FSMTC of Russia Deputy Director Konstantin Biryulin: Military and technical cooperation with Belarus, and other CSTO countries has a powerful potential for a further development.

Belarus and other CSTO states play an increasing role in the area of military and technical cooperation between Russia and foreign countries. Annual volumes of deliveries of Russian military equipment to these countries grow, and cooperation relations between defence enterprises get a stronger momentum.

Deputy Director of the Federal Service for Military-Technical Cooperation (FSMTC of Russia) Konstantin Biryulin told Interfax-AVN about joint projects implemented today by Russian and Belarus arms exporters, and areas of the military and technical cooperation within CSTO.

- Belarus is the country with which we have signed a number of high-profile contracts, including in MTC. Today, the two countries maintain allied relations.

Since there is no formal border between Russia and Belarus, and no customs clearance, such conditions create additional opportunities for developing cooperation between their defence enterprises, and implementing MTC-based joint projects.

For example, Belarus sights have been mounted for many years on T-90 tanks produced by Uralvagonzavod. Belarus, in turn, buys Russian arms. Last year, we signed the contract for delivery to Belarus Tor air defence missile systems at reduced prices, i.e. at the same prices at which the Russian Defence Ministry buys these systems.
Besides, we implement a joint project with participation of Russian PVO Almaz-Antey Concern, and Belarus Agat enterprise to upgrade Buk air defence missile systems. Jointly upgraded Buk version will be offered not only to own armed forces, but foreign customers as well. And such examples are many.

- Belarus military leaders repeatedly stated that they would like to get S-400 Triumph, newest Russian air defence missile system. When such deliveries can start?

- It is known that according to a moratorium on deliveries of this system abroad, requirements of our own armed forces are top priority. As to S-400 Triumph export deliveries, they are expected to start since 2013 when we reach a normal output of the system.

Certainly, Belarus will be one of the first countries to get S-400 Triumph systems, if it so wishes.

- Belarus has been accused that it sells weapons to so-called rogue states. There were even statements that Russia allegedly uses it, delivering through Belarus weapons to countries subject to sanctions of the United Nations. Comment on such information.

- There is nothing to comment on because all these accusations are absolutely unfounded. There are no facts, and they cannot be found that Russia or Belarus delivered weapons bypassing the United Nations sanctions. I represent and warrant that. Russia and Belarus signed the Agreement for joint transfer of military products to third countries. Sometimes, it is economically and politically reasonable to implement a contract through Belarus. And if it is so, what’s wrong with these deliveries. Especially, so far as concerns arms delivery, Belarus enterprises participate in manufacturing these products, and their share in the implementation of the export contract is substantial.

I would like to underline that we and Belarus in the world arms market perform not as competitors, but as partners.

Each delivery must be authorised by the leadership of the two countries, and carried out in a strict conformity with the international rules and standards.

Arms delivery to any other countries, especially subject to sanctions of the United Nations, is excluded. There are procedures requiring the end user’s certificate. If we deliver certain equipments through Belarus, and they say that it will go to the third country, the end user’s certificate must be presented according to which we see the destination of our arms and military equipment.

As to deliveries of MANPADS, and other, let’s say, sensitive types of arms, we have developed special controls.

Yes, not all are happy that we deliver arms to countries of Latin America, Middle East, and North Africa. But it does not mean that we should refuse to maintain military and technical cooperation with these states. Until the United Nations sanctions are introduced against any country, it may buy arms and combat material, enjoying the same rights as other states.

- What opportunities does the unified customs space open for defence enterprises of Russia, Belarus, and Kazakhstan?

- First of all, I would like to say that the unified customs space creates bright prospects for the unified economic space covering the three states. All parties involved will win.

It is not a matter of return to the Soviet Union, it would be wrong. The unified economic space would allow our enterprises to exchange both services, and goods in an easy way and better manner.

The unified customs space provides traffic of all goods without customs clearance. The only restriction is imposed on movements of arms and combat materiel, i.e. military products. They move, though without customs clearance, but under the state control.

In other words, control over arms and combat materiel traffic remains even within the unified customs space. It corresponds to national interests of the supplier state and the customer state. This rule is true not only for finished samples, but also completing products.

We signed the Agreement with Belarus allowing law enforcement bodies of our countries to communicate directly with manufacturers. We are at the stage of producing the same agreement with Kazakhstan. If we sign it, we will create conditions within the post-Soviet territory when law enforcement bodies of each of three states can maintain direct relations with enterprises of other state.

- It is known that military and technical cooperation under CSTO involves a number of privileges and preferences. For example, arms to CSTO countries should be supplied at the same prices as to own armed forces. And how is it implemented in practice? Aren’t Russian exporters forced to sell arms at the prices below the world ones affected by such deliveries?

