tons during World War I. Post-1945 military logistics, or defence logistics, grew out of these developments, in particular techniques adopted by the U.S. army, such as (a) the building in a few hours of inter-modal platforms for unloading ships and loading airplanes and trucks; (b) the use of roll on-roll off techniques for troop landings (like in the D-Day in Normandy); (c) the building of artificial ports on Northwestern European coasts; (d) the conversion into oil pipelines of Palestine’s waterworks; (e) the massive use of metal containers for supplies destined to the U.S. armed forces fighting in Europe; and (f) the application of systems for reducing the time ships waited for loading and unloading at ports.

During the Korean War (1952-54), container systems became standard in military transport operations,(169) and the U.S. military was able to quickly move and manage about 110,000 different pieces of cargo. This experience was applied on a larger scale during the Vietnam War (1965-75). The US Defense Department let transport companies such as Sea-Land Services, which had become a leader in containerised transport,(170) to manage several logistic aspects of the military intervention, with the help of logisticians trained in military academies. Afterwards, these logisticians found opportunities and careers at Sea-Land and other transport companies. Thus, defence logistics know-how passed from military to civil operators, while logistics turned into a giant commercial business.

By hiring personnel and applying techniques and skills coming from military experience, the logistic sector became a strategic resource for the industrial system during the economic growth of the 1960s and 1970s. It was even more important in supporting the fast-growing international trade of the 1970s and 1980s, when world trade grew two times faster than world production. In the middle of the 80s, what has been defined as the logistics revolution(171) took off, sustained by diminishing costs in all transport modalities, and in particular in maritime transport, where the introduction of containers had completely changed its way of operating. Since then, commercial logistics has been involved in defence logistics, arms production and transfers, and warfare even more than in the past.

CONTAINERISATION AND DEFENCE LOGISTICS

● At the core of containerisation of cargo lays the combination of two technologies, "unitization" and "intermodal transport". "Unitization" is the process of consolidating smaller packages in a larger unit, a wood or metal container for example, and "intermodal transport" is the use of different modalities for shipping the same cargo. Once trucks, railcars, ships and aircraft are prepared to handle and carry standard containers, there is no need to unpacking and repacking the cargo in each change of modality, with an evident cut of labor costs and transfer times.

● Prior to World War II, the US shipping company Matson Navigation had tested unitization techniques and developed its own containers for cargoes shipped from Hawaii.

● The industrial application of containerisation to maritime transport is however credited to a US trucking company owner, Malcolm Purcell McLean, who in early 50s had attracted the interest of the military community with his plans to build ships suited for carrying truck trailers using roll-on/roll off techniques.

● In 1955, McLean purchased the Waterman Steamship Corp. and its subsidiary Pan-Atlantic Steamship Corp. and a year later inaugurated a service that utilized former tanker ships modified to carry truck trailers without wheels on their decks. Pan-Atlantic Steamship Corp. was renamed Sea-Land Services Inc. in 1959. In June 1967, under a multi-year contract granted by the US Military Sea Transportation Service, Sea-Land started a containerized cargo services to transport military equipment from the port of Oakland, California, to the port of Da Nang, Viet Nam.(172)

While modern military organizations had historically regarded logistics as one of their specialties, the fast evolution and progress of commercial logistics during the 70s and 80s convinced the military authorities of countries with sizeable armies and regional or global engagements to partner with private companies to try to reduce freight and logistics costs and adapt their logistic unities to the best practices of logistics services providers.(173) Methods adopted by commercial logistics led the way in transforming the whole chain of military supplies and the on-field logistic support to troops. Defence logistics became an increasingly complex web of functions and operations such as:

· Research, design, development, manufacture and acceptance of materiel;

· Storage and stock control, transport, distribution, maintenance, and disposition of materiel;(174)

· Transport of personnel;

· Acquisition or furnishing of services (medical services included) and acquisition, maintenance, operation and disposition of facilities.

In other words, the application of defence logistics was gradually extended from research aimed to adapt the design of armaments to the storage and transport constraints of arms, and also to the methods for monitoring and managing all the military assets along the supply "pipeline".(175)

Since the logistics revolution had proved to be a fast way to rationalize and improve the whole production and distribution system, arms manufacturers of major weapons systems (such as tanks, combat aircraft, battle ships, and missiles) also rapidly aligned their production and logistics methods to those adopted by similar industrial sectors, in particular electronics and vehicles. Manufacturers of other type of armaments, ammunition, and small arms followed the same trend. For example, the Italy-based company Beretta, a market leader of military and non-military small arms, started to use an intensive "inbound" system of logistics for outsourcing the production of non-core parts and for coordinating several hundred small subcontractors. Beretta also used the so-called "outbound" logistics for controlling assembly lines, quality checks, arms tests, and the final shipment to customers worldwide.

Outsourcing defence logistics

As a result of these trends, the armed forces of many countries have become increasingly dependent on commercial logistics companies for their arms procurement, military operations, and forces deployment.(176) Logistic functions performed by military units have been increasingly flanked by so-called "contract logistics support" companies i.e. - as mentioned above - private companies that provide support under government military contracts in areas such as supply and distribution, maintenance, training, software support, and even services in the theatre of military operations.(177) In addition, certain activities related with military deployments and post-war operations are now routinely outsourced to other types of companies such as:

· Private military companies, which may or may not deploy personnel to engage in combat and often provide intelligence, training, procurement and other services in zones of armed conflict

· Private security companies, which guard installations, provide policing, security training, and personnel security, sometimes in zones of armed conflict(178)

· Private companieswith experience in re-building and restoring operations.

This tendency to outsource sensitive military and security support operations previously under the direct control of governments and military command systems is increasing in the USA and some other powerful states.(179) As the chain of sub-contractors is extended internationally, the role of arms brokering, transport and logistics can become ever more remote from democratic oversight and accountability.

Modern transport markets are nowadays organized on the basis of specialization (either for routes or means of transport), so the outsourcing by governments of defence logistics services for international transport is becoming limited to two main options: (i) chartering cargo aircraft and sea vessels (usually with their crews) over a period of time or (ii) maintaining a system for which a defence ministry has a guaranteed space on vessels run by commercial carriers with a global networks of routes. In general, the first approach is the most common, but the world leader in outsourcing defence logistics services, the U.S. military, has increasingly chosen to use the second approach(180) and its cargo can be loaded virtually anytime for all the destinations covered by the system, including war zones.(181)

The U.S. Department of Defense (DoD) is currently the most important purchaser of logistics services in the world.(182) As of May 2004, all combined, the estimated value of the DoD Logistics Support Contracts reached about $12 billion, of which $5.6 billion to support military operations in Iraq.(183) One of the most strategic and lucrative segment of US contract defense logistics is maritime transport, characterized by the so-called "cargo preference" that benefits U.S. flagged ships.(184) Nearly all the former main U.S. shipping lines (such as Sea-Land, APL, Lykes Line, Farrell Line) are today controlled by foreign capital, but DoD contracts are so attractive that the new owners have preserved their US subsidiaries under the US flag. Other profitable segments of US outsourced logistics services are the private military and security markets and the re-construction market, recently boosted by contracts for operations in Afghanistan and Iraq but also present in many other countries including Burundi, Colombia, Liberia, and Sudan.

