Exports of military equipment are not a tool of economic policy. Whether or not a licence is issued for exports of military equipment depends in every case on foreign and security policy considerations. Labour policy considerations must not be a decisive factor.

Irrespective of the individual decisions made on exports of military equipment, the Economic Affairs Ministry seeks a dialogue with the military equipment sector. After all, the companies and the people employed there have a right to expect policy makers to justify their decisions. For this reason, Sigmar Gabriel engages in discussions with businesses, associations and trade unions.

The export of military equipment is a highly sensitive field and therefore must be subject to clear rules and regulations and to strict controls. Germany has a clear statutory framework for the export of military equipment and war weapons.

Article 26(2) of the Basic Law states: Weapons designed for warfare may be manufactured, transported or marketed only with the permission of the Federal Government. Details are laid down in a federal act.

The key federal acts are the Foreign Trade and Payments Act, the related Foreign Trade and Payments Ordinance, and in particular the War Weapons Control Act.

These stipulate the details of how the licensing process for the export of military equipment and war weapons works. Further to this, the Foreign Trade and Payments Ordinance contains an “Export List”. This cites all the military equipment for which export licences are required.

Basically, companies wishing to export military equipment must always obtain a licence for that export. This is stipulated in the Foreign Trade and Payments Act and the Foreign Trade and Payments Ordinance. All military equipment and war weapons covered by this are cited in the Export List and are thus precisely defined.

Like the EU’s Common Military List, the Export List is based on the list of the “Wassenaar Arrangement” of 1995. In the Wassenaar Arrangement, which was co-authored by Germany, 41 countries agreed on a uniform list of military equipment to be subjected to controls.

In principle, all military equipment is subject to export controls. However, some types of military equipment are also war weapons.

War weapons are subject to additional restrictions. For example, their manufacture or transportation within Germany is subject to authorisation. What types of military equipment are also defined as war weapons is clearly stated in the War Weapons List. The War Weapons List is an annex to the War Weapons Control Act. Examples of war weapons include combat aircraft, tanks, fully automatic small firearms and naval vessels.

Types of military equipment which are not war weapons are called “other military equipment”. They are not subject to a special authorisation under the War Weapons Control Act, but only to a licence under the Foreign Trade and Payments Act. The list of “other military equipment” is long: It includes pistols and revolvers, hunting and sporting rifles, radar and radiocommunications technology, as well as certain explosive substances and intermediate products destined for military deployment.

A distinction must be made here between war weapons and other military equipment. In the case of war weapons (see preceding question), there is no statutory entitlement to an export licence. The Federal Government will first examine each case very carefully to ascertain whether the applicant is reliable and whether the export jeopardises peace or German obligations under international law.

In the case of other military equipment, the export rules of the Foreign Trade and Payments Act and the Foreign Trade and Payments Ordinance apply. The principle here is that foreign trade and payments are basically unrestricted. This means that in principle applicants have a legal entitlement to receive an export licence. However, the Federal Government can still refuse to issue a licence in an individual case if, pursuant to the Foreign Trade and Payments Act (Section 4 subsection 1 figures 1-3), the security interests of Germany are endangered, the peaceful co-existence of nations is disrupted, or a substantial disturbance to Germany’s foreign relations is likely.

An important point here is that the Federal Government’s decision is based on the EU Council Common Position and the “Political Principles” (cf. next question).

The Foreign Trade and Payments Act and the War Weapons Control Act lay down the basic statutory framework for the licensing of exports of military equipment. In addition to these general rules on export controls, it is important to use recognised, viable and transparent criteria for decision-making when each individual export of military equipment is scrutinised.

Here, the Federal Government can draw on two key catalogues of criteria: The Political Principles of the Federal Government and the EU Common Position.

The “Political Principles Adopted by the Government of the Federal Republic of Germany for the Export of War Weapons and Other Military Equipment of 19 January 2000” emphasise the following key aspects for decision-making:

  • observance of human rights in the country of destination
  • consideration of the internal and external situation in the country of destination
  • the recipient country’s conduct toward the international community concerning matters such as the fight against international terrorism and organised crime; the extent to which the recipient country meets its international obligations as well as aspects of non-proliferation, military weapons, and arms control
  • restraint on licences for and a strict control of exports to “third countries” (countries outside the EU, NATO and the NATO-equivalent countries of Australia, New Zealand, Japan and Switzerland) regarding the human rights situation, and the security policy interests of Germany and the international community
  • Germany’s special interest in the ongoing capability for cooperation of Germany’s defence industry in the EU and NATO

The EU Common Position of 2008 contains eight specific criteria for decisions on export applications and is an integral element of the Political Principles. It takes account of the situation of the relevant country in the region, including the significance of the exports in question for the preservation of regional peace, security and stability. The examination also attaches special significance to the observance of human rights in the country of destination and the dangers of misuse of the specific military equipment.

