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09MOSCOW1459 2009-06-03 14:46:00 CONFIDENTIAL Embassy Moscow
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DE RUEHMO #1459/01 1541446
R 031446Z JUN 09
					  C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 001459 


E.O. 12958: DECL: 04/30/2019

REF: 08 MOSCOW 1503

Classified By: Political M/C Alice G. Wells. Reasons 1.4 (b), and (d).

1. (C) Summary. In a recent meeting with Washington
analysts, Aleksandr Y. Skobeltsyn, Chief 2nd Department for
Military-Technical Cooperation (FSVTS), reiterated FSVTS's
role in Russia's arms export policy (reftel), stressing that
his office focused on reviewing proposed arms sales to
foreign countries, not export controls or dual-use item
sales. He noted that Rosoboronexport (ROE) was the only
Russian company authorized to export final systems, which
were strictly controlled. While saying that Russia
understood and shared U.S. concerns about re-transfer
vulnerabilities, particularly in Latin America and the Middle
East, Skobeltsyn commented that if Russia did not provide
weapons to such countries, "someone else" would;
nevertheless, he welcomed a continued dialogue on arms export
policies. End summary.

FSVTS Role in Russia's Arms Export Policy


2. (C) Skobeltsyn explained Russia's system for approving
arms transfers and the FSVTS's role in that process (reftel).
According to Skobeltsyn, the FSVTS is responsible for
analyzing arms transfer requests and controlling export
organizations. The FSVTS also prepares reference materials
for customers about weapons exports and processes and is
responsible for working out problems with orders before they
reach the office of Russia's President for a decision about
the transfer. Export controls are handled in a special
division within the FSVTS that prepares lists and licenses
that are included in the package submitted to the President.
Skobeltsyn's service also prepares reference materials to
accompany license requests. FSVTS only deals with military
items, not dual purpose items, according to Skobeltsyn.

3. (C) Skobeltsyn commented that there were not many
departments within the FSVTS, but that he saw this as an
advantage because it allowed flexibility and says the ability
to get information out "very quickly." Skobeltsyn emphasized
that the President controlled all decisions on where to
export and what weapons systems to export. Because Russia's
Constitution did not grant the President the right to create
new ministries, the FSVTS was created. He explained that the
FSVTS was dependent on the Defense Ministry and the first
drafts of all FSVTS documents must be coordinated with the
Ministry of Defense before they go further. After this
coordination occurs, the analysis and forecasts go directly
to the President. Skobeltsyn maintained that the Russian
arms transfer process was based on a set of open and
transparent laws that include the Federal Law for
Military-Technical Cooperation and that there is a list for
items approved for sales abroad while there is another list
of countries that are approved for cooperation. According to
Skobeltsyn, there are no pre-set times for revisions to the
list and it has only been revised once, four years after it
was initially created. The FSVTS was currently working on a
second revision.

4. (C) Skobeltsyn repeated oft-heard comments that Moscow's
arms transfers obeyed all UN resolutions and international
laws. Skobeltsyn explained that if a country not on the
pre-approved list makes an arms request, that request is
submitted as a report to the President (described as a
"prospective opportunity"). Then, the President makes a
decision whether or not to fulfill the order in principal.
This decision is made by the President in consultation and
coordination with Russia's Security Council and the
Commission on Military-Technical Cooperation.

5. (C) Skobeltsyn explained that there were approximately 25
organizations in the military-technical cooperation structure
which were allowed to talk to foreign customers. However, no
private organizations could analyze weapons sales or sell
weapons, and only Rosoboronexport could export final arms
systems; the other 24 companies could export spare parts. A
formal application must be submitted to the FSVTS for
approval before an arms sale can proceed. After receiving
the application, the FSVTS decides if it wants a different
company than the one the customer originally requested to
handle the contract. According to Skobeltsyn, the official
arms sale application includes the official request from a
customer's Ministry of Defense for the item, and the end-user
certificate or an official letter from the customer's
government saying it will provide an end-user certificate by

MOSCOW 00001459 002 OF 002

the time that the item is transferred. The FSVTS then
nominates someone to act as the agent. This agent must have
the end user certificate on file at all times.

6. (C) Skobeltsyn said that Moscow also requires all
manufacturers to have licenses and end-user certificate
copies on file, including those required for spare parts
requests. Applications by a customer to re-export a Russian
weapons system are special cases, however, because there are
intellectual property rights concerns that are involved that
are different from the initial application.

7. (C) Skobeltsyn explained that after a system is
manufactured, ROE must apply for an export license from
Russia's customs service. This application must include the
official nomination of the legal agent to execute the
contract, the official decision of Ministry of Industry
verifying that a Russian company can produce the system,
copies of the agreements between Russia and the customer
country on general military-technical cooperation, the
official Ministry of Defense decision to transfer the system,
and documents about the system's technical specifics.

8. (C) After the export license is granted, it is submitted
to the President because he must decide again whether to
deliver the system, and the license indicates that the system
is legally allowed to go across the border. Skobeltsyn said
that it is only after the President's decision is made on
delivery that the contract "enters into force."

9. (C) Skobeltsyn explained that the end user certificate is
good for the life of the item and the Russia trusts its
customers in other countries, but also has mechanisms in
place to verify the end-use. Skobeltsyn said that the
Russian military attache visits the customer and the ROE
in-country service team is responsible for what is going on
with the system. Russia, according to Skobeltsyn, has to
"trust its customers" and cannot blindly make accusations or
insist on inspections. He mentioned that there were
penalties for unsanctioned re-exports, but that Russia "never
thinks about ending the dialogue" with a country even if
there are problems with a contract.

10. (C) Skobeltsyn said that MANPADS and ATGMs represent a
special category of weapons to Russia. Moscow is in the
process of developing a mechanism to control such weapons
after delivery. Skobeltsyn said that Russia understood and
shared US concerns about re-transfer vulnerabilities, noting
that Latin America and Middle East were especially sensitive
areas. But, he argued, if Russia did not provide these
weapons to certain countries, than "someone else" would, and
these other suppliers might not have the same concerns and
the same after-delivery controls.

11. (C) Skobeltsyn said that he was not particularly
concerned about the financial crisis because Russia had
enough arms orders to last it at least two years. He also
encouraged further communication between the US government
and the Russian government on these issues saying, "we should
talk face-to-face more."