April 8, 2018 / 10:55 AM / 3 months ago

France, Saudi Arabia agree new defense contracts strategy

PARIS (Reuters) - France and Saudi Arabia have agreed a new intergovernmental accord to conclude weapons deals, a French defense ministry official said on Sunday. 

The agreement replaces a process that had been criticized by Saudi Crown Prince Mohammed bin Salman, who is also the country’s defense minister. Sources said the prince, who is known as MBS, wanted to make a break from past processes.

He arrived in Paris on Sunday for a three-day visit.

“In conjunction with the Saudi authorities, France has initiated a new arms export strategy with Saudi Arabia, which until now has been managed by ODAS,” the official said, referring to the organization that currently handles French defense interests in Saudi Arabia.

“It will now be covered by an intergovernmental agreement between the two countries. The ODAS company will only provide for the termination of existing contracts.”

The official did not elaborate. 

France, the world’s third-biggest arms exporter, counts Saudi Arabia among its biggest purchasers, and defense firms including Dassault and Thales have major contracts there.

In recent years, Riyadh has bought French tanks, armored vehicles, munitions and artillery and navy ships.

In 2016, licenses potentially worth 18 billion euros ($22.11 billion) to Saudi were approved, with deliveries worth about 2 billion euros.

The crown prince’s visit comes amid growing pressure on Macron at home from lawmakers and rights groups over France’s weapons sales to the Saudi-led coalition fighting Iran-backed Houthi rebels in Yemen.

A private letter sent to Macron from 12 international non-governmental organizations last week urged him to pressure MBS to ease a blockade on Yemeni ports and suspend French arms sales.

French daily newspaper Les Echos on Friday said a deal could be signed for navy patrol boats from CMN, while Le Telegramme reported a possible deal for Caesar artillery canons from Nexter.

Neither company responded to requests for comment, and the French presidency has played down possible contracts. 

A Saudi official said Riyadh would continue to buy military equipment despite public criticism, especially for its navy. 

Reporting by John Irish and Sophie Louet, Editing by Sarah White

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