- Certainly, Rosoboronexport pursues to get a maximum interest from sales. Under existing documents, it is established that Rosoboronexport consideration for operations with CSTO countries is 1.5 percent of a transaction amount, while this figure is higher for deliveries to non-CSTO countries. Based on the value and terms of a transaction, it is about 5 percent.

It is a different case for the enterprises. When exporting their products, they pursue to get maximum profit margin. But the price for products for CSTO countries is formed under similar conditions as for own armed forces. In other words, they cannot expect to earn excess profit.

I would like to highlight that a share of deliveries to CSTO countries in the total amount of the Russian weapons export is minor. But nevertheless, there are a lot of transactions, even more requests.

Belarus is among those states that often buys arms under favourable terms: we delivered to them S-300 air defence missile systems at CSTO prices. The same scheme operates for Armenia. This year, we have carried out a number of consultations with Kazakhstan. They are interested in armoured vehicles, and AAD.

Kazakhstan is notable for its complex internal legislation requiring the necessity to issue guarantees of return of difference between the internal price and foreign trade price. In March, we had discussions with Kazakhstan partners, and the Defence Ministries reached understanding of how to deal with deliveries of Russian weapons to the country, taking into account the internal legislation of Kazakhstan.

- Until recently, the military and technical cooperation with the CSTO countries has been mainly limited to delivery of spare parts and upgrading of available arms. When can the CSTO countries start mass purchases of finished products from Russia?

- I cannot quote exact dates. And it would not be absolutely correct to state that only Russian weapons will be bought. Each country is empowered with a sovereign decision-making what to buy. Purchase of any arms includes comparison of technical characteristics, fighting efficiency, and price parameters. Certainly, there are strong preferences for the CSTO countries.

You see, our commitment to deliver products of the same quality and at the same prices as delivered to the Russian armed forces is a strong competitive advantage.
Strong argument in favour of purchase of the Russian weapons is also the fact that the CSTO Collective Rapid Deployment Forces must be equipped with advanced and compatible weapons. It is only Russia that can provide delivery of such weapons today.

Besides, there is an objective to establish a new cooperation in manufacturing arms and military equipment where each country contributes to the manufacture of arms, and here, it is not critical where it will be manufactured: in Kazakhstan, Russia or Belarus.

The top priority is to create a unified need for arms and military equipment within CSTO. Sooner or later, we will do this.

- What is a share of arms and combat material supplies to the CSTO countries in the total amount of the Russian weapons export? What are long-term volumes? What arms, in particular, are delivered by Russia to the CSTO countries today?

- This share is not so considerable yet, and amounts to about five percent of the total amount. Potentially, we can reach ten and more percent in the next years, in other words, minimum to double arms supplies to the CSTO countries.

Each party would like to get the newest models. Nobody will buy old equipment. Kazakhstan would like to have S-400 Triumph systems, and Belarus also wants to buy S-400.

As to tanks, all want to have the latest, highly upgraded with all frills Т-90С, instead of the T-90 tank produced 10 - 15 years ago. There were statements that Т-90 is a seventeenth-eighteenth upgraded T-34 tank. Then, the German Leopard is also the twentieth upgraded version of a Tiger produced during the Great Patriotic War. New equipment draws on available research and engineering input.

- Recently, military and technical cooperation between Russia and foreign countries has been implemented through joint projects, and licensed manufacture of arms and military equipment at the customer’s location? And what about CSTO?

- The main thing for us is to establish cooperation at the level of enterprises to generate the market of products manufactured by joint efforts of several states.
I have already said that such projects between Russia and Belarus are already in the pipeline, in particular, on communication facilities, control facilities, etc. We actively cooperate with Kazakhstan that adopted a number of local decisions aimed at developing own production facilities. They set the following objectives - to boost mechanical engineering, electronics, and other areas, including an aviation component. I think that it will give momentum to cooperation between the enterprises.

- What is done to improve after-sales service of exported combat material, including to the CSTO countries? How much was granting to a number of the enterprises the right to independent foreign trade activities regarding delivery of spare parts justified?

- As to the idea of granting to the enterprises the right to independently enter the market of the delivery of spare parts and service, it was a good idea as it was said many a time.

Experience of large foreign enterprises testifies that about 30 - 40 percent of their goods turnover amounts to spare parts, as well as rendering after-sales services. As to our majors, it is 5 - 10 percent and no more.

Last year, a share of deliveries of spare parts and service in the total amount of the Russian weapons export was about 10 - 15 percent. It is peanuts. But it is 10 times more than those indicators a decade ago when the enterprises were not authorized to independently enter the market.

Date of publication: 01.08.2011




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