Irresponsible Weapons Transfers and Future Weapon Systems

Home , Alarm, Black Knight (rocket), Damocles (targeting pod), Hermes (missile), High Explosive Research, Loitering munition

Irresponsible weapons transfers Irresponsible and future weapon systems weapon future and Out of Control: of Out 7 1

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 G 38 AG ThyssenKrupp 37 Group Thales 35 AG Rheinmetall 33 Co Raytheon 31 Corp Grumman Northrop 29 Corp Martin Lockheed 28 SpA Leonardo 27 Corp Dynamics General 25 Co Boeing 23 Systems BAE 21 SE Airbus Profiles Company profiles Country Region: MENA the in Exports Controversial Methodology 10 Banks and Companies Defence of Role The – Weapons Controversial 8 Banks and Companies Defence of Role The – Exports Arms Controversial Summary Executive REUTERS/Khaled Abdullah REUTERS/Khaled 2015. 20, April Sanaa capital Yemen's overlooking mountain a on depot weapons army an on strike air an during rises Smoke Photo: Cover Content 2

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5: Appendix 4: Appendix 3: Appendix 2: Appendix 1: Appendix report the to Appendices Recommendations and Demands → → Managers: Asset 51 compared policies –Defence Banks European Investments Harmful 48 Investment aBad are Weapons Autonomous Why line: Bottom The 42 Yemen in War From (Crimes) Profiting Companies Arms and Banks Hand-in-Hand: 40 Law International of Violations and Palestinians, of Movement of Restriction and Punishment Collective of Support the in Complicit toIsrael: Exporting Companies Arms Features Safely Money Investing 53 War? of Lord or Champion Sustainability Inc: Blackrock onre 75 Countries Region (MENA) Africa North and East Middle for Assessment 73 Towards Watchlist Heading Autonomy? APotential 71 Companies from Divestment Institution Financial 70 Tables Data Financial 61 Company by Table Exports Weapons of

uies 55 Business! –ADeadly 57 Yemeni civilians and prioritize justice and peace or peace and justice Yemeni prioritize and civilians ‘Russia, France and Germany dramatically increased increased dramatically France‘Russia, Germany and António Guterres, United Nations Secretary General Secretary Nations United Guterres, António region, where conflicts and tensions are rife,’ tensions and and conflicts where region, But if you are adapting it to track down a certain acertain down track it to areBut if adapting you weapon out of it, don’t be surprised if we take a look alook take if we of it, out don’tweapon surprised be weapons, which are politically unacceptable and and are politically unacceptable which weapons, morallyrepugnant.” their arms sales to Egypt in the past five years.” past in Egypt the to sales arms their type of individual in a certain environment, and and environment, in acertain of individual type the US, UK, France and other European countries US,the UK, European countries France other and Johan H. Andresen, head of the ethics panel of the the of panel ethics the of head Andresen, H. Johan Pieter D. Wezeman, Senior Researcher with the SIPRI Arms Arms SIPRI the with Researcher Senior D. Wezeman, Pieter Radhya Almutawakel, chairperson of Mwatana for Human Rights Human for Mwatana of chairperson Almutawakel, Radhya human beings. I call upon States to ban these these ban to States upon Icall beings. human Norwegian Government Pension Fund Global Global Fund Pension Government Norwegian emboldening war criminals with impunity.” with war criminals emboldening UAE. the Arabia Saudi and especially These cooperating with others to make an autonomous anautonomous make to others with cooperating continue fuelling the war with weapons and and weapons war with the fuelling continue of side the —take make to achoice have countries coalition, of the members to arms sell to continue at you.”at and Military Expenditure Programme Expenditure Military and Weapons USA, the United from the Kingdom If you think about developing technology technology developing If think about you Imagine the consequences of an autonomous of autonomous an consequences the Imagine the after four years that It shameful is for recognising cancer,for recognising fine. is that system that could, by itself, target and attack itself, by could, attack that and target system escalation of the armed conflict in Yemen, conflict armed of the escalation and Franceand Gulf in are the in high demand 1 4 3

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FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 T The study alsoshows thatallofthedefense companies are The study shows thatarmsare beingexported by global defense Summary 2015 and2018to countries definedascontroversial. (MENA) region.*** Thestudy alsolooksatwhichofthetop ten through thejoint venture MBDA have exported large numbers of the largest (by volume) oftheseexporters are Raytheon, Boeing weapons. Thisincludes–to alesserextent –theproduction ofkey future warfare andare part ofacurrent global high-tech armsrace. at theextent to whichthese11companies are engaged in arms to controversial countries –mostnotably to Saudi Arabia and and Lockheed Martin.Inaddition,Airbus,Leonardo andBAE inpart 9 were unfree regimes, andallexcept high onehadhighorvery to theirrole inthewar inYemen. the UAE –countries notonlyconsidered controversial for arms Egypt (both alsopart oftheSaudi-ledcoalition inYemen). The Executive Executive ofcorruption.levels not available, thisstudy looksatthescale oftheflows between repressive regimes. Whileaccurate values ofthesearmsflows are controversialnew technologies- namelytheemergence ofso- *** ** * Of the25countries intheMENAregion, 16are considered to be showing thattheseweapons are emerging askey technologies of controversial armstrade** largest volume of exports overall hasbeento Saudi Arabia and controversial for armsexports –14ofthesewere inarmedconflict, countries inarmedconflict, unfree countries, andto (highly) companies to controversial countries intheMENAregion- to called Lethal Autonomous Weapon Systems (LAWS). components ofnuclear weapons, butfocuses ontheemergence of increasinglydeveloping autonomous weapon systems (AWS), defense companies are engaged intheproduction ofcontroversial exports dueto beingdefined asunfree countries, but also due have exported to controversial countries intheMENAregion, All of thetop 9(andthetwo German) global defense companies According to data provided by SIPRI EU. military transport systems and other military goods, as referred to by the Common Military List of the Controversial arms trade relates to weapons the supply of (important and weapon parts systems, of) Leonardo, Rheinmetall and ThyssenKrupp. Lockheed Martin, Boeing, Raytheon, BAE Systems, Northrop Grumman, General Dynamics, Airbus, two largest Germandefense companies).* Itspecifically looks funders ofthetop nineglobal defence companies (andthe his study examines whichEuropean banks are thelargest

in theMiddleEastandNorthAfrica

The banks shown inthisreport have each provided finance to at The ten banks**** were selected based ontheamountsoffinance to Egypt andSaudiArabia andisinvolved intheproduction of the companies, totalling €2.6billion.Total investments inall the lowest holdingsinthearmscompanies. ****

countries arms companies. Thetotal finance provided to allthese and investment provided to the11companies. ThoseEuropean and 2018,totalling €2.8billioneuro. Lloyds provided numerous countries products non-state actors; to countries where corruption isrife and;where development risk third withfinancingsof€3.4billionwhichincluded€1.2to policies arms producing andexporting defense companies andthattheir essential thatbanks ensure thatthey investigate thepractices of Deutsche Bankranks second ininvestments withholdingsinallof Lockheed Martin. investments (shareholdings andbondholdings)of€3.2billion. linked finance to the companies, totalling €4.1billion each. TheItalian that provided loan, bondandequityissuances to asmany8ofthe least three ofthecompanies shown here, somebanks have banks withthelargest finance provided were selected. nuclear weapons) totalling €2.4billion.Credit Agricole came in loan andbondissuances to General Dynamics(whichhasexported providedbank, UniCredit, loans andbondissuances to Northrop of Grumman (whichisinvolved innuclear weapons) between 2016 Credit Agricole was thelargest investor inthecompanies with Lloyds BankandUniCredit were thelargest overall providers of companies amountsto roughly €24.2billion. companies by thebanks is€9.9 billion.Lloyds and UniCredit had Where nuclear Credit Suisse, UniCredit. Commerzbank, DeutscheBank, lloyds, Barclays, Credit Agricole, BNP Paribas, BBVA, Banco Santander, of they being to banks prevent these and restrict (i.e. in weapons armed linked invest services of those types poor financing finance conflict, to and in companies of countries) human supplied/sold companies controversy. components. to and companies repressive rights investing that this exporting abuses have exposes In affect regimes, addition, involved in supplied companies the and to banks sustainable controversial violations. fragile in banks the arms to significant that production states, must to It could is ensure and be The companies withthehighestvolume ofexports to controversial the countries involved intheSaudi-ledAlliance, withtheexception the 16controversial countries intheMENAregion andto almostall Lockheed Martinreceived financingfrom Barclays, BNP, Lloyds and Credit Agricole asrecently as2018.Lockheed hasexported to 7of countries are Raytheon, Lockheed Martin,BAE andLeonardo. of Morocco andSudan. Lockheed continues to export signnew ** ** * and exports to controversial countries: 11 selected global arms companies showing controversial weapons production Table: deals withcountries intheSaudiAlliance.

The joint project Eurofighter exported 72 weapon systems in the period 2015–2018. The company MBDA which is a joint venture between Leonardo, Airbus and BAE system exported approx 2,700 weapon systems to controversial countries. the companies are as yet producing such LAWS, however the production of increasing autonomous weapons or weapons with autonomous features are being produced (for more on this see page X). In fully autonomous systems (also known as Lethal Autonomous Weapon Systems or LAWS), the system itself will – without human intervention – be able to choose when, against whom, and how it will use force. None of Northrop Grumman General Dynamics Lockheed Martin ThyssenKrupp Rheinmetall Raytheon Leonardo Boeing Thales Airbus BAE

no. weapon systems (2015–2018) ordered 12,000 54,860 26,180 Approx 1,300 2,900 4,890 630 120 190 90 4

Saudi-Alliance and to controversial in MENAregion Exports to countries Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes and DeutscheBank(predominantly through DeutscheAsset are fragile states, thoseexperiencing ofinstability, highlevels Raytheon totalling approx. €1billion. Management butalsoDeutscheBankAG) have holdingsin BNP,Bank, Credit Agricole andCredit SuisseinNovember 2015. Raytheon received financinginequalparts from BBVA, Deutsche poverty andconflict. Ithasexported to countries where there is Over thetimeperiod,Raytheon hasexported to countries that considered controversial for exports, e.g.theUAE. of armedconflict. Raytheon too continues to export signnew oppression ofpolitical andcivillibertiescountries inthemidst deals withcountries intheSaudi-ledcoalition andcountries Yes Yes Yes No No Yes Yes Yes (nuclear missileupgrades) andautonomous weapon systems (nuclear weapon production) andalsoautonomous weapon systems nuclear weapons andsomeautonomous weapon systems (nuclear (support autonomous weapon systems (heavily involved inkey components) increasingly anddeveloping (nuclear production), investments inautonomous weapon systems (involved in nuclear) andalsoinautonomous weapon systems systems. nuclear autonomous andnoknown highlydeveloped development weapon (production andmaintenance nuclear) andautonomous weapon systems weapon systems (key producer ofnuclear arsenal) limited ofautonomous development (nuclear/autonomous weapons)* of controversial weapons Production/development Yes Yes Yes

components)and for

nuclear weapon limited systems) development prototype of autonomous autonomous 5 Credit Agricole weapon weapon 5 systems systems

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 (in €millions) by bank Equity issuances Loan, bondand (in €millions) by bank and bondholdings Shareholdings 6

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mma r mma r S m S m t t E i A E i A n i n i c c G G s s n n C C o o r r p p 100 million,thesamefor BNP, Crédit Agricole andDeutscheBank. 23 banks participated inaloan to BAE Systems includingBarclays, third-party assets. Bankpoliciesonexports to controversial weapons widerto consider corporate credits, own investments and UniCredit as Jordan. Inaddition,BAE have exported to Iraq andLebanon, Banco Santander in April2018to €2.3billioneuro. Weestimate Barclays share at investments incompanies engaging intrade withcontroversial Lloyds Bank BNP Paribas BBVA Barclays Deutsche Bank many investment products, bothactive and passive. production of“controversial weapons” astheseare thebasis for providers shouldautomatically exclude companies involved inthe banks andasset managers are notsufficientto prevent repression. BAE hasexported missilesto coalition member be strengthened. Allof thebanks inthisreport mustimprove the particular banks needto extend theirpoliciesoncontroversial Arabia andto theUAE andotherSaudi-ledcoalition members such known. BAE hasexported large amountsofweapons to Saudi At thisstage again theHumanRightsviolationsinYemen were well Overall, theresponsible investment policiesandpractices ofthe scope oftheirexisting policiesaswell asenhance theirdefinitionof Commerzbank Credit Suisse Credit Agricole controversial countries for armsexports. Andfinally, global index countries since 2015andupuntilasrecently as2018. countries marked ascontroversial dueto armedconflict andstate countries, inparticular countries inconflict andfragile states, must countries, andthoseproducing controversial weapons. In Total finance provided 4,129.99 1,216.09 2,953.58 3,408.58 2,320.26 1,635.43 4,109.97 1,717.01 1,814.41 906.61 (in €mill)

Total investments 2,615.29 1,081.84 1,634.85 3,165.22 1,066.71 142.81 (in €mill) 97.65 53.42 4.29 9.97

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 T The global armstrade isincreasing steadily witha10%increase the role of Defense Companies Amnesty International’s regional director Heba Morayef Heba director regional International’s Amnesty international community,” international violations on a shocking scale, amid deafening silence from the the from on ashocking scale, amid deafening silence violations and Banks Banks and violence inIraq, Libya, SyriaandYemen continues to displace to life, rightto peaceful assemblyandassociation,rightto free the top 100companies in2017,totalled $398.2billion.Thelargest While Controversial Arms Exports – Controversial Exports Arms against are notusedto perpetuate genocide, harmcivilians,incrimes as schools,hospitals, housing,and water andsanitation. This to countries withexceedingly highlevels of government Failure to manage thetrade andexport ofarmsresponsibly has Human international potential lossoflife. responsibility lead to thedamage anddestructionofcivilianinfrastructure, such millions ofpeopleannually. For thisreason, thereport isfocused responsibility to respect humanrights“exists over andabove regulatory burden andthatweapons companies simplycomply or social andcultural rights,suchastherightto health, water, Germany, andChina. sufficient companies too, bear aresponsibility to ensure thattheirproducts education, adequate food, andadequate housing, expression. Where armsare exported to conflict regions, thesecan exported to repressive regimes thesecan impact onpeople’s right on weapons exports to thisregion. conflict-related deaths have beenintheMENAregion, while compliance exports exporting countries were theUnited States, Russia,France, of armsto theMiddleEastcontinues to increase. Armstraded by over theperiod2013–2017compared with2008–2012andtheflow of conform directly impacts thepopulation’s enjoyment oftheireconomic, devastating impacts onthelives ofcivilians.Where armsare corruption indefense procurement. armed Exports by armscompanies to unfree, authoritarian regimes; to conflict zones; to fragile states; and he widerMiddleEastandNorthAfrica (MENA) region: states Across MENA and 2018 throughout of dissidents thousands peaceful critics have been victims of shameless government government of shameless victims been have critics peaceful humanity, Rights conform 8 to conflict for this. with have defense humanitarian to (UNGPs) It ensure to national enterprises the is or IHL. also 6 other companies primary Since 2000,anestimated 60%oftheworld’s make The that reiterated laws war law” UN weapons should it obligation, and crimes, clear Guiding (Guiding to by regulations”. claim respect that the exports i.e. Principles it the that UNGPs Principle that is the corporate not 7 states conform their standards It their that is 8 on aswell asthe 12). arms therefore have Business “in sole to situations IHL. and the of Arms their not and This documentisfocused onthosecountries intheMENAregion that The obvious impact thatarmstransfers hasonhumanrights, and THE WARINYEMEN with widely seenasundesirable andthere isaseriousriskthatarms their potential associationwithgross humanrightsviolations, taken by theSaudi-ledcoalition inYemen inviolationof inter tance and,according to theUN,15,000peoplekilledorinjured. the bleakest humanitarian situation, malnutrition,cholera, and and international law. Since 2015, research by credible human internationally renowned indices andstandards, asgiven by the Finance provided to armscompanies allows them to outtheir carry methodology inthePAX “Controversial report, ArmsTrade: Acase What banks needto know: MBDA (ajointcompany owned by BAE, Leonardo andAirbus).

Middle Eastiscurrently hosting awar of two of thewealthiest, Nowhere isthedevastating impact of thearmstrade more appar ing Rhein study in Yemen, withanestimated 22millionYemenis inneedof assis states; andto countries withexceedingly ofgovernment highlevels Global defense companies, however, continue to export to countries supply corruption can operations, to weapons new develop andto export to markets. new risk of beinglinked to thesehumanrightsviolations. prevent theseexports hasputbanks andinvestors atextreme human rightsprinciplesandthefailure of defense companies to been gathered linkingUS andUKarmsusedinthedestruction national humanitarian law(IHL).Incertain cases evidence has national andothers have consistently demonstrated actions rights organisations suchasHumanRightsWatch, AmnestyInter but alsofrom thedevastating effects of a war associated with not defend themselves. Notonlyare civilians,manyof whomare of civiliantargets, resulting inciviliancasualties includingchil- children, dying in the midst of combat air strikes fire, and artillery oil-rich countries, victims beingthose whocan withtheprimary - ent thaninthecurrent war inYemen. Thepoorest country inthe Arms exports to theSaudi-ledcoalition are inclear violationof All sidesof theconflict have reportedly violated humanrights dren. Theseincidents can belinked to armscompanies, includ- disease. Thisconflict continues to take aheavy toll oncivilians be unfree, prepared defined in these metall, Raytheon, Lockheed Martin,BAE Systems and in authoritarian defence as cases for controversial the results procurement. Fair regimes; Insurance in increased for arms to The Guide”. conflict exports. export human 9 zones; to rights The these to definition violations. fragile countries - uses - is - ! The UNGPs applyto allbusiness enterprises, includingcommercial violations. to to anycompany orcommercial vehicle from anyothersector that to taking arms are better regulated by states, anditcan beensured that arms to controversial countries isunacceptable – Indeed, insomecases where there isevidence ofarmsbeingused It isclear thatbanks mustputinplace duediligence processes, By investing inweapons companies whichare exporting to in theviolationofIHL,somethesebanks can beseenas fragile states, countries where defence corruption potentially profiting from andfacilitating humanrights violations. repressive regimes orfragile states, to countries where defence means thatbanks mustconsider carefully thebehaviourofarms rights banks mustapplytherequirement by theUNGPs “to respect human process rights particularly for thosecompanies orregions whichposehighhuman bank. may beaclientof, orenter into abusinessrelationship with,a placing themselves atriskofbeingassociated withhumanright products are notexported to controversial countries, banks are Given sure thatthey are notcontributing to humanrightsviolations. spending are atodds,banks andinstitutional investors cannot be corruption isexceedingly high,orwhere poverty andmilitary controversial countries, banks are Until placingthemselves atrisk. companies before providing financingorinvestments. omits to take anyactionto require, encourage orsupporttheclient entity to cause harm,ifitknows orshouldhave known thatthere isa spending are atodds. defense companies are not permittingexports to authoritarian defense companies shouldtrigger anenhanced duediligence banks and other entities in the financial sector, is exceedingly high,or where poverty andmilitary i.e. exports to authoritarian repressive regimes or human rightsriskassociated withaparticularclientorproject , butit all prevent This documentrequests thatbanks adopt the linethatexport of weapons systems actors, industry, 11 the for risks their Theresponsibility to protect humanrightsappliestherefore by all specific or In banks. associated responsibilities businesses equally –both particular mitigate including risks Where these with of “a wherever by it gross bank is to their fuelling seriously, risks.” clear banks human may activities they 12 that conflict, and facilitate i.e. operate”. defense rights to to and arms ensure any abuses a client companies client Equally, dealing companies. 10 that meaning that relationships. posed or their other they with are by apply the not This demandcan clearly beappliedto thecontinued weapon ex THE IMPACT OFWARANDCONFLICT: Syria, Afghanistan andIraq. Since 2013arisingnumberof refugees have arrived inEurope, wars inYemen orSyria. weapons from European states, whilstbeinginvolved inproxy with 3.3MillionYemenis currently beinginternally displaced. war, aggravation of thehumanitarian situation and increase of their homes. tion, butrather increased thelevel of violence andmilitarization Weapon exports to countries involved incivilwars notonly finding asolution. flight needed to be tackled inorder to putalastingend to the Unlike Yemeni civilians,Syriansare ableto fleeacross inter as they have to remain inornearby areas of conflict andare and militarized. Thisconsequently leads to anelongation of and politiciansincreasingly demandedthatthecauses of their Internally Displaced Person (IDP)isthatthelatter hasnot In most cases, theonlydifference between a refugee andan led to theflow of refugees andmusttherefore participate in largely originatingfrom countries intheMENAregion- primarily In Yemen, thiswas mainlyreflected inInternal Displacement, Europe.

in neighboringstates, butroughly 1millionSyriansarrived in in therefugee-producing countries. For instance, asshown inthis REFUGEES ANDINTERNALLY DISPLACED PEOPLES so-called “refugee crisis”. They alsopointed outthatEuropean more often thannot forgotten by theinternational community. results inanincreasing numberof refugees, butfurther report, Saudi-Arabia regularly received andcontinues to receive ports by European countries to states thatare actively involved refugees. national borders andabout5.6millionSyriansare currently countries are partly responsible for thehumanitarian crisesthat ered asrefugees, they mayface thesamedifficultiesandmore, crossed aninternational border. AlthoughIDPs are notconsid- civilian casualties. complicates peace negotiations, astheconflicts get more violent of theYemeni andSyriancivilwar. exported to Saudi-Arabia were therefore usedonthebattlefields opposition forces –financiallyandmilitarily. European weapons of theconflict, constantly worsening thesituation for citizens. As aresult, agrowing numberof civilianswere forced to leave 19 Most of theSyrianrefugee populationsettled 14 Inbothwars, SaudiArabia issupporting 13 Intheyears thatfollowed, citizens 15 Thisdidnotease thesitua-

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FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 K Treaty ontheProhibition ofNuclear Weapons whichprohibits The diagram below shows theillegal andcontroversial weapons. WEAPONS the role of Defense Companies and Banks Banks and these. through theirnormaluse,mayviolatethat, fundamental treaty onnon-proliferation entered into force in1970.However, the suffering ofbothciviliansandcombatants inarmedconflict. Controversial Weapons – Weapons Controversial and restriction ofcertain typesofweapons isanattempt to limit incidental lossofcivilianlife excessive inrelation to theanticipated advantagemilitary gained shouldnotbeproduced. Theprohibition humanitarian principles.Nuclear weapons are includedamong banks shouldnotbeinvested incompanies thatproduce weapons humanitarian lawhasnotyet entered into force, althoughthe nuclear weapons andconsiders themillegal underinternational All theweapons listed inthediagram below are considered to be Illegal andControversial Weapons controversial. Nuclear weapons are notlabelledasillegal asthe distinction between combatants andciviliansthatcan cause andused,amongstothers.developed Weapons that don’tallow for ILLEGAL the concepts of“proportionality” and“distinction”. These concepts regulate andlimitthetypeofweapons thatcan be ey components ininternational andhumanitarian laware 10

Depleted uranium ammunition Non-detectable fragments Blinding laserweapons Incendiary weapons Anti-personel mines Biological weapons Chemical weapons Cluster munitions Nuclear weapons WEAPONS CONVENTIONAL DESTRUCTION OF MASS WEAPONS

