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South Africa seeks to unlock stalled arms sales to Saudi Arabia, UAE

Local defence firms have lobbied the government for months to change a clause in export documents at the heart of an export row 
Delegates at weaponry and military aviation show at South African air base in 2016 (AFP/file photo)

South Africa aims to free up more than a billion dollars in stalled weapons sales, including to Saudi Arabia and the United Arab Emirates, by amending a document at the heart of an export row, a senior arms control official told Reuters.

Local defence firms have lobbied the government for months to change a clause in export documents requiring foreign customers to allow South African officials to inspect their facilities to verify that weapons aren't being transferred to third parties.

Saudi Arabia and the UAE buy at least a third of South Africa's arms exports and have been engaged in a war in Yemen. They refused to agree to the inspections because they considered them a violation of their sovereignty, industry officials told Reuters in November.

At that time, the Aerospace, Maritime and Defence Industries Association of South Africa (AMD) said the dispute could threaten the sector's survival. "We've got one clause that's disabling us from exporting 25bn rand [$1.7bn] worth of value today, right now," said Simphiwe Hamilton, the head of the AMD.

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A further $3.4bn to $4bn in future business and 9,000 jobs at defence firms and supporting industries are put at risk by the deadlock, the industry body said in November.

"I can confirm that the amendment of the end-user certificate was approved by the NCACC recently," Ezra Jele, the head of the secretariat of South Africa's National Conventional Arms Control Committee (NCACC), told Reuters.

A draft letter from Jele to a defence industry association obtained by Reuters and authenticated by two industry sources said the NCACC planned to replace a clause allowing for "on-site verification... performed by an inspector designated by the [defence] minister."

The new clause would state "on-site verification of the controlled items may be performed, through the diplomatic process".

Defence sources said the changes were aimed at assuaging the concerns of importing nations that objected to the original wording, in the hope that exports may resume.

Before it takes effect, the amendment must be published in the government gazette. But the letter stated that permission was being sought from the defence minister for companies to use the new language in the interim.

Jele declined to comment on the letter, as did the head of the industry association to whom it was addressed.

South Africa has sought to reform its defence industry - once a pillar of the racist apartheid regime - by making export approvals subject to human rights considerations.

It has long included a clause in its end-user certificates requiring on-site inspections, though it was rarely acted upon. But in 2017, arms control officials moved the clause to the front page of the certificates, and countries including Saudi Arabia, the UAE, Oman and Algeria refused to sign them.

Exports to the Gulf and North Africa are a key source of revenue for local defence companies including state-owned Denel, Paramount Group and Rheinmetall Denel Munition, a joint venture between Denel and German industrial giant Rheinmetall.

Defence firms threatened hundreds of job cuts if the wording of the clause wasn't changed to resolve the row.