In contrast, military organizations with a more limited foreign engagement and contractual leverage have tended to choose the chartering method, sometimes with questionable results. For example, during the Bosnian operations in the late 1990s the United Kingdom government was committed to supplying the British Army’s mechanized forces for the peacekeeping mission but lacked sufficient cargo capacity of its own. Thus, the UK Ministry of Defence was compelled to call upon roll-on/roll-off vessels of the U.S. reserve fleet to transport UK troops and equipment to the Balkans. As a result of the difficulties experienced in shipping cargoes to Bosnia, the United Kingdom later chartered at least six roll-on/roll-off ships for transporting mechanized forces in peacekeeping missions. Similar difficulties were encountered during the four-month troop rotation of the Italian contingent in Iraq comprising 3,000 soldiers. This was laboriously overcome with a mix of chartered vessels (passenger aircraft, Antonov 124 freighters, and containerships) and Italian military transport: the military personnel flew on commercial passenger airliners to Abu Dhabi, from where military C-130Js "Hercules" with protection systems ferried them to Basra; then the troops continued their journey to Nassiriyah by armoured vehicles. Urgently requested military supplies were sent by long-range freighter planes landing at Basra and by low/middle payload military aircraft (C-27Js "Spartan", C-130Js) that land at the Tallil airport. Containers and heavy equipment arrived by sea in Kuwait and proceeded to Nassiriyah by truck.(185)

A third type of logistics support is one that mixes the chartering method with the "guaranteed space" method. This method is used increasingly by the NATO Maintenance and Supply Organization, NAMSO, set up by NATO member states to provide logistics support for their collective requirements as coordinated by NATO Military Headquarters. NAMSO covers a large variety of logistics services(186) - including services provided at ports(187) and support for operations such as those deployed in the Balkans, Afghanistan, Kuwait, and Iraq. These services are directly performed by NAMSO or by companies subcontracted by NAMSO. For example, in 2004 NAMSO contracted airlift services for 100 missions in support of NATO "in-theatre" operations costing €18 million. One contract signed in August 2004 for the chartering of cargo aircraft in support of troops deployment in Afghanistan cost €7.5 million. During the same year, NAMSO signed two contracts for sealift capabilities and another contract (valued at about €1.1 million) for freight forwarding services in the United States. Between 2000 and 2004, NAMSO provided logistics services to NATO member states for a total of €2.5 billion (US$3.1 billion), of which €61.3 million was for "transportation and warehouse" services and €55.8 million was for "operations support". In the year 2004 alone, the value of multi-year contracts signed with NAMSO by member countries reached €567 million, with Germany, the United States, and Italy as the major purchasers.(188)

The chartering method of arranging military supplies is more attractive for governments and private military companies that want or need to pay the low prices offered by many cargo transport firms, in particular from East European and former USSR countries, firms that now also operate commercially from many other parts of the world. However, the use of chartering can stimulate "grey" markets in military items because the use of complex sub-contracting arrangements by private agents and operators across different countries. Unscrupulous operators and agents, in association with weak or corrupt military and law enforcement agencies, can then circumvent national laws and regulations so that military cargoes are irresponsibly handled, "plausibly" diverted and seriously abused by end users.

The creation of "grey" defence logistics markets

Unlike freight transport markets for the international trade of civilian goods, defense logistics markets have usually resembled captive markets, i.e. markets in which buyers have very few choices about which seller to buy from. Competitiveness in such markets has been limited by security concerns, established military alliances, arms control laws, and rules of confidentiality, factors that play a less important role, or no role at all, in other type of transport markets.(189) Defence ministries and logistics agencies have traditionally awarded contracts to their respective national companies and, for budgetary and security reasons, they have restricted the number of companies which may access defence contracts. Nevertheless, in the last fifteen years, the tendency to outsource defence logistics services and the growth in the demand for logistic support of military operations abroad have gradually opened defence logistics markets to international competition.

In situations requiring a military deployment in a relatively short time, defence logistics agencies charged with the task of procuring transport services are often faced with a limited offer of vessels and aircraft, because significant portions of the best maritime fleets are usually chartered on long-term civilian contracts and cargo planes fitted for military operations are also the most requested by air operators servicing many civilian cargo markets. Types of vessels that are crucially important for fast deployments of military equipment and troops - such as roll-on/roll-off ships, containerships, and tankers of sizeable tonnage as well as planes able to carry from 20 to 120 tons or hundred of paratroopers - are scarce and expensive.(190) Sourcing foreign markets for these types of vessels is now often the only choice left for governments, despite the risks this outsourcing may entail.

For example, in the 1990-1991 Desert Shield/Desert Storm’s sealift and airlift operations - the largest and fastest ever to a single war theatre in the history of warfare - the U.S. military alone moved more than 500,000 troops and nearly 3 million tons of cargo, i.e. four times the cargo carried across the English Channel to Normandy during the D-Day and six and half times the peak reached by the Vietnam War.(191) This large deployment of equipment and troops was made possible only by resorting to commercial logistics markets and operators but at a price: the U.S. military authorities chartered many vessels registered on the U.S. Coast Guard’s "blacklist" for vessel safety (making up 40% of the 172 foreign-flag vessels employed) and they were able to carry far less cargo than a significantly lower number of US flagged ships employed in the same war theatre.(192)

Confronted with the surge in demand that major wars can provoke, global logistics markets have often responded by raising the price of the most requested services. State-of-the-art wide-body air cargo planes that could have been chartered for about $200-300,000 in early 2000s were running in late 2005 at $375-500,000 and sometimes more for the giant Antonov-124 that has been employed for US operations in Iraq.(193) This trend has created the economic space for smaller companies, mostly using ex-USSR freighter aircraft, offering far less dependable, but similarly capable, planes for sometimes half those prices.

In regions such as Central Africa, for example, where cargo planes are often the only means of moving troops and military equipment, governments with severe budget restraints and lack of military transport capacities have increasingly hired companies whose fleet could not be offered in other markets where stricter safety controls and strict noise regulations have barred certain companies and planes from airport traffic. A number of these operators have been accused of violating United Nations arms embargoes on armed groups based in Angola, the DRC and Rwanda that have committed large-scale human rights abuses and of delivering arms to governments in that region responsible for human rights violations as well as war crimes and crimes against humanity.

The tendency to use commercial chartering for the supply of military items has also affected other low income countries - as seen for example in transport services for the support of military and peacekeeper operations and humanitarian relief operations in Afghanistan. Planes that are often poorly maintained and inspected have been increasingly involved in accidents with fatal consequences.(194) For example, one company described below, Ukrainian Cargo Airways, was in 2003 involved in a fatal accident in the DRC while transporting Congolese troops and the same company has over time participated in NATO military exercises (2000), arms trafficking (2001), United Nations relief programs (2003), operations for the UK Ministry of Defence (2003) and the U.S. Department of Defence (2004).

Companies such as the Moldova-based Aerocom, for example, have transported cargo for defence logistics operations of the U.K. ministry of Defense,(195) for relief assistance,(196) as well as for sanction-busting schemes in connection with many other air cargo companies.(197) Another company, Volare Airlines of Ukraine, was hired for flights for the U.K. Ministry of Defence in 2005(198) despite being reported in 1999(199) and 2001(200) for transporting arms allegedly from Czech, Georgian, Israeli, Moldovan, and Romanian firms to destinations such as Eritrea and Nigeria at a time when they were under U.N. embargo.

On May 2, 2001 for example, a Volare Il-76 had been reportedly "detained at Burgas Airport on April 24 where it stopped over for re-fuelling en route from Ostrava, the Czech Republic, to Tbilisi, Georgia. It was suspected that the arms consignment it carried was destined for Eritrea, which was under a UN arms embargo." (201) The plane reportedly carried 30 tons of weapons, including six guns, AK-47s, and ammunition, but had a certificate only for the six howitzers and their spare parts (shipped by the Czech company Thomas CZ and destined for Georgia). According to a Thomas CZ representative, in Ostrava the plane was loaded only with the howitzers and spare parts. Burgas airport authorities, reportedly alerted by the FBI, detained the plane and saw that the pilots - who had requested a non-planned landing in Burgas for refueling - had hand-corrected the destination on their flight plan from Aspara (a city on the Black Sea) to Asmara. On June 6, after many contradictory statements by Czech, Bulgarian, and Georgian authorities, the plane was allowed to take off and "the departure of the plane was authorized after a local state attorney’s office ‘found no evidence of a crime’ having been committed."(202)

The case of Ukrainian Cargo Airways

The following case illustrates how one air cargo company can be used by the United Nations and NATO while also being accused of flying illegal military cargoes in Central Africa. On May 8, 2003, a large Ilyushin-76MD cargo plane operated by Ukrainian Cargo Airways(203) was flying from the DRC capital Kinshasa to Lubumbashi, in the country’s southeast, with Congolese military personnel, their families, and military vehicles on board. About 45 minutes after take-off the rear-door, improperly fastened or defective, opened. The plane depressurized, and passengers were sucked out. The pilot managed to return the plane to Kinshasa airport. Military helicopters were sent to search the area for bodies. The 18-year old plane had been hired since 2002, according to the pilot, by the Congolese military authorities through a Russian air chartering company, Hermes.