“distinction” ininternational humanitarian law(IHL).According to There are seriousconcerns over whether theseweapon systems The rapid technological towards development LAWS remains This report shows someexamples by ofdevelopments thetop ten years rather thandecades from now, andisstrongly opposedby (CCW) “Itisnotmachinesthat‘apply’ or‘respect’ thelaw, itis (LAWS). Thisrelates to theincreasing ofautonomy levels of targets withoutanymeaningful humancontrol could bereality in where robotic weapons are ableto selectandattack individual today, could bemore accurately definedashighlyautomated where Autonomous Weapon Systems (AWS) donothave weapons systems andtheassociated reduction inhuman these weapon systems. Theprogress ofthesesystems with the more advanced ofthesesystems are often prototypes, it to ensure respect for IHL.” When considering thelawsofdistinction,proportionality, and an International Committee ontheRed Cross (ICRC)assessment, artificial intelligence, willbeableto operate withoutmeaningful able to choosewhen,against whom,andhow itwilluseforce. roboticsand even companies. and attack, they shouldbeconsidered to beinviolationofIHL. Lethal Autonomous Weapons, once activated, usingsensors and/or involvement inthedecisionto useforce. Infully autonomous increasing autonomy is therefore starting to place the development global armscompanies inthefieldofautonomous weapons. While human control over thecritical functions. law”. humans whoare responsible andaccountable for respecting the highlighted attheConvention onCertain Conventional Weapons many countries aswell asscientists,religious leaders, civilsociety, meaningful humancontrol over theircritical functions ofselection highlights thatthesophisticated technology isalready available for A potential additionto thecategory ofcontroversial weapons isthe precautions inattack thatoverall “itseemsevident humancontrol systems, butwith increasingly autonomous functions. Afuture systems, thesystem –be itselfwill–without humanintervention could meet ever theexisting concepts of“proportionality” and of normsoutsidearegulatory control system. currently unregulated. Weapon systems whichhave beendeployed over theselectionandattack oftargets willcontinue to berequired ofsocalleddevelopment Lethal Autonomous Weapon Systems 21 20 InNovember 2018,theICRC 22 The UNGuidingPrinciplesonBusinessandHumanRights(UNGPs) The reputational riskbanks face wheninvesting incontroversial violate theprinciples ofIHLinterms ofproportionality and the production andtesting ofLAWS would constitute apotential targets withoutmeaningful humancontrol over individualattacks, weapons systems thatare widelyopposedfor theirimmoral and the production ofnuclear weapons ortheircomponents andare that manyoftheten largest global companies are stillinvolved in these typesofweapons whichcause suchwide-scale and to 88in2018. adverse humanrightsimpact. are clear thatthecommitment to respect humanrights“exists also clear thattheuseoflethal autonomous weapons would also illustrates clearly whichfinancialinstitutions continue to WHAT BANKS NEEDTO KNOW: independently ofStates’ abilitiesand/or willingnessto fulfil their is unacceptable. Banks andinvestors have onthewholebeenaware ofcompanies institutional investors thatillegal andcontroversial weapons have investments inproducers. Thereport “Don’tBankontheBomb” indiscriminate harm, as well astheregulatory issueshasreduced investing inproducers ofcluster munitions,falling from 166in2017 international law, and manyhave criteria developed for excluding potential aswell asactual humanrightsimpacts. Itispossiblethat laws andregulations protecting humanrights.” The UNGPs make production and testing ofLAWS, whichcan selectandengage many countries andcivilsociety to anduse.Itis theirdevelopment have notyet beenbanned, thatthere itisevident isoppositionby no place ininvestment portfolios. Thisdocumentshows however, banks lagging,there hasbeenawideacceptance by banks and profit from theproduction ofnuclear weapons. Despite some has resulted intheoverall numberoffinancialinstitutions producers oftheseweapons. Theglobal ban oncluster munitions

still receiving finance andinvestment from large European banks. clear thatbusiness’ humanrightsduediligence shouldassess obligations. Anditexists over andabove compliance withnational own human rightsobligations, anddoes not diminishthose distinction. Itisfor thesereasons thatthedevelopment, destructive results, are clear. Whileautonomous weapon systems developing controversialdeveloping weapons orthoseillegal under 23 Thereputational riskassociated withfinancing 24

! “Heading towards autonomy? Apotential watchlist.” Technological ofautonomous development weapons israpid, and This means thatbanks have theobligation to undertake due violations. Inrelation to autonomous weapon systems, banks can which can selectandengage targets without weapons systems. Anintroductory listisprovided intheappendix: and shouldmonitor ofthesesystems. thedevelopment autonomous weapon to systems. bringthis Thisdocumentserves testing of lethal autonomous weapons systems, issue to theattention ofbanks, to encourage engagement with

clients whomaybeinvolved ofautonomous inthedevelopment companies thatare moving swiftlytowards of thedevelopment could beareputational concern for banks to belinked with opposition isstrong –for thisreason, investments inproducers diligence to ensure thatthey are notassociated withhumanrights meaningful humancontrol over individualattacks, is unacceptable.” This documentrequests thatbanks adoptthe line thatthe“Development,production and 11

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 T The definitionofthecontroversial armstrade isgiven inthisstudy, The report covers exports by theaforementioned companies to → → → → → → weapons andweaponthe supplyof(important systems, parts of) as inthe2015report by PAX. active inthewar inYemen. Thereport alsolooksattheeleven included. COMPANY SELECTION: Methodology Autonomous Weapon Systems. munitions, aswell asemerging technologies inthefieldof by ListoftheEU, theCommonMilitary to: transportmilitary systems goods, andothermilitary asreferred to DEFINITION OFCONTROVERSIAL ARMSTRADE: Africa (MENA)region, aswell asexports to theSaudi-ledalliance Additionally, thetwo largest Germandefense companies were

controversial weapons systems –nuclear weapons andcluster companies andtheirinvolvement intheproduction of countries definedascontroversial intheMiddleEastandNorth government budget onweapons.” poor countries spendingadisproportionate share oftheir countries considered afragile state; and countries withahighriskofcorruption procurement; inmilitary countries involved ina(civil)war; unfree countries; countries underanUN/EUarmsembargo; The ninelargest defense companies globally were selected. service100 arms-producing andmilitary companies 2017. he defense companies were selected based ontheSIPRITop 12 27 28 “Controversial armstrade relates to 25

There isalsoan overlap between someofthecountries inthe The export data covers thetimeperiod2015–2018.Thedata is The following countries intheMENAregion have notbeen Saudi Arabia, Somalia,Sudan,SouthSyria,United Arab Saudi-led coalition, whichare themselves considered to be the overarching definitionofcontroversial armstrade. those sectors producing civilianaircraft for example. However, financing provided aswell asinvestments are more often thannot funding thepart ofthebusinessproducing weapons, butonly available. Thismeans thatbanks willoften claim thatthey are not and notinto specificbusinesssectors, asthisinformation isnot and onlineresearch was undertaken to allocate weapon systems to used to fund theentirety oftheorganisation. It isimportant to note inrelation to the armscompanies thatsome Institute (SIPRI)armstransfer database andwas extracted on14 Emirates (UAE), Turkey, Yemen. Based ontheabove definitionofcontroversial armstrade, the Bahrain, Jordan, Egypt, Kuwait, Morocco, Sudan, UAE. However, for thefinancingofthesecompanies itispossibleto look November 2018,updated data was thenextracted from thetransfer following countries intheMENAregion have beenincluded: Azerbaijan, Bahrain, Iran, Egypt, Iraq, Lebanon, Libya, Mauritania, EXPORT DATA:

Oman, Qatar, Kuwait. In addition,exports to those countries involved intheSaudi- controversial for armstrade based onthecriteria given above and led coalition inYemen have beenincluded:SaudiArabia, only atfinancingandinvestments intheoverarching companies of thecompanies, suchasBoeing,AirbusandThyssenKrupp have companies. company producing theweapon isnotprovided inthedatabase extracted from theStockholm International Peace Research diversified businesssegments andare notonlyproducing arms. database on12March 2019andaddedto theexport tables. The included: Algeria, Armenia,Djibouti,Israel, Jordan, Morocco, “distinction” ininternational humanitarian law(IHL).According to There are seriousconcerns over whether theseweapon systems The rapid technological towards development LAWS remains States. Fully autonomous weapons are different thanfor example (LAWS). Thisrelates to theincreasing ofautonomy levels of targets. Afully autonomous weapon would beprogrammed sothat weapons systems andtheassociated reduction inhuman where Autonomous Weapon Systems (AWS) donothave weapon systems. Theprogress ofthesesystems withincreasing that thesophisticated technology isalready available for these today, could bemore accurately definedashighlyautomated armed drones. Drones, or“uncrewed aerialvehicles” (UAVs), are autonomous weapon systems have beendeployed orare being artificial intelligence andwillbeableto operate without algorithms anddata analysisprogramming usingsensors and/or an International Committee ontheRed Cross (ICRC)assessment, autonomy istherefore starting to place ofnorms thedevelopment and attack, they shouldbeconsidered to beinviolationofIHL. Republic ofKorea, Russia,theUnited Kingdom, andtheUnited involvement inthedecisionto useforce. More than380partly remote control, selecttargets, andchoosewhento fire uponthose remotely piloted by humans.Humanoperators flythedrones by meaningful humancontrol over thecritical functions. DEFINITION OFAUTONOMOUS WEAPONSYSTEMS: A potential additionto thecategory ofcontroversial weapons isthe meaningful humancontrol over theircritical functions ofselection more advanced ofthesesystems are often prototypes, ithighlights select andfire upontargets allonitsown, based uponits once itisdeployed, itoperates onitsown. shows someexamples by ofdevelopments thetop ten global arms systems, butwithincreasingly autonomous functions. Thisreport could meet ever theexisting concepts of“proportionality” and outside ofaregulatory control system. companies inthefieldof(semi-)autonomous weapons. Whilethe currently unregulated. Weapon systems whichhave beendeployed inatleastdeveloped 12countries, includingChina,France, Israel, ofsocalleddevelopment Lethal Autonomous Weapon Systems 30 29 Itwould beableto This doesnotincludeallfinancialdata, onlythat whichthe The financialdata isextracted from theThomsonEikon database. This ledto theselection ofthefollowing banks: January was alsoextracted for shareholdings andbondholdingsonthe15 SELECTION OFBANKS: amount was by divided evenly thenumberofbanks. Often and investment provided. as well astheonlySwissbank andItalian bank. underwritings ofshares andbondswereunderwritings alsobased onsimilar for 2019.Data theperiodNovemberunderwritings 2015to January In selectingthebanks for thestudy, thefinancialdata for loans, breakdown ofeach bank’s contribution was notprovided, the Data was extracted for loans, bondissuances andequity BNP Paribas, BBVA, Banco Santander, Credit Suisse,UniCredit. Commerzbank, Lloyds,Deutsche Bank, Barclays, Credit Agricole, led to alistof13banks. Thislistwas further reduced to include provided finance to more thanonecompany were selected. This period 2015–2019was assessed.TheEuropean banks thathad to thedefensebond andequityunderwritings companies for the FINANCIAL DATA: estimations dueto alack ofdetailed data. only: thetop two banks from Germany, theUK,Spain, andFrance, database holds,however, itprovides anindication ofthefinancing 2019. Where a syndicate of banks provided financing, 13 but a

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 The easiest way for companies to obtain capital isto borrow money. Selling shares andbonds to private andinstitutional investors is to market demands. there are sufficientbuyers for thoseshares andbondsthatthe these corporate loans are usuallydeclared for ‘general corporate What typeof finance is covered andwhy? Where loans are provided, allloans allocated asgeneral corporate form ofcorporate loans orproject financings.Theproceeds of another important way for companies to increase theirequityor UNDERWRITING OFSHARESANDBONDS(ISSUANCES): In mostcases, money isborrowed from commercial banks inthe Financial institutions (FIs)initiallytake over (allor)part ofthe investors, thusactingasintermediaries. After thesuccessful DIRECT FINANCE(CORPORATE LOANS ANDPROJECT FINANCE): number ofthatparticular share orbondinorder to beableto react makers keep themtradable. Thisrequires themto always holda placement oftheshares orbondsonthemarket, theFIsasmarket issuedsharesnewly orbondsto sellthemto otherinterested loan capital. By services, banks offering underwriting ensure that purposes’ andcan therefore beusedfor allactivitiesofthe report are excluded. Thishasbeenappliedwhere information and not relate to theactivityofcompany beinginvestigated inthis loans have beenreviewed andinvestigated. Thoseloans thatdo purpose thatare linked to thecompany are included.Allother segments. companies receive thebestpossiblereturn oninvestment. company, thusalsoincludingpotentially contentious business detail isprovided onthedestinationofallocated funds. 14 The bank assessmenthasbeenundertaken policy withthehelpof (can) have asignificant influence oncompanies aslarge-scale were alsoshown theirresults andasked for comments andfurther the availability ofcapital for thecompanies by keeping theirshares the methodology* from theFair Finance Guide.Someofthebanks While FIsemphasisethatitisimportant to differentiate between When referring inthisdocumentto financingswe mean loans, and bondsliquidonthefinancialmarkets, hence makingthem are acquired onbehalfofclients,they donotprovide detailed information. Finance usingthemethodology oftheFair Finance Guide.Banks Brazil. TheUK,Italy andSwitzerland were assessedby Facing France, aswell asSantander covered by theFair Finance Guide Paribas andCredit Agricole covered by theFair Finance Guide investments, (i.e. through clientfees). Furthermore, they facilitate investments ifthey alongsidetheirclients,even donotown the investments they make withtheirown capital versus holdingsthat in thisstudy are rated and ranked by theFair Finance Guideintheir investment we mean shareholdings andbondholdings. IMPORTANT NOTE: more attractive to potential investors. Even more importantly, FIs businesses andoperations. FIsbenefit from Nevertheless, these numbers regarding thesetransactions, makingitdifficultto respective country. TheseincludeDeutscheBankand MANAGEMENT OFSHARESANDBONDS(HOLDINGS): responsible investors. bond issuances Whenreferring andequityunderwritings. to * Commerzbank covered by theFair Finance GuideGermany, BNP shareholders, granting themtherightto vote andactassocially ASSESSMENT OFBANKS: determine theirexact offinancialbenefitfrom level harmful edited-181212.pdf www.fairfinanceguide.de/media/494821/ffgi-policy-assessment-2018-methodology-180308- Methodology for the Fair Finance Guide is available on the Fair Finance Guide.de Media tab: https:// © US Army via Flickr CC-BY-2.0 Flickr via Army © US from a Howitzer. M109A6, medium self-propelled fired round (HE) explosive high a 155mm, from A blast

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Countries for for Countries Controversial Countries for for Countries Controversial MENA MENA region MENA rs Exports Arms rs Exports Arms 16

Fragile state Fragile Armed conflict embargo arms &UN /EU EU Corruption regime Unfree authoritarian Northrop Grumman Lockheed Martin General DynamicLandSystems Thyssenkrupp Leonardo SpA Raytheon TURKEY Boeing Thales Airbus Lockheed Martin ThyssenKrupp Leonardo SpA Rheinmetall Raytheon EGYPT Boeing Thales Airbus MBDA region Lockheed Martin BAE Systems LEBANON Raytheon Boeing MBDA General Dynamics Lockheed Martin SAUDI ARABIA Leonardo SpA BAE Systems • • • Rheinmetall

Raytheon Controversial for arms and evidence of exports by companies exports of evidence and arms for Controversial exports of evidence no exports arms for Controversial exports arms for controversial Not Boeing Thales Airbus MBDA Raytheon Northrop Grumman Lockheed Martin BAE Systems MBDA IRAQ Raytheon Northrop Grumman Lockheed Martin BAE Systems BAHRAIN : :

Thales Raytheon MDBA Lockheed Martin Leonardo SpA General Dynamics Boeing BAE Systems Airbus UAE Azerbaijan Egypt Iraq Azerbaijan has been included as a Egypt is considered to be in armed conflict Prior to 2004 there was an arms embargo controversial country for arms export due and an EU arms embargo has been in on Iraq. But since the formation of the to its classification as an unfree country place since August 2013. This arms government, both the UN and EU arms with high levels of corruption in the embargo includes “any equipment which and other embargoes were partially lifted defense sector. Azerbaijan’s authoritarian might be used for internal repression”. In and allow the sale, supply, transfer or government has ruled since 2003, there is contrast to general arms embargoes, this export of arms and related material only rampant corruption and due to arms embargo is not legally binding and to the Government of Iraq. Restrictions persecution, there is limited formal the frame has become unclear.33 The remain in force on non-government forces. opposition, in recent years there has been Egyptian government is also considered to According to Freedom House, democratic an extensive crackdown on civil liberties be in armed conflict, predominantly due governance is impeded in practice by and independent expression or activism is to the fight against the Islamic State (IS), corruption and security threats, including severely repressed.31 which takes place mostly in the Sinai militant groups such as the IS. The country Peninsula.34 There have been reports of is noted as being in conflict in 2017. While Rated as “not free” by Freedom House and human rights violations committed by the terrorist attacks reportedly declined, IS scoring a freedom rating 6.5/7, political Egyptian military in North Sinai.35 maintained enough of a presence to carry right 7/7 and civil liberties 6/7. Aggregated out several large-scale bombings in Iraqi score: 12/100. Egypt is ranked as having the highest risk cities outside the main conflict zones. Iraq in relation to government corruption in is also experiencing high levels of the defence sector. instability, poverty and conflict, and is Bahrain therefore still considered to be a fragile Bahrain in this report is considered as state with high unrest and turmoil. being in armed conflict. Bahrain is Iran considered one of the Middle East’s most A UN arms embargo was put in place repressive states with the monarchy against Iran in 2007 to prevent the Lebanon systematically dismantling opposition and development of technology related to The UN arms embargo was established in cracking down on dissenters. The Bahraini nuclear weapons and was extended in 2006 to help the Lebanese government government continues to respond to 2010 to cover the export of most major exercise full sovereignty over all Lebanese political opposition in a repressive and conventional weapons.* This embargo territory. The arms embargo is on non- violent fashion, including in Bahraini remains in place, however in 2015 it was governmental forces, thus the embargo security forces’ 26 January 2017 use of live amended to allow certain exports with does not apply to the Government of ammunition in an attack on protesters in express permission from the UN Security Lebanon, but it does apply to all arms Diraz.32 In addition, the country also falls Council.36 The EU arms embargo relates transfers to Lebanon not authorized by the in the highest risk category for corruption also to the concern around the Government or the United Nations Interim in defence spending, particularly in development of nuclear weapons, but Force In Lebanon.39 The conflict over procurement. In addition, the country also additionally to concerns about the human government in Lebanon flared up again in falls in the highest risk category for rights situation and that equipment may 2014, in part due to conflicts with IS.40 In corruption in defence spending. be used for internal repression.37 The EU addition, defence corruption in Lebanon is imposed a full arms embargo on Iran since high and of concern. Rated as “not free” with a score in 2007. The Iranian government is also freedom rating 6.5/7, political right 7/7, considered to be in armed conflict, civil liberties 6/7. Total score 12/100. predominantly with the IS, but also with assorted groups attempting to overthrow the current government and conflict in relation to the interests around Kurdistan.38

* battle tanks, armoured combat vehicles, large calibre artillery, combat aircraft, attack helicopters, warships, certain missiles and missile launchers.

17 7 | 2019 PROFITSFINANCE | DIRTYFACING FACING FINANCE | DIRTY PROFITS 7 | 2019 The aggregated score is9/100with The UNestablished anembargo including Sanctions Committee. However, control September 2011,suppliesto thenew September 2011, after they took control, the supply of arms and military equipment the supplyofarmsandmilitary will ultimately fall. Theembargo was Libyanthe new government. the Libyan oppositionforces were freedom rating 6.5/7,political rights7/7 from andto Libya 2011.In inFebruary again in2017. and 2015,thisconflict became active an electionin2014,two forces claimed armed groups roaming across theregion. and thehumanrightsconditions and extremist groups, violence increased and civilliberties6/7. arms inLibya isweak, there isno accepted by theUNGeneral Assemblyas Mauritania isconsidered acountry in Libyan NationalTransition Council(NTC) instability atMauritania’s eastern and Mali. government situation andothercriminal guarantee into whosehandsthesearms power resulting inarmedviolence in2014 neighbouring Mali,whichgenerates hundreds ofthousands ofpeople. have been allowed, ifapproved by the Attacks against the UNmissioninMaliare human rights,includingrepression of southern borders, includingthethreat of Libya Mauritania conflict dueto concern around thewar in over thetransportation andstockpiling of on theriseandviolence ismoving southof established dueto systematic violationof decreased. Italsoledto displacement of demonstrators by thegovernment. In 44

18 42 Dueto theproblematic 41 Following 43

There iscurrently aUNarmsembargo in 7/7, civilliberties 7/7. 7/7, political rights7/7, civilliberties7/7. 2007 to allow armssuppliesto theSomali Somalia hasanaggregated score of7/100 Saudi Arabia isconsidered to beacountry Saudi Arabia isalsoconsidered anunfree Saudi with freedom rating 7/7,political rights war towards almost allpolitical andcivillibertiesare Saudi Arabia Somalia In addition,SaudiArabia hasanextremely is alsoconsidered to beinarmedconflict internationally supported national in three parts, oneledby an in in groups, suchasAl-Shabaab. government, theotherby theShabaab government forces only. rated ashavingahighriskofcorruption in militant group andthethird by a place inSomalia.Thiswas changed in high riskofgovernment corruption inthe national level arenational level elected, there is restricted backed by theSaudiledcoalition, Aggregated score: 7/100,freedom rating separatist government. Nodirect national Government country isnoted asunfree. elections have beenheldto date andthe embargo country, low freedom ratings withvery and civilian conflict continued over government between the due to thestrugglewithvaried insurgent defence procurement. Somaliaisdivided defense discrimination inbothlawandpractice the conflict in feature Arabia Yemen. population has sector. women is and in unabated supported taken relation of in article IS controlled. 2015 Yemen and also an in in and religious in to enormous carried Yemen. by and this 2016 its 47 2016. the Thisarms No key 50 forces document). 49 and out 45 officials EU. Itisalso minorities. role

The (See toll 48 attacks 2017. of Somalia in conflict on more Hadi, the at the This a in 46

The aggregated score for Sudanis8/100 The Sudanisconsidered anunfree 7/7, andcivilliberties7/7.SouthSudan Yemen, andconflict against rebel Sudan. Sudanese government intheDarfur region three categories in7. with freedom rating 7/7,political rights with otherstates, suchasUganda and the independence ofSouthSudan,anew to violentcrimes against civilians, the government divideditself. Thiswar led the region, theUNimposedan arms from asevere civilwar since 2013,when alliances. arms embargo, andincludedSouth authoritarian regime. Sudan journalist andaidworkers aswell asan after amajorityofthe independent, Darfur. in 2005.Thiswas again strengthened to ground troops. SouthSudanissuffering has anaggregated score of2/100withall region emerged. Otherconflicts also population voted for independence. With led coalition inYemen, providing mostly non-state actors andwas expanded to the economic collapse. cultural divisionofthecountry, conflicts emerged, for governance, religion and conflict regarding thecommon border ongoing humanrightsabusesand ensure thatarms didnotfindtheirway to embargo ontheDarfur region. Itincluded deteriorating humanitarian situation in 52 53 TheEUalsoimplemented this UN In2011,theSouthSudanbecame 54 Sudanisalsopart oftheSaudi- 51 Inreaction to the The country isconsidered to beanunfree, The Arab Spring,where thegovernment 7/7, political rights7/7, civilliberties7/7. violently repressed demonstrators, hada Syria inresponse to theviolentrepression almost allcivillibertiesandpolitical authoritarian regime whichrepresses also imposedeconomic andfinancial against theruler. all majorinternational powers. Former Syria In May2011,theEUimposedsanctionson rights. protests. Thiswas partly lifted in2013, by Syrian government forces ofpeaceful Aggregated score: -1/100.Freedom rating rebel groups, thegovernment andalmost major impact onthecountry leading to a sanctions against theSyriangovernment. equipment. excluding onlythetransfer ofspecific conflicts fuelled thewar, includingrevolts civil war whichincluded manydifferent 57 55 Theleague ofArab States 56 The UNestablished anarms embargo, The UAE isafederation emirates ofseven Yemen the country hasquicklyescalated with which was implemented shortly afterwards alsoby theEU. Thearms and excludes thepossibilityofachange in and civilliberties. are and noncitizens, whomake upan United Arab Emirates (UAE) ultimately rests hereditary withtheseven 2019. February government through elections. hereditary rulers amonopolyonpower political system grants theemirates’ began in2015,hasledthecountry to be non-governmental forces. Theviolence in rulers. Thecivillibertiesofbothcitizens legislative, andjudicialauthority banned political parties, andallexecutive, led inpractice by Abu Dhabi.TheUAE has Aggregated score: 17/100.Freedom rating Aggregated score: 13/100.Freedom rating severe consequences for civilians.Forces several armedgroups. Itisanannual situation inthecountry andappliesto 6.5/7, political rights7/7, civilliberties6/7. 6.5/7, political rights7/7,civilliberties6/7. coalition. of Hadiare supported by aSaudi-led conflict anddeteriorating humanitarian embargo was imposedbecause ofthe embargo, whichhasbeenextended until classified asunfree andlackinginpolitical overwhelming majorityofthepopulation, overwhelming subject 60 Thedevastating civilwar that to significant 59 Thisisanembargo on restrictions. 58 The Turkey isacountry currently engaged in Turkey the death ofcloseto 300people. the the Kurdistan Freedom Hawks(TAK) territorial claims.In2016,theconflict from theTurkish armedforces, operating armed conflict. Turkey hasexperienced around thedeath ofciviliansandhuman airstrikes aspart oftheUS coalition, and under thenameThePeace atHome unilateral airstrikes innorthernSyria. In thelate of15July2016,units evening Human RightsWatch hasraised concern is inconflict inSyria,andithasconducted government, state institutions, national media andkey pointsofcommunication in posts inAnkara andIstanbul respectively. became active for thefirst timedueto two between theGovernment ofTurkey and by groups challengingthegovernment for operations.military rights violationsinSyriarelated to Turkish Council YSK triedto take control ofthe state-based violence bothby groups change thepolitical system inTurkey and challenging thegovernmental power to deadly bombingstargeting government country. The failed 63 coup attempt 19 61 Turkey led 62

