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Open Access 2022 | Open Access | Buch

NL ARMS Netherlands Annual Review of Military Studies 2021

Compliance and Integrity in International Military Trade

herausgegeben von: Prof. Dr. Robert Beeres, Dr. Robert Bertrand, Prof. Dr. Jeroen Klomp, Dr. Job Timmermans, Dr. Joop Voetelink

Verlag: T.M.C. Asser Press

Buchreihe : NL ARMS

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

Inhaltsverzeichnis

Über dieses Buch

This is open access volume of the NL ARMS offers an interdisciplinary view on the domain of Compliance and Integrity in International Military Trade (CIIMT), integrating defence economics, international law, arms export control frameworks and policies, information management, organizational sciences and ethics. Although, in academia, and from an interdisciplinary perspective, CIIMT constitutes a relatively novel research domain, across private and public defence-related sectors, the subject evokes high levels of attention and interest, instigating a need for critical thinking, reflection and creativity to address ensuing multi-faceted issues and problems.
The Faculty of Military Sciences at the Netherlands Defence Academy extends an in-house MSc programme on CIIMT, which, by integrating practice-based and scientific-based knowledge, aims to contribute to this need. The MSc programme on CIIMT is concerned with exploring, analysing, understanding, explaining, controlling and improving the military dimension in international military trade. More particularly, CIIMT studies managerial questions regarding strategic trade control of military and dual-use goods and services.
CIIMT ties in with the Netherlands Defence Academy’s vision on scientific education, embedded in the reflective practitioners' paradigm uniting both management and leadership skills needed to decide and operate in high-tension and high-risk knowledge intensive environments. The Faculty of Military Sciences uses the reflective practitioners’ paradigm to refer to critical thinking, reflection and Bildung that characterize its thinking doers, the so-called Thinking Soldiers, either at the academic Bachelor’s or Master’s level.
In view of the complexity of the international trade regarding military and dual-use goods and services, the rapid evolvement of strategic trade control and frameworks, and its importance to procurement processes, defence organizations require innovative thinking doers, who, based on an in-depth understanding, from an interdisciplinary perspective can be expected to find - and take responsibility for - creative solutions to problems.
NL ARMS 2021 comprises, amongst others, contributions from students and lecturers partaking in this programme.
All the editors are affiliated with the Faculty of Military Sciences of the Netherlands Defence Academy in Breda, The Netherlands.

Inhaltsverzeichnis

Frontmatter

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Chapter 1. Introduction

Abstract

This year’s volume of the Netherlands Annual Review of Military Studies (NL ARMS) offers an interdisciplinary view on the domain of Compliance and Integrity in International Military Trade (CIIMT), integrating defence economics, international law, arms export control frameworks and policies, information management, organizational sciences and ethics. Although in academia, and from an interdisciplinary perspective, CIIMT constitutes a novel research domain, across private and public defence-related sectors, the subject evokes high levels of attention and interest, instigating a need for critical thinking, reflection and creativity to address ensuing multi-faceted issues and problems. From 2017, the Faculty of Military Sciences (FMS) at the Netherlands Defence Academy (NLDA) has offered an in-house MSc programme on CIIMT, which, by integrating practice-based and scientific-based knowledge, aims to contribute to this need. The NL ARMS 2021 comprises, amongst others, contributions from students and lecturers partaking in this programme.

Robert Beeres, Jeroen Klomp, Job Timmermans, Robert Bertrand, Joop Voetelink

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Chapter 2. Economics of Arms Trade: What Do We Know?

Abstract

Taking an economic perspective, and underpinned by a literature review, this chapter analyses the development of explicit sets of relationships between dependent and independent variables in the international arms trade from 1995 onwards. We distinguish five main categories within the markets of military and dual-use goods and services, comprising weapons of mass destruction, major weapon systems, small arms and light weapons, dual-use goods, and services. Per category, papers are ordered by research type and methodology. Based on our findings thus far, the final section of the chapter offers a research agenda for further studies.