According to media reports,(204) survivors estimated that between 300 and 350 passengers were on the plane and between 100 and 130 died. One of the survivors, Police Lt. Ilunga Mambaza, declared that several of his colleagues "were sucked out by the wind. I don’t know how many, because I fainted" and another policeman, Sgt. Kabmba Kashala, said that he "was just next to the door and I had the chance to grab onto a ladder just before the...door let loose."

Two days after the incident, the Ukrainian Ministry of Defence denied that there were any casualties involved, quoting officials of the airlines, despite evidence of the opposite. "Neither the people, nor the cargo, nor the plane itself were hurt or damaged," a representative of the Ministry told the Associated Press in Kiev. According to a South African newspaper, four Russian crewmembers were closeted in Kinshasa’s Grand Hotel and ordered not to discuss the incident.(205) To date, the exact number of casualties is still unknown.

The same aircraft had participated in NATO exercises in Italy on November 15, 2000.(206) According to media and NGO reports,(207) another Ukrainian Cargo Airways plane(208) was stopped en route from Bratislava in the Slovak Republic to Luanda in Angola. It had flown via the Israeli airport of Ovda,(209) and then from Aswan in Egypt to Mwanza in Tanzania. Security officers at Mwanza airport then detained the plane and crew when they reportedly discovered undeclared weapons on board. The plane was released the next day "under instructions of top-level security organs."(210) In fact, the flight was part of a complex "multinational" operation that involved the delivery of ammunition as well as military aircraft spare parts, and other cargo to the Angolan government.

Despite this, in 2003 Ukrainian Cargo Airways was also flying for the United Nations and one of the planes hired by the UN(211) was photographed in Kindu, DRC, on August 11. In 2003, the UK government exempted a Ukrainian Cargo Airways Ilyushin(212) from compliance with European Union noise regulations ban in order to use the plane at Brize Norton Airport and RAF Base in the UK for the UK Ministry of Defence.(213) Since January 2004, Ukrainian Cargo Airways has been authorized by the U.S. Defense Energy Support Center to buy fuel at its depots worldwide, for operations in support of the U.S. Department of Defense.(214) Ukrainian Cargo Airways is also one of the four air companies authorized by the Ukrainian ministry of Defence to transport military equipment.(215)

PICTURE E AND CAPTION (UN-UKRAAIRCARGO)

US quest to control international transport after September 11, 2001

Governments have claimed that the specific regulation of the arms transportation is too difficult and complex because there are too many operators and cargoes, as stated in a UN Group of Experts report on small arms and light weapons manufacturers and dealers in 2001.(216) But in fact the post 9/11 security initiatives for international transport operators have shown that strict regulation is entirely feasible – the only problem is that these initiatives are primarily designed to protect the US rather than having a wider remit of helping prevent human rights abuses, both by armed groups and by governments, worldwide.

After the September 11 atrocities, the US government reversed its past trend toward liberalization and self-regulation of the transport market. Driven by its perception of US security needs, the US government pressured both the allied governments and the transport industry to introduce several "security" elements in the logistics chain, some of which may amount to violations of the right to freedom of movement(217) so as to facilitate the direct US control over international commercial trade and transport towards the United States.

Making logistics, transportation and international trade safer became the object of a growing US-led activity involving policymakers, public officers, managers and consultants, manufacturers of security systems, security and personnel protection companies. Transport security programs rapidly expanded and spread along the global logistics supply chain and passenger travel networks, involving at the end several hundreds airports and seaports, and millions of passengers. Governments, intelligence and military agencies progressively regained control over a crucial area of the international business activity by introducing stricter controls in all of the sensitive crossroads of the international transport system and by recording personal, confidential data about transport workers, logistics operators and their clients.

On November 19, 2001 President Bush signed the Aviation and Transportation Security Act (ATSA, Public Law 107-71). Within a few days the U.S. government created a new federal administration, the Transport Security Administration (TSA), and John W. Magaw was appointed as its director(218). For the first time in history, a federal agency would have responsibility over the security of all national seaports and airports, supervising the entire transport system. TSA’s agents were given the power make arrests without a warrant. Within a year, the U.S. administration committed itself to establishing a complete transport security plan, starting from control of airports and passenger movements to the control of U.S.-bound cargo in foreign ports and airports. U.S. air operators and their organizations strongly disapproved of some of the TSA’s proposed measures, particularly the attempt to physically control all air cargo movements entering the United States, with the same X-ray techniques used for checking baggage in airports.(219) TSA and air cargo operators agreed on spot checks and stricter controls over airport personnel.

After the approval of the Homeland Security Act in November 2002, a new structure, the Department of Homeland Security (DHS), was created in January 2003 to consolidate 22 previous agencies, including TSA, into a single federal department, with a $35 billion budget and 170,000 employees. DHS employees were by law deprived of labour rights and of the right to publicly denounce abuses by their superiors. Given that almost half (by value) of the U.S.-bound cargo arrived in the United States by maritime containers, the DHS implemented a number of policies related to the security of the maritime containerized cargo through specific regulations and voluntary partnership programs for foreign partners. These measures shifted part of the burden of the U.S. security onto its trading partners. With the aim of preventing any attacks on US ports by so-called "floating bombs" (ships rigged to explode), the Coast Guard - one of the state agencies now part of the DHS - planned to "trust but verify" security projects and certificates issued by other flag states under the International Ship and Port Security Code for some 8,000 foreign-flag vessels that call at U.S. ports.

The DHS also imposed its own security plan on foreign port authorities and shipping operators, mainly through the voluntary programs named Container Security Initiative (CSI) and Customs Trade Partnership Against Terrorism (C-TPAT). Both these US programs shared the same premise as the mandatory 24-Hour Advance Manifest Rule: ensuring the safety and integrity of containerised cargo as far upstream in the logistics chain as possible. Therefore, CSI moved the containers’ inspection activity to ports of origin while the C-TPAT moved the burden of ensuring container integrity to the original shipper.

Container Security and the US "War on Terror"

The Container Security Initiative was designed to develop bilateral agreements between the United States and foreign countries that could allow for pre-screening of high-risk containers in ports of loading. All identified high-risk containers were to be inspected, either before loading at a CSI port or, if arriving from another port, upon arrival in the United States. In CSI-abiding ports, local Customs officials and a team from the U.S. Bureau of Customs and Border Protection (CPB)(220) were charged with the task of deciding which containers to inspect before loading.

The initiative was built upon four main points: (1) establishing security criteria to identify high-risk containers; (2) pre-screening of these containers prior to arrival in the United States, which involved the deployment of CBP officials to foreign ports; (3) using scanners and other techniques for pre-screening activities; and (4) developing and using smarter, tamper-evident containers.(221)

The deployment of U.S. Customs officers in foreign ports was a very strong measure that implied a certain level of intrusion in the political and economic autonomy of the CSI partner countries. In order to facilitate the introduction of the CSI in ports with a substantial trade with the United States and in the so-called mega-ports,(222) the U.S. authorities started to invite the Canadian ports - Halifax, Montreal and Vancouver, which mostly depend on U.S. import-export movements - into the CSI initiative and granted a reciprocity clause to the Canadian Customs in the U.S. ports of Seattle, Tacoma and Newark. Then the attention focused on Singapore and Rotterdam,(223) the world’s two principal container hubs, both of them suffering from very strong international competition and a traffic growth that was too low. As they could not run the risk of a U.S traffic breakdown, they were persuaded to accept CSI without the reciprocity clause.