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Company Profiles Profiles © Think Defence via flickr CC-BY-NC-2.0 flickr via Defence © Think flight in Taranis 20

Company Profiles Turkey andtheUAE. There hasbeenanarmsembargo onEgypt A Space earning €872millionin2017.Airbushasastatement on the world. UniCredit fighters inSinaipeninsula.Thishasinvolved severe restrictions on and according to theStockholm International Peace Research autonomous weapon systems. More information isgiven underthe also claim that through their delivery ofproductsalso claimthatthrough they are theirdelivery Institute (SIPRI)data for 2017the7thlargest defense company in BNP Paribas Deutsche Bank BNP Paribas Deutsche Bank BAE Systems (37.5%) inthecompany MBDA, whichproduces EXPORTS TO CONTROVERSIAL COUNTRIES INTHEMIDDLEEAST Airbus hasexported transport aircraft missiles andmissilesystems. MBDA isalsoproducing increasingly Airbus (37.5%)ispart ofthe jointventure withLeonardo (25%)and humanitarian crisisintheregion. repression. Arguably transport aircraft donotfitthedescription tohuman rightsandisasignatory theUNGlobal Compact.Airbus segment, itisstillthesecondsegment, largest defense supplierinEurope Crédit Agricole since 2013for anyweapons thatcould beusedfor internal Investment inAirbusSE Finance provision AirbusSE company profile for Leonardo. civilians andHumanRightsWatch warned inearly 2018ofa covered by thearmsembargo. However, Egypt isalsoacountry contributing to asafer andmore prosperous world. AND NORTH AFRICA (MENAREGION): defined asinarmedconflict, dueto itsoperations against IS Airbus SE Airbus irbus SEisamultinationalaerospace company, withits revenue comes from itsDefence andSpace business headquarters intheNetherlands. Whilejust15%ofitstotal 65 Ithadtotal earnings of€4.3billion,withDefense and (in €millions) (in €millions) 68 1,769.15 558.38 569.04 342.73 445.45 383.51 67 to SaudiArabia, Egypt, 66 64 , The UAE isconsidered anunfree country whichsuppresses civil Through theconsortium MBDA andEurofighter, Airbushas Yemen –theUAE, SaudiArabia Allofthesewere andEgypt. → → → → (3 ofwhichwere delivered by Airbusin2015). Saudi airforces inYemen, ashadTyphoon andTornado aircraft, whether theseare nuclear orconventional missiles. will alsoproduce missiles for theIndianarsenal- itisunclear and Storm Shadow missileshadbeenusedincombat missionsby used for crowd control. French airforce. MBDA The new –Larsen &Toubro jointventure, refuelling operations, SaudiArabia hasafleet ofsixtheseaircraft begun. TheAirbus A330MRTT are usedinthewar withYemen for Airbus isproviding medium-range air-to-surface missiles to the launched French nuclear missiles.Through it’s jointventure MBDA, made by thecompanies MBDA andthrough theEurofighter EXPORTS TO COUNTRIES INSAUDI-LED COALITION INYEMEN: PRODUCTION OFCONTROVERSIAL WEAPONSYSTEMS: reconnaissance satellites to countries participating inthewar on Airbus hasexported transport aircraft, helicopters and Airbus doesnotproduce cluster munitions,buttheAirbusGroup reconnaissance satellites to theUAE. liberties, detains humanrightsactivists,andhasviolentlycracked Exports to SaudiArabia andtheUAE are considered office admitted in2016thatBritish-madeandlicensed Brimstone consortium respectively. delivered eitherin2015orthereafter, after thewar inYemen had does produce key components for bothsubmarine andair down onoppositionto therulers –Airbushasalsoexported exported to: countries. controversial for armsexports, bothdueto theirrole inthewar Airbus hasexported to: in Yemen andalsodueto thembeingconsidered asunfree i i ] → → → → Saudi Arabia Saudi Arabia Egypt Egypt More detail onspecificexportsisgiven inAppendix1:Exportdata → → → → → → → → Turkey UAE UAE Kuwait 69 Itispossiblethesecan be → 70 → Britain’s foreign Kuwait

71 → 21

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 The specificconcern around drone swarms, amongothers, relates target drones controlled from amannedcommand andcontrol (C2) these typesoftechnologies. couldthis typeofdevelopment lead to anarmsrace focused on aircraft. Whileahumanpilotcontrols thebehaviourofswarm, armed. and communication, andpotentially alsofightingshouldthey be attacking swarms maybedefensive swarms”. Itiseasy to seehow It isalsoadvancing inthefieldofautonomy inweapon systems. it doesnotcontrol theindividualdrones. intelligently withtheaircraft anddemonstrate automatic guidance, navigation, andcontrol. particularly to theissueofanautonomous armsrace: “Early MMP-Anti-tank UGV © Facing Finance © Facing UGV MMP-Anti-tank October 2018,Airbus demonstrated Do-DT25 five Airbus-built One example isinthefieldofmanned-unmannedteaming. In swarm. crew oftheaircraft withreconnaissance, disruptingenemyradar experiments indicate thattheonlyeffective protection against drone inaswarm could trigger cascading changes across theentire 74 76 22 73 Thedrones would beableto supportthe 75 Additionally, malware orhackingone 72 Thedrones interact There have beenindications by Milrem previously thattheTHeMIS System (FCAS) whichAirbusandDassaultAviation and willdevelop to make each component smarter by connecting themviasatellite weapons expo, IDEX2019. world’s first anti-tank unmannedground vehicle (UGV) atthe weapon’s features includein-flighttargeting andre-targeting, which isequippedwithakitfor autonomous real-time control and forget” autonomously outmultipletasks. carry and cyber-secured networks. Thenext-gen aircraft would beatthe MBDA andMilrem Robotics showcased theMMP-Anti-tank UGV, the interactive firingpostwithautonomous operation anda“fire-and- Drone swarms are anessentialpart oftheFuture Combat Air identify likely combatants andtarget them,onitsown”. heart ofFCAS, ableto control unmannedplatforms to Altitude Long-Endurance UnmannedAerialVehicles (UAVs), the platforms, includinganext-generation fighter aircraft, Medium- produce. Itaimsto connect arange ofmannedandunmannedair mobility, withMBDA’s MMPmissilesystem integrated.

system hasthecomponents to beableto “interpret whatitsees, cruise existing fleet ofaircraft suchas theA400MandEurofighter, future missiles, option that and enables combat 78 Thesystem usesMilrem’s THeMISUGV the drones weapon flying 77 to

in guide swarms. itself Airbus 79 to The 81 its target. intends 80

B Tornado aircraft currently beingusedinthewar inYemen. Typhoon andtheLightningF-35whichare produced aspart ofthe The court found infavour ofthegovernment, proving theabsolute Systems 2017 for theGroup came inatapprox €233million.In2017,the (other 21%). the UK,paying £300 millionto endthecase. weapons were soldto SaudiArabia, includingTyphoon and USA 39%,Great Britain 21%,SaudiArabia 16%,andAustralia 3% arms deals withSaudiArabia totalling £43millionfor whichBAE against ourown responsible trading principlesandwe donot against BAE sayingthatarmssalesto SaudiArabia violated export In 2010,BAE Systems pledguiltyto criminalcorruption charges in However, thevolume ofexports provided to the Saudi-ledalliance BNP Paribas Barclays Deutsche Bank Barclays Finance, BAE “Weassesspotential noted export that: contracts Eurofighter consortium. BAE systems hasahumanrightspolicy its revenue coming from thedefense sector. BAE BAE government commitment to maintaining armssalesto Saudi bring thisapproach into question. paid bribesto Saudiprinces of£6million. majority ofturnover can bedistributed amongfour countries: the Al- Yamamah deal) andthefurther Al-Salamdeal, avast array of proceed businessopportunities withnew ifthey donotmeet our noting acommitment to humanrights.Inaresponse to Facing Arabia. licencing, astheUK“forbid thesaleofarmsthatmight beusedto Commerzbank Credit Suisse strict criteria, ifexport (even licences mayhave beenapproved).” Campaign Against the ArmsTrade (CAAT) brought alegal challenge Investment inBAE Systems Finance provision BAE Systems commit violationsofInternational Humanitarian Law(IHL)”. producer intheworld andthelargest inEurope with98%of AE Systems isan international defense, aerospace and security company. Itwas, in2017,thefourth largest arms 83 Thetop sellers for BAE Systems are theEurofighter (in €millions) (in €millions) 100.13 100.13 329.83 220.43 823.33 64.90 85 Aspart ofthisdeal (the 84 82 Thecase related to BAE’s earnings for 86 In2016, The combat aircraft Hawk-100 hasbeensoldto SaudiArabia by BAE (25%) andAirbus(37.5%)inthecompany MBDA, whichproduces which isusedto train fighter jet pilots(but isalsousedasalight are subjectto UKgovernment approval andmonitoring.” autonomous weapon systems. More info isgiven underthe In total 22Hawks have been delivered to thecountry. Inaddition, BAE Systems (37.5%) ispart ofthejointventure withLeonardo BAE Systems hasexported missilesto Iraq andLebanon, both BAE hasalsoexported to Bahrain, oneofthemostrepressive government isalsoknown to violentlysuppress minoritygroups Armoured Personnel Carriers andrecovery vehicles have been not have theirown publiccriteria onexports. → missiles andmissilesystems. MBDA isalsoproducing increasingly regimes intheworld. EXPORTS TO COUNTRIES INSAUDI-LED COALITION INYEMEN: EXPORTS TO CONTROVERSIAL COUNTRIES INTHEMIDDLEEAST Eurofighter Typhoon on offer in Berlin at ILA Airshow 2018 © Facing Finance Finance © Facing 2018 Airshow ILA at Berlin in offer on Typhoon Eurofighter

received Armoured Personnel Carriers despite beingknown asa personnel, militants, andcivilianswere killedorinjured inthe resulted inarmedresistance –anunknown numberofsecurity stringent export regulations andthat their“activities andexports strike aircraft), state dueto ofpoverty highlevels andinstability. SaudiArabia has such astheShiite. In2017 thousandsofShiite were evicted which company profile for Leonardo andAirbus. countries currently inconflict. Iraq isalsoconsidered to beafragile considered acountry athighriskofcorruption indefense spending. country thatrepresses allcivilliberties and freedoms –the clashes asdemolitionsproceeded. AND NORTH AFRICA (MENAREGION): delivered. BAE Systems notes thatthe UK government has 88 allowing SaudiArabia to increase itsfighter fleet. 87 Additionally, SaudiArabia is 23 90 They do 89

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 “fire andforget” weapon andeitherhumanoperators can pickout Trident andUS AirForce Minuteman missilesprogrammes andis Yemen. → → → → 2,000 Mistral portable surface-to-air missilesand100Milananti- Shadow cruisemissiles,1,000Brimstone air-to-surface missiles, weapons. thus involved inproduction ofkey components ofnuclear targets for themissiles,orin“lock-on mode” itisgiven abroad tank missiles.TheBrimstone missile,aground orairlaunched (Airbus, BAE Systems andLeonardo) andMBDA, BAE systems area andcan search for, selectandattack withlimited BAE doesnotmanufacture cluster munitionsbutdoesprovide intervention. attack weapons to theSaudicoalition countries operating in logistics, systems, andreadiness supportfor theUS andUKNavy missile, isproduced by MBDA intheUK.Theweapon isaso-called PRODUCTION OFCONTROVERSIAL WEAPONSYSTEMS: Of themissilessentto thecoalition countries, 450were Storm Exports by BAE through theconsortium MBDA andEurofighter: BAE hasexported to countries experiencing highlevels of Exports by BAE Systems: has exported Typhoon Aircraft andthousands of precision civilian populations.Aspart of theconsortium Eurofighter known to beinarmedconflict and to countries thatsuppress instability, poverty andconflict. Ithas exported to countries i i ] → → → → Saudi Arabia UAE Iraq Bahrain More detail onspecificexportsisgiven inAppendix1:Exportdata 24 92

→ → → → → → → → Saudi Arabia Kuwait Egypt Lebanon → → → → Jordan UAE

The fighter will beableto flyunmanned,useswarming technology Tempest” willincludeengine-maker Rolls-Royce, Italian defence There are substantial concerns related to theuseofAIinweapon the useoflethal force.” there shouldalways bea‘humanintheloop’ whenitcomes to key there are obvious benefitsto unmannedsystems, isthat ourview these. and incorporate ArtificialIntelligence deeplearning. Itwillhave aircraft willbedemonstrated in2025withproduction in2035. automatically launchcounter fire. Itcan alsoswingtowards any In correspondence with Facing Finance, BAE Systems noted: “While Programme Manager, Clive Marrison,pointed outthatalthougha In addition,BlackKnightisatank by thathasbeendeveloped BAE, BAE anadvanced is developing prototype autonomous stealth is ableto identifyand attack targets autonomously –BAE’s Taranis it isanunmannedground vehicle, ableto detect incoming fire and itself withalmostnoneedfor operator input. humans mustalways beincharge whenthere isadecision suchas human operator currently OKstheattack, anautonomous strike has alsobeendefined,meaning the weapon system can be Another future project thatBAE willbeinvolved inisthe

According ofDefense, to Taranis theUKMinistry can flydeepinto swarm ofother smallerdrones. Aneedfor “scalable autonomy” systems- malware andmanipulationoftraining data are justtwo of offensive anddefensive weapons andwillbeableto control a capability could berequired inthefuture. optionally mannedorAIdriven. Thecurrent plannotes thatthis contractor oncoming fire to beprepared for counter fire. enemy territory to collect intelligence, drop bombsanddefend decisions, includingtheuseoflethal force. that Wefirmlybelieve oftheTempestdevelopment stealth fighter. Theso-called “Team drone, Taranis isanexperimental drone andiscurrently notinuse. Leonardo, and the European missile 94 93 96 Reportedly, Taranis consortium MBDA. 95

B Company Boeing Boeing The $10.27 billionandthedefense businesssector hadearnings of$2.2 this sector. United Arab Emirates (UAE), Kuwait, Qatar, OmanandEgypt.” Middle Eastgoes back to 1982.Since then,BDShasexpanded its “TheBoeingDefense, SpaceEast: &Security(BDS)’presence inthe Barclays Deutsche Bank BNP Paribas Deutsche Bank Barclays relationships across theregion withafocus onSaudiArabia, billion. Credit Suisse Investment inBoeing Finance provision Boeing customers. TheBoeingGroup in2017hadearnings before tax of company intheworld, despite only29%ofitsrevenue coming from aircraft, defence andsecuritysystems, aswell asthemain provider ofairtechnology to governments andcommercial oeing istheworld’s largest manufacturer ofcivilandmilitary 97 Boeingisthesecond largest anddefense military 98 Boeingacknowledges astrong presence intheMiddle (in €millions) (in €millions) 373.19 805.94 527.76 399.16 560.05 553.81 © Steve Jurvetson CC-BY-2.0. Jurvetson © Steve Atomics. General by made a Predator is X-45 the Above missions. strike combat for specifically designed (UCAV) Vehicle Aerial Combat Unmanned modern first the was X-45A The 99

Turkey hasbeenpart oftheUS-led coalition inSyriaandtheUNhas the sea intheportofAden. taken of5,000smalldiameter delivery bombsand3,600precision aircraft, helicopters, guidedbombsandmissiles.TheUAE has uncertain. use onnaval shipsandsubmarines.Egyptian naval vessels have Boeing hasexported missiles(Harpoon) to Egypt whichwere for Peninsula anditisalsopart oftheSaudi-ledcoalition inYemen. Egypt iscurrently inarmedconflict against theISinSinai Boeing hasexported missilesto Egypt andSaudiArabia, and Boeing hasexported helicopters andguidedbombsto Turkey, the international humanrightslaw. international humanitarian lawandviolationsorabusesof guidance systems from Boeing. before to Egypt delivery in2009,withnewer deliveries thisis been dispatched to Yemen andhave taken part intheconflict from helicopters to Turkey, SaudiArabia andtheUAE. Ofitsexports to hardships, whichinsomeinstances mayamountto violationsof reported thatinparts ofNorthWestSyriaciviliansunderthe licences were agreed, however, itwas whenthey were delivered. EXPORTS TO COUNTRIES INSAUDI-LED COALITION INYEMEN: EXPORTS TO CONTROVERSIAL COUNTRIES INTHEMIDDLEEAST of theHarpoonto hitlandtargets from naval vessels was disabled controversial countries, mostwere to SaudiArabia –including control ofTurkish forces andaffiliated armedgroups face country was notyet considered to beinarmedconflict whenthe AND NORTH AFRICA (MENAREGION): 102 →

101 According to reports, news theability 100

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 “Autonomy willdefinethenext 100years –andBoeing isdriving Yemen. → → → SAs fighter jets. Saudi Arabia bought650airto surface missilesto equiptheirF15 thermal imagingoracamera. the safe innovation andintegration ofautonomy to maximize the Boeingcompany. ScanEagle isalongendurance Unmanned the ScanEagle produced of by Insitu Inc,awhollyowned subsidiary also recently beenexported to places suchasLebanon. Itoffers arsenal until2030. to theirrole inthewar inYemen andalsodueto thembeing Boeing iscontracted to helpkeep theMinuteman IIInuclear intercontinental ballistic missilesoperational intheUS nuclear into ofautonomous thedevelopment weapon systems stating: persistent surveillance andreconnaissance andisequippedwith Arabia] isanimportant customer for products.” Boeingmilitary PRODUCTION OFCONTROVERSIAL WEAPONSYSTEMS: human potential.” Aircraft System (UAS) andhasbeeninoperation since 2004, ithas produced by BoeingincludetheX45andPhantom Ray aswell as

Boeing hasexported to: Boeing’s majorexports are to theUAE andSaudiArabia, considered asunfree countries. countries considered controversial for armsexports, both due i i ] → → → Turkey Saudi Arabia Egypt More detail onspecificexportsisgiven inAppendix1:Exportdata 104 26 Boeingacknowledges that“Thekingdom [ofSaudi 103 Thesefighter jets have beenusedinthewar in 107 106 Systems withautonomy thatare being TheBoeingCompany islaunching headfirst → → → → → → UAE Kuwait Lebanon 108 → → Jordan

105 The X-45 was asanUCAV developed prototype, whichcan carry the UCAV willexplore itscapabilities for “supportingmissionsthat fixed andmobiletargets innear real time. advanced precision guidedmunitions. and autonomous aerialrefuelling.” and landingare fully autonomous butapilot-operator hasthe Phantom Works, based ontheX-45 data. Phantom Ray. ThePhantom Ray isaprivate venture, by Boeing into production, thefundamentals formed thebasis for the production. may includeintelligence, surveillance, andreconnaissance;

suppression of enemy airdefenses; electronic attack; hunter/killer; of sensors whichallow detection, identification, andlocation of option ofcontrolling thesemanoeuvres. Itisequippedwithasuite 112 Thiswas alsonotput into 109 Thetaxiing, take-off 111 110 Further testing of WhileX-45 was notput G vehicles, vehicles have beenexported to SaudiArabia by General Dynamics. Saudi Arabia isalsocurrently atwar inYemen andhasarepressive tank that equipment, suchassmallarms,batons,that equipment, tear gas andarmoured when with for Corporation General although thesewere ordered before thewar began – itisuncertain inoperations,have beenobserved ashave theLAV-25and turrets, and itearns 63%ofits revenue from itsdefense business. authoritarian regime –yet hundreds oftanks andarmoured used Lloyds Bank BBVA Barclays Deutsche Bank Egypt Dynamics Dynamics has anarmsembargo inplace for anyweapons thatcould beused has EXPORTS TO COUNTRIES INSAUDI-LED COALITION INYEMEN: EXPORTS TO CONTROVERSIAL COUNTRIES INTHEMIDDLEEAST have General Dynamicstanks have beenusedinthewar intheYemen General Crédit Suisse Investment inGeneral Dynamics Finance provision General Dynamics exported M-1A2Stanks to Kuwait andSaudiArabia, thesetanks AND NORTH AFRICA (MENAREGION): internal exported an delivery by been the are billion. Itisthesixthlargest defense company intheworld company, in2017ithadoperating earnings ofaround $1.59 eneral Dynamicsisaglobal aerospace anddefense existing security Dynamics has delivery exports used repression. been to tanks Yemen, arms on forces to of has repeatedly the to a these embargo. Egypt conflict exported ground to Tanks although suppress turrets which and used zone, in to Yemen. 2,097.03 the 2,353.91 occurred. other Egypt, were 110.65 protests. to (in €millions) a 88.70 66.53 supplier repressive repress (in €millions) armoured delivered 116 UAE Thedata alsoshows a General 114 dissent. here and Amnestyhasnoted

regime in Saudi vehicles is Dynamics 2015. uncertain. 115 Exportsto and Arabia. 113 Egypt can

a ©Nathan Rupert Rupert ©Nathan Dynamics General Tank by Abrams M1A1 state be It → → Switchblade loitering munition,describedasaminiature Switchblade can beoperated manuallyorautonomously, them are inherently governmental responsibilities.” types ofweapons to buy, where to sellthemandhow to use technologies become available. AeroVironment the developed targets” andhasanopendesignthat isupgradable asnew this statement they attempt to abdicate themselves ofany which repress opposition andkill,imprisontorture with minimalcollateral effects”. According to theproducer, with aback-packable, non-line-of-sight precision strike solution inSyriaand Iraq.also beenobserved automation required for smalldrone andloitering missilesystems automated drones) andprecision loitering missilesinto armoured In October 2018,General DynamicsLandSystems and II nuclear missiles,itdoes notproduce cluster munitions. integration willensure precise, mobilelethality withincreased intelligence andlethal platform designedto provide thewarfighter General Dynamicshasexported weapons systems to countries General Dynamicsalsoexported to SaudiArabia, another General Dynamicshasexported to: AeroVironment announced strategic anew relationship. The PRODUCTION OFCONTROVERSIAL WEAPONSYSTEMS: responsibility in theimpacts oftheirweapons exports.

