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Viewing cable 09BRASILIA796, BRAZIL'S EXPORT CONTROLS ON MILITARY SALES: HOW THEY WORK

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Reference ID Created Released Classification Origin
09BRASILIA796 2009-06-22 17:05 2011-01-21 00:12 CONFIDENTIAL Embassy Brasilia
VZCZCXYZ0025
RR RUEHWEB

DE RUEHBR #0796/01 1731744
ZNY CCCCC ZZH (CCY ADX7E2784 MSI7611 - 648)
R 221744Z JUN 09 ZDS
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 4551
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 7904
RUEHSO/AMCONSUL SAO PAULO 4249
RUEKDIA/DIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC
C O N F I D E N T I A L BRASILIA 000796 
 
C O R R E C T E D COPY - PARA 1, 2, 6 
 
SIPDIS 
STATE FOR WHA/BSC, PM/DDTC 
 
E.O. 12958: DECL: 06/22/2019 
TAGS: PREL ETTC MASS PARM BR
SUBJECT: BRAZIL'S EXPORT CONTROLS ON MILITARY SALES: HOW THEY WORK 

REF: A. BRASILIA 34 
B. STATE 11869 
C. BRASILIA 613 

Classified By: DCM Lisa Kubiske. Reason: 1.4(d) 

1. (C) SUMMARY. Brazilian policy supports increasing Brazil,s exports of military goods and technology as part of the development of Brazil,s own defense sector. Brazil currently has a system of export controls that has been effective in ensuring that Brazil,s limited military exports do not fall into the wrong hands. Brazilian controls are based on policies aimed at not contributing to conflicts and observing UN and other international standards. The GOB is preparing new regulations that set procedures into code and enhance the role of Ministry of Defense licensing authorities. Brazilian export control authorities are open to dialogue on U.S. practices, particularly electronic licensing. END SUMMARY. 

2. (C) Brazil's December 2008 Defense Strategy (ref a) mandated efforts to revitalize Brazil's defense industry by promoting exports of Brazilian defense products. While Brazil had a niche as a supplier of armored vehicles and other low-end military products, primarily to fellow non-aligned nations, during the Cold War, defense exports have since remained relatively low, at a rate of only about a thousand per year, according to Ministry of External Relations (MRE) Director for Commerce Promotion (responsible for export controls) Norton Andrade. The largest number of these cases are for export of ammunition and small arms. Brazil's current system of export controls has effective procedures but lacks a formal set of regulations with legal force similar to the U.S. International Traffic in Arms Regulations (ITAR) and reflects the limited volume of exports and the relatively low level of technology involved. 

3. (C) The Brazilian export licensing process currently begins when an exporter has an opportunity to sell a product outside of the country and consults the MRE and other relevant Ministries about the proposed sale. This process, referred to as &prenegotiation,8 is a key to the Brazilian system of control. In effect, the GOB will tell the exporter if the proposed export is likely to be approved leading to an approval rate of almost one hundred percent on the actual applications. Andrade likened the process for licensing to a &gentlemen,s agreement8 and said that most Brazilian exporters had a good idea of what exports would normally be approved and over what items the GOB will exercise greater control . Brazil,s Ministry of Industry has published a code of what items require export licensing (equivalent to the USML). Once an application is submitted, it undergoes a process of interagency consultation that normally takes about a week, then is forwarded to the MOD for approval. Cases involving higher technology, for example anti air missiles, can take up to two months for interagency review. 

4. (C) Brazilian export control policy is based on two principles: not contributing to existing conflicts and upholding UN standards. Brazil requires end user certifications for all military exports and will block those it believes will not go to legitimate military organizations. For example, in 2008, Brazil turned down an export of small arms ammunition to Chad because of concerns it would either contribute to internal conflict or be diverted across the border to Sudan. Although Brazil,s role in Africa is expanding, it still treats exports of military items there with caution. One exception has been the training Brazil has provided to the Mozambique army for African Union peacekeeping operations. As of April 2009, however, this training did not include equipment or weaponry. Brazilian policy is to support all UN restrictions on arms transfers, although where specific UN measures do not exist, Brazil generally will approve sales. Brazil,s 2005 attempt to sell Super Tucano aircraft to Venezuela, a sale blocked by USG refusal to agree to retransfer of U.S.-origin items on the aircraft provided a case where Brazilian and U.S. policies diverged. Brazil argued that such a sale would give Brazil more influence with Chavez, military that could be a moderating force and complained that the denial of the turboprop Super Tucano trainers led to Venezuela,s decision to procure advanced jet fighters from Russia. It is likely that Brazil,s desire to market the Super Tucanos was driven by the plane,s manufacturer, Embraer, putting pressure on the GOB to approve in order to protect industrial jobs in the runup to the 2006 elections rather than any Brazilian policy toward Venezuela. Recently, Brazil received protests from India for a proposed sale of anti-radiation missiles to Pakistan. 

5. (C) COMMENT. As Brazil,s economy and technological base keep growing, so will its role as an exporter of military items. Both President Lula and Defense Minister Jobim have stated that developing strong defense industries that thrive on exports will enhance Brazil,s security. It is therefore probable that governments and non-government actors seeking access to military technology will increasingly turn to Brazil. This year,s Latin American Aerospace and Defense Exposition LAAD (ref c) was notable for the high profile given to Brazilian products. Brazil,s current system of export controls, with its emphasis on informal consultations and understanding that &all our exporters know what they should do,8 while sufficient for the present, could become inadequate. The GOB is working on elements for greater controls through a technology transfer working group and possibly adding a process for adjudicating which exports require licensing as defense products. According to Andrade, Brazil also hopes to make greater use of technology in its export licensing process. 

6. (C) These changes create an opportunity for the USG to offer to share our best practices with Brazil. Andrade indicated informally that he would be interested in "the American system" with particular attention to State Department experiences with e-licensing and USG interaction with the U.S. export community. Post recommends seeking an opportunity to establish contacts between Brazilian licensing authorities, both from the MRE and MOD, and PM/DDTC. In addition to the above topics, the Brazilians could benefit from information on the USG Commodity Jurisdiction (CJ) process and on compliance issues. The October 2008 visit of a Blue Lantern team (ref b) gave an overview of licensing and compliance issues, but an exchange of information on trends in arms trafficking in Latin America would serve to sensitize Brazil to the need for developing a compliance program of its own. 

SOBEL