Interview of FSMTC of Russia First Deputy Director A.V. Fomin published 11.11.10 in the newspaper News Time

There was the time when weapons were sold for ideological reasons

Export of the Russian arms and military materiel (AMM), as well as the oil and gas sector are the main sources of public revenue. The budget is replenished through the assistance of the Federal Service for Military-Technical Cooperation (FSMTC of Russia) which will celebrate its ten-year anniversary on 1 December 2010.

FSMTC First Deputy Director Alexander FOMIN told about history of export of Russian weapons and objectives of the Service in his interview to the News Time military observer Nikolay POROSKOV.

- Until 1917, Russia imported weapons. When did it transform from the buyer to the seller?

- Yes, from 1878 to 1917, Russia bought in the USA only about 100 warships. During the First World War, the United States delivered to Russia thousands of planes, about 6 thousand field guns, and over 42 thousand machine guns. Large batches of ammunition, heavy artillery guns, and planes were bought in France. After the October Revolution, export of arms prevailed.

In 1921-1922, Russia delivered to Turkey more than 100 thousand rifles, 150 artillery guns, plenty of planes, radio stations and other arms. In 1920, the Soviet Russia delivered arms for the Army of Afghanistan. Soviet specialists participated in construction of a gunpowder factory in Kabul.

The Soviet-American Amtorg Trading Corporation created in 1924 made it possible to purchase military materiel and licenses for its manufacturing and gave impetus to rise of the national mechanical engineering. Starting from the 30ies, the volume of deliveries and their geography sharply increased. Most weapons were delivered to China - «for fight against imperialistic Japan». In 1937, the Soviet Union delivered 200 warplanes, aircraft engines, air defense and field artillery, radio stations, and ammunition. During 1936-1939, the Soviet Union delivered to the Republican Government of Spain about 350 tanks, over 600 warplanes, artillery guns, small arms, and ammunition.

- Has arms export and import always been regulated by the State?

- The State has always held a monopoly on this type of foreign trade. The state broker in charge of military and technical cooperation (MTC) with foreign states has been a key element in this system. In 1939, the Engineering Department was set up in the Foreign Trade Narkomat (People's Commissariat), since 1942, it was reorganized into Tekhnoexport. During the World War II, it delivered under lend-lease military materiel from the USA, the UK, and Canada. The All-Union Association Iransovtrans at the Foreign Trade Narkomat was the first state broker delegated with the powers of the Government. During the World War II, the Association delivered military materiel to the USSR from the USA and the UK through Iran.

After the war, the USSR effectively obtained the status of the arms exporter. Almost half of deliveries accounted for Eastern Europe, first of all, countries of the Warsaw Treaty, such as Vietnam, China, DPRK, Cuba, Laos, Mongolia, and Yugoslavia. The arms were delivered to countries of the Near East, and Africa.

- How were partners chosen?

- Basically, weapons were sold for ideological reasons, and economic benefits were not pursued. It was demonstration of support to states which proclaimed the Marxist-Leninist ideology as official one, or national-liberation movements. In exchange, importers carried out policy loyal to the USSR.

- In the Soviet period, abbreviations GIU and GTU were often mentioned in talks on arms traffic. What did they mean?

- GIU, the General Engineering Department at the Ministry for Internal and Foreign Trade of the USSR was created in May 1953.

It was a self-supporting foreign economic organization. It was not liable for obligations of the State, but its main tasks, inter alia, were prompt commercial execution of contracts for export of arms and military materiel, licenses for their manufacture, and performance of works. In four years, GIU was reassigned to the State Committee of the USSR for Foreign Economic Relations (GKES).

GKES rendered economic and technical assistance to developing countries. GIU was engaged in a new line of activities - rendering technical assistance to foreign states in organizing, creating, and building multipurpose facilities, including those for licensed manufacturing of arms and ammunition.

In April 1968, a large size portfolio of orders for deliveries of the Soviet weapons required creation of a specialized state broker - the General Technical Department (GTU). It was engaged in building in foreign states military and special purpose facilities, and training of national specialists. GTU assisted in building more than 1,200 military facilities, including mausoleums of Dimitrov in Bulgaria, Ho Chi Minh in Vietnam, and Agostino Netto in Angola.

- The system of military and technical cooperation in the USSR seems to be bulky, with overlapping elements.

- In 1979, Departments for export deliveries and repairs at the Foreign Trade Ministry were abolished, and their functions were assigned to GTU. It was only GKES which could provide foreign customers with a full range of services. As mutual obligations of the member states of the Warsaw Treaty expanded, in 1988, the Main Administration for Cooperation (GUSK) was spinned off from GIU and GTU. It was responsible for AMM import to the USSR from socialist countries and technical assistance in creating defense enterprises in the member states of the Warsaw Treaty.