General Dynamicsproduces key components for UKandUS Trident General Dynamicsalsonotes: decisionsaboutwhat “Webelieve can drop devastating miniature missiles. TheUS Armyhas combat vehicles. According to AeroVironment, “Thisenhanced companies agreed to integrate smalltactical UAS (suchas deployed some4,000Switchblades inAfghanistan. Modelshave deployment”. repressive regime, currently leading thecoalition inYemen. repression” General Dynamicsexported tanks to thecountry. on “any equipmentwhichmightbeusedfor internal political opponents. i i ] → → Saudi Arabia Egypt More detail onspecificexportsisgiven inAppendix1:Exportdata 119 Theintegrated system willbeableto “finish

117 → → Despite aclear armsembargo inEgypt → → Yemen Kuwait

118 Through 27 120 and

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 L 2015 and2016.Turkey joined theUS-led coalition operations in (37.5%) andBAE Systems (37.5%) inthecompany MBDA, which Syria in2014,theintensity reached level war in2016.Inearly 2018 allegations ofserioushuman rightsviolationsincluding an offensive by Turkish forces military (operation olive branch) in also akey part oftheEuropean consortium producing the unnecessary civiliancasualties (anestimated 120). Egypt isalsoconsidered to beacountry atwar, makingit Leonardo hasalsoprovided exports to several countries where Deutsche Bank Banco Santander Leonardo hasexported helicopters, satellites military andmaritime BNP Paribas Eurofighter including SaudiArabia, Egypt andtheUAE. Leonardo S.p.A. Leonardo India, Panama andSouthKorea. government corruption indefense contracts isofhighconcern, Leonardo hasfaced several recent allegations ofcorruption in produces missilesandmissilesystems. northern Syriakilledatleast 260SyrianKurdish andISfighters and patrol aircraft to Turkey whichwere delivered variously between EXPORTS TO CONTROVERSIAL COUNTRIES INTHEMIDDLEEAST Crédit Agricole Commerzbank Goals. Global Compact andhasintegrated theSustainable Development Crédit Agricole Investment inLeonardo Finance provision Leonardo extrajudicial killingsby theEgyptian inSinaiagainst military IS. controversial for armsexports. In addition,there have been condemned Turkey’s offensive ontheKurdish heldarea ascausing AND NORTH AFRICA (MENAREGION): displaced around 5,000civilians. Leonardo’s earnings were at1.5billioneuro. 68% ofitsrevenue coming from defense sales. eonardo isanaerospace, defence andsecuritycompany with 124 28 Leonardo (25%)ispart ofthejointventure withAirbus jets, the consortium (in €millions) (in €millions) includes 123 125 Leonardo isamemberoftheUN 107.69 107.69 107.69 HumanRightsWatch has 78.95 7.29 9.24

BAE, Airbus 122 126 121 Leonardo is

and In2017 Leonardo. 127

→ → → → violations. Ithasalsoexported to countries whichrepress and (mini andtactical MALEUAV, UCAV andRUAV). the war directly. their operations. Accordingly, thecompany systems isdeveloping for warships. Itcannot beevidenced thatthesehave beenusedin and platforms invarious areas from underwater to space, including applied over andabove therequirements by thestate. Thistakes Leonardo doesnotproduce cluster munitions,butitisakey Peninsula) withnaval vessels. themostpopulouscountry intheArabEgypt, world, isamember Leonardo itsown internal hasdeveloped export policy, whichis into account “regulations aswell asobligations related to producer for theFrench nuclear weapons arsenal. Leonardo patrol Babal-Mandab(thestrait between Yemen andtheArabian policy doesnotlistSaudiArabia,policy Turkey, ortheUAE Egypt, as PRODUCTION OFCONTROVERSIAL WEAPONSYSTEMS: EXPORTS TO COUNTRIES INSAUDI-LED COALITION INYEMEN: has arole inproducing weapon systems withautonomous features. Also through itsjointprojects for example withMDBA, Leonardo sensitive countries for export. satellites androbotics for extra-planetary missions,land, andair Leonardo hasexported to countries atwar whichleaves the Leonardo has,aspart of theconsortiums MBDA/Eurofighter, Leonardo hasexported to: of theSaudi-ledcoalition atwar inYemen, itsrole ismostlyto embargoes, sanctionsorothertrade restrictions”. Interestingly this develops technologiesdevelops in aimedatminimisinghumanintervention oppress theircitizens. company atriskof beingassociated withhumanrights exported to: i i ] → → → → Turkey Saudi Arabia UAE Egypt More detail onspecificexportsisgiven inAppendix1:Exportdata → → → → → → → → Saudi Arabia UAE Kuwait Egypt

128 129

Leonardo hasprovided naval guns

130

L UniCredit While Lockheed notes that“careful consideration for export Corporation arms exports willcontribute to internal repression by thestate. arbitrary arrest anddetention, suppression oftherightto free and association,rightto free expression. used to suppress civilliberties.Armsexports to thiscountry Lloyds Bank Deutsche Bank Barclays Bahrain continues to violate itspopulation’s humanrights,andits Martin Martin Lockheed guided rockets to Bahrain. InBahrain real there isavery riskthat EXPORTS TO CONTROVERSIAL COUNTRIES INTHEMIDDLEEAST has exported to ofthe16controversial seven countries, including negatively affect Bahrainis’ rightto life, rightto peaceful assembly be considered controversial asthere isahighriskthatitcould be Crédit Agricole Crédit Suisse Investment inLockheed Martin security forces have beenaccused of, amongothercrimes, Finance provision Lockheed Martin costs. expression, assembly, andassociation,thetorture of civilian needs” isundertaken before salesoccur, controls andtrade policies,products’ intended useandimpact on AND NORTH AFRICA (MENAREGION): detainees. Lockheed Martinin2017earned $2billionafter taxes and in theworld and88%ofitsrevenue isfrom armssales. ockheed Martinisthelargest aerospace anddefence company 131 133 Anyarmsdeals withthegovernment since 2011would 1,235.85 (in €millions) 911.90 180.20 131.69 581.68 190.96 (in €millions) 132 thecompany at IDEX 2019 in Abu Dhabi. © Facing Finance Finance © Facing Dhabi. Abu in 2019 IDEX at missile Hellfire the advertising Martin Lockheed Saudi coalition, withtheexception ofMorocco andSudan. war inYemen, however theseare usedto destroy incoming war inYemen, butalsoaircrafts and helicopters. Bahrain is which iscurrently inconflict) and150to Lebanon, alsoacountry in additional 16F16sto Bahrain. Indeed, Lockheed contract signedanew inJune2018to provide an Lockheed hasexported F-16sandguidedrockets to Bahrain. Lockheed hasexported to almostallthecountries involved inthe Lockheed hasexported 5,000Hellfire missilesto Iraq (afragile state EXPORTS TO COUNTRIES INSAUDI-LED COALITION INYEMEN: missiles. been soldto Kuwait andSaudi Arabia andhave beenusedinthe

Lockheed hasexported notonlymanythousandsof Hellfire conflict dueto itsfightagainst theISinregion. missiles to countries inconflict, includingthose engaged inthe region, yet this hasnotprevented Lockheed’s exports. considered to be oneof themost repressive states intheMENA 135 →

134 Patriot PAC3 missilesystems have 29

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 → → → → vehicles thatare underdevelopment. (RS/RV) subsystem supportto thevalue ofuntil2030. (loitering weapons can stay inanarea for anextended timeto find the region”. facilities. Lockheed Martinhasalsoreceived $879million anew further research into autonomy androbotics. allow for a“man-in-the-loop”. autonomous attack missionwithouttheoptionofoperator able to gather information, aswell as(withauthorisationfrom an advanced global securityproducts andtechnologies willenhance and strike targets ontheground) withafully autonomous upgrades (for US &UK),Minuteman IIImissiles(US), managing UK Martin addedatwo-way satellite linkto the LOCAAS system to Lockheed isalsofully committed to theresearch anddevelopment Lockheed Martinisheavily involved intheproduction ofkey Lockheed Martinis proud ofitsrelationship withSaudiArabia, intervention isundesirableintervention inmanytactical situations, Lockheed nuclear weapons laboratory, andseveral US nuclear weapons PRODUCTION OFCONTROVERSIAL WEAPONSYSTEMS: national securityinSaudiArabia, strengthen thecause ofpeace in noting “[…].Weare especiallyproud ofhow ourbroad portfolio of reportedly ofautonomy. dueitshighlevel Attack System (LOCAAS) good example isavery ofwidearea search

contract Vehicles for System/Re-entry theMinuteman IIIRe-entry Lockheed Martinhas exported to: operator) attack specific targets. of autonomous weapon systems, partnering even withMITfor components engagement mode.TheLOCAAS was eventually cancelled, demonstrated alow cost autonomous attack system whichwas i i ] → → → → Iraq Lebanon Egypt Bahrain More detail onspecificexportsisgiven inAppendix1:Exportdata 30 136 of nuclear → → → → arsenals → → → → Turkey Jordan Saudi Arabia UAE 139 including TheLow CostAutonomous 140 Itisaloitering weapon 141 the Because afully → → 138 → → Trident In2005Lockheed Morocco Kuwait

137 II (D5) missile “The onboard autonomy mustbesufficientfor theLoyal Wingman System (SMSS), was by developed Lockheed Martinandhasbeen threats whenitsdata-link even to thecontrol andcommand to complete allbasic flightoperations untethered from aground this impliesthatthe“Loyal Wingman“hasto get increasingly aircraft ontheground was cutoff. autonomous, asthepilotinF-16fighter cannot command a aircraft, head outandconduct anairstrike thenreturn to the and iscurrently ademonstration programme. “Have Raider I” autonomous drone. Theprogramme isknown as“Have Raider” F-16s software to make decisionsbased on“operational Lockheed hasalsodemonstrated turning anF-16fighter into an Roketsan, theadvanced SOM-Jstand-off cruisemissile.Thismissile togetherMartin hasalsodeveloped, withtheTurkish company include armeddirect fire andindirect fire modules. is capable ofperforming in-flight retargeting andin-flightmission parameters” andchangingtheseasthesituation changed. manned aircraft. “Have Raider II”thenbuiltonthisto allow the According to arequest for Information from Flight Global Magazine: newer aircraft suchastheF-35instrike missions. human According to Airspace Magazine thisexercise shows “a drone that An UnmannedGround Vehicle (UGV), SquadMission Support

station andwithoutfull-time direction from themannedlead,” selection, itisnotdetailed whether thisisdoneautonomously or out in2017,showed thattheF-16drone could respond to various cheaply to operate autonomously, andcan work together with can detect andrespond to unexpected threats onitsown, withno deployed inAfghanistan, thelong-term vision for thissystem isto drone (orafleet ofdrones) inadditionto whatheisalready doing. anautonomousdeveloped F-16whichcould leave itsmanned demonstrates thatolderaircraft suchastheF-16can beadapted intervention required”. 143 TheHave Raider IIexercise carried 144

TheHave Raider exercise 146 Lockheed 142

145 147

N Yemen. worldwide supplychainto share thiscommitment andadopt the recently agreed saleofF-16sto Bahrain by Lockheed Martin. the Saudi-ledcoalition inYemen. Itspurchase oftheAPG-83SABR UniCredit U.S. defense companies. However Northrop hasexported to Turkey, Corporation Grumman accounted for 85%in2017.Northrop Grummanhasahumanrights and identifytargets faster andatlonger ranges.” and total salesover $25billion. Iran andBahrain. Northrop hasexported combat aircraft radar to F-16s have beenusedintheaircampaign against Houthirebels in Lloyds Bank Barclays Deutsche Bank Bahrain, despite itspoorhumanrightsrecord andbeing Exports to controversial countries are perhapsnotashighother Northrop Northrop government crackdown nearly ayear ago, activistsinBahrain have inwhichitstatespolicy thatitexpects “partners [...]inour been imprisonedorforced into exile. EXPORTS TO CONTROVERSIAL COUNTRIES INTHEMIDDLEEAST Crédit Suisse Crédit Suisse system, allows itsF-16fighter jets to beupgraded to “detect, track Investment inNorthrop Grumman Finance provision General Dynamics enforce principlessimilarto thoseinourHumanRightsPolicy”. considered arepressive regime- since thebeginning ofa customer isthe U.S. Government, AND NORTH AFRICA (MENAREGION): company intheworld, with87%ofitsrevenue coming from orthrop Grumman isthefifthlargest armsproducing 153 defense sales.Itsnet earnings in2017were over $2billion 148 2,797.15 Northrop Grumman’s largest 149 118.20 425.88 635.22 109.21 salesto theU.S. Government 83.65 150 (in €millions) Bahrain isalsoamemberof (in €millions) 151 Thisalignswith 152

→ 2016, afragile state andhavingahighriskofcorruption indefense (for US &UK),Minuteman IIImissiles(US), and involved in the foundation ofNorthrop Grumman’s businessculture. Ourgoal forces, therefore exports to theIraqi government are not as acountry atwar. approx 2015.Turkey joinedtheUS-led coalition inthewar inSyria as controversial for armsexport asitiscurrently considered to be Radars (FCRs) for theAH-64Apache Attack Helicopter, Northrop Northrop exported to Iraq, despite itbeinginarmedconflict since Northrop Grummanisinvolved inTrident II(D5)missileupgrades Northrop Grumman notes intheircorporate responsibility Northrop shows noexports to SaudiArabia, however they do Lockheed Martinwiththecombat radar system by Northrop Bahrain hasnow upgraded itsF-16fighter jets purchased from in 2014,theintensity reached level war in2016.Arguably the in armedconflict. Thearmswere licenced in2009anddelivered in in 2017. managing some US nuclear weapons facilities, ithasalsoacquired range ofcapabilities andtechnologies indefense, security, Cyber- PRODUCTION OFCONTROVERSIAL WEAPONSYSTEMS: EXPORTS TO COUNTRIES INSAUDI-LED COALITION INYEMEN: highest principlesofintegrity andconcern for others. Oursenseof beensolelytohas never comply withthelaw, butto abideby the Grumman hasbeenheavily involved inthetraining and Combat aircraft radar were alsosoldto Turkey, acountry defined Orbital ATK whichhassimilarinvolvements. security andcommunications, suchastheLongbow Fire Control date isunknown buttheorderGrumman. Thedelivery was placed Grumman’s exemplary reputation.” statement: “Doingwhat isrightbecause itistherightthingto dois Northrop Grummanhasexported to: embargoed. contracts. Thearmsembargo onIraq isonnon-governmental exports specifiedinAppendix1are priorto Turkey’s classification clearly have apresence intheregion notingthatthey: “provide a ethics anddoingwhatisrightare thecornerstones ofNorthrop personnel”. oftheSaudimilitary development i i ] → Bahrain More detail onspecificexportsisgiven inAppendix1:Exportdata → → Iraq 155 156 → → 154 → Turkey 31

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Through itspurchase ofOrbital ATK inSeptember 2017,157 The combination oftheSwitchblade loitering missilewithPuma 2018 by AeroVironment. vast ocean andcoastal regions for maritimedomainawareness. Switchblade© (see alsoGeneral Dynamics). with limited except humanintervention, attheendstage of was confirmed by anoperator. Currently fieldedSwitchblade the locations to Switchblade, Switchblade thenlaunchedand UAE systems (sensor-to-shooter orS2S)was demonstrated inApril field ofautonomous systems. Thisincludestheminiature flying automatically to flew thetarget andengaged thethreat (inthe autonomous features for land,sea andair. Key programmes autonomously. Northrop Grumman hasfurther enhanced itstechnology inthe Hawk system, whichprovides near real-time high-resolution Northrop Grumman hasproduced various typesofsystems with imagery, alsotheTriton system, whichprovides real-time ISRover include high-altitude long-endurance systems, suchas theGlobal lethal missilemadetogether withAeroVironment, known as locate andidentifyaseriesoffast-moving attack craft” andpass Provided under creative commons license CC-BY-2.0 Grumman X47-BNorthrop Unmanned Aerial Vehicle. © Sarah Pierce, Flickr. systems can beupgraded withtheS2Scapability. This engaging orstrikingthetarget, to operate anentire mission demonstration showed theabilityoftwo systems working together demonstration withaninertpayload). Theoperation to engage 32 159 ThePumawas ableto “successfully 158

“With future enhancements, multiplesimultaneous threats can be vehicle (UCAV). Thisalsohasthepotential to bearmedwith that holdsupto sixSwitchblade munitionsandsoftware that allows operators to control multipleairvehicles simultaneously. Northrop alsoproduced theX-47B, anunmannedcombat aerial precision guided missiles. launch andlandingonthedeckofanaircraft carrier.

defeated”. Future enhancements willincludeamulti-pack launcher 161 Thesystem iscapable ofautonomous 162 160 R Their customers intheregion includeSaudiArabia, Bahrain, Egypt, Jordan, Kuwait, Oman,Qatar, theUAE andothers. Systems; Space andAirborneSystems; andForcepoint. Raytheon with countries demandingintegrated fighter aircraft systems, air Company and missiledefense solutions,C5I™products andservices, and Saudi-led coalition inYemen, includingthousandsof Paveway unfree regimes suchastheUAE andSaudiArabia. Deutsche Bank BNP Paribas Barclays Raytheon hasexported to countries that are fragile states, those Raytheon hasexported to countries in conflict, includingSaudi Defense Systems; Intelligence, Information andServices; Missile Raytheon Raytheon Arabia, Turkey, Iraq, Egypt, andBahrain. Ithasalsoexported to EXPORTS TO CONTROVERSIAL COUNTRIES INTHEMIDDLEEAST notes that“The MiddleEastisoneofourmostimportant markets, Crédit Agricole Crédit Suisse Crédit Agricole Investment inRaytheon Raytheon ismakingintheregion in2019. Morocco andtheUAE. Thiscontinues withnew deals that Raytheon hasbeenby far oneof thelargest exporters to the Finance provision Raytheon critical infrastructure protection andcybersecurity solutions”. civil libertiesandcountries inthemidstofarmed conflict. exported to countries where there isoppression ofpolitical and experiencing ofinstability, highlevels poverty andconflict. Ithas AND NORTH AFRICA (MENAREGION): missiles andthousandsof anti-tank missilesto SaudiArabia, arms sales,with94%ofitsrevenues coming from armssales. aytheon isthethird largest defense company intheworld by Raytheon operates five businesssegments: Integrated (in €millions) (in €millions) 631.70 418.46 127.65 57.99 57.99 57.99 164 163

13,600 Paveway missileswere soldto theUAE in2017,arguably, → → → → vehicles andguidedbombshave beenexported by Raytheon to the Saudi-led coalition members andhave unequivocally been (IHL), asthey appeared to directly target civilianinfrastructure. weapons – despite itsslogan “Creating a Safe World”. to beinvolved intheproduction andfacilitation ofnuclear US Long Range Standoff weapon. Raytheon istherefore considered after there was strong evidence provided thattheSaudi-led associated withtheviolation ofinternational humanitarian law agreed to cooperate ondefense-related projects to create use hasbeenfound inYemen, someofthesetargets have alsobeen Kingdom. Raytheon Company andSAMI(SaudiArabia Industries) Military Raytheon isinvolved intheMinuteman IIImissilesystem for theUS Raytheon hasexported thousandsuponofPaveway indigenous defense, aerospace andsecuritycapabilities inthe instrumental inthedeath anddestructioninYemen. InMay2017, nuclear arsenal. Itisalsoproducing key components for the new missiles to SaudiArabia, theUAE andto Jordan, evidence oftheir PRODUCTION OFCONTROVERSIAL WEAPONSYSTEMS: EXPORTS TO COUNTRIES INSAUDI-LED COALITION INYEMEN:

Raytheon hasexported to: coalition was violatingIHL.Precision missiles,tanks, armoured i i ] → → → → Iraq Lebanon Egypt Bahrain More detail onspecificexportsisgiven inAppendix1:Exportdata 165

→ → → → → → → → © Facing Finance Finance © Facing Dhabi. Abu in 2019 IDEX at missiles their advertising Raytheon Turkey Saudi Arabia UAE Kuwait

→ → → → Jordan Morocco

166 → 33

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 withKongsberg.JSM whichitisdeveloping Thismissileuses the intended target. working onistheanti-shiporland-attack JointStrike Missileor automatic target recognition, andcan strike targets over 100 advanced seeker andtarget-identification technology, with acknowledgement ontheirwebsite aboutthemoral orethical Raytheon alsotakes aproactive andpositive stance towards the initial tests are beingcompleted ontheF-16.The JSMcan beair implications thismay bring.Oneoftheadvanced systems itis launched orshiplaunched. nautical milesaway.

ship typeswhichmean that itcan distinguishbetween theseand carrier, zeroing inonthelarger ship. differentiate between, for example adestroyer andanaircraft development ofautonomousdevelopment weapons systems, withlimited 34 © Facing Finance 2016, Dhabi Abu UMEX exhibition in at shown vessel Unmanned autonomous 169 167 Themissilewould therefore beableto Itwas for developed theF-35fighter jet and 168 Theweapon hasalarge database of

that control them. working relationship between robots andthehumanoperators technologies. Theresearch apparently aimsto improve the tools to autonomously control swarms ofground andair-based UAVs. advancing thescience ofbio-inspired systems andautonomous autonomous navigation market along withThales(France) and autonomous vessels andis described asakey player inthe Northrop Grumman(US) amongothers. Raytheon isalso involved ofmarine inthedevelopment Raytheon, aswith otherdefense companies isalsodeveloping behaviour.”. Itisbeingusedby theUS to military attack enemy between UAVs, whichenablesautonomous, collaborative having “a breakthrough technology thatusesinformation sharing © Facing Finance 2015 DSEI at presented JSM or Missile Strike Joint

sponsors theCenter for Autonomous Systems andTechnology drones. 171 170 TheCoyote UnmannedAerialSystem (UAS) isdefinedas 173

172 Finally, Raytheon R were delivered in2015.Germanyhasbeenincreasing itsexports to transfers, aclear indication thathumanrightsconcerns are nottop to bearepressive state often violently, whichcrushescivildissent, Group Group and armssuchastanks are particularly controversial asthey can In November 2018Germanyhalted armsexports due to Saudi Deutsche Bank Egypt asthe US reassess theirinvolvement. Rheinmetall hasexported Armoured Personnel Carriers to Egypt as involvement inthekillingofJamalKhashoggi.Rheinmetall Rheinmetall Rheinmetall 5,896 millionofwhich€3,036was from theirdefense have beencovered by anarmsembargo since 2013. be usedto oppress civilians–inadditionthesetypesoflarge arms part ofalongterm agreement since 1987where thelast ofthese policy whichnotes:policy “themanufacture, trading andexport of responded 2019by threatening to thisinJanuary to suethe EXPORTS TO COUNTRIES INSAUDI-LED COALITION INYEMEN: EXPORTS TO CONTROVERSIAL COUNTRIES INTHEMIDDLEEAST Commerzbank Crédit Suisse Crédit Agricole German government for lossofrevenue dueto thehaltinarms Investment inRheinmetall sector. Finance provision Rheinmetall our homemarket ofGermany, andrightlyso”. of theiragenda. Thischimesincontrast to Rheinmetall’s export AND NORTH AFRICA (MENAREGION): defense technology products isstrictlyregulated, particularly in 25th ontheglobal listofdefense companies in2017.51%of its total salesare inarmsand2017they hadsalesof€ heinmetall isthelargest Germanarmsproducer, ranking 174 (in €millions) (in €millions) 227.25 11.83 92.53 26.81 175 176 Egypt isconsidered

through theirsubsidiaries andpartners Rheinmetall alsoexport to technology. Wegreatly appreciate this. By placingthisorder, were linked to thedeath ofcivilians–thiswas awell-documented aerial bombingthatkilledsixfamily members, includingfour also exported to theSaudicoalition andtheuseoftheseweapons In 2016Rheinmetall delivered airsearch radars to SaudiArabia, Italian foreign andRheinmetall ministry over this. Board ofRheinmetall Defence, explains inrelation to theKuwait Further jointventures ofRheinmetall includeRWM-Italia, whichhas in thewar inYemen delivered in2016 and2017,suchasrecent Kuwait willsoonpossessNBCreconnaissance capabilities thatare not besubjectto export restrictions. Additionally, Rheinmetall hasexported to othercountries involved

projectiles and aircraft bombsupto 2000lb. projectiles factory inRiyadh, whichproduces shells,mortar artillery weapon producer MIC at IDEX 2013, © Facing Finance © Facing 2013, IDEX at MIC producer weapon Rheinmetall Munitions displayed at booth from Saudi-Arabian * Arab country inRheinmetall, Europe’s leading supplierofarmy Rheinmetallsubsidiary DenelMunitions,have set upa$240million second to pleased none. Weare to very bemakingadecisive covering aperiodoffive years. exports to Kuwait, whichincludesatechnical supportagreement countries withintheSaudi-ledalliance. Rheinmetall, through their of Rheinmetall Vehicles MANMilitary andMemberoftheExecutive children. Acoalition ofhumanrightsgroups are now suingthe contribution here”.* → deal, “Thisimportant order isamajorvote ofconfidence by an reconnaissance-vehicles-64772/ Talk. (Accessed 14.3.19) https://www.defencetalk.com/kuwait-orders-advanced-armored-nbc- Rheinmetall AG (2.7.15): Kuwait Orders Advanced Armored NBC Reconnaissance Vehicles. Defense 179 Pietro Borgo, ManagingDirector 177

