French-UAE Intel Satellite Deal in Doubt

[HRK]

French-UAE Intel Satellite Deal in Doubt | Defense News | defensenews.com

DUBAI AND PARIS — A United Arab Emirates (UAE) deal to purchase two intelligence satellites from France worth almost 3.4 billion dirhams (US $930 million) is in jeopardy after the discovery of what was described as “security compromising components.”

A high-level UAE source said the two high-resolution Pleiades-type Falcon Eye military observation satellites contained two specific US-supplied components that provide a back door to the highly secure data transmitted to the ground station.

“The discovery was reported to the deputy supreme commander’s office [Sheikh Mohammed Bin Zayed] in September,” the source said. “We have requested the French to change these components and also consulted with the Russian and Chinese firms.”

The source would not elaborate on what role the Russians or Chinese could play in future negotiations.

According to the deal — signed July 22 by Sheikh Mohammed, Crown Prince of Abu Dhabi and deputy supreme commander of the armed forces, and French Defense Minister Jean-Yves Le Drian — delivery was set for 2018, along with a ground station.

The satellites are provided by prime contractor Airbus Defence and Space and payload-maker Thales Alenia Space. Neither company was available for comment.

Twenty engineers will be trained to use the new equipment.

According to the UAE source, the discovery prompted increased talks between the UAE and Russia and a number of high-level delegations have shuttled between Moscow and Abu Dhabi.

“If this issue is not resolved, the UAE is willing to scrap the whole deal,” he added.

The UAE has drawn on Russian technology, with the GLONASS space-based navigation system fitted as a redundancy feature on a Western European weapon system, a French defense expert said.

The competition for the deal has been ongoing for more than a decade, and UAE officials in late 2012 said they had narrowed the Falcon Eye competition from 11 bidders and their backing governments to proposals from US and French teams.

The UAE source said the French team won the bid due to the US State Department’s restrictions on the use of the system, often referred to as “shutter control.”

In Paris, one defense specialist found it intriguing that France had drawn on US technology for the satellites under the Falcon Eye program.

“That is surprising,” the specialist said.

France operates the Pleiades spy satellite in what is viewed as a critical piece of the nation’s sovereignty. Given that core competence, it seemed strange that France would use US technology, although there is an agreement between Paris and Washington over transfer of capabilities, analysts said.

Or, Abu Dhabi’s questioning of the satellite deal could be a way of putting pressure on Paris to get a better offer for the Dassault Aviation Rafale fighter.

“The satellites would be part of a big package deal,” the defense specialist in Paris said. “It’s not surprising. The UAE drives a hard bargain. They’re using it as a lever of power.”

A second defense specialist said it was possible French industry had drawn on the US.

“The payload is complex, not all the technology is French,” the second specialist said.

The French negotiations with the US on the technology for the UAE would have been sensitive. For example, when the US sold spy satellites to Saudi Arabia, Israel wanted to limit the resolution level in the payload, the second specialist said.

For the French satellites sold to the UAE, a very high optical resolution and encrypted code could be used to guide a cruise missile to a target in Iran, the second specialist said.

It is not clear whether the critical components can be replaced, the specialist said.

The way ahead may be to find a formula, a compromise which allows the UAE to say it was firm on technology demands, while accepting US gear on a French system — perhaps through the British, the specialist said.

Generally, Arabian Gulf countries split arms buys to reduce dependence on the US, the specialist said. The UAE flies the Lockheed Martin F-16 and Dassault Mirage 2000-9, while the Saudis operate the Boeing F-15, as well as the Tornado and Typhoon.

But the ultimate guarantor for security in the region is the US, the second specialist said.

Under wide French press coverage of the Falcon Eye deal, La Tribune noted the “colossal work” of the Direction Générale de l’Armament procurement office and help from the French Embassy.

The DGA and the embassy declined comment.

Airbus Defence and Space will build the Astrobus-based platform, while Thales Alenia Space will deliver the payload. The latter is a Franco-Italian joint venture majority-owned by the French partner.

Thales Alenia Space CEO Jean-Louis Galle said the company delivers the “operational intelligence capability,” daily Le Figaro reported in July.

François Auque, head of Space Systems for Airbus Defence and Space, said France has never agreed before the UAE deal to sell such high-resolution optics in a military satellite to a foreign country, Le Figaro reported.