By making an advance inquiry, potential applicants can obtain an orientation regarding the potential outcome of an intended export application even before a contract is signed. The answering of advance inquiries does not amount to a final decision on the export, and is not a substitute for it. Since the material, legal and other circumstances in which export applications can be licensed can change, the response to the advance inquiry cannot be binding. Advance inquiries relating to war weapons must be submitted to the Foreign Office; advance inquiries relating to other military equipment must be filed with the Federal Office for Economic Affairs and Export Control. The answers to advance inquiries are governed by the same criteria as applications for export licences.

For constitutional reasons, the Federal Government does not provide any information about ongoing licensing procedures, including possible decisions on advance inquiries, since this pertains to the core area of administrative responsibility.

Also, the process involves a great deal of commercial and operational secrets of companies, as bidding processes and contract negotiations are still underway.

Useful and effective controls of military equipment are only possible if it is ensured that the military equipment provided remains with the consignee in the country of destination and is not passed on to other recipients and/or to other countries without permission from the Federal Republic of Germany – e.g. by being sold on by a consignee.

The “end-use control” ensures that the war weapons and other military equipment stay where they should. Every decision on whether military equipment may be exported is preceded by a careful ex-ante review. All of the available information is fully scrutinised and assessed. The recipient makes a declaration confirming that exports from Germany will stay in his country.

If the Federal Government has doubts about the final use of the military equipment in the country of destination, it rejects export applications for that country.

In order to improve the controls on the end-use of war weapons and other military equipment, the federal cabinet adopted principles for “post-shipment controls” in July 2015. These measures make it possible to undertake on-the-spot controls at the recipient of the military equipment listed here. This makes it easier to detect and deter the passing on of such equipment to third parties.

In order to improve the controls on certain military equipment like small arms, the federal cabinet decided in July 2015 to pilot the introduction of on-the-spot controls for certain exports of German military equipment to third countries. This can prevent small arms from being passed on to others without permission. If it is found that violations of the end-use statements have taken place, or if the carrying out of agreed on-the-spot controls is refused, the country of destination will be excluded from deliveries of further war weapons and other military equipment until the problem has been resolved. In March 2016, the federal cabinet adopted the necessary amendment to the Foreign Trade and Payments Ordinance. Post-shipment controls improve the control of exports of military equipment. It will finally be possible to verify on the spot whether recipients are complying with their declaration about the end-use of the weapons. Germany is thus introducing a system where controls for exports of military equipment are not completed after the granting of an export licence. Together with the small arms principles, these are the most stringent rules on military equipment exports that have ever existed in the Federal Republic of Germany.

In order to gather initial experience with on-the-spot controls, the German government is concentrating on controlling small arms, pistols, revolvers and sniper rifles in a pilot phase. The first on-the-spot controls can of course not be carried out until weapons have been produced and exported subject to post-shipment controls.

In contrast to an individual licence, a collective export licence permits particularly reliable exporters to make a large number of exports or transfers to various recipients based in one or in several countries. Collective export licences are granted only to exporters which are subject to special controls by the Federal Office for Economic Affairs and Export Control. As a rule, the collective licences permit shipments of military equipment to EU, NATO or NATO-equivalent countries.

A range of commercial products and technologies can be used both for civilian and for military purposes. These are called “dual-use goods”.

Dual-use goods include machine tools, testing and measuring equipment, materials, valves, electronics and a host of other industrial products. Their export is regulated at European level by the Dual-Use Regulation. According to this, the export of these goods and technologies to non-EU countries is subject to controls if they are included on certain lists of products. In the case of military use, under certain conditions the export of other (non-listed) goods may be subject to authorisation and may be prohibited. Here, consideration is particularly given to the potential misuse of an exported product for purposes of internal repression against the population or for military purposes in regions of conflict.

Uniform rules are needed to ensure that there are effective international controls of dual-use goods and common standards. For this reason, 41 countries including Germany have agreed in the “Wassenaar Arrangement” on lists of conventional military equipment and dual-use goods. The EU is responsible for the implementation of the Wassenaar lists in EU law, and it does this via the EC Dual-Use Regulation and a control list contained in Annex I to this Regulation. Implementation of these European rules takes place at national level; the Federal Office for Economic Affairs and Export Control is responsible for issuing licences.

