Spanish Arms Manufacturer Says It Cannot Export Planes to Venezuela

The Spanish arms manufacturer, EADS-CASA, which had agreed to export 12 military planes to Venezuela, says it will not be able to fulfill its contract because of a US veto on the inclusion of US-made parts in the planes. Replacing the parts with non-US items would be unviable, according to EADS-CASA.

Caracas, Venezuela, February 8, 2006—EADS-CASA, The Spanish company contracted to provide Venezuela with 12 military planes has been reported saying that unless the US lifts its veto on the sale of the planes it will not be able to send them to Venezuela.

The deal for the unarmed C-295 transport planes was signed in Venezuela in November 2005. The US was able to veto the sale because the Spanish-made planes have parts that use US technology. On January 31 the Spanish Deputy Primer Minister Maria Teresa Fernandez de la Vega said EADS-CASA was trying to find “mechanisms of substitution,” for the parts needed.

Now the Spanish newspaper ABC News reported an “unnamed source” in EADS-CASA that said changing the parts would be technologically “unviable.” According to the same source, this is because the structure of the planes would have to be changed if the US technology was replaced.

This follows claims reported in November 2005 in the Spanish daily El Pais that the added cost of replacing the US parts would make the deal unprofitable for EADS-CASA.

In a recent speech, Venezuelan President Hugo Chavez said that if Spain could not confirm its completion of the contract soon Venezuela might buy the planes from China or Russia. Neither the Venezuelan Ministry of Defence or EADS-CASA were available to confirm what the status of the deal is now.

Diego Quintana from the Spanish Embassy in Caracas said “we cannot speak on the part of EADS-CASA as it is an independent company”. Quintana also said, “Obviously the deal is much more difficult without the US parts and we are talking with the US to allow for their use.” The deal is estimated to be worth $1.7 billion to EADS-CASA and would create hundreds of jobs in Spain.

The US State Department said it is blocking military sales to Venezuela to try and stop an arms race in Latin America. US Secretary of State Condoleeza Rice has called Venezuela a “destabilising influence in the region”. Critics have accused the US of hypocrisy over this as it has sent $860 million of military aid to the continent in the last year alone.

Relations between the two countries have been bad since 2002 when the US failed to share advance knowledge of a coup against Chavez with the Venezuelan President. Since then Chavez has repeatedly accused the US of backing efforts to destabilise his government.

Last year the US stopped Israel from repairing Venezuela’s F16 fighter aircraft. In January the Brazilian government complained of perceived US pressure not to sell Super Tucano ground attack planes to Venezuela. No formal US arms embargo has yet been declared.