In this way the U.S. security initiatives became a factor of competition among several ports - in particular European ports - with important relations with the United States, the world’s largest importer. Ports that quickly decided to join the U.S. initiatives enjoyed a competitive advantage on other ports because of the diversion through them of the export traffic destined to the United States. In Europe, le Havre, Felixstowe and Antwerp followed Rotterdam, soon joined by Göteborg (the first European port outside the top 20 mega ports to join CSI), Hamburg, Bremerhaven, Genoa, La Spezia. At the same time, Hong Kong and Yokohama ports decided to join, in order to avoid a Singapore port monopoly on U.S.-Far East container traffic. On April 22, 2004, the European Union and the U.S. Department of Homeland Security signed an agreement that calls for the prompt expansion of the CSI program throughout the European Community.

In June 2002, the World Customs Organization unanimously passed a resolution that will enable ports in all 161 of the member states to begin to develop programs along the CSI model. By June 2003, 23 ports around the world representing at least 60% of container imports to the USA had signed CSI agreements and the CSI was operational in 15 of these. After a year, 38 ports in 18 countries were in various stages of CSI implementation. In addition, China, Sri Lanka and Thailand each signed a CSI "declaration of principle" with the U.S.’s CBP. In July 2005, the CSI was operational in 37 ports in 19 countries, to reach 44 ports in 25 countries in early May 2006.

THE 44 PORTS CURRENTLY OPERATIONAL IN THE CONTAINER SECURITY INITIATIVE

Port CountryFrom PortCountryFrom

HalifaxCanada03/15/02KobeJapan08/06/04

MontrealCanada03/15/02Laem ChabangThailand 08/13/04

VancouverCanada 03/15/02Tanjung PelepasMalaysia 08/16/04

RotterdamNetherlands 09/02/02NaplesItaly 09/30/04

Le HavreFrance 12/02/02ZeebruggeBelgium 10/29/04

BremerhavenGermany 02/02/03Gioia TauroItaly 10/31/04

HamburgGermany 02/09/03LiverpoolU.K.11/01/04

AntwerpBelgium 02/23/03ThamesportU.K.11/01/04

SingaporeSingapore 03/10/03TilburyU.K.11/01/04

YokohamaJapan 03/24/03SouthamptonU.K. 11/01/04

Hong KongChina S.R.05/05/03LivornoItaly 12/30/04

GothenburgSweden 05/23/03MarseilleFrance 01/07/05

FelixstoweU.K.05/24/03DubaiU.A.E.03/26/05

GenoaItaly 06/16/03ShanghaiChina04/28/05

La SpeziaItaly 06/23/03ShenzhenChina06/24/05

PusanSouth Korea 08/04/03KaohsiungTaiwan07/25/05

DurbanSouth Africa 12/01/03SantosBrazil09/22/05

Port KlangMalaysia 03/08/04ColomboSri Lanka09/29/05

TokyoJapan 05/21/04Buenos AiresArgentina11/17/05

PiraeusGreece 07/27/04LisboaPortugal12/14/05

AlgecirasSpain 07/30/04Port SalahalOman03/08/06

NagoyaJapan 08/06/04Puerto CortesHonduras03/25/06

SOURCE: CONTAINER SECURITY INITIATIVE (CSI) – MAY 2006

In March 2003 the Secure Trade in the APEC Region Initiative (STAR) was announced and had to involve the containers moving between APEC ports,(224) electronic data exchange between customs, and the private sector adopting supply chain security.

The Customs Trade Partnership Against Terrorism (C-TPAT) agreement was the second major voluntary security initiative for the supply chain. Under it, states and companies undertook to implement policies, plans and procedures to ensure the integrity of all the components of the supply chain. States and companies that wanted to join the initiative had to sign an agreement that engaged them to: (1) to conduct a comprehensive self-assessment of supply chain security using the C-TPAT security guidelines;(225) (2) to submit a supply chain security profile questionnaire to U.S. Customs; (3) to develop and implement a program to enhance security throughout the supply chain in accordance with C-TPAT guidelines; (4) to communicate C-TPAT guidelines to other companies in the supply chain and to work to implement the guidelines in relationships with these companies. In return, once the U.S. Customs have validated the participant’s plans, C-TPAT participants could be entitled to benefit from expedited customs procedures. Participants had to shoulder the burden of investments in securing the physical integrity of their own premises and ensure that their trading partners did the same.

The "24-Hour Advance Manifest Rule" (or the "24-Hour Rule") required that detailed information on cargo manifests for US-bound cargo be provided to US Customs 24 hours before loading at the foreign port. Prior to December 2, 2002 the relevant customs regulations simply required the master of every vessel arriving in the United States to have the manifest on board the vessel. The manifest had to include a cargo declaration listing all the inward foreign cargo on board the vessel, regardless of the intended US. port of cargo discharge. No merchandise would be unloaded until Customs officers had issued a permit for its discharge. In cases the master of a vessel had committed any violation of customs laws – for example, presenting or transmitting a forged, altered or false manifest – he was liable to pay a civil penalty.

Transit containers bound for outside the USA were equally affected by the rule. In addition, any container trans-shipped before reaching its final US destination, had to fulfil the 24-Hour requirements at the last trans-shipment port. For each container, the manifest had to provide a large amount of data, including, inter alias:

· a precise, detailed description of the cargo;

· numbers and quantities of the lowest external packaging unit as per B/L;

· container number and (if applicable) seal number;

· the exact weight of the cargo;

· the foreign port where the cargo is loaded, the last foreign port before the vessel departs for the U.S.A. and the first foreign port where the carrier takes possession of the cargo;

· the full names and the complete, accurate and valid addresses of the consignee and the shipper of the cargo.

Generic descriptions(226) and descriptive clauses, which were commonly used and accepted until then, were no longer acceptable and had to be replaced by more specific clauses. Indirectly, the new requirements also affected the bills of lading and other transport documents used in international trade, as carriers needed to relate a number of data from the relevant shipping documents, including the identity of the "shipper" and "consignee".

The information had to be provided to U.S. customs by the carrier, not the shipper of cargo. In practice, however, this meant that shippers had to provide the necessary information several days ahead of sailing, whereas in the past manifests it was invariably submitted long after the vessel had departed.

The US government justified these requirements as measures to protect US citizens from terrorism, but foreign companies feared that the information could easily be used to give competitive advantages to U.S. business operators. US Homeland Security authorities did not provide the international business community any formal guarantee about the use of information collected under voluntary CSI/C-PTAT agreements and the 24-Hour Rule.

The International Maritime Organization has also been involved in global efforts against terrorism initiated by the US government. IMO adopted a number of amendments to the Safety of Life at Sea Convention of 1974 (SOLAS 74). The main part of these regulations was intended for new vessels, while the existing merchant fleet was only partially affected. Among the prescriptions mandated by IMO there were(227):

· the use of an Automatic Information System (a ship transponder) for ships of 300 gross tonnage and upwards;

· a ship’s identification number that should permanently and visibly appear either on the ship’s hull or superstructure (passenger ships should bear this number on a horizontal surface visible from the air);

· a Continuous Synopsis Record (CSR), which is intended to provide an on-board record of the history of the ship, like an aircraft "black box," and should contain identity-related information, such as the name of the ship, its flag, its registration date, the ship’s identification number, the registration port, the name of the owner(s) and their address (any changes were to be recorded in the CSR in order to provide updated, current information together with the history of the changes;

· all ships were to be equipped with a ship security alert system which, when activated, can transmit a ship-to-shore security alert to a competent authority, identifying the ship, its location and indicating that the security of the ship is being threatened or has been compromised.

The most far-reaching of the many SOLAS Convention amendments was the new International Ship and Port Security Code (ISPS-Code). In essence, it stated that ensuring the security of ships and port facilities was basically a risk management activity and that, in order to determine what security measures are appropriate, an assessment of the risks must be made in each particular case. Each shipping company, each ship, each port facility should have its own "security officer" and a detailed security plan to allow for prompt responses at different security levels, approved by a governmental authority. However, a recent IMO report warned that far less than 10% of worldwide ports were supposed to be ISPS-compliant by the July 1, 2004 deadline. One month before this deadline, only 301 of about 5,500 port facilities complied with the security code, and only 1,933 security plans out of 12,283 submitted by commercial vessels were accepted by the security agencies.(228)

5. Arms brokerage and the risk of diversion

In general, international arms brokering can be defined as activity carried out by individuals or companies to mediate, arrange or facilitate an international arms transaction between a buyer and seller in return fora fee or material reward or benefit. Brokering activity does not necessarily involve the actual purchase, possession or delivery of the arms directly by the brokering agent, although this is often linked in practice. Rather, the brokering activities focus on mediation and may include the provision of vital technical, logistical and financial information to customers about arms supplies and prospective clients and sub-contractors in different countries, the facilitation of documentation and/or payment between buyer and seller, and/or the arrangement of transportation, finance or insurance services for the delivery of the arms cargo in question.

