US Tech-Transfer Laws Freeze Spain-Venezuela Aircraft Deal
Recently, DID articles have reported on the USA’s move to block a proposed $100 million Israeli update of Venezuela’s American-bought F-16s, and also on a $2 billion Spanish sale to Venezuela of 12 C-295/C-235MP aircraft and 8 small naval vessels. This follows a Forecast International report that spotlighted Venezuela as the top Latin American arms buyer over the next decade.
At the time of CASA and Navantia’s EUR 1.7 billion deal, DID noted that “technology transfer restrictions – and their accompanying restrictions – may play a role in this sale as well.” This has proven to be exactly the case.
The USA has blocked the planned sale of EADS CASA’s military aircraft to Venezuela under the 1976 U.S. Arms Export Control Act. This would be done on the grounds that they contain U.S. equipment or technology listed as “military use”, though the US has not publicly specified precisely which equipment falls under this provision. See this article and press briefing transcript for more information.
It may be possible for Spain to build the planes with non-US equipment, either via alternative suppliers or by sacrificing certain functions; however, this would certainly raise both the delivery time and cost of the aircraft. Since Navantia has publicly described the naval portion of the deal at over EUR 1.2 billion, it can be inferred that the baseline cost of the aircraft deal is EUR 450-500 million.