Israel's Unauthorized Retransfer of U.S. Technology Exposed

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Israel's Unauthorized Retransfer of U.S. Technology Exposed

By Shawn L. Twing

Although allegations have been made on numerous occasions linking Israel to the illegal re-export of U.S.-origin defense and dual-use technology, there never has been an independently prepared, comprehensive and systematic analysis of the phenomenon available to the general public--until now.

"Israel's Unauthorized Arms Transfers," by Duncan Clarke, appearing in the summer issue of Foreign Policy quarterly, demonstrates beyond a reasonable doubt that some American defense technology received by Israel has been retransferred to other countries, some of which are potentially hostile to the United States, in direct contravention of U.S. law. Clarke, a professor of international relations at American University in Washington, DC, maintains that these retransfers "have threatened American commercial interests, compromised intelligence, upset regional stability, strained diplomatic relations, and confirmed the U.S. national security bureaucracy's long-standing distrust of Israeli technology transfer practices."

In order to understand the magnitude of Israel's retransfer of U.S. technology, it is important to consider four factors. First, Israel receives the largest sum of annual U.S. security assistance, $1.8 billion per year, and has access to much of the most sensitive U.S. technology. Second, Israeli defense firms which, according to Clarke, often re-export with the Israeli government's approval, retransfer U.S. technology to countries to which the United States will not sell (e.g., pre-Mandela South Africa) or who are potential adversaries of the United States (e.g., China). Third, Israel's defense industry produces nearly identical versions of U.S.-origin equipment which it then sells on the world market in direct competition with U.S. defense firms. Finally, the complaints made by U.S. officials responsible for safeguarding America's technological secrets fall on deaf ears in Congress, where domestic political maneuvering takes precedence over protecting American national security and commercial interests.

Israel's annual security assistance budget from the United States helps subsidize the Israeli defense industry, making it heavily dependent on the U.S. for its economic survival. The 1995 Foreign Assistance Act, for example, stipulates that Israel receive no less than $625 million in U.S. taxpayer grant money in 1995 to research, develop and procure "advanced weapons systems" and "defense articles" in the United States and in Israel. This subsidy, combined with Israel's willingness to re-export U.S. defense technology, gives Israeli defense companies a substantial edge over potential competitors, including defense companies in the United States. By heavily subsidizing the research side of the development process, providing what are effectively working prototypes from which the Israeli firms can build, and allowing Israel to retransfer sensitive technology, the United States government has increased Israel's ability to compete in the international market exponentially.

Perhaps the worst aspect of Israel's contravention of U.S. export law involves the end recipients of U.S. technology. South Africa and China, the "principal recipients of unauthorized Israeli re-exports of U.S.-origin defense technology," according to Clarke, have received substantial amounts of sensitive U.S. technology from Israel. South Africa has acquired anti-tank missiles, aircraft engines, armored personnel carriers and recoilless rifles. China has obtained thermal imaging tank sights, air-to-air missile technology, assistance with "new generation" fighter aircraft (based partly on the largely U.S.-funded Israeli Lavi fighter) and even Patriot missile technology. Not only is most of the evidence for these allegations based on information deemed "reliable" by "virtually all policy and intelligence officials who follow technology transfer issues," it was partially substantiated with physical evidence when, ironically, U. …