Evidence shows that arms brokering activities have been performed by (i) private firms and individuals specializing in the mediation of arms deals; (ii) organizations that represent sectors of the arms industry and promote their increasingly wide range of military and security products on the differentiated global markets; and also (iii) government agencies that have the task to facilitate the procurement of domestic arms production by foreign entities. Obtaining evidence of arms brokering is often difficult. However, most studies of arms brokering focus only or mainly on private firms and individuals.

Governments say that arms brokering has a legitimate and sometimes necessary role in the increasingly complex "legal" arms trade, and that "middle men" have a part to play in meeting states’ legitimate security needs if properly regulated. However, the worldwide absence of strict laws and regulations to govern arms brokering in most countries has created a significant ‘grey’ area in the international arms trade. While this may sometimes be convenient for those in power, it also encourages the proliferation and misuse of arms, often undermining respect for human rights.

Many studies have shown over the past ten years that the strict state control of arms brokering, including of small arms, light weapons and related materiel, is an essential prerequisite to removing and reducing the risk of arms transfers and illicit arms trafficking that contribute to human rights violations, especially in conflict-prone regions of the world where such violations are widespread and frequent.(229) Successive United Nations reports on the violation of Security Council arms embargoes on different countries in particular show that a lack of effective accountability of arms brokers poses a trans-national threat to security.(230)

Questionable or illegal brokering activities are often the result of individual arms brokers operating with a network of shell companies, agents and subcontractors who are able to exploit legal loopholes. Such networks are usually fluid, opaque and complex. Individual arms brokers tend to be businessmen with military and security backgrounds and close contacts in the arms supply and security industry. From an arms distribution point of view, they are usually a conduit for "strategic" political considerations of selling and/or buying states and powerful companies, even though from an individual point of view, they are motivated primarily by economic gain. They take advantage of the global banking, tax avoidance mechanisms and transport industries. Above all, those brokers dealing with dubious customers are skilled at hiding their tracks, often using fake documentation, bribery of officials at all levels, and sometimes linking up with organized criminal networks.

Most government action to better regulate arms brokering activities has been the result of an intense effort by several campaigning NGOs and researchers carried out since the mid 1990s to compel international bodies and governments to act on a growing and dramatic problem.(231) International outrage was expressed particularly about the brokering of arms to and within Africa after the revelations in 1995 that such brokers had played a crucial role in arming the perpetrators of the 1994 genocide in Rwanda.(232) Further concern was expressed after revelations emerged about the role of brokers in helping to arm the Angolan rebel movement, National Union for the Total Independence of Angola (UNITA), as well as the Revolutionary United Front (RUF) rebels in Sierra Leone, despite arms embargoes imposed on these rebel groups by the United Nations Security Council.(233)

Although much of the supply and acquisition of arms in areas of armed conflict was conducted by government agents or licensed entities, it became increasingly apparent in the late 1990s that lack of effective control of international arms brokering was an important additional factor fuelling conflicts in Africa and elsewhere, in particular in the destabilizing accumulation, trafficking, and possession of small arms and light weapons. It was also recognized that the phenomenon has been closely linked to the illegal exploitation of natural resources, as well as to money laundering, corruption and other malpractices that together undermined socio-economic development and human rights in Africa and elsewhere. The recent focus of international concern on the arming of warring parties in the Democratic Republic of the Congo (DRC) where a staggering three million civilian people are estimated to have died directly and indirectly from the war since 1998 has confirmed this general view.(234)

The term ‘illicit’ arms brokering usually refers to those acts of mediation to facilitate arms shipments where the recipients of these arms are those groups or individuals or states that are prohibited by law from possessing or acquiring weapons — embargoed states, armed groups, including those believed to engage in terrorism, and, criminal gangs. However, whether such brokering activities are illegal in the country where the broker carries out the activity or where the broker resides or holds nationality depends on whether there is a relevant law – sadly, this is often not the case because so few states have laws that specifically cover arms brokering. Some such activities may nevertheless be criminal under more general laws– such as statutes that outlaw bribery, which is illegal in most if not all states.

The case of Leonid Minin and its outcome

On August 5, 2000, Leonid Minin, an Israeli national(235) born in Ukraine and already known to the Italian and Belgian police for his trafficking activities, was arrested in his hotel near Milan. In his room, the police found non-declared diamonds,(236) large amounts of money, and about 1,500 documents in various languages (English, Russian, Dutch, French) on oil, timber, and arms transactions, mostly with Liberia, a country subject to a UN arms embargo since 1992 and a diamonds embargo since early 2001(237). He was briefly detained and then put under house arrest, but on June 21, 2001 was re-arrested, charged with arms trafficking and illegal possession of diamonds valued at 500,000 euros and remanded in custody. The Monza (Milan) Court’s public prosecutor charged Minin with organizing, in association with others, two arms shipments apparently destined for Burkina Faso’s National Defense Department and the Ministry of Defence of Cote d’Ivoire, respectively, but in fact directed to UN-embargoed Liberia and to the Liberia-backed RUF in Sierra Leone, also subject to a UN arms embargo.

According to the documents, the first delivery arranged by Minin in March 1999 was a cargo of 68 tons of military equipment, including 3,000 AKM assault rifles, 1 million rounds of ammunition, 25 RPG-7s and related ordnance, Strela-3 and Metis systems and 80 related missiles. The arms were bought from the Ukrainian arms marketing company, Ukrspetsexport,through a Gibraltar-based firm, Engineering & Technical Company Ltd., allegedly one of Minin's shell companies, by using an end-user certificate from Burkina Faso signed on February 10, 1999 (n. 990067) by Lieutenant-Colonel Gilbert Diendere. The arms were transported from Gostomel, Ukraine, to Ouagadougou, Burkina Faso, on a giant Antonov 124.(238) The aircraft was operated by a U.K. company, Air Foyle, which was the sales agent for Ukraine’s Antonov Design Bureau. After it arrived in Burkina Faso, the cargo was transshipped to Monrovia, Liberia, in various flights made by Minin’s own business jet.(239)

PICTURE F AND CAPTION (BAC-111 PLANE)

Payments for the shipment show the global nature of the arms deal arranged by Minin. Italian prosecution authorities were directed – reportedly by Minin himself – to a Hungarian bank account(240) owned by a company allegedly related to Minin, the British Virgin Island-registered firm Engineering & Technical Company Ltd. To this account, John Enrique Smithe,(241) Commissioner of the Liberia’s National Bureau of Immigration for Naturalization (sic) credited payments for a total US$463,470 on March 8 and 10, 1999. Payments credited to the same account were entered for two other companies - Tholos Anstalt, for $965,750 on April 22, 1999, and Zimbabwe Defence Industries (ZDI), for $1,383,150 and $2,103,150 on March 22 and on May 31, 1999. Payments amounting to $295,815 from the account were made on June 1, 16, and 22, 1999, to a T.J. Dube, who appears to share the same name with Colonel T.J. Dube, head of the ZDI. Further payments from the same account were made to various companies, including Ukrspetsexport,(242) Air Foyle,(243) Trans Balkan Cargo Service (BV and Ltd),(244) Phoenix FZE,(245) Arsenal Corp. General-Technical (Bulgaria),(246) and a mysterious company, NAIRFO Trading SA.(247)