Naturally thesewill 178 35

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 → → SMArt 155 is not a new weaponSMArt 155isnotanew system, itisconsidered to besemi- targeting, however thetarget isatsomepointcurrently preselected Weapon MunitionGmbH, aswell astheMulti-MissionUnmanned autonomous features. ThisincludestheSMArt155produced by autonomous navigation, mobility, trigger andto someextent autonomous. Mostfire andforget weapons posetheproblem of armies ofSwitzerland, Greece, Australia andtheUK. autonomy. Rheinmetall doesnotmanufacture orproduce cluster munitions, intelligent andhighperformance submunitions. robust “fire andforget” capabilities whichhastwo autonomous, nor nuclear weapons orkey components thereof. PRODUCTION OFCONTROVERSIAL WEAPONSYSTEMS: by ahuman.Thequestionhere istheslidetoward increasing Facing Finance 2017, DSEI © at (UGV) vehicle Ground Unmanned Multi-Mission GIWS describestheSMArt 155asasensorfused munitionwith Ground vehicle (MMUGV). GIWS, ajointventure ofDiehlDefence GmbHandRheinmetall Rheinmetall hasexported to: does research, andproduce develop weapon systems with deployed by theBundeswehr in2000,andhasbeensoldto the i i ] → → Kuwait Egypt More detail onspecificexportsisgiven inAppendix1:Exportdata 36 183 → → → → Saudi Arabia Egypt → → 181 Saudi Arabia

180 SMArtwas first Rheinmetall 182 Whilethe “increasing itsautonomous capability andthecapacity to operate The MMcan operate in“follow-me” mode.** According to news 2017, theUGV can becustomised according to therequirements of vehicle systems inAustralia. Science andTechnology to commonly autonomous develop weapons systems suchastheBOXER tank, whichwas by developed the client. weapon station fitted ThalesTDA withseven rockets. In 2018Rheinmetall Defence Australia signedafive-year strategic Rheinmetall’s MMUGV isaflexible andadaptable unmanned Rheinmetall for theGermanArmy. integrate anumberofweapons, includingpotentially aremote in swarms ofUGVs conducting thesamemission.” ground system whichcan outavariety carry ofmissions,including remote control andautonomous operations are bothpossible. research alliance anddevelopment agreement withDefence reconnaissance andsurveillance. According to jane’s itcan also perimeter protection, escorting, target acquisition, and protection variant oftheMMUGV isspecifically designedfor reports, Rheinmetall Canadaisseekingto evolvetheMMby protection” means inthiscontext andwhatengagement tasks are *

could have decreasing humancontrol inthefuture. engagement tasks. covered by thisterm. According to aRheinmetall press release in from the target, with options for obstacle detection. technology, the robot can understand where its target is, and keep pace at a predefined distance The robot can track and follow an operator, vehicle, or another robot. Using Ultra wideband 188 Itisofcourse possiblethatanyengagement tasks 187 Itisseeminglyunclear asto what“force 189 Theprogramme willinvolve existing 190 186 Theforce 184 Reportedly 185

T Thales hasexported to various members oftheSaudi-led coalition, Thales hasexported alarge numberofweapons to whichsince Egypt, Thales’s Thales has exported to Egypt and Turkey, both countries cur 2017. to Egypt ofanyequipmentwhichmightbeusedfor internal repres the and crowd control architecture aimedatpreventing alldissentand Saudi-led coalition operating inYemen. Barclays Banco Santander Deutsche Bank BNP Paribas Egypt including Egypt hasalsoacquired frigates andradar systems from Thales March EXPORTS TO COUNTRIES INSAUDI-LED COALITION INYEMEN: EXPORTS have allparticipated intheconstruction ofawidespread surveillance primary August 2013hashadanarmsembargo imposedby theEUon“export SA Thales has Crédit Agricole Crédit Agricole Investment inThales social movement andleading to thearrest oftens ofthousands since sion”. Finance provision Thales opponents AND rently in armed conflict. It has also exported to countries in the naval exported hales Group isranked ninthintheworld interms ofdefense sales, sales NORTH 191 2015. It “is 2015 Defense related projects account for roughly 60%of has overall exports to blockade Saudi TO came and and bring been According engaged satellites

AFRICA CONTROVERSIAL activists.” the activities Arabia, to from documented security, these largest in in (MENA the its to used shelling (in €millions) the media defense 194 countries in Gulf safety defense Thalesnotes thattheGroup’s visionin UAE, the for (in €millions) REGION): by of crowd Middle reports, Yemeni and COUNTRIES Egypt, Aden. Amnesty sector are 140.69 162.59 922.68 company 824.75 100.32 growth 51.08 control.

East. radars, Egypt Kuwait, targets the with International Egyptian 192 in € 193 in has IN the both 17.7 “In so doing, they “Insodoing,they and France. and THE deployed country”. billion participating ground Jordan. Navy MIDDLE that 51% in has 195 at and Thales of Its sales

least EAST its since - air. - in in

The primary restriction that needtoThe primary beplaced onthedevelopment Thales Thales Thales UKrecently started to maritimeautonomous develop Thales hasexported to: → → → vides defence related land,sea andairsolutionsto theUAE armed Systems, two gunboats andtwo destroyers, bothMK-class shipshave Thales the together withAirbus,Safran, SNPEandDCNS,obtained aten-year the government-backed Man-MachineTeaming, orMMT, study for forces, includingon-board electronic systems for theMirage 2000-9, fall lightmultirole missile,itcan alsobeequippedwiththeSTANAG and applying an ability able autonomous In France’s Hermes innovation ing UAVs –anautonomous andHalcyon boatalreadytested –were PRODUCTION by theRoyal Navy. medium lead thisprogramme, whichwilldraw onanetwork ofsmalland

Crotale sting system surveillance systems standard sources, theUAV has“fully autonomous missioncontrol andan of contract inDecember 2004to M51nuclear buildthenew missilefor designed for the Britisharmyandisbased ontheElbitsystems design i i ] → → → 2015 autonomous Turkey annual Saudi Arabia Egypt More detail onspecificexportsisgiven inAppendix1:Exportdata new application to gun is for claims intended different with Thales MK3, UAV. French in government involved companies AI a weapon fire the € Plymouth. joint drive to 100 the and The GATR, take-off control to Watchkeeper combat launched OF submarines, weapon million venture of ability be operational to to a Watchkeeper in control 203 CONTROVERSIAL fully force future Europe’s develop PR4G the and

and has and Thales’ aircraft. → → → “to integrated on M51 → → → to by systems the laboratories. announced F@stnet Scout Jordan UAE system. Kuwait proof landing offer artificial targets. Thales X future missile Watchkeeper no with requirements”. to autonomous Dassault is 1 be surface cameras, the are built in an 202 system, and simultaneous and weapon weaponized unmanned craft intelligence

for estimated that WEAPON plans 199 in Sonar Elbit. the search. Aviation and the of radar, X, in French marine systems. to 201 identification, an UK According addition allow → suite. Thisincludesthe increase → SYSTEMS: 196 value aerial with unmanned electronic (AI) by Morocco

and operation”. Thalesalsopro Arsenal. 197 UAV systems, it as the This to of Thales systems. to part spending to Tactical € be Thales a 3 37 includes

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FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 T ThyssenKrupp boughtAtlas Elektronik in2017. which produces submarinesandundertakes naval services. BNP Paribas Banco Santander BNP Paribas Deutsche Bank is predominantly through ThyssenKruppMarineSystems ThyssenKrupp AG ThyssenKrupp Crédit Agricole Commerzbank Investment inThyssenKrupp Finance provision ThyssenKrupp ThyssenKrupp AG come from thedefense sector, after Rheinmetall. Only4%ofthetotal salesof hyssenKrupp isthesecond largest Germanarmscompany, 38 (in €millions) 107.19 700.74 740.54 280.72 (in €millions) 43.83 64.42 206 204 this © Facing Finance Finance © Facing 2019 IDEX at Dhabi Abu in systems marines offering ThyssenKrupp 205

ThyssenKrupp hasexported submarinesto Egypt whichwere ThyssenKrupp hasexported to: → the war inYemen, andhavingarepressive authoritarian regime. and Egypt hasalarge part to play, butalsoDiehlDefense and Information onThyssenKrupp’s submarinesdelivered to Israel can Egypt isnoted here asitiscontroversial for armsexports, dueto increased 205%. Krauss Maffei Wegmann have exported to Egypt. be found inthe feature articleonIsrael inthisreport. being inarmedconflict, participating intheSaudi-ledcoalition in

delivered. Inthelastfive years Germanexports to Egypt have delivered between 2016and2017afurther order isyet to be i i ] → Egypt More detail onspecificexportsisgiven inAppendix1:Exportdata 207 Thesubmarinedeal between ThyssenKrupp

208 Features

Launching a Multiple Launch Rocket System (MLRS). © US Army via Flickr CC-BY-2.0

39 7 | 2019 PROFITSFINANCE | DIRTYFACING FACING FINANCE | DIRTY PROFITS 7 | 2019 B “operation pillarofdefence” and2014 “operation protective edge” “The Gaza blockade (through theland,airandsea) isadenialof and violations of international law international of violations and Since early 2000,four majorconflicts involving Palestine andIsrael the Palestinian organization Hamasalsoviolates international law, followed. for example by usingthepresence ofcivilians to cover itsmilitary actions against Israel. access to agricultural landandfishingwaters” amounts to collective Itseverely restricts punishment. importsand Israeli armyundertook airstrikes onupto 100targets inGaza. During theconflicts in2008,2012and2014theIsraeli armykilled Palestine, thereafter the2008–2009“operation cast lead”, 2012 Palestinians, isthrough theGaza blockade, whichhasbeen Palestinians dependentonhumanitarian aid.According to theUN, involved Israel andHamas. Media inGaza alsodeclared thatIsraeli naval vessels were involved imposed by Israel (andEgypt) since 2007,itrestricts themovement in strikes offthecoast of Rafah. groups insouthern Lebanon led peopleto take to thestreets indemonstration. have taken place; from 2000–2005thesecond intifada started in metropolitan region ofTel Aviv. basic humanrightsincontravention ofinternational lawand One way inwhichIsrael isviolatingthehumanrightsof Human rightsviolationsandcontradiction to over 6,362deaths. over 2,000Palestinian civilians. escalated withtwo rockets beingfired from Gaza toward the of around 2millionPalestinians, andhasleftmore than1million exports, as well asthemovement ofpeopleinandoutGaza, and humanitarian law: of movement of Palestinians, Palestinians, of movement of collective punishment restriction and of support complicit the in Arms companies exporting to Israel: companies exporting Arms The conflict between Israel andPalestine hasbeenongoing for over 70years, andintheyears 1989to 2017resulted in ackground to theconflict: 40 213 Israel isalsoinvolved inconflicts withSyriaand 209 Inrecent years conflict theprimary has 210 214 Asrecently asMarch 2019theconflict . 211 212 215 Inanimmediate response the

Undoubtedly, ontheotherhand, 216 . Thisblockade has 217 The Israeli government enforces severe anddiscriminatory the basis to ofapolicy uselive ammunitionagainst peoplewho weapons exports to Israel. where Israeli authoritieshave evicted hundreds ofPalestinians through theunlawful transfer ofIsraeli citizens to thewest bank firing zones within theWestBank. from theirhomes. Israel hasenforced checkpointsand military force. approached orattempted to damage thefences. as well asPalestinian armedgroups. ammunition against protestors, despite noimminentthreat to life around theGaza frontier inMarch 2018.Israeli forces shotwithlive Israeli forces usedlethal force against Palestinian protestors investigation concluded thesewere “seriousviolationsofhuman Israel’s occupation policiescontinue to violate thehuman proportionate. Inthisregard Israel hasbeenaccused ofwar rights andinternational humanitarian law,” Lockheed Martin,Raytheon andThyssenKruppcontinue restriction ofmovement inandout oftheGaza stripbutalso restrictions on Palestinians’ humanrights–boththrough the Amnesty International are demandinganarmsembargo onIsrael © Israel Defense Force Defense © Israel Border Gaza the Near Operate Corps Armored

crimes of lethal force against theprotesters was neithernecessary nor of Israeli soldiers orIsraeli civilians.Theseactionswere taken on rights of Palestinians, yet defense companies includingBoeing, demonstrations were almostentirely civilianinnature andtheuse 221 220 andhumanrightsviolationsintheiruseofweaponized

222 223 Consequently, NGOssuchas 219 . Itconcluded the 218 AUN vehicle thatcan remote carry controlled weapons andsensors to to forces themilitary ofIsrael over theperiod2012–2017.The the company delivered vessels includingsubmarinesandafrigate the Guardium, produced by theIsraeli company G-Nius.Itcan be these systems hasbeenusedto patrol theGaza border, itiscalled world inrelation to itsimportofarms. which isconsidered astrategically important sector. Israel ranks the sameoperation room, which can belocated longdistances there isofcourse theriskthattheseweapons willagain beusedto weapon hasbeensoldto Israel by Boeing intheperiod2014–2017, defenceWith awell-developed sector, Israeli defence companies While naturally itcannot besaidthatThyssenKruppis,through its from theborder area. “It’s possibleto guidethevehicle to allsorts also produce anumberofautonomous weapon systems. and thepotential for violationsinthisarea. Naval vessels are also used indifferent modes,eitherremote controlled orpre- used by Israel to protect thegas fieldsintheoffshore region, some In the2008/09war itis claimedthatIsrael usedtheGBU39from Ben-Gurion international airport. Israel hasatechnologically advanced local weapons industry, Boeing to destroy infrastructure inGaza. Leonardo, Lockheed Martin,Raytheon andThyssenKrupp. inflict severe damage onPalestinian peopleandinfrastructure. The naval vessels have inthepast beeninvolved inattacks on lead”. rights violations,itshows thevolatile situation onthecoastline has imported weapons from several companies includingBoeing, programmed, andcan beequippedwithorwithoutaremote- patrol theGaza border. Soldiers willcontrol allofthevehicles in reach Thearmywillalsodeploy unmannedpatrol anew thespot. border andto keep incheckinvaders untilthesoldiers are ableto

8th intheworld interms ofitsarmsexports, butalso 8thinthe Gaza, German company ThyssenKrupphasalsomadedeliveries to Israel, system was alsoevaluated for useinsecuring theperimeter ofthe conflict between Palestine andIsrael isnotconfined to land,and of thesegasfields were confiscated by Israel during“operation cast controlled lightweapon system. of places withoutoperation rooms nearby,”. deliveries ofvessels, directly involved inanyincidentsofhuman Autonomous weapons patrolling theborder: Arms Companies delivering to Israel: 226 228 was alsoareport ofanattack against civilianfisherman. 230 232 Itstask isto protect theGaza

224 Inthelastfour years Israel 225 Thissametypeof 231 TheGuardium 229 Oneof 227 © Facing Finance 2018. Eurosatory at a display/poster of Photo Gaza. with border its on weapons important most Israel’s of one is vehicle ground unmanned made Israeli Made Israeli Guardium UGV: This “Fire andForget” autonomous weapon, which“detects, attacks weapons are usedto oppress civiliansisconsidered highly with theviolationofhumanrightsandinIsrael thisriskremains would notmeet thestandards ofinternational humanitarian law. the Harpy decides to destroy anyenemyradars withinageneral that once launchedsearches for enemyradar signalsand the detected enemyradar signalisindeedamilitary target or area inspace andtime,buttheHarpy itselfchooses thespecific and destroys enemyradar emitters”. undertaken to ensure thattheir weapons willnotbeassociated Exporting weapons to astate where humanrights are violated and In additionto systems suchastheGuardium, Israel haswell Paul Scharre captures itinanutshell:“Thehumanlaunching

high. Inaddition,Israel’s ofautonomous development weapon

systems shouldbecloselymonitored to prevent thedevelopment DEVELOPED BY ISRAEL companies exporting to Israel mustensure thatduediligence is controversial and shouldbecloselymonitored by companies. The of fully autonomous weapons systems, thetechnology is OTHER AUTONOMOUS WEAPONSYSTEMS radar itdestroys.” humanitarian law. rather onacivilianbuilding,suchasschoolorhospital. It can stay intheairfor several hours andcover around 500km. engages detected targets withouthumanapproval. Thesystem clearly fails theprincipleof distinctionrequired by international developing rapidlydeveloping toward increasing autonomy andthesesystems described by its manufacturer Israel Aerospace Industriesasa developed loitering drones, for example theHarpy drone is 234 235 However, theHarpy drone cannot tell if 233 Itisaloitering munition

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 at war in Yemen Alliance Saudi-led the in countries to exporting Companies Lockheed Martin MOROCCO Raytheon 42 Boeing Thales General Dynamics Lockheed Martin ThyssenKrupp Leonardo SpA Rheinmetall Raytheon EGYPT Boeing Thales Airbus MBDA SUDAN none Lockheed Martin BAE Systems Raytheon JORDAN Boeing Thales General Dynamics Lockheed Martin SAUDI ARABIA Leonardo SpA BAE Systems Rheinmetall Raytheon by companies • •

Boeing Thales Airbus MBDA Involved in the Saudi-led Alliance and evidence of exports exports of evidence and Alliance Saudi-led the in Involved exports of evidence no Alliance Saudi-led the in Involved Thales Rheinmetall Raytheon Lockheed Martin General Dynamics Boeing MBDA Airbus KUWAIT Raytheon Northrop Grumman Lockheed Martin BAE Systems BAHRAIN Thales Raytheon Lockheed Martin Leonardo SpA Boeing MBDA BAE Systems Airbus UAE B The UAE sponsors, trains andarmsitsalliedYemeni forces andhas The conflict inYemen escalated heavily in2015,whentheSaudi-led 2016, called for foreign governments to haltsalesandtransfers of 2018, thatthecoalition (amongotherentities),includingSaudi violated IHLprinciples,includingthoserelating to distinction, Sudan hasthelargest presence military ontheground inYemen of the aircampaign aswell assending800ground troops to Yemen warfare butalsoholdsakey role ontheground insouthernYemen. the enjoyment ofhumanrights.Thesubstantial flow ofweapon United Arab Emirates (UAE), Jordan, Egypt, Morocco, andSudan. following thebreakdown inrelations withUAE andSaudiArabia. and contributed to thenaval blockade withfour warships. any external memberofthecoalition. Egypt hasplayed arole in also established detention centres to (believed have violated and otherinternational andYemeni groups have, since early in all weapons related andmilitary equipmentif“there isa appointed by theUN,concluded inareport publishedinAugust also violate thecore normsoftheArmsTrade Treaty (ATT). Houthi forces, consists ofSaudiArabia, Bahrain, Kuwait, the international rightsoflaw”. in certain cases detailed over theperiod2014–June 2018, incidents regarding theirrole inalleged unlawful air-strikes. human rightsincluding,butnotlimited to, torture ofitsinmates). proportionality, andprecautions inattack that mayamountto war Arabia leading thecoalition andconducting themajorityofair- Although initiallypart ofthecoalition, Qatar withdrew in2017 been violated. Thiswould mean thatexports to theSaudiAlliance may, subjectto determination by anindependentandcompetent Arabia andtheUnited Arab Emirates, have committed actsthat Arms transfers to theSaudiArabia-led coalition negatively impact A Group ofRegional andInternational EminentExpertsonYemen, strikes, theUAE, congruous to itsSaudipartners, participates inair Coalition countries are involved to varying degrees, withSaudi systems to countries involved isfuelling adevastating war. HRW serious violationsofinternational humanitarian lawor substantial riskofthesearmsbeingusedto commit orfacilitate Evidence of War crimes: crimes. evidence strongly demonstrates thattheSaudiArabia-led coalition coalition members refuse to provide anydetail aboutspecific coalition began air-strikes intheregion. Thecoalition, fightingthe court, amountto international war crimes. Banks and Arms companies Arms and Banks Hand-in-Hand: in Yemen profiting from war (crimes) war from profiting ackground to thewar: Countriesinvolved intheongoing conflict in Yemen HUMAN RIGHTS IMPACTED 239 There isstrong evidence thatIHLhas 240 Thereport notes that 237 238 The 236

“There islittleevidence ofanyattempt by parties to theconflict to The coalition blockades andrestrictions onnaval andairentries, The coalition airstrikes have caused themostdirect civilian 2,200 peoplehave diedofCholera andalready malnourished to preventable causes. Currently, there isnochildinYemen notin that attacks mayhave beeninviolationoftheprinciples facilities. Thisbringsinto questioncompliance withoneofthe funerals, weddings, detention facilities, civilianboats, andmedical closeto400.000 ofwhichare to starving very death. More than Diphtheria. Cholera iseasy to treat, however, 50%ofhospitals have imported, meaning theblockade hasaccounted for nearly 2million independent experts examined manyofthesecases, concluding need ofhumanitarian aid. medication, alsoattributable to theblockade. been destroyed andthere continues to bealack ofdoctors and minimize civiliancasualties.” be directed atcombatants objectives. andmilitary between objectives. civilianobjectsand military Attacks mayonly most fundamental principlesofthelawswar –thedistinction © Alisdare Hickson … markets hospitals, schools, targeting Yemen on assault Saudi backed UK The in Yemen’s four-year conflict. estimates that130children daydue undertheage offive dieevery can beseenaspotential violationsof IHL. children are weakened intheirfightagainst Cholera aswell as children inYemen suffering from severe acute undernourishment, crimes. Thehead oftheExpertpanel noted: casualties, withairstrike hitsonresidential areas, markets, nearly 1,000civilians,includingchildren, intwenty-seven attacks American- andBritish-madebombs mayhave killedorinjured distinction, proportionality and precaution and may amount to war 243 244 245 241 80%ofYemen’s food is 242 Save The Children 47 The group of 43

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 The busattack ofthe9thAugust 2018thatkilled40 children and 1.29 billionUSD) advanced airto ground munitionsto theSaudi Since thewar began in2015,neithertheUS northeUKhasreduced their products.” through theiruse by SaudiArabia. Italsoclaimed“thatthe war crimes inYemen: the US agreed adeal to provide 10,000(withthevalue of forces for operations inYemen andSyria. arms salesto theSaudiAlliance, for example inNovember 2015 appropriate steps to make sure theirproducts didnotcause or In June2016anOECDcomplaint was filedagainst bothLockheed Martin andBoeing,alleging that thecompanies didnottake included Paveway munitionsmadeby Lockheed andRaytheon. products directly caused adverse humanrightsviolationsinYemen, LOCKHEED MARTIN manufactured by Lockheed Martin.Thiswas oneofmanythousand re as at 15.01.2019. All figures are given in € millions. € millions. in given are figures All 15.01.2019. at as re investments and 2019 2015–Jan Nov period the for are financings all Note: Companies didnothave arelevant anddidnot humanrightspolicy Evidence of weapons usedinspecificattacks andpotential carry outappropriatecarry humanrightsduediligence inthesaleof contribute to humanrightsviolationsandthatthecompanies’ of itskindto besoldby theUS to SaudiArabia. children) usedthe500-pound laser-guided MK82bomb adults,injuringafurthereleven 79people(56ofwhomwere Credit Agricole, 1.235,85 Credit Barclays, 190,96 Barclays, 44 Investments in Lockheed Martin Lockheed in Investments Financings to Lockheed Martin Lockheed to Financings 250 Deutsche Bank, 180,20 Deutsche 246 Lloyds Bank, 911,90 Bank,Lloyds

Credit Agricole, Credit Credit Suisse, 131,69 Credit 43,45 247 Paribas, Paribas, Unicredit, 581,68 Unicredit, 110,56 BNP BNP Thesemunitions Paribas, Paribas, 22,34 BNP BNP 249 Barclays, Barclays, 98,67 bank, bank, merz Com 20,45

