German arms manufacturer to sue govt over weapons deliveries’ halt to Saudi Arabia – report

Berlin might face a lawsuit from one of Germany’s largest defense contractors, Rheinmetall, over its decision to halt all arms deals with Riyadh in the wake of the murder of Saudi journalist Jamal Khashoggi, Der Spiegel reports.

Rheinmetall AG might file a claim for compensation against the federal government worth millions of euro, the company said in a letter to the Ministry of Economics, the German weekly says. The defense industry giant considers itself eligible for restitution as Berlin suspended exports, which were already approved by the German security council, “for political reasons.”

The company also fears that its own shareholders could file lawsuits against it if the management fails to demand compensation for the losses stemming from the halt of arms exports to Saudi Arabia. The exact amount of compensation has not been revealed, though.

Back in October, Chancellor Angela Merkel announced her country would stop supplying weapons to Riyadh “under current circumstances” – referring to the investigation into the killing of Jamal Khashoggi. The self-exiled fierce critic of Riyadh’s policies was murdered in the Saudi consulate in Istanbul.

In November, the German Ministry of Economics confirmed that all arms exports to Riyadh had been stopped. Even those arms shipments approved before Merkel’s October announcement were halted. The government also said at that time it “influenced the holders of individual licenses” to completely stop any arms deliveries to Saudi Arabia.

Such a drastic decision was apparently provoked by the government’s move to extend the weapons embargo imposed against Riyadh in October for two months. Initially, the ban was expected to be in force until the end of 2018. However, in early January, the cabinet agreed to prolong it following a heated discussion.

No German arms manufacturers, except for Rheinmetall, expressed their discontent over that situation so far. Before the halt, Germany had approved arms exports worth €416.4 million ($475.7 mn ) to Saudi Arabia in 2018 alone. However, the total losses the German companies are suffering because of the ban might be even bigger as Der Spiegel reports that the total value of the affected arms exports might amount to up to €2 billion ($2.27 bn).

Merkel also called on Germany’s European allies to follow suit and cut off arms sales to Saudi Arabia. While Norway and Spain have canceled weapons sales as well, others were apparently reluctant to let their defense industries suffer losses because of this situation.

French President Emmanuel Macron refused to halt arms sales to the nation’s second-biggest purchaser as its deals with the Kingdom were worth almost €4 billion ($4.67 bn) just between September 2017 and August 2018. US President Donald Trump also said it would be foolish” to scrap his country’s ongoing $110 billion arms deal with the Saudi government despite pressure from both sides of the political spectrum.

Canada’s Prime Minister Justin Trudeau also said it would be “very difficult” to drop the US$12 billion (CAN$15 billion) deal on arms sales to Riyadh despite concerns” about Khashoggi’s fate. The journalist’s grisly murder still resulted in large-scale diplomatic fallout for Riyadh and strained its ties to some of its long-time allies in the West.

The United States imposed economic sanctions on 17 Saudi officials in November for their role in the Khashoggi killing, and a month later, the US Senate unanimously passed a resolution holding Crown Prince Mohammed bin Salman responsible for the murder.
The kingdom eventually charged 11 individuals in connection to the murder, with five suspects facing the death penalty. Saudi officials also doubled-down on their insistence that the crown prince knew nothing of the brutal assassination.

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