The UAE has previously asked for a high level of technology access. In the 1990s, when Abu Dhabi bought the F-16 E/F Block 60, authorities asked for the source code as the UAE co-developed and co-owned the Desert Falcon fighter. The UAE invested a reported $3 billion in the total $7.3 billion acquisition.

 

[HRK]

France Cleared To Sell Falcon Eye Satellite to UAE | Defense News | defensenews.com

PARIS — The White House has swept aside attempts by Lockheed Martin to overturn a French sale of military spy satellites to the United Arab Emirates, a senior French defense official said.

President François Hollande met President Barack Obama Feb. 10 on a three-day state visit, and the two leaders agreed that France would go ahead with the Falcon Eye satellite sale to the UAE, worth almost US $930 million, the source said.

“Lockheed Martin has put pressure” on the administration to cancel the deal, the senior French defense official said, adding, “there has been a political solution ... at the highest level.”

The UAE had chosen Lockheed’s Digital Globe satellite, but later opted for the Falcon Eye. However, the French needed US approval to sell the satellite because it contains US-made components.

Deepening political ties between Paris and Washington are believed to be the reason the US is allowing the French deal to go forward.

French media have widely reported US industry lobbied the government to slow down the contract for the satellite program, as the European manufacturers needed clearances for American components under the US international traffic in arms regulation.

A holdup under the rules threatened a completion of the contract due at the end of January, putting the deal under pressure, the reports said.

Now that there is political support, there is no contract renegotiation and no plan to change components, the official said.

“We are not going to renegotiate. It’s not a technical problem,” the official said.

No comment was available from the Elysée president’s office. The White House also declined to comment, and directed questions to the State Department. A State Department spokesman declined to comment.

Under the contract, signed July 22, the satellites will be built by prime contractor Airbus Defence & Space and payload-maker Thales Alenia Space.

After the UAE chose Lockheed’s satellite, intensive efforts by Defense Minister Jean-Yves Le Drian with Sheikh Mohammed Bin Zayed won over the support of the deputy supreme commander, business website La Tribune reported.

Le Drian also urged Thales Alenia Space and the rival Airbus unit to field a joint offer, rather than pitch separate and competing products, the report said.

The two companies teamed up and pitched two satellites and a ground station based on the Pleiades system developed for the French military.

Thales CEO Jean-Bernard Levy declined to comment on the satellite deal due to client confidentiality rules in the contract signed in July. No comment was available from the Airbus space division.

According to Space News, Francois Auque, head of Airbus Defence & Space’s Space Systems division, discussed the issue during a Feb. 13 event here. He credited Le Drian with swaying the UAE.

The newspaper reported that Auque and Jean-Loic Galle, chief executive of Thales Alenia Space, disagreed on how the final export approval was obtained.

“There was a lot of bureaucracy and lots of paper, but at the end of the day, it was pretty much business as usual and followed the normal process,” Auque said, according to the paper.

A Lockheed spokeswoman also declined to comment, saying, “This is a matter involving the Falcon Eye program contractors.”

It comes as no surprise a US company lobbied the US government to get help in winning an export contract, a stock market analyst said.

“This type of reaction — to block a contract — is not unusual,” the analyst said.

A defense sector consultant agreed, and said it reflects a growing US-European competition in critical export markets.

The agreement between the Obama and Hollande teams at the summit signals a political closeness between the two administrations, the consultant said.

That perceived political closeness between the White House and the Elysée palace follows France taking a lead military role in Libya, Mali and the Central African Republic.

Hollande, alone in Europe, also offered to step up last year when it looked like the US would move against Syria, before Washington backed off on taking action.

Those French moves in sub-Saharan Africa, supported in logistics on the ground by American forces, come as the US geopolitical focus moves to the Asia-Pacific region.

“The cooperation between the French and US militaries is probably strongest today than at any point in recent memory. Similarly, the two countries’ top diplomats [Secretary of State John Kerry and French Foreign Minister Laurent Fabius] enjoy warm relations,” the consultant said.

“Hollande’s visit to the US, the first by a French president in nearly two decades, proved that a close working relationship is also possible at the highest political levels.”

Such an agreement sets a positive backdrop to Obama’s first official trip to the European Union this summer, the consultant said.

Obama visited here when he was the junior senator from Illinois on the campaign trail in the 2008 US presidential election, and he was received by then-President Nicolas Sarkozy. On that visit, the presidential candidate told the press the Afghanistan campaign should be the US military’s focus, rather than Iraq.