- - 248 17 raids by theSaudi-ledcoalition, includingfood warehouses and Yemen. Security Council, published in January 2018, Security Council, publishedinJanuary was manufactured by ofRheinmetall, RWMItalia, asubsidiary a the plane.Theserialmarksonthispart shows oftheweaponry it the MK-80 family ofammunitions.Intherubblewithremnants the Italian export authorities. way systems usedby theSaudi coalition onciviliantargets was for thehighprecision, 500-poundbomb (asidefrom theRAF). The further 171injured intheattacks. Oneof thePaveway IVguided alleging criminalresponsibility ofthe Rheinmetall and subsidiary are suppliedby ThalesUKandRaytheon UK. a softdrinksfactory. used to indiscriminately target 13civilianeconomic structures in In thefinalreport oftheUNPanel ofExpertsYemen, for the UN Paveway isusedontheTyphoon andTornado strike aircraft, Paveway IV. Thismissilewas co-developed by theBritishandUS Haijari, killingafamily of6.Themissileusedwas aguidedbombin Médecins SansFrontières hospital, killing11andinjuring19others. manufactured by BAE. Anumberofthecomponents for thebomb branches ofRaytheon, withSaudiArabia being theonlycustomer RAYTHEON RHEINMETALL A 2016report by HRWpresented clear andcompelling Arabia after thecoalition had commenced aerialcampaigns in bombs was produced inMay2015,meaning itwas sentto Saudi region of€200millioninNovember 2015. are as at 15.01.2019. All figures are given in € millions. € millions. in given are figures All 15.01.2019. at as are investments and 2019 2015–Jan Nov period the for are financings all Note: On the8 German armsmanufacturer. Only Commerzbank provided financingsto Rheinmetall, inthe of thebomb, was asuspensionlugused to attach theweapon to evidence that UKarms,includingthePaveway missile,have been Credit Agricole, 92,53 Credit 254 th Onthe5 ofOctober 2016anairstrike hitthevillage ofDeirAl- Investments in Rheinmetall in Investments th ofAugust 2016,aPaveway guidedmissilehit a 253 HRWreported 130civiliancasualties witha 251 Acriminalcomplaint hasbeenfiled Credit Suisse, Suisse, Credit Deutsche Bank, 26,81 Deutsche 11,83 255 252 evidence of Pave

bank, 3,85 bank, Commerz Santan Banco Banco

… The extent to whichRaytheon isinvolved inSaudiArabia isalso Trade Treaty. The fact, amongothers, thattheseare precision guidedmissiles violations ofhumanrights. Saudi AirForce, active inYemen. were beingdeliberately targeted. for thePaveway systems are manufactured by theBritishcompany unlikely thattheprinciplesofIHLproportionality andprecaution Raytheon isable to circumvent anyoversight offered by state arms British Tornado andTyphoon aircraft are amajorcomponent ofthe in attack were respected. Thisreport highthreshold sets for avery indicated to theUNExpertsthatinmajorityofcases itishighly BAE systems. BAE BAE based onthefact ofcivilian levels thatdespite “worrying representing 21%ofsales. are as at 15.01.2019. All figures are given in € millions. € millions. in given are figures All 15.01.2019. at as are investments and 2019 2015–Jan Nov period the for are financings all Note: there, Raytheonsubsidiary SaudiArabia. shown for nineairstrikes, resulting inaciviliandeath count of84. credibility andisbased onverifiable information only. export controls intheUS andthereby circumventing theArms casualties” thecourt could notdetermine whether thesecivilians claimed thatarmssalesto SaudiArabia should bebanned dueto demonstrated by thefact thatin2017they set upawhollyowned Barclays, 57,99 Barclays, BNP Paribas, 57,99 Paribas, BNP Credit Agricole, 631,70 Credit 258 SaudiArabia is BAE systems’ largest customer Investments in Raytheon Co Raytheon in Investments Financing of Raytheon of Financing Credit Agricole, 57,99 Credit Credit Suisse, 57,99 Credit 259 260 Credit Suisse, 127,65 Deutsche Bank, 418,46 In2017acourt case against BAE Thiscase was thrown out ofcourt 257 261 TheTyphoon fighter jets used Barclays, 97,05 256 By setting uphere Deutsche Bank, Bank, Deutsche 57,99 47,59 Pari BNP bas, bas,

- “Hakim” air-launched cruisemissilewhichwas usedto target a The UKparliament hasalsoconfirmed thatMBDA weapons have Yemen. violations ofIHL.Theclear-cut case for increased scrutinyof (25%), andBAE Systems (37.5%). firm Marconi dynamicsin1990. In December reported 2016,Skynews thatanosecone ofastorm HRW identifiedintheirreport aUK- manufactured PGM-500 Many ofthecase examples ofspecificweapons found, have been MBDA isaprivate company owned by Airbus (37.5%),Leonardo implicated inthedeath ofciviliansandoften directly inpotential manufactured andsoldlongbefore MBDA hadanyinvolvement. became part ofMBDA, however themissilewas ofcourse MBDA radiation missile,Storm Shadow long-range cruisemissile. been usedinYemen including;DualModeBrimstone, ALARManti- are as at 15.01.2019. All figures are given in € millions. € millions. in given are figures All 15.01.2019. at as are investments and 2019 2015–Jan Nov period the for are financings all Note: shadow missilehadbeenfound ontheground inSa’adah Cityin civilian ceramics factory inYemen, thiswas manufactured by the exports to theregions. Barclays, 823,33 Barclays, Barclays, 329,83 Barclays,

265

Investments in BAE in SytemsInvestments Financing of BAE Systems of Financing BNP Paribas, 100,13 Paribas, BNP Commerzbank, 100,13 262 Marconi Dynamicseventually Credit Agricole, Credit Lloyds Bank, 100,13 Bank,Lloyds 100,13 Credit Suisse, Suisse, Credit Deutsche Bank, 220,43 Deutsche 64,90 Deutsche Bank, Bank, Deutsche 100,13 Agricole, Agricole, Credit Credit 41,88

264 263

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 SIPRI data, together theUS andtheUKsuppliedover 98percent of weapons imported by SaudiArabia. which would likely beusedto violate international humanitarian transfers thatwould likely beusedto commit crimesagainst Under Article6.3oftheArmsTrade Treaty states cannot allow arms theUAE,Egypt, andKuwait. Despite increasing ongoing evidence ofwar crimes,countries and equipmenttomilitary SaudiArabia (includingnaval patrol craft), law. humanity orwar crimes,includingattacks onciviliansorcivilian the war. © Priyanka Motaparthy. Human Rights Watch Rights Human Motaparthy. © Priyanka war. the of start the after 2015, in bomb the manufactured Raytheon that indicates number stock The Warehouses. Hodeida the struck that bomb Guided IV a Paveway of Remnant Exports to theSaudi Alliance: companies continue armssalesto countries involved. According to objects. deliveries to Egypt andhaslicensed significant quantitiesof 268

46 267 Thismeans thatthey cannot permitarmstransfers 266

Germany hasmadesignificant

The responsibility to respect humanrightsisgiven by theUNGPs on The responsibility of Banksto respect HumanRights: €2 billion to BAE Systems inApril2018wheninformation about too aware oftheriskassociated witharmscompanies exporting to well thehumanrightsandinternational humanitarian lawrisks take anyactionto require, encourage orsupporttheclientto that businessesmust“seekto prevent ormitigate adverse human While companies willargue thatitistheresponsibility ofStates to assurances thatthey are notinthisway beingassociated with a war zone suchasYemen. Banksshouldtherefore seekextra associated withitsbusiness model.Inaddition,banks shouldbeall and BAE should. arms exports despite increasing evidence ofviolations,companies approve exports inlinewiththeATT, theUNGuidingPrinciples Crédit AgricoleBank, andBNPParibas to Lockheed Martinin2018. Bank, CommerzbankBank, andothers provided loans totalling over In thecase ofarms industry, itcan beassumedthatbanks know Business andHumanRights,withinthistherequirement that human rightsviolationsinYemen were well known, thesebanks human rightsviolations.For example, before Barclays, Deutsche respect humanrightsexists independentlyofStates’ abilitiesand/ regulations”. Italsoarticulates clearly that“responsibility to rights “exists over andabove compliance withnationallawsand leave nodoubtthatthecorporate responsibility to respect human rights principles. prevent or mitigate theserisks. risk associated witha particular clientorproject butitomitsto harm where ifitshould have known thatthere isahumanrights rights impacts thatare directly linked to theiroperations, products most often applies to therelationship banks have withclients,is should have requested extra assurances regarding thearms states suchastheUS andUKare failing to take actionto prevent companies’ exports. This istruealsofor loans provided by Lloyds operating inthesecountries suchasRaytheon, Lockheed, MBDA or willingnessto fulfil theirown humanrightsobligations, and contributed to thoseimpacts.” Abank can beseento befacilitating or services by their businessrelationships, ifthey even have not does notdiminishthoseobligations”. Thismeans thatalthough 269 Theseexports are inclear violationofhuman 270 they do notdisclosethisinformation, butthatthey doengage with a high-level. In response to ourrequest only2banks replied, bothnoted that

Credit: Ibrahem Qasim / License: CC-BY-SA-4.0 / License: Qasim Ibrahem Credit: 2016 June 13 Sanaa, of south the in house Destroyed clients andthatthey doensure thesetypesofcases are reviewed at 47

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 – humanexperience, emotions,ethical andlegal awareness and TO AUTONOMOUS WEAPONSYSTEMS Why Autonomous Weapons Autonomous Why are a bad investment A which require e.g.qualitative humanjudgement, moral reasoning the principlesofproportionality, necessity, distinctionandmilitary that itwould beunlikely thatthesetechnologies would beableto with IHLandIHRL–ultimately created by andfor humans.Most to anautonomous weapon andreducing itto afew linesofcode they innately respect thepersonhood oftheenemy, are aware of without meaningful humancontrol crosses amoral line.Human autonomous weapon system fails, itcannot beheldaccountable. and understanding ofcontext. Moreover, aweapon system adhere to thelegal obligations underIHL.Thisrelates primarilyto artificial intelligence (AI)androbotics researchers questionthe anddisputing and humanrightslaw(IHRL),puttingciviliansatrisk, and stability, under autonomous weapons proceeds atgreat pace, threatening peace unproductive of diplomaticdiscussions,thedevelopment CONCERNS ANDRISKS RELATED battlefield raises concerns ofunpredictability andthus,puts reliability oftechnologies available inweapon systems andagree A lossofhumanagency posesseriouschallenges to compliance Outsourcingharming andfeel thisdecision theweight ofthisact. moral judgement indecision-makingprocesses. Asmoral agents Autonomous weapons raise anumber ofethical, legal, technical, The bottom line: bottom The civilians, combatants Ifsuchan andtheenvironment atrisk. operating outsidehumancontrol andableto self-learn onthe Legal Risks soldiers makinglife-or-death decisionsincorporate –amongothers Giving weapon systems thefreedom to selectandengage targets control: asoldier’s conscience. established norms,values andprinciples. on Conventional Weapon Systems (CCW) are trapped inyears of of gunpowder andnuclear arms.While states attheUNConvention Ethical Risks operational risks: andsecuritypolicy disrespects the value oflife andremoves thefinalinstance of to become thethird revolution inwarfare after theinvention utonomous weapon systems (AWS), whichselectand engage targets withoutmeaningful humancontrol, threaten 48 mining international humanitarian law(IHL)

The possessionofautonomous weapons alsolowers theoverall The high-tech powers military ofChina,RussiaandtheUS, aswell Technical &Operational Risks Since 2014,states have heldnumerous meetings related to lethal threshold to begin conflict orjoinamilitary dueto expected terrorist groups –maybeinlessadvanced, butmuchmore the comprehension ofhumanbeingsthiscould lead to unintended STATES’ DISCUSSIONS the process. Theseare, mostnotably, theUnited States and the five permanentmembers oftheUNSecurityCouncil,whichhas funding available for research into ofAIfor anddevelopment When combined withmachinespeedandtheabilityto actoutside as somealliesincludingFrance, have significantly increased autonomy, thepredictability andreliability ofoutcomes isreduced. and Israel –allofwhominvest funds andefforts inthe a majorityofstates prefers moving to anegotiating mandate for a Security Risks agreement currently inforce requires thegovernment to supporta includes proliferation to dictators andnon-state actors suchas increasing thelikelihood ofproliferation andmasskillings.This Russian Federation, United Kingdom, Republic ofKorea, Australia necessary to produce autonomous weapons are cheap andeasy to reduced economic andpolitical costs. Because thetechnology purposes,pointingtowardsmilitary anaccelerating AIarmsrace. becomes anunacceptable Asweapon risk. systems increase in AI andmachinelearning raise issuesofalgorithmic bias,alackof invests heavily ofautonomous inthedevelopment weapons and number have taken advantage oftheconsensus ruleto obstruct legally-binding instrumentand28call for anoutrightban, asmall ban onAWS. binding political declaration to regulate AWS although thecoalition obtain, powers military could mass-produce theseweapons, combination withchaoticandfoggy battlefield environments this explainability, malfunction andhacking,amongothers. In escalations ofcrisis,friendlyfire start oreven awar. should thusbeviewed withcaution. Germanyisproposing anon- called for aban ontheuseofautonomous weapon systems. Still, it dangerous andunreliable variants. AT THEUNITED NATIONS ofautonomousdevelopment weapons. Chinais theonlycountry of autonomous weapon systems withintheCCW framework. Although

This DirtyProfit Report already includesweapon systems with Trusted Autonomous Systems launcheda$9millionprogram to Samsung Techwin (now HanwhaTechwin) andKorea University SELECTION OFWEAPONSYSTEMS would notonlyputchildren atriskthatcross thatthreshold, but United Kingdom andIsrael. Therefore, certain are developments forces, Russia hasrecently tested Pantsir-S1 itsnew system which from shootingat peoplebelow acertain height. approaching theDMZ(presuming thatanyperson crossing theline adopted inthesameway thatKalashnikov’s AK-47 assaultrifle allegedly can operate “fully autonomously” inrelation to decision- South Korea In 2019,theUniversity SouthWales, ofNew theUniversity of to identifytargets andmake decisions”. the world.” Following arange thislogic,Russiahasdeveloped of IDEX exhibition thatitmight be inAbuDhabi.Expertsbelieve Demilitarized Zone (DMZ).Inprincipal, itissupposedto actlike a In 2017,President VladimirPutinstated: “Artificialintelligence isthe in anautonomous mode. is anenemy)through its integrated software relying ondifferent robot SGR-A1 thesentry jointly developed for theKorean Kalashnikov unveiled smallloitering anew munitionduringthe human soldier. Therobot oughtto detect enemy soldiers purposes. military Australia, whoallrefuse aban onautonomous weapon systems. highlighted intheRussianFederation, Republic ofKorea and revolutionaries across theglobe. became theweapon ofchoice for armies,militiasand making, targeting anduseofforce. research ethical autonomous robots. military Oneresearcher future [… ].Whoever becomes theleader[… ]willbecome therulerof have littleto dowithembeddingethics inamachine. China was alsoincludeddueto substantial investments inAIfor suggested to save children by training weapon systems to refrain Queensland andtheDefence Cooperative Research Centre for system hasreportedly beendeployed intheDMZ,however, unlikely still remotely controlled. TheKalashnikov armsmanufacture OF BAN-REFUSERS cameras. Iftherobot identifiesathreat, itcan issueawarning and Russia decreasing meaningful humancontrol from theUnited States, decide to outanattack carry withanintegrated The machine-gun. declared to take astep further by “afullyautomated developing different robotic tanks suchasUran-9 orVikhr, whichare however Australia combat modulebased on neural network technologies thatenableit 273 274 According to theRussianArmed

272 Russianmanufacturer 271 Suchproposals 2020s thataccording to reports news could “perform awiderange Secretary General, HumanRightsCouncilRapporteurs, 100NGOs weapons to bedeployed onland,airandwater. Anexample is weapon systems to –itistimefor jointhis thefinancial industry through autonomous mode. the IDEX2019exhibition inAbuDhabi.According to specialized as 28states have therefore called for aban onautonomous across theglobeunited inthecampaign Stop KillerRobots, aswell and armedaerialvehicles includingthe“Blowfish” system during Despite widespread concerns, weapons withdecreasing Pacific Ocean. Chinesemanufacturer unveiled various unmanned CONCLUSION instability incontested waters suchastheSouthChinaSea andthe investing inarisky, dangerous andinsecure future. China researchers, 21NobelLaureates, theEuropean Parliament, theUN meaningful humancontrol over selecting andengaging targets are Blowfish UAV at IDEX 2019 © Facing Finance © Facing 2019 IDEX at UAV Blowfish media theBlowfish system can becontrolled eithermanuallyor China’s pushfor underwater vehicles to beintroduced intheearly China pursues ofalarge thedevelopment range ofautonomous call andto undertake thenecessary precautions inorder to avoid atarapiddeveloping pace. More than4,500AIandrobotics attacks againstenemyvessels”. of missions,from reconnaissance to mineplacement to even suicide 276 275 Suchsystems could increase the 49

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Harmful Harmful © Petteri Ylinen via Flickr CC-BY-NC-ND 2.0 CC-BY-NC-ND Flickr via Ylinen © Petteri Helsinki. in show air Kaivopuisto at Hornet F/A-18 investments investments 50 Harmful investments T the ICRCassessment). that they are notassociated withhumanrightviolations these rankings refer to theFair Finance Guideintherelevant the methodology oftheFair Finance Guide,aproject by Oxfam We expect banks therefore to take therelevant actionsto ensure Weapon Systems, itisclear thatLAWS, oranyweapons without While theabove assessmentcriteria donotincludeelements assessing thebank policiesandapproach to Lethal Autonomous investments intop global defence companies). International. For themostaccurate andupto date information on include bothweapons exports to controversial countries andthe Defence policies compared policies Defence – Banks European human control would beillegal andwould violate IHL(based on banks selected inthisstudy (i.e. thoseEuropean banks withlarge related to theuseof LAWS. Inthisregard we sentaletter to the

production ofcontroversial weapons (cluster munitions,anti-per

Lethal Autonomous Weapon Systems andthedevelopment sonal andnuclear weapons). assessmentisbased Thepolicy on country available online.For example, atfairfinanceguide.de of increasingly autonomous weapons: Santander UniCredit Credit Suisse Crédit Agricole Commerzbank Deutsche Bank Lloyds Barclays BNP Paribas BBVA BANK 0–19% ment inthedefense sector. Thecriteria thatare assessed banks based approach ontheirpolicy to finance andinvest he bank assessmentsbelow rank policy theten selected 20–39% 40–59% - - 60–79% Two banks replied notingtheirawareness oftheissueLAWS: the bank. the countries ofdestination,whichincludesexclusion rules set by the transaction isanalysedandevaluated bothfor itsnature and that are systematically excluded, however, the equipmentbehind that noneofthebanks score assessment. well ontheirpolicy for acommon andcomprehensive definition,andtherefore the field ofLAWS. Itnotes thatthebank isaware ofthescrutinyand above 40% BBVA scores thebest ofthebanks at54%.Onlytwo banks score bank doesnotincludetheminthelistof“controversial weapons” bank notes thatLAWsare stillsubjectto international discussions A second bank noted thatthey assessLAWsundertheirdefence ments inthesector andisconducting significant research into the

* As thesebanks selected were theEuropean banks withhighest sector since policy they fall underthescope ofthepolicy.* The one response noted thebank was following closelythedevelop escalates to seniormanagement anycases where concern arises. exposure to theselected weapons companies, itisunsurprising

security and police equipment. see below), internal militaryor not, and dual-use equipment, repression as well as equipment, In this Policy, “defence and security equipment”, generally refers to weapons (whether controversial 80–100% POLICY RATING 54% 22% 25% 25% 28% 29% 31% 34% 39% 47% 51 -

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Santander UniCredit Commerzbank Crédit Agricole Credit Suisse Deutsche Bank Lloyds BNP Paribas BBVA BANK Barclays 52 The bank hasnopoliciesonexports to controversial countries. The bank’s policiesoncluster munitionsandlandmines,aswell asnuclear andbiological andchemical weapons are volved insuchactivities,butonlyto theactivitiesthemselves. Thisistruefor export policiesalso, Commerzbank has Scores well onpoliciesaddressing controversial weapons production. BNPs inrelation policy to armsexports to Santander haspoliciesfor the“manufacture, trade ordistribution”ofanti-personnel landmines,cluster munitions, trade finance and(inthecase ofarmsembargoes) to corporate credits, thesepoliciesshouldbeextended to third weapons (itdoesnotapplyto allcountries, leaving exceptions for theUK,US, France). Thesepoliciesonlyapplyto weapons exports, leaves thepolicy aloophole,andthusitdoesnotappropriately address controversial exports. tries currently inarmedconflict. they are notappliedto corporate credits, own accounts orclientaccounts. Santander hasnopoliciesrelated to the With regard to armsexports, BBVA scores full pointsfor havingasatisfactory onarmsembargoes, policy only While Crédit Agricole issatisfactory initscluster munitionsandanti-personnel landminespolicy, thebank’s nucle full pointshere. onpreventing Ithasapolicy exports to countries thatviolate humanrights,orwhere weapons could financing andinvestment thatare related to anti-personnel landmines,cluster munitions,andABCweapons. arms export thebank policy doeshave, again, onlyappliesto corporate credits. address theadditionalconcerns around exports to controversial countries. acceptable but notappliedto asset management or corporate credits. ar weapons islimited- policy particularly inscope. Italsofails to take aclear prohibitive stance ontheproduction, assets. assets andcorporate credits. Thebank hasavague publicstatement onarmsexports to countries where there isa SCORE ASSESSMENT unclear limited applies.Thebank how widelythispolicy policiesonarmsexports hasvery andthere isnoclear ex Deutsche Bankhasacceptable policiesoncluster munitions,anti-personnel landmines.Onanti-personnel minesthis Lloyds oncluster hasasufficientpolicy munitionsandanti-personnel landmines,andinpart sufficientfor nuclear In relation to controversial weapons production BBVA scores satisfactorily- they exclude companies from alltypesof Regarding nuclear weapons, theexclusion appliesto countries thathave notratified theNon-proliferation Treaty. ing nuclear weapons, thepoliciesare currently insufficientandthescope could beimproved by covering itsown as Barclays haspoliciesoncluster munitions,anti-personnel landmines,nuclear weapons andchemical andbiologi- couldpolicy beimproved by applyingitto thebank’s management ofown assets. Whilethebank haspolicies cover ports to countries witharmsembargoes. Noneoftheother weapons export criteria are covered by apolicy. Theonly party andown accounts. Thebank’s policiesonarmsexports are lacking–there preventing isonlyapolicy armsex make publicly-available theirdetailed onthedefense policy sector. maintenance andtrade innuclear weapons. Whilethebank onallbutoneoftheelementsrelated hasapolicy to policies stating thatweapon exports to countries inarmedconflict andthosewhichabusehumanrightsare consid- nuclear weapons, theseare onlyappliedto investments. Commerzbank alsodoesnotrefer to companies thatare in- Although Commerzbank oncontroversial hasapolicy weapons covering cluster munitions,anti-personnel minesand be usedto violate humanrights.BBVA onweapons hasnopolicy exports to fragile states, corrupt regimes, orcoun - no policiesonexports to countries underarmsembargoes, thosewithhumanrightsconcerns, oroppressive states. risk thattheweapons could beusedfor seriousviolationsofinternational humanrightsandhumanitarian law. Itis nuclear weapons, chemical weapons and biological weapons. Thesepoliciesare notcognizably widely applied– According to publiclyavailable information thebank hasnopoliciesonarmsexports to controversial countries. set management andthatofclients.DeutscheBankfalls exceptionally shortonpoliciesrelated to armsexports, with Credit Suissehas sufficientpoliciesoncluster munitionsandanti-personnel landmines. Itspoliciesonnuclear pro spending –althoughBarclays noted intheirresponse thatthey doconsider these, itisunclear how or to whatextent, embargo, BNPdoeswell to applythisto allfinancialproducts andservices. However, there are nofurther policiesto controversial countries islimited. prohibits Theonlyspecificpolicy thesupplyofarmsto countries underanarms clusion offinancingfor companies exporting to conflict zones, to fragile states, to states withcorruption indefense on theirdefence policy, they alsoprovided further information to However, ourrequest. itisadvisedthatBarclays or whatactionsare taken. Thebank policiesare heldinternally andBarclays provides apublicly-available statement ered unacceptable. Commerzbank could improve by applyingthesepoliciesto itscorporate credits andthird-party cal weapons, onlythecluster covers munitionspolicy widerfinancing, for example management ofthebank’s own export ofarms to controversial countries. duction, trade andmanufacture are insufficientasthey donotcover allelementsnorare they widelyapplied. ------I “clients willstillhave theabilityto buyelsewhere”. Sustainability champion Sustainability the financialmediareported thisasapush by Blackrock to make those companies whichearn significant revenue from cluster with respect to theweapons industry. Itdoesnothave anexclusion weapons. weapons to conflict zones seemcontradictory to thisgoal. Unlike thebanks thatwe investigated BlackRock inthisreport, Blackrock leaves thesustainability choice to theclient–citingthat BlackRock Inc. – Inc. BlackRock Blackrock thisbutreceived to query noresponse. WhenBlackrock BlackRock does applyexclusion criteria to specificportfolios, for required. Whileinstitutional investors mayhave abetter idea of landscape, aswell asofthe ESGperformance ofcompanies is money, considerable information andknowledge oftheinvesting managers have differing ways ofdealing withthis,makingit move by clientsto demandmore ESGcompliant funds, butasset really have ifitdoesnotfocus onitsown investment strategies? munitions, whileothers will have notolerance andprefer to nor doesitscreen companies whichdeliver goods military to coveringpolicy controversial arms,thecontroversial armstrade, sustainability criteria, thelackofstandardised rulesandconsistent sustainable investing mainstream. Butwhatimpact can Blackrock should show how they make “a positive contribution to society” sectors, dependsontheclient- somemaywant to exclude only often lesswell informed. confusing for clients.For aclientto decidewhere to invest its society, the production ofcontroversial weapons andthesellingof states itexpects companies to make apositive contribution to exclude anycompany earning revenue from anyweapons. Our research into theasset manager hasshown thatithas controversial countries. Asthisseemedimplausible,we contacted operate incontroversial sectors, suchasfossil fuels, tobacco or example someinvestments willscreen outcompanies which definition of“ESGinvesting” mean retail investors inparticular are does nothave anypubliclyavailable general investment policies report. Thisisfar more thanallten European banks combined. investments of €32.6billionintheweapons companies inthis or Lord of War? of Lord or (with assets undermanagement ofUS$5.98 trillion) n 2018,whentheCEOofworld’s largest asset manager letter to allthecompanies intheirportfolio, stating that they 279 How far clientsare willingto beexposed to these 281 There isa 278 wrote a 280

