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Norwegian Opposition Pushes Stricter Export Rules

Mar. 2, 2014 - 04:30PM   |  
By GERARD O’DWYER   |   Comments
A proposal would toughen rules governing Norwegian exports, such as the Penguin missile. (US Defense Department)
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HELSINKI — A proposal by three Norwegian opposition parties could add a layer of restrictions to weapons and equipment exports, potentially curbing sales to foreign countries.

The Norwegian Defense and Security Industries (NDSI) organization has criticized the move, warning that tougher rules could weaken industry’s ability to export and participate as subcontractors in international defense projects.

The center-left parties’ initiative is being spearheaded by the Liberals, Center and Socialist Left groups in the Norwegian parliament. The three parties want to amend the Arms Export Act to require that Norwegian defense companies provide formal assurances that Norwegian-produced components and dual-use equipment supplied to international projects, and weapon systems, would not be sold to countries blacklisted by Norway.

“There is a consensus among the opposition and government parties that Norway should have strict rules governing weapons exports,” said Liv Signe Navarsete, the Center Party’s representative on the parliament’s Committee on Foreign Affairs And Defense (CFAD). “We prohibit exports to undemocratic and authoritarian states, and that is good. What we are proposing is a tightening of the rules to ensure that Norwegian components are not included in weapons systems and equipment that end up being sold to countries which we have export bans with.”

The move comes in the same week that ØKOKRIM, Norway’s national authority for the investigation and prosecution of economic crimes, charged Kongsberg with corruption and suspicious business practices. The charges are connected to the delivery of equipment, valued at US $250 million, by Kongsberg Defence Communications to Romania from 1999 to 2008.

The case is unlikely to affect the arms export initiative, said Marit Nybakk, the Labor Party’s CFAD representative.

“There isn’t a great deal of division in opinion between the center-left groups and the government parties, or even other opposition parties like Labor who also sit on the opposition benches,” Nybakk said. “We all want to see strict rules governing arms exports. That said, we will need to consider the need for further changes carefully.”

There is no guarantee that the proposal, with the three parties controlling 30 of the 169 seats in parliament, will succeed, Nybakk said.

The legislative amendment proposed by the center-left grouping follows the annual review of arms export rules by the CFAD, which was completed Feb. 20. The committee was briefed on the tough competitive international market facing Norwegian companies as the value of defense equipment exports declines.

The defense industry needs political support to specialize, strengthen its overall competitiveness and grow in export markets, said Torbjørn Svensgård, the NDSI’s CEO.

“If there should be uncertainty around whether Norway’s defense industry can meet its long-term obligations, then there is the danger that companies could be excluded from participating as subcontractors in major international collaborative projects,” Svensgård said.

The value of Norwegian military equipment exports dropped by almost $67 million to $350 million in 2013 compared with 2012. This continued a pattern of declining Norwegian defense exports since 2008, when they peaked.

The sharpest decline in 2013 related to weapon systems and components, which dropped $97 million compared with 2012. But the news wasn’t all negative. The export value of missiles, grenades, torpedoes, mines and rockets reached $167 million, an increase of $30 million compared with 2012.

The US, Sweden and Poland were the largest customers for Norwegian military exports in 2013. Exports to the US were valued at $95 million in 2013, a $13.2 million increase over 2012. The value of weapons exported to Sweden amounted to $56 million, an increase of $37 million over 2012. Norwegian exports to Poland rose by $8 million to $49.2 million in 2013.

“Tighter export controls will not harm the defense industry’s ability to export or become involved in international projects,” said Trine Skei Grande, the leader of the Liberals and the party’s CFAD representative. “This is not an anti-industry proposal, but an attempt to reinforce the tough export rules that already exist and offer greater clarity on the end destination of Norwegian components and the responsi­bilities of defense exporters.”

The Norwegian industry’s wish to leave the export rules unchanged is in part influenced by what is perceived as more liberal latitude given to defense exporters in Sweden in terms of the component content of systems delivered to international customers.

By contrast with Norway, Swedish defense exports increased by 22 percent to $1.83 billion in 2013, with shipments outside the EU accounting for almost half of all arms deliveries. ■


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