In early 1992, already after the disintegration of the USSR, the volume of military deliveries fell; GIU and GTU were reorganized into Oboronexport, the Russian State Foreign Economic Association for export and import of military products and services, and Spetsvneshtekhnika, the State Foreign Economic Company for export and import of arms and military materiel.
Export of military products in demand on the world market became the only opportunity for many Russian defense enterprises to survive, maintain research and production teams and technological and production base of the defense industry.

- And it was the beginning of the epoch of Rosvooruzhenie?

- The State Company for Export and Import of Arms and Military Equipment, Rosvooruzhenie, was founded 18 November 1993. The Decree of the President of Russia «On the State Committee of the Russian Federation for military and technical policy» (GKVTP) was signed 30 December 1994. The Committee accountable to the Russian President acquired the right to issue arms export licenses. A new MTC system was effectively created with formation of GKVTP.

However, by early 1992, weapons export landscape became intricate. First, the Foreign Economic Associations Tekhnoexport, Aviaexport, Sudoexport, Mashinoexport, the Association of Ordnance Plants of Udmurtia Kalashnikov, NPO Tulamashzavod, and Voentekh at the Minister of Defense of Russia along with the state brokers were delegated the right to export weapons. Second, Russian exporters started to unfairly compete with each other in the world arms which led to a considerable reduction in volumes of export of the Russian weapons and their prices.

The Main Administration for military-technical cooperation (GUMTS) created in 1992 to coordinate state brokers failed to change the landscape. It was necessary to streamline the arms export system. The Decree of the President dated 12 May 1992 «On military-technical cooperation with foreign countries» laid down the foundation for a new MTC system.

As GKVTP reported directly to the Russian President, it held an exclusive status enabling to successfully co-ordinate activities of MTC participants. The export volume from 1.71 billion USD in 1994 increased to 3.56 billion USD in 1996. But in November 1996, GKVTP was merged with the Ministry of Foreign Economic Relations. Jurisdiction of the Committee to the President did not remain. It quickly and negatively affected the MTC efficiency. 1997 saw recession of volumes of arms export and FX receipts by 30% and 25%, respectively.

The current weapon export system rests on the Act dated 19 July 1998 «On military-technical cooperation of the Russian Federation with foreign states».

- Having become the President, Vladimir Putin started to build a power vertical. What were the implications for the MTC system?

- By the end of 2000, Russia maintained military and technical cooperation with more than 60 countries; intergovernmental agreements were signed with 25 of them. 1 December 2000 is the inception date of the Committee of the Russian Federation for military and technical cooperation with foreign states (КMTC). So, the President’s vertical managing the complicated system of the export of the Russian military purpose products has been effectively restored.

- How does the State maintain its monopoly of MTC?

- In particular, it is maintained through the authorization-based procedure for export and import of military purpose products. The procedure implies a strict legal and administrative regime both for state authorities and MTC affiliated entities, and developers and manufacturers of products. The Russian system regulating MPP export is one of the toughest in the world practice. We are second only to France in this respect. All decisions are made by the President or the Government, as well as the Federal Service for Military-Technical Cooperation.

- Could you comment on a current system of MTC of Russia?

- It is composed of the Commission for military and technical cooperation with foreign states at the President of the Russian Federation, the Military-Industrial Commission, the Government, competent federal authorities, MTC –related intergovernmental commissions and working groups, including the Russian Technologies State Corporation, the state broker Rosoboronexport, MTC affiliated enterprises and defense enterprises authorized to carry out foreign trade operations with military purpose products, and other MIC enterprises. Our Service functions under the jurisdiction of the President of Russia.

- What are FSMTC current objectives, what decisions are within its competence?

- The primary objectives are to control and supervise military and technical cooperation, participate in devising state policy in this area, and implement the state policy for MTC. The Service makes decisions on import to/export from Russia military purpose products, issuing export/import licenses, issues authorizations to developers and manufacturers of military purpose products to carry out foreign trade operations (relating to spare parts, auxiliary materiel, and repair). The Service holds exhibitions and displays of versions of military purpose products in Russia and abroad.

FSMTC examines applications of foreign customers, and supervises progress of their implementation. Accounting and registration of foreign trade contracts, and maintaining the register of MTC-affiliated entities are among the tasks to be performed by the Service.

For a decade of the Service’s existence, 40 countries signed cooperation agreements. Agreements on Intellectual Property Right Protection were concluded with 19 states, Agreements on mutual protection of classified information – with 29. There are six intergovernmental agreements on procedure for interaction in export of military purpose products to third countries, five – for preserving specialization of enterprises and organizations involved in manufacturing military purpose products.

Today, Russia maintains military and technical cooperation with more than 80 states, and 62 countries buy our weapons.

Publication date: 16.11.2010

Date of publication: 18.01.2011


 


 

 


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