Jan van Lieshout, Robert Beeres

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Chapter 3. Export Control Regimes—Present-Day Challenges and Opportunities

Abstract

The system of export control regimes is an important instrument to prevent the proliferation of both weapons of mass destruction and conventional weapons. However, this system faces several structural and recent challenges. The regimes are informal, and consequently, their measures are non-binding upon states. Second, the regimes consist of a selective group of countries, excluding some dominant arms exporters. New technology is rapidly changing the military field, and it is difficult for the export control regimes to keep up with these developments. Further, most of the regimes were designed when states were the most important international actors while currently legitimate and illegitimate non-state actors play an ever-increasing role for export controls. In addition, it is unclear how the regimes will advance with the multipolar world order of the twenty-first century. All new developments could lead to the proliferation of weapons, making efforts to prevent proliferation more relevant than ever. There are several opportunities to reform and strengthen the export control regimes. Cooperation could help the regimes to remain relevant. The sharing of good practices can help the regimes to find the least disruptive and effective non-proliferation measures. Setting up a paradigm-based regime instead of a weapon-based regime may be more suitable for the future. In addition, a revision of the decision-making process would help the regimes to respond swiftly to developments in the field.

Esmée de Bruin

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Chapter 4. Case: Non-compliance at Fokker Services

Abstract

From late 2005 through to late 2010, Fokker Services BV (FSBV) failed to comply with the economic sanctions the United States (US) Government had established against Iran and Sudan. By scanning the case, violations by FSBV came to light in a structured way, laying bare how FSBV operated to evade export control, breaching sanctions regimes and export control laws. Next, analysis stipulated that the cause and conditions of the violation of the export control regulations were mainly rooted in the tone at the top, the role of (intermediary) management and the absence of a Compliance Program. Subsequently, a short-term and a long-term response were formulated addressing the tone at the top, the development of an Internal Compliance Program, and the application of soft controls to promote an ethical culture.

Ben Klappe, Mark Keunen

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Chapter 5. International Export Control Law—Mapping the Field

Abstract

Traditionally, the control of the export of arms and other military material is a national concern that flows from the principle of state sovereignty. As international public law developed, national rules and regulations were increasingly affected by a growing body of international law. Together, these rules and laws constitute an emerging subdiscipline of law impacting the international trade in military and dual-use goods, technology, and software and can be referred to as export control law. This chapter explores various well-established disciplines of public international law that form the constituent parts of international export control law.

Joop Voetelink

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Chapter 6. Exploring the Multifaceted Relationship of Compliance and Integrity—The Case of the Defence Industry

Abstract

Over the years, compliance has come to be closely associated with integrity. Originally, compliance foremost had been understood as abiding by (financial) law and regulation as a prerequisite to pursuing an organization’s operational goals. In response to societal developments and corruption scandals this perspective gradually has shifted. Despite the increased importance and consecutive academic attention of the seemingly self-evident relationship between compliance and integrity, a dedicated analysis of this relationship is still lacking. Such an analysis not only will increase our theoretical understanding of the underlying concepts and how they evoke each other, but practically its insights may also help to increase the effectiveness of managing compliance and integrity within organizations. This contribution, therefore, conducts a conceptual analysis into the relationship between compliance and integrity. First, the meaning of compliance and integrity as individual concepts is discussed, followed by a comparison of the two concepts. The commonalities and differences that come to the fore then act as a stepping stone to unpack the various ways the concepts of compliance and integrity invoke each other. Based on this discussion a basic analytic framework is drawn up that summarizes the different valuations of the relationship between compliance and integrity. To illustrate their practical relevance, the different valuations depicted by the framework are illustrated with an example drawn from the defence industry. It concludes by discussing the implications of the analysis and suggesting some possible routes for further research.

Job Timmermans

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Chapter 7. Do Sanctions Cause Economic Growth Collapses?

Abstract

This chapter explores whether economic sanctions are able to trigger sudden economic growth collapses. The primarily aim of economic sanctions is to cause a political or behavioural change by imposing serious restrictions on important economic activities undertaken by the target country. In particular, the basic idea is that sanctions cause a large adverse and sudden shock to the target’s economy. It assumes that when this shock is severe enough, the target country is more willing to cooperate. The findings reported in this chapter clearly demonstrate that economic sanctions have a significant positive effect on the likelihood of a growth deceleration in the first three years after the first threat signals or actual imposition. It turns out that not all sanctions are equally successful in creating a sudden economic shock. In particular, trade sanctions, multilateral sanctions, and sanctions aimed at the business sector are the most harmful for the economy of the target country.

Melody Splinter, Jeroen Klomp

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Chapter 8. Datasets for Combat Aircraft

Abstract

As part of an empirical investigation into factors contributing to the world-wide demand and supply of fixed-wing combat aircraft, the authors have conducted a search for data sources providing insight in the characteristics, types and qualities of aircraft designed for combat purposes, the total volume on the market (entries, movements and exits), as well as the financial equivalents of each in a specific period of time. This chapter discusses both the various pathways embarked on to this end, as well as the research results.