277

Yemen have beenassociated withtheviolationofIHL(asshown in 22 States Parties. 2017. Thetreaty isnotinforce yet States buthas70signatory and Saudi-led coalition inYemen. TheuseofRaytheon’s weapons in (€ 4billioninmanaged shares andbonds)hasto beseenas System, Airbus, Boeing,General Dynamics,Northrop Grumman, weapons from mainstream indices that itsproduct components have beenusedinYemen (aerial this report). BlackRock alsomanages shares andbondsofthe to theUAE andSaudiArabia, bothinvolved inthewar inYemen. weapons from itsown funds. Moreover, itisinvesting incompanies autonomous weapons, inadditionto exporting thousandsof analysed inthisstudy to thevalue of€32.6billion.It’s largest It’s second largest, Lockheed Martin(€5.3billion),isdeveloping Recently agroup ofasset managers withacombined $6trillionin BlackRock manages weapon shares company andbondsofevery NGO PAX, BlackRock hasinvested $70.52millioninsomeofthe Blackrock hasalsomadenocommitments to exclude controversial Nuclear weapons have alsobeenprohibited by aUNtreaty since Lockheed MartinandThales. involved inthenuclear weapon industrialcomplex, includingBAE not particular for itssustainability andESGofferings. Yet Blackrock has managers already have policiespreventing investment in AuM have demanded thatindex providers remove controversial Bybombing). supportingthesecompanies, BlackRock is largest Germanarmsproducer Rheinmetall (€200million),a missiles to countries inconflicts. Alsoitsinvolvement inRaytheon managed shares andbonds),acompany whichismainlyexporting holding, oftheselected companies, isinBoeing(€11billion most well-known companies producing cluster munitions. production ofcluster munitionshasbeenbanned inover 100 manufacturing cluster munitionsandnuclear weapons. The million in18ofthetop 20companies thatare mostheavily controversial weapons –Blackrock relies heavily onindex funds, in economically benefitingfrom thekillinghappeninginYemen. company whichissubjectto alawsuitfollowing theimplication controversial, asthecompany isoneofthelargest exporters to the controversial weapons, includingnuclear weapons andfully countries because oftheirindiscriminate killing. joined the call 286 to Nonetheless, BlackRock hasinvested $38.381 exclude 287 controversial 282 andnumerous asset weapons 284 According to the from 53 indices. 285

283

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 weapons companies (in€million): Graph: Share andbondholdingsof blackrock compared to the Diagram: Share andbondholdingsof Blackrock inselected combined ten European banks inthisstudy(in€millions): 1 1 Boein 0 2 8 6 4 2 0 0 0 0 0 A 0 0 0 0 0 ir 0 0 g,10.998,21 0 0 0 0 0 0 bu 0 s G 54 B ro A u E p

Sy s te m B G o s e e n in er g a C l D o yn a Le m o i n c a s Lo rdo ck h S N e pA o e r d th M ro a p rt G in ru m m a R n a y th R eo h n Loc

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T Martin kheed h e y t s al se l n K ru pp

T ,5.370,54 h al es Raytheon North where to invest. to weapons –placingtheonusinstead ontheclientto decide In thisway, BlackRock would take responsibility for itsproduct BlackRock’s size andvast assets undermanagement mean itcan it shouldonboard funds nonew thatdonotmeet thesecriteria. behalf ofclientsandshouldensure thatallofthefunds are ESG hands ofallresponsibility initsinvestments into majorweapon products nordoes ithave ageneral withrespect investment policy have asignificant impact onsociallyresponsible investing, yet it

compliant, withstrong ESGguidelines andexclusion criteria and contractors. Asanasset manager, BlackRock actsasanagent on offering. does notapplyESGcriteria across allitsactive investment o Gru rop 4.041,34 , mman ,3.613,61 288 Consequently, BlackRock isableto wash its Gen Th ales,1.383,88 rlDyneral amics ,3.158,21 A Systems,BAE 1.375,78 ThyssenKrupp, 514,06 Airb s 1.775,62us, Leon metall Rh ein- ard o Investing Money A Deadly business!A O the majorityofretail funds soldby the large Germanasset with Commerzbank aswell assellingitsfunds through thenetwork with DeutscheBankstillholdingamajoritystake. DWS excludes than 70percent oftheGermanmarket want theirown money to beinvested inthearmsindustry the “right“way. results show Survey thatGermansavers donot actually take into account specificexclusion criteria for the advisers, blindlyhoping thattheseadvisors willinvest theirmoney universe andstates thatthey take ESGcriteria into account intheir Investment collaborates withthecooperative banking sector (Volks- Investment, togetherInvestment, thesefour asset managers make upmore Due to theclose proximity, savers mostlyrely ontheirbank Deutsche Bankandalsowiththeinsurer Zurich; andAGI partners investment decisions.They note thatthey have aproxy voting industry. DWS. itself adopted oncontroversial policy anew weapons lastyear, incl. regarding inplacepolicy andengage indiscussionswithcompanies nevertheless, onlyaroundnevertheless, 5–10%ofassets undermanagement knowledge. managers. Thismeans thatthemoney belongingto Germansavers large numberofaround 400savingbanks (Sparkassen); Union market are retail funds producers ofcluster munitionsandlandminesfrom itsinvestment Allianz Global Investors (AGI), Deka DWS Investment, andUnion nuclear weapons companies, doesnotextend butthispolicy to nuclear weapons, inorder to to atleast limitfinanciallinkswith try General exclusion criteria are for notappliedto thearmsindustry DWS Group still invest innuclear weapon companies andalsoincompanies could beinvested inarmscompanies –often withouttheir of agents oftheinsurer Allianz. und Raiffeisenbanken); DWS works together withthebranches of channels: Deka Investment sellsitsproducts exclusively viathe exporting their armsto areas ofconflict and war. DeutscheBank due to thefact thatthey can rely onwell-established distribution ver the past ten years theassets managed by German financial institutions have doubledto €3trillion.Onethird of theseassets undermanagement ontheGerman ESG 292 hasbeenalisted asset manager since March 2018, issues. However, 289 . Themostimportant asset managers are in practice 290 . Theirimpact isinpart this means that 291 DWS – can Safely F-15jetsThe military madeby BoeingandtheEurofighter jets of The investigation undertaken shows thatDWS isinvested inallof Saudi-Arabia anditsallies.Theapproximately 20,000airraids are these asset managers. researchedthe eleven weapons companies. Almosthalfofthe for ESGcommitments. focus onexclusion criteria, butrather onabroader, non-binding When divinginto thenumbers inourresearch, it’s clear thatAGI is facilities. Moreover, Airbus,BAE Systems undLeonardo also and isengaged indialogue withmanycompanies, inpart pushing aim ofpushingfor improved ESGperformance ofthecompanies. also adopted anengagement andproxy voting strategy, withthe and retail clients.Theparent company Allianzexcludes producers and Lockheed Martin.Raytheon andNorthrop Grummanare It manages over €500billioninassets onbehalfofit’s institutional ESG analysisintheirinvestment strategy withoutlimitingtheir Besides this,theGermanbranch ofAllianz,AllianzDeutschland AG, investment universe orpushingfor strictexclusion criteria. AGI has landmines are notpart oftheinvestment universe. Muchlike its pressure andcriticismover thisissueinGermanyandby German banks inGermany. heavily involved ofautonomous inthedevelopment weapons large American companies Boeing,Raytheon, Northrop Grumman researchedbonds inalloftheeleven companies, mainlyinthe production ofnuclear missilesfor theFrench army. leading manufacturers includingthe ofalltypesmissiles- responsible for thedeath ofthousandsciviliansandthe Airbus, BAE Systems andLeonardo, are thecurrent focus ofpublic money isinvested intheaircraft manufacturers BoeingandAirbus. systems andthiscould poseasubstantial reputational riskfor still significantly invested inthearmssector. AGI holds shares or engagement strategy. Deka alsohasinplace aproxy voting policy competitors, theinvestment strategy ofDeka Investment doesnot Deka Investment isessentiallytheinvestment armofthesavings clients. AGI follows asimilarapproach aswithDWS: they integrate of cluster munition,landmines, biological andchemical weapons. company owned by theglobal financialservices group Allianz. cooperate inthejointventure MBDA, whichisoneoftheworld’s criticism asthesejets are frequently usedinthewar inYemen by does notinvest inproducers ofnuclear weapons dueto increased destruction ofalarge numberofessential/important infrastructure Allianz Global Investors isaglobal investment management – 294 Producers ofcluster munitionsand 55 293

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 The asset manager oftheGermancooperative banking sector, Yemen. Furthermore, Deka isinvested inThyssenKrupp, oneofthe Union’s strategy is,rather thanto divest from certain deadly allies, whichare alsobeingusedinthelongandviciouswar in Union Investment, onlyhasoneabsolute taboo regarding upgrading ofmissilesfor theUS andUKarmy. Investment Union In particular thecompanies’ exports to authoritarian regimes like Rheinmetall andBAE Systems. Allthesecompanies provide investments in the arms industry thanitscompetitors,investments inthearmsindustry however, investments in the arms industry they excludeinvestments inthearmsindustry producers ofcluster Egypt andTurkey have caused afloodofnegative headlines in DWS Investment Deka nuclear missilesand Northrop Grummanisalsoinvolved inthe nuclear weapon producers suchasAirbus,BoeingandNorthrop producers ofnuclear weapons. According to ourdata, this business branches generally, to engage withthesector. Last munition andlandmines. According to ourdata, Deka isinvested ineightoftheeleven largest Germaninvestment companies Table: Bond-andShareholdings of the TOTAL Investors Allianz Global recent years. most important submarineandwarship manufacturers worldwide. Grumman. AirbusandBoeingare producing key components for summer, Unionannounced itwould divest littleby littlefrom commitment hasnotyet beenfulfilled. Unionisstillinvested in equipment like jets, missilesandmunitionto Saudi-Arabia andits companies researched. Thisincludesthecompanies Airbus,Boeing, 56 1,101.93 Airbus 156.24 500.36 270.16 103.94 295 Systems Overall, UnionInvestment haslower 429.65 196.07 69.90 57.71 4.41 BAE

1,452.61 Boeing 178.07 466.85 36.80 25.37 Dynamics General 143.02 14.28 5.06 Leonardo 125.60 51.32 23.89 3.43 5.47 Lockheed 377.52 Martin 143.01 96.36 0.15 technologies thatcan beusedwithautonomous weapons without want to deal with,for instance, ITcompanies providing AI would take into account thatthemajorityofGermansare against fail. Allianz,Deka, DWS andUnionshouldrethink theirinvestment at present noknown strategies on how Germanasset managers arms exports andtheproduction ofnuclear weapons andthatthey and war from theirinvestment universe. Suchdivestment efforts It isclear thatGermanasset managers currently donotplace any products andcompanies ispossibleandhasimpact. There isalso producers. Experience from thecluster munitionandlandmine budgets worldwide, includingauthoritarian regimes- isdoomedto model isbased onexports to countries withthehighestmilitary An engagement strategy witharmscompanies whosebusiness manufacturers. meaningful humancontrol- orhow to deal withtheir strategy andexclude, least,producers atthevery ofthemost campaigns shows thatadivestment strategy from harmful engaging incontroversial armstrade oronnuclear weapon convincing restrictions oninvestments inarmscompanies controversial weapons systems andexporters to regions inconflict do notwant theirmoney invested inthisdeadly business. Grumman Northrop 654.86 168.49 166.62 61.35 60.24 Raytheon 642.89 301.63 192.76 5.95 156.81 Rhein- metall 23.55 53.55 76.45 140.65 Thales 31.15 82.47 5.46 Thyssen 314.06 120.62 Krupp 65.04 87.37 16.25 5,539.60 1,495.69 1,258.01 TOTAL 440.52 733.62 Investment Union DWS Investment Deka TOTAL Investors Allianz Global largest Germaninvestment companies Table: Bond-andShareholdings of the 1,101.93 Airbus 156.24 500.36 270.16 103.94 Systems 429.65 196.07 69.90 57.71 4.41 BAE

1,452.61 Boeing 178.07 466.85 36.80 25.37 Dynamics General 143.02 14.28 5.06 Leonardo 125.60 51.32 23.89 3.43 5.47 Lockheed 377.52 Martin 143.01 96.36 0.15 Grumman Northrop 654.86 168.49 166.62 61.35 60.24 Raytheon 642.89 301.63 192.76 5.95 156.81 Rhein- metall 23.55 53.55 76.45 140.65 Thales 31.15 82.47 5.46 Thyssen 314.06 120.62 Krupp 65.04 87.37 16.25 5,539.60 1,495.69 1,258.01 TOTAL 440.52 733.62 and financial financial and Recommen- institutions by Jan-Philipp Thiele on Unsplash Photo Financial Frankfurt dations for banks banks for dations

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 → → the following issues: delivery ofweaponsthe following issues:delivery the controversial arms trade mustcover an armedconflict, to fragile states, to arms embargo, to unfree countries, to goodsand military to countries withan investments inarmstrading companies. From ourpointofview, policiesregarding place thatcover the financingand limited by expenditure. military Very few report have anexclusion for policy Currently allofthebanks covered inthis of thebanks inthisreport have policiesin countries where poverty is alleviation countries where corruption ishighandto of humanrights,to countries engaged in countries violatingfundamental principles Financing of andInvestment incompanies controversial arms trade are more limited. covering themanyfactors related to the controversial weapons, butpolicies exporting armsto controversial countries: war crimesasdefined by international to war zones, weapons usedinthe the Geneva Conventions of1949, agreement. arms companies thatsupplyweapons and admittingtheATT (Article6.3.)and accounts andcorporate credits. attacks directed against civilianobjects against humanity, grave breaches of introduce thatexcludes apolicy improve theirpoliciesby referring to be appliedto own accounts, third party Banks andinstitutional investors must Banks andinstitutional investors must exclude anyfinancialrelationship with controversial armstrade. Thisshould or civiliansprotected assuch,orother commission ofgenocide, crimes 58 296 → → → → with humanrightsviolations. which are controversial for armsexports, asinthePAXthis report, report (see We suggest thatthemethodology usedin and could therefore associate thebank provide abasis for identifyingcountries methodology sectionofthisreport), could

through theirinvestment andfinancing to countries whichare considered trigger additionalduediligence. through theirinvestment and financing annual report onthenumberof apply theUNGuidingPrincipleson Business andHumanRights governance issuesconcerned, andthe be more transparent abouttheir linked to humanrightsviolations policies related to armsexport should problematic for armstrade andscreen Banks andinstitutional investors must regulations, thatbanks ensure that Banks andinstitutional investors must Banks andinstitutional investors Banks andinstitutional investors should publishexclusion listsrelated should identifycountries whichare states’ approaches to export consequences they drew from that engaged andtherelevant socialand companies withwhomthey have exporting companies, includingan engagement processes witharms ensure thatregardless ofindividual controversial for armstrade. countries. Companies withpoor companies thatdeliver to these decisions. dialogue. decisions they willnotbefacilitating or The majorityofthebanks covered inthis Therefore, banksandfinancialinstitutions → → Swiss Sustainable Finance Engagement weapons companies involved in achieve thisbyachieve signingonto theOpen without meaningfulhumancontrol over which can selectandengagetargets Initiative. Banks andotherfinancialinstitutions Letter to Index Providers coordinated by Production of, maintenance of, andtrade in Development, production andtesting of many cases. nuclear weapons could beimproved in mines, however, thecoverage related to report have acceptable policiescovering mainstream indices for the removal ofall should alsowhere applicable lobby Financing andInvestment incompanies cluster munitionsandanti-personnel controversial weapons. They can helpto lethal autonomous weapons systems, producing controversial weapons: must: must: parts ofnuclearweapons, isunacceptable. nuclear weapons, includingimportant individual attacks, isunacceptable. technology, parts, products orservices. trade ofnuclear weapons related testing, production, maintenance or and associated companies. This active, internal andexternal andto all just theparts ofthecompany includes thewholecompany andnot participating inthedevelopment, management classes –passive and This shouldbeappliedacross all Exclude allnuclear weapon producing subsidiaries inallmarkets, to allasset entities withinthegroup, includingall existing andfuture investments. → → the topic ofautonomous weapons, and are necessary by banks andcould bedone Further research development andpolicy in thefollowing way: noted thatthey were aware oftheissue. responded to Facing Finance inrelation to

Only two banks oftheten banks requested Technological of development the ICRCreport “Autonomous weapon without humancontrol, are illegal towards of thedevelopment and would violate IHL(based onthe autonomous weapons, oranyweapon also linkthemto potential human autonomous weapon systems, could autonomous weapons israpid, and are recommended to monitor the ICRC assessment).Thisobligation and investments inproducers could humanitarian law”. legal background isdefinedwithin rights violations. Banks mustacknowledge that banks, beingassociated with become areputational concern. For Banks andotherfinancialinstitutions systems underinternational companies thatare moving swiftly opposition isstrong – for thisreason ofthesesystems.development 297 “business relationship “undertheOECD The OECD,inlinewiththeUNGPs on → their own andclientfunds alsoneedto to shiftresponsibility from theentity their operations, products orservices by a applied to thesefinancial relationships. Business andHumanRightsshouldbe Business andHumanRights,states impact directly isnevertheless linked to between aninvestor andinvestee rights duediligence to theirapproach. The Asset managers intheirrole ofmanaging not contributed to thatimpact, whenthe mitigate adverse impacts where they have “Seekto preventbusiness must: or relationship.” business relationship. Thisisnotintended OECD guidelinesnote thatarelationship Guidelines. Thismeans that theUNGPon shareholding can beconsidered a Recommendations for company includingaminority ensure thatthey applyrelevant human enterprise with whichithasabusiness causing anadverse impact to the Asset Managers: ShareAction, found that“Only8asset weapons companies to improve their transparency by asset managers inthis asset managers, by theorganisation Best practice engagement disclosure human rightsrecords. Arecent study of results ofengagement withinvestee managers, or20%,provide afull listof regard. Asset managers shouldusetheir substantial leverage to engage with companies.” covers thetotal number, topics, and companies engaged withover theyear.

298 299 Facing Finance supports → → → →

Sustainable Finance Engagement their clientsofthepotential and that asset managers communicate with those companies producing with investment inarmsproducing this by signingonto theOpenLetter to the humancontrol onkillingdecisions. technology usedto reduce or eliminate weapons. weapons includingchemical biological funds thatreplicate themarket indices, dutyof finds itiswithinthefiduciary actively working towards developing and governance issues. asset managers to inform theirclients approach ofthosewhohave chosento Initiative. Index Providers coordinated by Swiss Finance strongly recommends and involved incontroversial weapons. increasingly autonomous weapon investing inweapons companies and/ removal ofallweapons companies Asset managers can helpfully achieve Asset managers thatprovide passive Asset managers shouldalsoinform In thecase ofasset managers, Facing Asset managers shouldfollow the should lobby theseindices for the systems and/or artificialintelligence or other(IT)companies thatare emerging human rightsrisksof clients regarding environmental, social controversial weapons. Itisessential countries andalsoofinvestments in companies exporting to controversial of thehumanrightsrisksassociated divest entirely from controversial 300

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 to the report the to © IRIN photos via Flickr BY-NC-ND-2.0 Flickr via photos © IRIN clan. Huthi the from rebels and government the between war escalating the by displaced people than more to 10,000 home now is Arabia Saudi with border north-west Yemen's of scrublands mountainous tough the in camp Mazrak Appendix Appendic Appendix 60

to the report the to Appendic Turkey Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia UAE UAE UAE UAE UAE Egypt Egypt Kuwait Kuwait Egypt Egypt

Recipient Recipient MBDA andEurofighter APPENDIX 1: TABLE OF WEAPONS EXPORTS BY COMPANY Airbus Group Controversial Controversial arms exports arms exports country for country for yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no Country partCountry Country partCountry of Saudi-led of Saudi-led in Yemen in Yemen coalition coalition yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no Germany (FRG) Kingdom Kingdom Kingdom Kingdom Kingdom Supplier Supplier United United United United United France France France France France France France France Spain Spain Spain Spain Spain Spain Spain Italy Italy Italy Number Number ordered ordered 1000 100 150 100 130 100 800 10 28 30 23 24 50 48 49 3 3 2 1 8 4 5 MM-40-3 Exocet MM-40-3 Exocet Storm Shadow/ designation designation EC725 Super A400M Atlas A-330 MRTT Brimstone C-295MPA Typhoon Typhoon Typhoon Block-20 Block-20 Weapon Weapon Helios-2 Marte-2 Marte-2 Block-8 Cougar Meteor Mistral Mistral SCALP EC145 MPCV C-295 C-295 C-295 C-295 MICA Maritime patrol Light helicopter range air-to-air range air-to-air surface missile surface missile sance satellite Beyond visual Beyond visual Surface-to-air Surface-to-air Air-to-surface Air-to-surface Tanker/trans Anti-ship MI/ Anti-ship MI/ description port aircraft FGA aircraft FGA aircraft FGA aircraft Surface-to- Surface-to- Reconnais Transport Transport Transport Transport Transport Transport Anti-ship Anti-ship Portable Portable Weapon Weapon aircraft aircraft aircraft aircraft aircraft aircraft aircraft missile missile missile missile missile missile missile missile type - - Year of order/ Year of order/ licence licence 2009 2006 2013 2016 2016 2013 2003 2009 2016 2014 2014 2014 2015 2015 2015 2015 2017 2017 2017 2007 2011 2007 2011 2010–2016 2015–2016 2015–2016 2013–2015 2013–2015 2013–2015 2014–2015 2015–2015 2016–2017 2016–2017 2014–2017 2009–2017 deliveries deliveries Year(s) of Year(s) of 2016 2017 2017 2017 2017 2017 delivered/ delivered/ produced produced Number Number 61 150 100 100 130 800 10 10 25 49 3 3 1 8 4 5