The second arms delivery arranged by Minin was routed via Cote d’Ivoire rather than Burkina Faso. The arms deal consisted of 113 tons of arms brokered through the Ukrainian State-owned company, "Spetstehnoexport" [Special Technical Export], and included 10,500 AK-47 assault rifles, 120 sniper guns, 100 grenade-launchers, night-vision equipment, and 8 million rounds of ammunition. A portion of these arms was delivered in July 2000, apparently destined for Cote d’Ivoire using an end-user certificate signed on May 26, 2000 by a senior official of the Ministry of Defence and authorizing a Moscow-based company, Aviatrend, to carry out the shipment.(248) The arms were transported from Gostomel to Abidjan, Ivory Coast, July 15 with the same Antonov 124(249) that ferried the arms to Burkina Faso in 1999, this time chartered by Aviatrend. Once there, they were trans-shipped to Monrovia in several flights performed by a relatively smaller aircraft, an Ilyushin 18, with a fake Liberian registration EL-ALY.(250) The aircraft was operated by "West Africa Air Services," a phantom airline purposely set up by the Liberian government and Sanjivan Ruprah,(251) an arms and diamonds dealer and business partner of the well known arms trafficker Victor Bout. Aviatrend Ltd. was found by Italian prosecutors to be controlled by Gibraltar-registered Aviatrend, owner of a bank account in Cyrus to which Minin sent about $1 million for the arms shipment through a complex route involving another account at the New York Chase Manhattan Bank.

On September 17, 2002, the Court of Appeal (Corte di Cassazione) in Rome upheld an appeal by the defendant against the continuation of his detention and ordered his release, unless he was charged and remandedfor other crimes.(252) The judges ruled that the prosecution lacked jurisdiction on Minin’s trafficking activities because the arms transfers in question did not pass through Italian territory. On December 18, 2002 at the trial of Minin in Monza, the judges declared Minin non-prosecutable for the charges relating to international arms trafficking because the court lacked jurisdiction but they upheld the charge for his illegal possession of diamonds, for which he was later convicted and fined 40,000 Euros.(253) Thus, Minin walked free and left Italy. However, the Monza public prosecutor appealed against the sentence in February 2003 and later submitted evidence to the Corte di Cassazione, including from the authorities in Ukraine, to support the right of jurisdiction to prosecute Minin for his trafficking of arms even though the arms never entered Italy.(254) Nevertheless, on January 9, 2004, the Corte di Cassazionedeclared its non-competence to examine the documentation, rejected the appeal, and confirmed the acquittal of Minin. Subsequently, Minin tried to return to Italy from Israel but was rejected by Italian authorities because of his inclusion in a U.N. Travel Ban List established in June 2001 and reiterated in March 2004 to enforce the UN embargo on Liberia.(255)

Despite the implications of the Minin case, the Italian government had by mid-2005 still not closed the loophole in its laws to enable the prosecution of violations of UN arms embargoes and unauthorised arms brokering by persons living in Italy in instances where the arms do not pass through Italian territory. The governments of Spain and Slovakia continued to authorise the export of significant quantities of arms and ammunition to Burkina Faso in 2004, despite the Minin case and the further allegations in 2003 that Burkina Faso was a conduit for arms to Ivorian rebels.(256)

National laws on arms brokerage activities

Only a few states have relevant laws and these often exclude related financial and transport services and provisions to cover extra-territorial brokering.(257) In mid-2005, it was variously estimated that between 30 and 40 states out of 191 UN Member States had enacted specific regulations covering brokering within their systems of arms export control, 25 of which were in Europe.(258) In the European region, countries with brokering regulations in place in 2005 included: Austria, Belgium, Bulgaria, the Czech Republic, Estonia, Finland, Germany, Hungary, Latvia, Lithuania, Malta, the Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, and the UK.(259)

Caution should be exercised when interpreting such data on legislation and regulations because of the large variations in the quality and effectiveness of such national controls – in Israel, for example, brokering agents deemed to be trusted are simply registered without being subject to strict licensing control or meaningful oversight. In other countries, local companies that are fronts for other international trafficking networks have been allowed to act as arms brokers. In global terms, progress has been slow, and even in those states which have laws applicable to arms brokering activities, too often the ethical standards and enforcement procedures are weak. Loopholes are left open by legislators for arms brokering networks to exploit.

A recent series of international agreements and other instruments could help form the basis of a sustained effort to close the loopholes in control systems, but they are not, for the best part, legally binding and do not yet cover Asia, the Pacific, the Middle East and large parts of Africa – all places where arms brokers operate.(260)

Weak definitions

It is currently taken as almost axiomatic in UN and some regional discussions that an international instrument on arms brokering should only cover small arms and light weapons (SALW) because this class of arms has been defined as the most widely used in current conflicts. However, most state laws covering the transfer of SALW also include other arms in the control lists. Moreover, in all current conflicts the opposing forces using SALW also use other arms and military-related equipment, and a number of such items such as military transport and communications equipment are required to deploy forces using SALW.

It is thus a distinct advantage that most existing national laws on brokering cover all conventional arms and other military and dual use items. In the EU Common Position the definition of arms is assumed to be the same as that in the EU Code of Conduct i.e. the common list of conventional arms and dual use items controlled by EU member states, and the Wassenaar agreements to control arms brokering also apply to all conventional arms.

A positive development is that there appears to some convergence in the definition of brokering activities in national laws as the mediation of contracts and the negotiation of services. Existing national controls usually apply irrespective of whether or not the broker acquires, possesses or delivers the arms in question when acting as an intermediary. Some state laws also include provisions requiring the regulation of activities closely related to brokering such as financing, transporting, freight forwarding, and the consulting of partners about arms transfer deals or deliveries, as well as marketing, promoting, advertising to commercial audiences the possibilities of making gains from arms transfer deals. Some definitions mention not only financial rewards from brokering but also possible non-pecuniary benefits that accrue to brokering agents, such as gains from barter trade.

In cases where the recipient and end user is illegitimate or dubious, brokers and their associates will try to circumvent stronger control systems and exploit weaknesses in the laws and practices of states with less control. Typically, they will arrange a transfer of arms from one foreign country to another to try to avoid falling under the jurisdiction of their home state. This is sometimes called "third country brokering", and is even more difficult to control where the arms do not enter into the possession of the broker. Many governments are now considering new laws and procedures to deal with these challenges, but progress has been far too slow.

The American and European approach

The Organisation of American States (OAS) opted for a wider definition of mediation and facilitation in arms brokering which, although limited to small arms, is helpful insofar as brokers often operate in networks with other subcontractors and experience shows that it is vital to bring the whole network into the frame of the national arms control law in order to prevent illicit trafficking. The Model Regulation for the Control of the International movement of Firearms, their Parts and Components and Ammunition agreed by the OAS in November 2003, defines a "broker" or "arms broker" as "any person or company who, in return for a fee, commission or other consideration, acts on behalf of others to negotiate or arrange contracts, purchases, sales or other means of transfer of arms." As such,"Brokering involves mediation between any of the following other parties: manufacturing, exporting, importing, financing, mediating, purchasing, selling, transferring, transporting, freight-forwarding, supplying, and delivering arms – or any other act performed by a person, that lies outside the scope of his regular business activities and that directly facilitates such brokering activities." This regional agreement has many other strong features, but lack of political will in the OAS has meant that so far it has not been widely adopted by OAS member states.