Germany particularly aims to subject new, sensitive technologies to controls. In order to uphold human rights, it is especially important to control the export of surveillance technology, i.e. technology that can be used to monitor computers and the internet or to tap phone calls. In 2013/2014, at Germany’s urging, a major step was taken at international and European level when the Wassenaar Arrangement included rules on the export of technology to monitor mobile communications, search software, satellite surveillance technology and network surveillance technology. Their export has been subject to a licence throughout Europe since 1 January 2015. This has made it possible to close significant gaps in the licensing of the export of such technologies. In 2015, the Federal Government went even further and introduced tighter national rules. Since 18 July 2015, the export of telephony evaluation systems, and since 1 January 2016 the export of maintenance and service for surveillance technology from Germany have been subjected to controls and require a licence. This entailed a revision of the Foreign Trade and Payments Ordinance. The Federal Government will work towards having the tighter rules introduced at national level on the export of surveillance technology applied at international and European level. At Germany’s initiative, the European Commission’s efforts to revise the EC Dual-Use Regulation are being backed by an expert group on surveillance technology. The group is to help draft specific proposals for effective additional controls, e.g. on the inclusion of evaluation systems for telecommunications networks (monitoring centres) and services for surveillance technology, as they are susceptible to misuse particularly in terms of human rights.

The government already makes case-by-case decisions on arms exports on the basis of the “Political Principles of the Government of the Federal Republic of Germany for the Export of War Weapons and Other Military Equipment” from the year 2000 and the “Council Common Position 2008/944/CFSP of 8 December 2008 defining common rules governing control of exports of military technology and equipment”.

In the case of each application the Federal Government conducts a very thorough examination in the light of the situation in the region and the relevant country, the upholding of peace, security and stability in the region, and the observance of human rights.

Former Economic Affairs Minister Sigmar Gabriel has stated clearly that the arms trade is not a tool of economic policy. The Federal Government faces up to its responsibility and pursues a more restrictive export control policy on military equipment, paying very careful attention to all significant aspects.

In internal and cross-border conflicts, by far the greatest share of casualties are caused by small arms. In many cases, the misuse of small arms by criminal or militant groups impedes economic and social development and frequently contributes to a violent escalation of conflicts. The Federal Government therefore applies particularly strict standards when issuing licences for small-arms exports to third countries.

There has been a significant drop in the export licences for small arms. The total value of the licences for small arms in 2015 amounted to €32.4 million (the 2014 figure was €47.4 million). This corresponds to a fall of nearly €15 million, and is the lowest figure for 15 years. The figures for export licences for small arms to third countries also reveal a decline from the previous year, by €7.1 million from €21.6 million in 2014 to €14.5 million in 2015.

Licences for overall small arms exports again declined in the first half of 2016: from €12.42 million in the first half of 2015 to €11.64 million in the first half of 2016. Within these figures, the value of licences issued for exports to third countries, i.e. not EU, NATO or NATO-equivalent countries, was €3.4 million.

In order to improve the control of small arms exports, the Federal Government adopted the “Small Arms Principles” (Principles for the Issue of Licences for the Export of Small and Light Weapons, Related Ammunition and Corresponding Manufacturing Equipment to Third Countries) on 18 March 2015. The Small Arms Principles state for example that no licences to export components and technology to third countries (e.g. in the context of the granting of licences to manufacture) will be granted where such exports would lead to the establishment of a new manufacturing line for small arms or corresponding ammunition. The basic principle is “new for old”. If the recipient wishes to obtain small arms, he needs to discard and destroy old small arms in order to be sent the new ones. The aim is to prevent the proliferation of small arms. In cases in which the new purchase covers a credible need on the part of the recipient for more equipment, and old weapons do not need to be destroyed, the recipient has to make a binding promise to destroy the new weapons when they are discarded (the “alternative” principle of “New, destroy when discarded”). Also, recipients in third countries will in future require the agreement of the Federal Government before they hand small arms on to other recipients in the country of destination than those covered by the export licence.

The Federal Government basically discloses all the licences for military equipment exports in the Report on Military Equipment Exports. This is important in order to ensure that the export controls are transparent and comprehensible.

However, the Federal Government can only provide general details about denied export licence applications. The reason is that it does not want to create an incentive for other companies to submit export licences which would create foreign policy concerns for the Federal Government.

In 2014, 100 applications for military equipment exports (preceding year: 71) were denied. The total value of the denials came to €9.72 million (preceding year: €10.04 million). The figure does not include applications withdrawn by applicants prior to notification because of poor chances of success or for other reasons.