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Case Study 3: Carelessness Uncovered: The Licensing Mix-Up

On September 26, 2001, customs officials halted a shipment of surplus fighter planes on suspicion of weapons smuggling. Their suspicion was aroused because the export license initially presented with the cargo, which named the destination as Angola, had expired some nine months earlier. The arms-exporting company, Hermes, then presented a new copy of the export license, but customs rejected it because the document had been noticeably altered. Where the old expiration date had appeared, the text had been blackened and a new date typed in. The change was marked with an official stamp but not accompanied by an official signature. Hermes maintained that this was a valid document, but customs officials disagreed.¹⁶⁷

The cargo was packed into thirty-one containers and loaded onto freight cars for onward transport to Gdansk, Poland, where it was to be loaded onto a ship bound for Angola. During a close inspection, Slovak authorities found further discrepancies. In addition to the dismantled planes, the train cars also were packed with machine guns and spare parts that did not appear on the export license shown to customs. Moreover, one of the planes was of a type that did not match the model number provided on that document.¹⁶⁸

There was much media speculation at first that this constituted an illegal deal, but this proved not to be the case. Following an inquiry by the customs authority and a criminal investigation overseen by the regional prosecutor’s office in Trencin, the items were released for export to Angola. The prosecutor’s office concluded that no laws were broken. The customs authority, for its part, found that Hermes had violated customs regulations when it failed to provide the required export authorizations at the time of the customs check. Customs imposed a fine of 2.5 million SKK (approximately $51,800), a decision challenged by the company.¹⁶⁹

Some current and former licensing officials expressed the view that customs had been overly zealous and that ultimately this case did not merit attention, as nothing had been done wrong. The detention of the shipment and the investigation that followed, however, served an important purpose. They exposed important deficiencies in the export-licensing process that needed to be rectified. The various mistakes served to highlight contraventions of Slovakia’s international commitments not to supply arms to human rights abusers and countries in conflict (discussed below). They also demonstrated lax licensing procedures and helped lead to revelations of conflicts of interest among licensing officials, as well as an investigation into allegations of official corruption.

Problems at Every Turn

A first issue is the licensing of the arms sale to Angola. The arms in this consignment were the final shipment under a long-term contract for the government of Angola, according to an official who had been involved in authorizing the deal.¹⁷⁰ He noted that Hermes was Angola’s largest partner in the region and had sought and been granted dozens of licenses for arms exports to Angola. He and others pointed out that the government of Slovakia was eager to dispose of surplus weapons, and happy to have a customer interested in the Soviet-era equipment, one that was not subject to a U.N. embargo.

Indeed, Slovakia cultivated arms trading ties with Angola. The Slovak government went to considerable length to promote arms sales to Angola, arranging state visits and even using diplomatic channels to press Angola to follow through on its contract with Hermes after the client indicated it wanted to withdraw from the contract.¹⁷¹ Angola maintains an embassy in Slovakia, one of few diplomatic outposts in the region for the African country. Both countries have declared trade ties as a priority in bilateral relations.¹⁷² The Angolan embassy in Bratislava also reputedly serves as the local office of Simportex, the arms procurement wing of the Angolan government.¹⁷³ Building on its history of arms ties, in 2002 Slovakia exported six L-29 jet trainers to Angola.¹⁷⁴

Slovakia’s arms transfers to Angola, while not in violation of an embargo and thus technically legal, present a serious problem because they contradict important pledges by Slovakia to exercise restraint in its arms trade. For more than twenty-five years, until 2002, Angola was involved in a civil war marked by gross human rights abuses and widespread violations of international humanitarian law.¹⁷⁵ Angola also fought in a bloody regional war in the Democratic Republic of Congo. Moreover, some past Angolan arms purchases have raised suspicions of corruption.¹⁷⁶ Slovak officials have steadfastly defended the arms trade to Angola. For example, in mid-2002, following a press conference in which Amnesty International-Slovakia denounced on human rights grounds the arms flows to Angola, the spokesperson for the Slovak Ministry of Economy declared that Slovakia had played a role in helping Angola defeat an insurgency.¹⁷⁷ He also expressed regret that media and civil society criticisms of the trade could undermine Slovakia’s market position,¹⁷⁸ stating: “[A]fter some unverified and unobjective information appeared in the media [the Angolan president] himself voiced concern that our future cooperation could be threatened and that he would have to turn to arms companies in Germany or other countries.”¹⁷⁹

With respect to the validity of the license presented by Hermes, records of the government licensing commission showed that Hermes had sought and been granted in December 2000 a prolongation to its original license, which was set to expire at the end of that month, for six Su-22 ground attack fighter planes of type M4. The change was implemented by the secretariat to the commission at the Ministry of Economy, whose standard practice at the time was to alter the original license to indicate the new expiration date and mark it with an official stamp, without adding an official signature. The prosecutor found that such license extensions were not in compliance with legal standards.¹⁸⁰

There were also concerns about undeclared items included as part of the shipment. Spare parts for the fighter planes, including tires, were packed onto the train, but no export license for these goods was supplied during the customs check of the cargo. Hermes, it was later determined, had been issued a license for the spare parts, which remained valid at the time the shipment was detained, but the company’s employee neglected to present it to customs at the time. Again, the investigators concluded that this was an oversight, rather than a deliberate attempt to evade licensing requirements.¹⁸¹

As for the packed machine guns, licensing authorities and Hermes maintained that they were considered part of the fighter aircraft and did not require a separate license, and the prosecutor’s office accepted this rationale. To clear up the matter, a corrected license issued at the Ministry of Economy made explicit mention of the items.¹⁸²

A discrepancy in the type of fighter planes exported under the license posed a further problem. The export permission covered six fighter aircraft, specified on the license as being of the type Su-22 M4. Some of the fighter planes decommissioned from the Slovak military were not of a sufficient standard, however, so the items were replaced. The actual cargo included four Su-22 fighter planes, together with a training model of the Su-22 with a designation (Su-22 UB) that did not match the model number listed on the export license. Prosecutors attributed the mistake to Hermes, which did not inform the licensing commission when the items changed and instead assumed that the training model also would be covered by the original export license. The Ministry of Economy corrected the error so these items could be released for export.¹⁸³

The case also involved possible corruption. Customs officials indicated in April 2002 that they were moving forward with a corruption case involving a staff member of the licensing body.¹⁸⁴ Slovak police officials indicated that the investigation, which related to this export of Su-22 fighter planes, was ongoing as of March 2003.¹⁸⁵

Media attention to the mix-up over the licenses turned up important information that shed light on other problems requiring reform. Following the trail of this Angola transaction, an English-language weekly, the Slovak Spectator, reported in December 2001 that three members of the nine-member licensing body simultaneously served on the supervisory boards of state arms companies. Slovak officials for the most part defended the practice, maintaining that it was designed to ensure close monitoring of the arms companies and that there was no suggestion of improper behavior by the officials who served a dual function. Under pressure, however, the government conceded that the appearance of a conflict of interest was damaging. As a result, the licensing commission was disbanded in early 2002 and replaced with a new commission that no longer included persons who served on the boards of arms companies.¹⁸⁶