The 1996 U.S. law is generally considered a model for the regulation of arms brokerage.(261) It defines an arms broker as "any person who acts as an agent for others in negotiating or arranging contracts, purchases, sales or transfers of defense articles or defense services in return for a fee, commission, or other consideration." According to the U.S. law’s broad definition of brokerage activities, the latter "includes the financing, transportation, freight forwarding, or taking of any other action that facilitates the manufacture, export, or import of a defense article or defense service, irrespective of its origin. For example, this includes, but is not limited to, activities by U.S. persons who are located inside or outside of the United States or foreign persons subject to U.S. jurisdiction involving defense articles or defense services of U.S. or foreign origin which are located inside or outside of the United States. But, this does not include activities by U.S. persons that are limited exclusively to U.S. domestic sales or transfers (e.g., not for export or re-transfer in the United States or a foreign person)."(262)

Those persons required to register as a broker include "any U.S. person, wherever located, and any foreign person located in the United States or otherwise subject to the jurisdiction of the United States […] who engages in the business of brokering activities with respect to the manufacture, export, import, or transfer of any defense article or defense service subject to the controls of this subchapter or any ‘foreign defense article or defense service’."(263)

The U.S. law incorporates a strong extra-territorial component that "requires US brokers living anywhere and foreign nationals residing in the United States to register and obtain licenses for all arms deals they transact. Not only does the law empower US implementing and enforcing agencies to monitor the number of brokers and the type of their operations, it also subjects violators to US jurisdiction wherever an offence has been committed." (264)

Despite the extensive extraterritorial jurisdiction, certain exemptions included in the same US regulation limit its effectiveness.(265) For instance, it does not require registration by government employees acting in an official capacity, employees of foreign governments acting in an official capacity, or "persons exclusively in the business of financing, transporting, or freight forwarding, whose business activities do not also include brokering defense articles or defense services. For example, air carriers and freight forwarders who merely transport or arrange transportation for licensed United States Munitions List items are not required to register, nor are banks or credit companies who merely provide commercially available lines or letters of credit to persons registered in accordance with Part 122 of this subchapter […]."(266) In other words, many of the middlemen who routinely facilitate the arms trade—including financial institutions, carriers and logistics service providers - are not usually required to register and therefore may escape official monitoring.

The US law states that "banks, firms, or other persons providing financing for defense articles or defense services would be required to register under certain circumstances, such as where the bank or its employees are directly involved in arranging arms deals […] or hold title to defense articles, even when no physical custody of defense articles is involved."(267) However, it is generally difficult to prove that entities and individuals are "directly involved" in arranging arms deals. Yet it is known that managers of financial institutions and transport/logistics companies based in the receiving country, because of their familiarity with the local business environment, are invited to take an active part in providing the expertise and contacts to "facilitate" an arms deal – and they would not expect a receipt for their services.

US courts have recently ruled that "non-US persons’ apprehended abroad as accomplices in brokering deals cannot be indicted under this law—which is another limitation to the jurisdiction.

The Europe Union [EU] and its neighbours generally have weaker laws on arms brokering than the USA, but Europe is the only world region in which a significant number of governments have adopted legislation to cover arms brokering activities – by mid 2005 about two thirds of EU member states had done so. EU agreements and laws covering brokering tend to cover all conventional arms, not just small arms and light weapons, as recommended by the UN Programme of Action (see further below). However, there are some crucial weaknesses in EU laws, notably the lack of full extra-territorial application and the use of "open" licences, as described further below.

The consequences of weak laws on brokering can be shown, for example, by the role of UK arms brokering for Sudan.(268) On May 25, 2004, an End Use Certificate (EUC) apparently issued by the Military Industries Corporation of Sudan authorized a United Kingdom company, Endeavour Resources UK Ltd, to negotiate for the supply to Sudan of twelve Antonov 26 cargo planes and 50 Antonov 2 "crop spraying" aircraft from the Ukrainian arms export company, Ukrspetsexport.(269) The Antonov 26 planes have been used by the Sudanese armed forces to bomb civilian targets in the south and western parts of Sudan. The Antonov 2 can carry light cargo or up to 14 passengers, and is reputed for its suitability for parachute drops and landing on very short, rough runways. This EUC and others were obtained by a UK newspaper.(270) The UK authorities investigated whether the UK firm violated UK law, including a law which entered into force on May 1, 2004 which prohibits the brokering of arms by UK nationals and residents to destinations which are subject to UN, EU or other arms embargoes. No prosecutions took place.

In June 2003 the EU adopted a Common Position on the control of arms brokering that was designed to form a basic guide to develop effective laws and regulatory practices.(271) Since the existing EU arms export control systems were considered quite robust, Article 2 (3) of the EU Common Position was drafted so as to define "brokering activities" as "activities of persons and entities: — negotiating or arranging transactions that may involve the transfer of items on the EU Common List of military equipment from a third country to any other third country; or — who buy, sell or arrange the transfer of such items that are in their ownership from a third country to any other third country. This paragraph shall not preclude a Member State from defining brokering activities in its national legislation to include cases where such items are exported from its own territory or from the territory of another Member State."

Under the European Union Common Position (2003), EU Member States are required to"take all the necessary measures to control brokering activities taking place within their territory." The lawful engagement of such activities will require"a license or written authorizations... from the competent authorities of the Member State where these activities take place" and Member States will assess applications"for specific brokering transactions against the provisions of the EU Code of Conduct on Arms Exports." However, the Common Position encourages, but does not oblige EU Member States to"consider controlling brokering activities outside their territory carried out by brokers of their nationality resident or established in their territory." Furthermore, even this "consideration" is only partial, as no mention is made of controlling EU citizens who both reside and broker abroad.Legislation which lacks such extra-territorial scope can be easily circumvented, and rather than preventing harmful brokering activity will simply move it elsewhere.

Other approaches

In parallel with the EU Common Position on Brokering, the Wassenaar Arrangement - the group of leading conventional arms exporters, including many EU states - agreed in 2003 a set of common Elements for Effective Legislation on Arms Brokering.(272) Although this is merely a politically binding agreement, it does raise the bar for brokering controls in a number ofareas and does cover all conventional arms. For example, Wassenaar Arrangement participating states agreed to:"Strictly control the activities of those who engage in the brokering of conventional arms by introducing and implementing adequate laws and regulations." "For activities of negotiating or arranging contracts, selling, trading or arranging the transfer of arms and related military equipment controlled by Wassenaar Participating States from one third country to another third country, a license or written approvalshould be obtained from the competent authorities of the Participating State where these activities take place whether the broker is a citizen, resident or otherwise subject to the jurisdiction of the Participating State..." Similarly, a license may also be required regardless of where the brokering activities take place.""Recordsshould be kept of individuals and companies who have obtained a license in accordance with paragraph 1. Participating States may in addition establish a register of brokers."(273)

In Africa, only one state – South Africa – had adequate laws to control the brokering of all types of arms. Despite suffering from the consequences of brokering of many types of conventional arms, African governments have so far chosen to restrict their regional agreements only to small arms and light weapons. In 2004, the states of east Africa, the Great Lakes and the Horn of Africa adopted the Nairobi Protocol(274)which included a number of requirements to control the brokering of small arms and light weapons, including the licensing of deals, the registration of individual brokers and record keeping.(275) Clauses on the extra-territorial application of laws based on the Protocol were, however, ambiguous (see below) and when officials of these states were asked in early 2005 whether their national laws would be drafted so as to only include small arms and light weapons and not other arms, they were unsure. Most of the states in the Great Lakes Region and the Horn of Africa have not yet established laws to comply with the Protocol, and judging by the high level of illegal arms trafficking in those regions often with the complicity of officials, most still lack the political will and the capacity to properly enforce such laws.(276) However, a positive development was the agreement in June 2005 by the Nairobi Group of states of "best practice guidelines" for authorising arms transfers that are consistent with international law and these could also apply to arms brokering.

Another African regional agreement including reference to arms brokering was previously adopted in 2001 by southern African states in the SADC Firearms Protocol, but some confusion apparently crept into the definition of brokering when the text was published. There has been very little follow up action to implement the SADC Protocol and no agreement to establish best practice guidelines based on international law.(277)

The Asian and Middle East regions lack any agreements on arms brokering. An explicit reference was made to preventing arms smuggling in the ASEAN Plan of Action to Combat Transnational Crime, and in the ‘APEC Guidelines On Controls And Security Of Man-Portable Air Defence Systems (MANPADS)’ which was submitted by Russian and U.S. governments during the 16th APEC Ministerial Meeting, November 17-18, 2004, is stated that: "Exporting economies will not make use of non-governmental brokers or brokering services when transferring MANPADS, unless specifically authorized to on behalf of the economy [member government]."

Extra-Territorial Applicability

Since brokering networks involved in arranging arms supplies to illegitimate end users will tend to conduct their activities outside jurisdictions with robust control systems, states that choose not to exercise a sufficient degree of extra-territorial control of their nationals and residents - as they do to prevent and curb the illicit trade in people, drugs and other items – will generally fail to control such activity. In this respect, such states will usually remain entirely dependent on governments with weak arms control laws and enforcement capacity.