Alsu Saitova, Robert Beeres

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Chapter 9. Does Legal Origin Matter for Arms Control Treaty Ratification?

Abstract

This chapter examines whether the legal origin of a country influences the likelihood of ratification of multilateral international treaties concerning arms control. We theorize that ratification of an arms control treaty signals a country’s intention to avoid arms races and wars. We know only little about the variation in the ratification of such agreements. One possible element that may explain this variation is the legal origin or tradition of a country. Since treaties are legally binding agreements between two or more states and/or international governmental organizations, they cannot be adapted to local needs and circumstances. Treaties are therefore generally an uneasy fit with the gradual, organic evolution of law that is essential in the common-law system. By contrast, the civil-law tradition neatly distinguishes between legally binding obligations and non-binding guidelines or directives. Consequently, civil-law countries are expected to be more likely to ratify treaties than common-law countries. The empirical results clearly confirm this expectation. In particular, civil-law countries have ratified about nine percent more treaties than common-law countries.

Jeroen Klomp, Robert Beeres

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Chapter 10. Case: Sharing Parts and Services Among NATO Members

Abstract

NATO’s goals require close cooperation of Member States on operational readiness, interoperability of their systems, material supplies, transfer of technology and joint R&D projects. A common approach on the application and implementation of arms export controls, however, is largely lacking. This chapter questions the absence of application and implementation of arms export controls in the context of the material logistical support and services provided by the NATO Support and Procurement Agency (NSPA). Three root causes of deviant behaviour of the Member States with the arms export controls are identified and analysed: (1) fragmentation of the arms export control laws and regulations; (2) a lack of leadership commitment and organisational culture of compliance; and (3) a combination of external and internal pressures leads to a forced prioritization of operational readiness above compliance. Next, a response is formulated to effectively counter deviant behaviour such as non-compliance with arms export controls by implementing a mixture of soft and hard controls. We advise the NSPA to create a culture of compliance within the NATO Partnership Program’s community based on ethical values and virtues. This requires social consensus, leadership commitment and a common agreement on and formalization of the basic rules of export control.

Semra Türkalp, Bastiaan Dekkers

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Chapter 11. Limits on the Extraterritoriality of United States Export Control and Sanctions Legislation

Abstract

The sovereignty of states is reflected in the notion of jurisdiction, empowering them to enact and enforce laws and regulations, and to adjudicate disputes in court. The jurisdiction of states and the exercise thereof is primarily territorial, limiting the exercise of state authority to their respective national territories except in specific situations. However, in an increasingly globalized and interconnected world, it would be hard to maintain that a state should be denied the right to exercise its sovereign powers beyond national borders when there are reasonable grounds for doing so. Consequently, the exercise of extraterritorial legislative jurisdiction has become more accepted, although it is limited to particular situations and circumstances. These have to do with the exercise of jurisdiction over nationals, vessels and aircraft registered in or pertaining to the legislating state, as well as certain activities aimed at undermining the state’s security or solvency or which constitute crimes under international law. However, in principle it is not allowed to regulate activities of foreign nationals or entities operating wholly outside the legislating state’s territory. One area where this has become increasingly prevalent is through the exercise of export controls over foreign nationals and legal persons. The United States (US) has long been engaged in the exercise of this type of extraterritorial jurisdiction and is, without doubt, the state that is most proactive in doing so. This chapter considers US extraterritorial claims with respect to its export control and sanctions legislation and explores the limits of this practice under public international law.

Joop Voetelink

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Chapter 12. Contract-Boundary-Spanning Governance Initiatives in the International Defense Supply Chain of the F-35 Program

Abstract

International cooperation in the American-led F-35 program inherently triggers national security concerns. Consequently, the multiple exports in the supply chain are subject to intricate licensing and export controls. Drawing on insights from governance and contract theory we introduce a theoretical lens that highlights some important trade compliance challenges in supply chain networks. In this chapter, contract-boundary-spanning governance mechanisms are defined as increasingly sophisticated hard or soft governance mechanisms in the private law sphere that can be deployed by any public or private stakeholder to govern international supply chains. We find contract-boundary-spanning governance initiatives by state and private stakeholders in the defense supply chain of the F-35 program. At the same time, we argue that while serious efforts have been made by various state actors and legislators to reduce the burden in trade compliance requirements in the F-35 program, the industry is still facing a considerable number of compliance challenges. We argue that more contract-boundary-spanning initiatives by the private parties in defense supply chain network are needed if these challenges are to be successfully overcome.