 

[Yzd Khalifa]

Best of luck for the UAE!

France Cleared To Sell Falcon Eye Satellite to UAE | Defense News | defensenews.com

PARIS — The White House has swept aside attempts by Lockheed Martin to overturn a French sale of military spy satellites to the United Arab Emirates, a senior French defense official said.

President François Hollande met President Barack Obama Feb. 10 on a three-day state visit, and the two leaders agreed that France would go ahead with the Falcon Eye satellite sale to the UAE, worth almost US $930 million, the source said.

“Lockheed Martin has put pressure” on the administration to cancel the deal, the senior French defense official said, adding, “there has been a political solution ... at the highest level.”

The UAE had chosen Lockheed’s Digital Globe satellite, but later opted for the Falcon Eye. However, the French needed US approval to sell the satellite because it contains US-made components.

Deepening political ties between Paris and Washington are believed to be the reason the US is allowing the French deal to go forward.

French media have widely reported US industry lobbied the government to slow down the contract for the satellite program, as the European manufacturers needed clearances for American components under the US international traffic in arms regulation.

A holdup under the rules threatened a completion of the contract due at the end of January, putting the deal under pressure, the reports said.

Now that there is political support, there is no contract renegotiation and no plan to change components, the official said.

“We are not going to renegotiate. It’s not a technical problem,” the official said.

No comment was available from the Elysée president’s office. The White House also declined to comment, and directed questions to the State Department. A State Department spokesman declined to comment.

Under the contract, signed July 22, the satellites will be built by prime contractor Airbus Defence & Space and payload-maker Thales Alenia Space.

After the UAE chose Lockheed’s satellite, intensive efforts by Defense Minister Jean-Yves Le Drian with Sheikh Mohammed Bin Zayed won over the support of the deputy supreme commander, business website La Tribune reported.

Le Drian also urged Thales Alenia Space and the rival Airbus unit to field a joint offer, rather than pitch separate and competing products, the report said.

The two companies teamed up and pitched two satellites and a ground station based on the Pleiades system developed for the French military.

Thales CEO Jean-Bernard Levy declined to comment on the satellite deal due to client confidentiality rules in the contract signed in July. No comment was available from the Airbus space division.

According to Space News, Francois Auque, head of Airbus Defence & Space’s Space Systems division, discussed the issue during a Feb. 13 event here. He credited Le Drian with swaying the UAE.

The newspaper reported that Auque and Jean-Loic Galle, chief executive of Thales Alenia Space, disagreed on how the final export approval was obtained.

“There was a lot of bureaucracy and lots of paper, but at the end of the day, it was pretty much business as usual and followed the normal process,” Auque said, according to the paper.

A Lockheed spokeswoman also declined to comment, saying, “This is a matter involving the Falcon Eye program contractors.”

It comes as no surprise a US company lobbied the US government to get help in winning an export contract, a stock market analyst said.

“This type of reaction — to block a contract — is not unusual,” the analyst said.

A defense sector consultant agreed, and said it reflects a growing US-European competition in critical export markets.

The agreement between the Obama and Hollande teams at the summit signals a political closeness between the two administrations, the consultant said.

That perceived political closeness between the White House and the Elysée palace follows France taking a lead military role in Libya, Mali and the Central African Republic.

Hollande, alone in Europe, also offered to step up last year when it looked like the US would move against Syria, before Washington backed off on taking action.

Those French moves in sub-Saharan Africa, supported in logistics on the ground by American forces, come as the US geopolitical focus moves to the Asia-Pacific region.

“The cooperation between the French and US militaries is probably strongest today than at any point in recent memory. Similarly, the two countries’ top diplomats [Secretary of State John Kerry and French Foreign Minister Laurent Fabius] enjoy warm relations,” the consultant said.

“Hollande’s visit to the US, the first by a French president in nearly two decades, proved that a close working relationship is also possible at the highest political levels.”

Such an agreement sets a positive backdrop to Obama’s first official trip to the European Union this summer, the consultant said.

Obama visited here when he was the junior senator from Illinois on the campaign trail in the 2008 US presidential election, and he was received by then-President Nicolas Sarkozy. On that visit, the presidential candidate told the press the Afghanistan campaign should be the US military’s focus, rather than Iraq.