In 2005, only 21 states had laws that provided for some degree of extra-territorial control of arms brokering, and most applied a licensing requirement for arranging an arms transfer for supply and delivery in foreign territories.(278) The USA and South Africa laws have a high degree of extra-territorial application that applies to the brokering of any arms supplies outside the home country by residents, companies as well as nationals wherever they are conducting the brokering activity.

In contrast, the laws in France and Italy did not provide for extra-territorial control. The UK law has a high degree of extra-territorial application that only applies to UK permanent residents and companies who broker arms supplies outside the UK to destinations subject to UN, EU or other embargoes, or to certain prohibited weapons. In the Netherlands, extra-territoriality is limited to controlling the financial involvement of a Dutch resident in brokering arms that physically occur between third countries outside the EU,(279) but apparently Dutch citizens who have established a permanent residence or operate regular business abroad do not require a licence from the Ministry of Finance, and are only subject to foreign laws regarding such activity unless the arms will violate an embargo agreed to by the Dutch government.

Most EU national laws to control arms brokering apply only to "third country" brokering i.e. where the broker who is a citizen or permanent resident helps, from his/her home territory, arrange an arms transfer that takes place outside his or her home territory in two or more foreign countries. In some cases, the home state of the brokering agent will require him/her to obtain a brokering license even if only part of the brokering activity is conducted on the home territory, including, for example, the sending or receipt of an e-mail, fax, or telephone call.

The EU Common Position was disappointing because it only requires that member states "take all the necessary measures to control brokering activities taking place within their territory." The OAS on the other hand opted to recommend, in Article 8 of the Model Regulations, that national laws covering brokering activities should apply whether or not such activities are conducted in the controlling state’s territory or in a foreign state.

In other regional agreements, there are also no specific clauses to enable the extra-territorial control of arms brokering by the home state of the broker. For instance, the pre-amble to the Nairobi Protocol reads: "CONCERNED about the supply of small arms and light weapons into the region and conscious of the need for effective controlsof arms transfers by suppliers and brokersoutside the region…" Yet in Article 11, the Nairobi Protocol requires: "State Parties, that have not yet done so, shall establish a national system for regulating dealers and brokersof small arms and light weapons. Such a system of control shall include: i. regulating all manufacturers, dealers, traders, financiers and transporters of small arms and light weapons through licensing; ii. registering all brokers operating within their territory."

Licensing systems and ethical criteria

All but one of the 21 states with laws on arms brokering in 2004 required a license to "mediate" an arms deal between sellers and buyers. Ten states imposed requirements on the closely associated activities of arms financing and arms transporting.

However, in only five states did regulatory systems involve the issuance of "individual licences" on a case-by-case basis for each brokered deal involving the transfer of arms – in other states, allowance has been made in the law merely for the granting of "open general licences" to a broker who could then mediate or negotiate many transfers usually for the same country or the same list of specified customers. Such open general licences could easily be open to abuse and should be restricted to exceptional cases where there is a high level of ethically responsible management of a defence project, but there is not much evidence published on this practice.

Typically, the brokering agent must submit details to the authorities of the deal and provide documentation on the origin, type, and quantity of the brokered arms, as well as on their intended end user and end-use. In the Netherlands and Finland, for example, the broker is required to submit an end-use declaration and relevant assurances by the intended recipient. This may allow the authorities to place conditions on the end uses and possible re-export of the arms.(280) One weakness in developing this system further is the absence of internationally agreed standards for end-use certificates.

A critical weakness of most laws covering arms brokering is that the criteria for the issuance of licences are ill defined and often inconsistent with international standards. This is compounded by the absence of adequate operational guidance for the issuance of licences for arms exports and imports.

The EU Common Position requires that member states assess applications "for specific brokering transactions against the provisions of the EU Code of Conduct on Arms Exports." While it embodies higher standards than most regional arms control agreements and standards, the EU Code of Conduct is nevertheless not legally binding and still falls short of requiring full compliance with some relevant provisions of international standards. Efforts are underway to improve the criteria in the EU Code, for example by fully incorporating respect for international humanitarian law, and to make the Code legally binding. These improvements will help the 25 EU Member States to improve their arms control systems as well as gain credibility when supporting the efforts of other states to make their national systems consistent with international law.

Since the development of the EU Code and other regional agreements, an increasing number of states have voiced their support for the establishment of universal minimum criteria to govern arms transfers. As indicated by officials at the Biennial Meeting of States on the UN Program of Action on small arms in July 2005, such universal criteria would give meaning to Section 2, Paragraph 11 of the UN Program if they are consistent with relevant principles of international law. In this regard, the OAS Model Regulations offer states an opportunity for considerable improvement of such criteria because in Article 5 the Regulation states that:

"the National Authority shall prohibit brokering activities and refuse to grant licenses if it has reason to believe that the brokering activities will, or seriously threaten to:

a. result in acts of genocide or crimes against humanity

b. violate human rights contrary to international law

c. lead to the perpetration of war crimes contrary to international law

d. violate a United Nations Security Council embargo or other multilateral sanctions to which the country adheres, or that it unilaterally applies;

e. support terrorist acts;

f. result in a diversion of firearms to illegal activities, in particular, those carried out by organized crime; or:

g. result in a breach of a bilateral or multilateral arms control or non-proliferation agreement.

Amnesty International believes that each of the above criteria for the granting to licenses to arms brokers should be elaborated and made operational in national law in a manner consistent with international law, and applied to international arms transfers whether or not they are brokered. Operational guidelines should include a ban on prohibited and restricted arms, updated lists of embargoed destinations/recipients and those that pose a high risk of diversion, relevant data on the grave abuse of human rights with arms, and other practical advice to ensure compliance with each criterion when considering licenses.

Registration and other controls on brokering, including government personnel

In addition to licensing requirements, as described above, the official registration of those wishing to conduct arms brokering activities is a feature of some national laws and is recommended in international agreements. Registration should allow national authorities to screen out persons and companies that cannot be trusted to comply with domestic and foreign arms control laws, for example because of past violations of arms transfer regulations or convictions for other serious criminal offences, and also to keep track of the persons and entities authorised to engage in the trade of military equipment.(281) This will be more effective if registrations are subject to regular renewal and if the registration system is transparent and used in combination with a case-by-case licensing system for each proposed brokered deal.(282)

In 2004, twelve states were found to have a regulation requiring anybody or entity engaging in arms brokering activities to be officially registered either (a) as a pre-condition for any licence to ensure some level of screening – e.g. Lithuania, the Netherlands, Slovenia, the USA; or (b) as part of an information collection system during the issuance of licences – e.g. in Norway, Sweden, the UK - where the information required on an application for a brokering license can provide the basis for a de factoregistry of brokers.

States that reportedly operate some form of screening registration system included Belgium, Bosnia and Herzegovina, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Malta, Nicaragua, Poland, Romania, Slovakia, Slovenia, South Africa, Spain, Switzerland, and the USA.(283) These systems vary greatly in their degree of ethical stringency and transparency. Many states have viewed screening registration as an additional optional element of brokering controls, but stronger systems appear to have some distinct advantages.

For example, Estonian law requires those wishing to engage in brokering activities to register not only to act as a broker but also for the particular categories of military equipment they may wish to broker. Each registered broker can be publicly identified on the electronic state register by name, and information is provided on the categories of arms and countries of destination for which the broker has been registered. In addition, the registration number and date are provided. This system allows for public scrutiny and for prospective clients to verify that an Estonian broker is considered to be a law-abiding agent by the Estonian authorities.(284)

In addition, all states with laws on brokering are required to keep records, and this requirement is included in international agreements,(285) but the problem is that the official data is almost never published thus undermining accountability and public scrutiny.

Moreover, only thirteen of the 21 states found to have laws on arms brokering in 2004 required arms brokers themselves to also keep full records of their activities. Yet this is essential for an adequate system of state record keep