Tom De Schryver, Gert Demmink

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Chapter 13. Effectiveness of Arms Control: The Case of Saudi Arabia

Abstract

Using a four-level dashboard, this chapter offers a quantitative and a qualitative analysis of the effectiveness of an arms embargo against Saudi Arabia. The chapter elaborates on the question as to how political, security and economic motives have impacted the (un)willingness of major arms selling states to join the arms embargo against Saudi Arabia.

Marion Bogers, Robert Beeres, Koen Smetsers

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Chapter 14. Case: Dronebuster; Handling Non-compliance to ITAR

Abstract

This chapter analyses the unauthorized transfer of a Dronebuster for testing in a fictitious European NATO member state (EUMS). As the Dronebuster had been purchased in the US, it remained subject to US export control regulations, and, prior authorization was warranted. As there had been no requests for prior authorization, this transfer is considered non-compliant behaviour. Using the Problem-Oriented Policing framework, we investigate the underlying causes and conditions. We argue that a coordinated operation of a mix of hard- and soft controls is the optimal response to prevent such behaviour.

Wim Nieboer, Dik van Manen

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Chapter 15. Developing an Adequate Internal Compliance Program for the Royal Netherlands Air Force Command

Abstract

This chapter examines how an adequate Internal Compliance Program (ICP) for the Royal Netherlands Airforce (RNLAF) was developed. In order to create an adequate ICP, it is essential to determine which legal and other aspects should be incorporated in the ICP framework. To deduct these relevant aspects of the environment the RNLAF operates in, a Political, Economic, Social, Technological and Legal (PESTL) analysis is used. Furthermore, the different ICP frameworks are compared in order to make a combination of them to create the most adequate ICP for the RNLAF. We conclude that this should be a combination of mainly US ICP Frameworks as of the fact that the RNLAF is mostly US orientated. The COSO model as an internationally widely used best practice framework is the core. The combination of the PESTL analysis, the legal framework and the chosen ICP frameworks together result in an 11 pillars ICP, which we consider is the most adequate ICP for the RNLAF. Leading principle in combining all the aforementioned elements, is that the ICP has to be tailored to its organizations’ characteristics (e.g. nature of items, size of the organization, national, regional and global footprint). We understand that there is no one-size-fits-all approach, but one needs to design an ICP that specifically fits the given organizational structure, its size and daily operations.

Robert Bertrand, Hans van Riet

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Chapter 16. Arms Exports and Export Control of the Dutch Republic 1585–1621

Abstract

The Dutch Republic underwent a process of state formation, accelerated economic growth and military reforms during the Eighty Years War. In particular between 1585 and 1621, Dutch merchant-entrepreneurs built up a burgeoning arms industry and sector of arms exports. These exports required a system of passports, still an under-researched theme in current literature, organized by the States-General and admiralties in order to support exports to neutral and allied states, but to forestall these did not fall into enemy hands. In particular, the system of passports shows how merchants, acting as intermediaries between allies and the States-General and the admiralties, could meet the volatile demand of war materials. As a result, the supply side of the export market was oligopolistic, but the composition of the group of oligopolists varied depending on the region and the prevailing market conditions in question. From this study it can be concluded that the system of export control had only a limited effectiveness regarding the creative arms exports to Spanish Habsburg destinations, due to divergent central and local interests. However, the major part of the Dutch arms exports flowed to allies such as France, Venice, Sweden and the German protestant states. Dutch merchants provided them with batches of strategic materials and total package-deals of armaments for entire army and navy units. From 1621, the States-General supported these transactions by supplying war materials from the state arsenals fostering timely and largescale deliveries, meeting volatile demand conditions.

Michiel de Jong

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Titel: NL ARMS Netherlands Annual Review of Military Studies 2021
herausgegeben von: Prof. Dr. Robert Beeres
Dr. Robert Bertrand
Prof. Dr. Jeroen Klomp
Dr. Job Timmermans
Dr. Joop Voetelink
Verlag: T.M.C. Asser Press
Electronic ISBN: 978-94-6265-471-6
Print ISBN: 978-94-6265-470-9
DOI: https://doi.org/10.1007/978-94-6265-471-6