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 The BoeingCompany Turkey Jordan Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia UAE Lebanon Iraq Kuwait Egypt Egypt Egypt Egypt Bahrain Egypt Egypt Recipient Recipient BAE Systems 62 Controversial Controversial arms exports arms exports country for country for yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no Country partCountry Country partCountry of Saudi-led of Saudi-led in Yemen in Yemen coalition coalition yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no United States United States United States United States United States United States United States United States United States United States United States United States Kingdom Kingdom Supplier Supplier Sweden Turkey Turkey United United France France France France Italy Number Number ordered ordered 2000 2000 100 150 320 350 400 650 15 20 20 25 25 48 50 22 22 56 2 6 6 WGU-59 WGU-59 WGU-59 MM-40-3 Exocet Storm Shadow/ ASTER-15 SAAM P-84 Poseiden designation designation SAK-70 Mk-2 M-113A300 M-113A300 HERCULES Harpoon-2 Harpoon-2 Harpoon-2 Hawk-100 Hawk-100 Marte-ER AGM-84H SLAM-ER Weapon Weapon RGM-84L RGM-84L RGM-84L Chinook Chinook WGU-59 M-88A2 CH-47F CH-47F 57mm SCALP MICA APKWS APKWS APKWS Trainer/combat Trainer/combat range air-to-air surface missile surface missile surface missile surface missile Beyond visual Surface-to-air Air-to-surface Air-to-surface Air-to-surface Air-to-surface Air-to-surface Anti-ship MI/ Anti-ship MI/ Anti-ship MI/ Anti-ship MI/ description description ASW aircraft Kill Weapon Surface-to- Surface-to- Surface-to- Surface-to- personnel personnel Armoured Naval gun Armoured Armoured Transport Transport helicopter helicopter Advanced Precision Anti-ship recovery Weapon Weapon (APKWS) System vehicle aircraft aircraft missile missile missile missile missile missile missile missile carrier carrier Year of order/ Year of order/ licence licence 2018 2018 2013 2016 2018 2016 2013 2014 2003 2016 2013 2015 2015 2015 2015 2015 2015 2012 2012 2011 2017 2011 2015–2016 2013–2015 2013–2015 2016–2017 2015–2017 2016–2017 2015–2017 2015–2017 2016–2017 2016–2017 deliveries deliveries Year(s) of Year(s) of 2016 2015 2015 2017 2017 2017 2017 # delivered/ delivered/ produced produced Number 1150 100 110 120 320 350 500 10 15 30 25 25 90 22 2 4 6 Turkey Turkey Turkey Turkey Jordan Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia UAE Saudi Arabia UAE UAE Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Kuwait Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Kuwait Saudi Arabia UAE UAE UAE Lebanon General DynamicsCorp Egypt Recipient Controversial arms exports country for yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no Country partCountry of Saudi-led in Yemen coalition yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no no no United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States Supplier Canada Canada Number ordered 1000 1500 1000 4000 3600 2645 5200 5000 100 119 153 125 264 314 600 571 70 28 12 12 12 24 24 24 17 84 51 2 4 6 4 6 AH-64E Apache AH-64E Apache AH-64E Apache AH-64E Apache AH-64E Apache Globemaster-3 P-8A Poseidon M-1A1 Abrams Piranha LAV-6 F/A-18E Super LAV-25 turret designation GBU-39 SDB GBU-39 SDB GBU-39 SDB Boeing-737 ScanEagle Guardian Guardian Guardian Guardian Guardian Weapon Chinook Chinook LAV-6 AT Piranha M-1A2S M-1A2S AEW&C CH-47F F-15SG F-15SG CH-47F Hornet AH-6S JDAM JDAM JDAM JDAM JDAM JDAM JDAM JDAM JDAM C-17A Anti-submarine Anti-submarine fighting vehicle warfare aircraft Fighter/ground Fighter/ground Tank destroyer control aircraft Airborne early- attack aircraft attack aircraft Guided bomb Guided bomb Guided bomb Guided bomb Guided bomb Guided bomb Guided bomb Guided bomb Guided bomb Guided bomb Guided bomb Guided bomb aerial vehicle warning and transport ac description FGA aircraft Unmanned Transport personnel helicopter helicopter Armoured helicopter Transport helicopter helicopter helicopter helicopter helicopter Weapon Combat Combat Infantry Combat Combat Combat Combat carrier Heavy turret (UAV) Tank Tank Tank Year of order/ licence 2018 2016 2016 2016 2018 2013 2016 2015 2009 2009 2009 2015 2014 2016 2014 2014 2014 2014 2015 2002 2015 2012 2012 2011 2017 2017 2017 2017 2011 2011 2017 2011 2011 2015–2016 2015–2016 2012–2015 2014–2015 2014–2015 2011–2015 2016–2017 2016–2017 2016–2017 2015–2017 2012–2017 2015–2017 deliveries Year(s) of 2018 2018 2018 2018 2016 2016 2015 2015 2017 2017 2017 delivered/ produced Number 63 1500 2500 3600 5200 198 100 200 250 264 314 600 12 28 12 12 24 24 90 2 4 2

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Turkey Turkey Turkey Turkey Turkey Yemen Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia UAE UAE UAE Egypt Egypt Egypt Egypt Kuwait Egypt Bahrain Bahrain Bahrain Bahrain Egypt Recipient Recipient Leonardo SpA Lockheed Martin 64 Controversial Controversial arms exports arms exports country for country for yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no Country partCountry Country partCountry of Saudi-led of Saudi-led inYemen in Yemen coalition coalition yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no no no no United States Supplier Number ordered Canada Canada Canada Canada Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy Italy UAE 19 14 20 12 24 25 Weapon designation AGM-114K HELLFIRE F-16C Block-50/52 Number ordered AAQ-33 Sniper AAQ-33 Sniper 724 119 119 155 218 16 20 50 3 3 2 2 9 4 1 9 4 1 1 6 6 6 GMLRS F-16V Compact Orion RTN-25X Piranha LAV-6 designation Piranha/LAV- Super Rapid Super Rapid Super Rapid Super Rapid Super Rapid Super Rapid Super Rapid Super Rapid Mangusta Mangusta Göktürk-1 Weapon RAT-31S RAT-31S Piranha Piranha M-1A2S Cougar A-129C A-129C AW139 76mm 76mm 76mm 76mm 76mm 76mm 76mm 76mm 6 IFV FSV 40L70 Fighter/ground attack Fighter/ground attack Aircraft EOsystem Aircraft EOsystem Anti-tank missile Guided rocket description Weapon Air search radar Air search radar fighting vehicle aircraft aircraft Recce satellite description fire support Fire control Helicopter personnel personnel personnel Naval gun Naval gun Naval gun Naval gun Naval gun Naval gun Armoured Armoured Naval gun Naval gun Armoured Naval gun Armoured helicopter helicopter Weapon Infantry Combat Combat vehicle carrier carrier carrier radar Tank Year of order/ Year of order/ licence licence 2010 2008 2003 2016 2013 2006 2009 2016 2016 2009 2004 2014 2014 2014 2014 2015 2015 2015 2017 2007 2011 2011 2010 2018 2015 2017 2017 2011 2012–2016 2011–2016 2013–2015 2014–2015 2011–2015 2011–2015 2016–2017 2016–2017 deliveries Year(s) of 2013–2015 2013–2015 deliveries Year(s) of 2016 2016 2015 2015 2015 2015 2015 2017 2017 2017 #delivered/ produced delivered/ produced Number 724 155 18 16 20 20 12 24 3 2 9 1 1 1 1 9 1 6 6 6 Turkey Turkey Jordan Jordan Jordan Jordan Jordan Jordan Jordan Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia UAE UAE UAE UAE Kuwait Kuwait Kuwait Kuwait Kuwait Kuwait Morocco Morocco Iraq Iraq Iraq Egypt Lebanon Iraq Egypt Lebanon yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no no no no no no no no no no no no no yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no no no no no no 1200 2176 5000 100 100 100 100 158 144 124 193 390 300 320 356 600 10 18 18 18 14 20 12 12 20 30 24 40 60 60 50 69 21 2 2 8 1 2 2 4 6 5 C-130J SuperHercules AGM-114K HELLFIRE AGM-114K HELLFIRE AGM-114K HELLFIRE AGM-114K HELLFIRE AGM-114K HELLFIRE AGM-114K HELLFIRE AGM-114L HELLFIRE AGM-114L HELLFIRE C-130J-30 Hercules MGM-140B ATACMS F-16C Block-50/52 F-16C Block-50/52 MH-60R Seahawk KC-130J Hercules AAQ-13 LANTIRN FGM-148 Javelin MIM-104F PAC-3 MIM-104F PAC-3 MIM-104F PAC-3 M-142 HIMARS AAQ-33 Sniper AAQ-33 Sniper AAQ-33 Sniper AAQ-33 Sniper Patriot PAC-3 Patriot PAC-3 Patriot PAC-3 Patriot PAC-3 BGM-71 TOW BGM-71 TOW S-70/UH-60L S-70/UH-60L S-70/UH-60L S-70/UH-60L S-70/UH-60L S-70/UH-60L F-35A JSF TPS-77 GMLRS GMLRS MMSC Mk-41 M28 Anti-submarine warfare Self-propelled Multiple Surface-to-air missile/ Surface-to-air missile/ Surface-to-air missile/ Fighter/ground attack Fighter/ground attack Combat aircraft radar GMLRS Guidedrocket Suface-to-air missile/ Tanker/transport ac Anti-ballistic missile Anti-ballistic missile Anti-ballistic missile Anti-ballistic missile Anti-ballistic missile Anti-ballistic missile Anti-ballistic missile Skytruck transport Surface-to-surface Aircraft EOsystem Aircraft EOsystem Aircraft EOsystem Naval SAMsystem Aircraft EOsystem Transport aircraft Transport aircraft Anti-tank missile Anti-tank missile Anti-tank missile Anti-tank missile Anti-tank missile Anti-tank missile Anti-tank missile Anti-tank missile Anti-tank missile Anti-tank missile rocket launcher Air search radar Guided rocket FGA aircraft Helicopter Helicopter Helicopter Helicopter Helicopter Helicopter helicopter aircraft aircraft system system system system missile Frigate 2017 2017–2018 2008 2018 2016 2016 2013 2016 2016 2016 2013 2016 2016 2013 2016 2014 2014 2014 2014 2013 2014 2015 2015 2015 2015 2015 2015 2015 2014 2014 2015 2015 2015 2012 2012 2012 2017 2017 2017 2017 2011 2017 2011 2011 2017–2018 2017–2018 2014–2016 2015–2016 2014–2015 2014–2015 2016–2017 2014–2017 2016–2017 2016–2017 2016–2017 2016–2017 2015–2017 2018 2016 2016 2015 2015 2015 2015 2015 2015 2017 2017 2017 2017 2017 2017 2017 65 2176 5000 100 100 144 390 300 400 356 600 18 18 12 12 20 30 24 80 50 93 21 52 52 1 1 1 2

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Turkey Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Lebanon Iraq Iraq Iraq Iraq Iraq Iraq Iraq Iraq Iraq Egypt Bahrain Bahrain Egypt Bahrain Egypt Recipient Recipient Northrop Grumman Raytheon 66 Controversial Controversial arms exports arms export country for country for yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes Country partCountry Country partCountry of Saudi-led of Saudi-led in Yemen in Yemen coalition coalition yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no no no no no no no no no Germany (FRG) United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States Kingdom Supplier Supplier United Number Number ordered ordered 2400 3100 8120 100 100 150 100 150 163 139 300 350 300 300 330 264 500 355 618 600 26 25 50 50 8 4 AGM-154 JSOW AGM-154 JSOW RIM-116A RAM RIM-116A RAM RIM-162 ESSM AGM-88 HARM APG-83 SABR BGM-71 TOW BGM-71 TOW designation designation Sidewinder Sidewinder Sidewinder Sidewinder AIM-120C AIM-120C Maverick Paveway Maverick Paveway Paveway Paveway Paveway AMRAAM AMRAAM Weapon Weapon Sparrow Sparrow Sentinel AIM-9L/I MPQ-64 AGM-65 AGM-65 AIM-7M APG-68 AIM-7M APG-68 AIM-9X AIM-9L AIM-9L Air search radar Short range air- Short range air- Short range air- Short range air- range air-to-air range air-to-air range air-to-air range air-to-air Beyond visual Beyond visual Beyond visual Beyond visual Guided bomb Guided bomb Guided bomb Surface-to-air Surface-to-air Guided bomb Guided bomb Guided bomb Guided bomb Surface-to-air Air-to-surface Air-to-surface to-air missile to-air missile to-air missile to-air missile Aircraft radar Aircraft radar Aircraft radar description description Anti-radar Anti-tank Anti-tank Weapon Weapon Combat Combat Combat missile missile missile missile missile missile missile missile missile missile missile missile Year of order/ Year of order/ licence licence 2010 2013 2013 2016 2013 2014 2013 2013 2013 2015 2016 2005 2005 2012 2017 2017 2017 2011 2011 2011 2017 2011 2011 2017 2017 2011 2011 2013–2016 2015–2016 2009–2015 2013–2015 2016–2017 2015–2017 2016–2017 2012–2017 2016–2017 2016–2017 2016–2017 deliveries deliveries Year(s) of Year(s) of 2016 2015 2015 2015 2015 2015 2015 2017 2017 delivered/ delivered/ produced produced Number Number 2400 3100 8120 100 150 100 150 163 139 220 220 300 350 300 355 232 25 50 50 4 Turkey Turkey Turkey Turkey Turkey Turkey Turkey Jordan UAE UAE UAE UAE UAE Saudi Arabia UAE UAE UAE Saudi Arabia UAE UAE Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Saudi Arabia Kuwait Kuwait Kuwait Kuwait yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no no no yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no no no no no United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States UAE 13640 10747 2000 4941 100 166 145 200 300 320 400 117 237 25 60 60 60 96 21 2 2 7 4 2 7 4 6 THAAD missile Mk-15 Phalanx Mk-15 Phalanx Mk-15 Phalanx RIM-116A RAM BGM-71F TOW- RIM-116A RAM RIM-116A RAM RIM-162 ESSM RIM-162 ESSM Guided Bomb Patriot PAC-3 Patriot PAC-3 Patriot PAC-3 Patriot PAC-3 BGM-71 TOW Sidewinder Sidewinder MIM-104C MIM-104F MIM-104F MIM-104F MIM-104F AIM-120C Paveway Paveway AMRAAM THAAD THAAD THAAD AIM-9X AIM-9X Talon PAC-3 PAC-3 PAC-3 PAC-3 PAC-2 2B ballistic missile ballistic missile ballistic missile ballistic missile Short range air- range air-to-air missile system missile system missile Beyond visual Surface-to-air Guided bomb Surface-to-air Guided bomb Surface-to-air Surface-to-air Surface-to-air Surface-to-air Surface-to-air Surface-to-air Surface-to-air Surface-to-air Air-to-surface to-air missile Anti-ballistic Anti-ballistic Anti-ballistic Anti-ballistic Anti-ballistic Anti-ballistic Anti-ballistic ABM system missile/Anti- missile/Anti- missile/Anti- missile/Anti- Anti-tank Anti-tank Close-in Close-in Close-in Close-in Close-in Close-in weapon weapon weapon system system system system system system system missile missile missile missile missile missile missile missile missile missile missile missile SRAAM missile missile 2018 2008 2018 2006 2013 2013 2018 2013 2009 2014 2014 2014 2014 2015 2014 2015 2014 2014 2015 2015 2012 2007 2017 2017 2017 2011 2011 2011 2017 2011–2016 2015–2016 2015–2016 2011–2016 2014–2016 2015–2016 2011–2016 2015–2017 2016–2017 2016–2017 2014–2017 2015–2017 2015–2017 2024 2015 2015 2017 2017 2017 2017 2017 2017 10747 67 1500 4941 166 200 346 117 237 72 30 25 60 96 80 21 2 4 2 2 6 1

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Thales Jordan Jordan Jordan Jordan Saudi Arabia Saudi Arabia Saudi Arabia Morocco Morocco Morocco Morocco Kuwait Kuwait Kuwait Kuwait Kuwait Egypt Egypt Egypt Egypt Egypt Egypt Egypt Egypt Egypt Egypt Egypt Recipient Recipient Rheinmetall 68 Controversial Controversial arms exports arms exports country for country for yes yes yes yes yes yes yes yes yes yes yes yes yes yes no no no no no no no no no no no no no Country partCountry Country partCountry of Saudi-led of Saudi-led in Yemen in Yemen coalition coalition yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes United States United States United States United States United States United States United States United States United States United States United States United States Netherlands Netherlands Netherlands Netherlands Netherlands Netherlands Germany Germany Supplier Supplier France France France France France France Italy 60 Number Number ordered ordered 1200 1280 200 209 300 600 20 20 12 12 30 26 80 60 85 3 3 3 1 1 1 1 4 4 1 Guided Bomb BGM-71 TOW BGM-71 TOW BGM-71 TOW designation designation Sidewinder Sidewinder Sidewinder Damocles Master-60 MIM-104C AIM-120C AIM-120C AIM-120C Paveway FGM-148 AMRAAM AMRAAM AMRAAM Weapon Weapon MRR-3D MRR-3D Fuchs-2 Ground TALIOS Javelin FREMM AIM-9X AIM-9X AIM-9X SMART STING STING STING X-TAR Scout Scout PAC-2 Fahd Air search radar Air search radar Air search radar Air search radar Air search radar Short range air- Short range air- Short range air- range air-to-air range air-to-air Beyond visual Beyond visual Surface-to-air to-air missile to-air missile to-air missile description description Fire control Fire control Fire control Sea search Sea search Aircraft EO Aircraft EO personnel Armoured Anti-tank Anti-tank Anti-tank Anti-tank Weapon Weapon BVRAAM system system missile missile missile missile missile missile missile Frigate carrier radar radar radar radar radar APC Year of order/ Year of order/ licence licence 1978 2018 2010 2010 2010 2016 2009 2013 2009 2016 2006 2006 2006 2014 2014 2014 2015 2015 2015 2015 2012 2017 2017 2011 2007 2011 2011 1986–2015 2016–2018 2015–2016 2013–2016 2015–2016 2014–2015 2014–2015 2014–2015 2013–2015 2013–2015 2013–2015 2013–2015 2009–2017 2016–2017 deliveries deliveries Year(s) of Year(s) of 2016 2015 2015 2015 2015 2015 2017 2017 2017 2017 delivered/ delivered/ produced produced Number Number 1280 200 300 209 300 20 20 30 12 26 80 60 85 3 3 3 7 1 1 1 1 1 1 1 Thyssenkrupp Turkey Turkey Turkey Turkey Turkey Jordan Saudi Arabia Saudi Arabia UAE Kuwait Kuwait Egypt Egypt Morrocco Kuwait Recipient Controversial arms exports country for yes yes yes yes yes yes yes yes yes yes no no no no no Country partCountry of Saudi-led in Yemen coalition yes yes no yes yes yes yes yes yes yes yes no no no no Germany (FRG) Germany (FRG) Germany Supplier Netherlands Netherlands Netherlands Netherlands Kingdom Norway Norway United France France France France France Number ordered 2 2 6 218 225 10 10 15 17 3 2 2 2 2 8 Type-209/1400 Type-209/1400 description Type-214 Weapon Thales ROTSS Ocean Master Master-200 Protector Protector Helios-2 I-Master SQUIRE Ground SMART SMART FLASH STING description Submarine Submarine Submarine Weapon Air search radar Air search radar Air search radar Anti-submarine Anti-submarine Recce satellite warfare sonar AGS/MP radar carrier turret carrier turret carrier turret Ground surv Ground surv Fire control MP aircraft personnel personnel personnel Armoured Armoured Armoured radar radar radar Year of order/ licence 2014 2012 2011 2009 2013 2016 2013 2014 2014 2014 2014 2015 2002 2011 2017 2019–2024 2016–2017 deliveries Year(s) of 2013–2014 2011–2015 2015–2017 2014–2017 2015 2017 2017 2017 2017 delivered/ produced Number 2 Comments planned by 69 225 Delivery Delivery 10 17 3 2 9 1 1 2 8 2021

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Table Shareholdings andbondholdings Table Total deals (loans, andEquityissuances bondunderwritings UniCredit UniCredit Banco Santander Deutsche Bank BBVA Barclays Banco Santander Deutsche Bank Lloyds Bank BBVA Barclays BNP Paribas BNP Paribas Lloyds Bank Credit Suisse Credit Agricole Commerzbank Credit Suisse Credit Agricole Commerzbank Grand Total Grand Total APPENDIX 2:FINANCIALDATA TABLES 70 1,907.46 2,987.18 1,769.15 558.38 167.86 143.56 342.73 569.04 445.45 311.42 107.17 383.51 32.38 25.53 27.97 0.70 9.78

Airbus Group SE Airbus Group SE 1,153.09 830.48 100.13 329.83 100.13 100.13 100.13 100.13 220.43 823.33 64.90 41.88 0.00 2.29 0.25

BAE Systems BAE Systems 3,684.67 213.40 392.10 460.73 527.76 338.74 560.05 338.17 553.81 299.91 2,195.44 (in €millions) 276.00 373.19 399.16 250.23 805.94 51.03 34.91 4.14 Boeing 0.85

4,450.94 Boeing 2,097.03 2,353.91 330.47 110.65 88.70 23.90 66.53 35.15 0.00 General Dynamics 5.54

General Dynamics 707.69 107.69 107.69 107.69 107.69 69.23 69.23 69.23 69.23

Leonardo 105.08 78.95 0.18 6.39 7.29 9.24 0.05 2.87 0.11 2,938.66 1,235.85 911.90 581.68 110.56 (in €millions) Leonardo 98.67

Lockheed Martin 595.08 180.20 190.96 131.69 22.34 43.45 20.45 0.00 6.00 4,326.15 2,797.15 425.88 233.95 233.95 635.22 Lockheed Martin Northrop Grumman Corp 403.95 118.20 109.21 12.03 28.33 83.65 43.72 6.00 2.82 289.95 57.99 57.99 57.99 57.99 57.99 Northrop Grumman Corp

Raytheon Co 1,338.90 631.70 418.46 127.65 47.59 97.05 13.37 227.25 0.00 227.25 3.09

Raytheon Co Rheinmetall 2,043.61 138.34 922.68 824.75 100.32 11.83 92.53 26.81 97.93 97.93 3.85 3.31 0.01

Thales Rheinmetall 2,805.08 740.54 700.74 372.64 280.72 280.72 240.92 280.72 280.72 140.69 162.59 51.08 12.47 0.76 0.33 4.71

ThyssenKrupp AG Thales 24,211.94 2,320.26 1,635.43 3,408.58 2,953.58 1,216.09 4,129.99 1,717.01 1,814.41 4,109.97 251.73 906.61 107.19 11.86 43.83 64.42 13.91 2.74 7.54 0.24

Grand Total ThyssenKrupp AG Leonardo Boeing BAE Systems Company General Dynamics Airbus APPENDIX 3:FINANCIALINSTITUTION DIVESTMENT FROMCOMPANIES → Defence contracts → Military-related Production → Producer ofweapons inbreach of → White Phosphorus → Anti-Personnel mines → Munitionswithdepleted uranium → Failure to guarantee thatthey will → Controversial Weapons → Nuclear Weapons → Defence contracts → Nuclear Weapons → Defence contracts → Military-related Production → HumanRights(violations) → Involvement inserious → Nuclear Weapons → Defence contracts → Military-related Production → Nuclear Weapons → Defence contracts → Military-related Production → White Phosphorus → Nuclear Weapons

Reasons For Exclusion the future not produce cluster weapons in Oslo andOttawa Conventions corruption cases → BPMT(Dutch Pension Fund) → Spoorwegpensioenfonds → SEB → PME → FDC → Danske Bank → Nykredit (Denmark) → Pensioenfonds Horeca &Catering (Netherlands) → PKA (DanishPension Fund) → PFZW → PGGM → Delta Lloyd Asset Management → Pension Funds PNOMedia(Netherlands) → KLP → Aegon → ABP(Dutch Pension Fund) → Spoorwegpensioenfonds → SEB → FDC → Danske Bank → Pensioenfonds Horeca &Catering (Netherlands) → PKA (DanishPension Fund) → PFZW → PGGM → Delta Lloyd Asset Management → Pension Funds PNOMedia(Netherlands) → KLP → ABP(Dutch Pension Fund) → SPOV StichtingPensioenfonds Openbaar Vervoer → Spoorwegpensioenfonds → SEB → FDC → Pensioenfonds Horeca &Catering (Netherlands) → PFZW → PGGM → Delta Lloyd Asset Management → Pension Funds PNOMedia(Netherlands) → KLP → ABP(Dutch Pension Fund) → SPOV StichtingPensioenfonds Openbaar Vervoer → Spoorwegpensioenfonds → SEB → FDC → Pensioenfonds Horeca &Catering (Netherlands) → PKA (DanishPension Fund) → PFZW → PGGM → Delta Lloyd Asset Management → Pension Funds PNOMedia(Netherlands) → KLP → ABP(Dutch Pension Fund) → SPOV StichtingPensioenfonds Openbaar Vervoer → BPMT(Dutch Pension Fund) → Spoorwegpensioenfonds → Schroders → SEB → PME → FDC → Pensioenfonds Horeca &Catering (Netherlands) → PKA (DanishPension Fund) → PFZW → PGGM → Pension Funds PNOMedia(Netherlands) → KLP → ABP(Dutch Pension Fund) Excluded From → NBIM → Fonds pourlesRetraites deRéserve (France) → Nordea → Menzis → MNHuisfondsen (Netherlands) → TKPInvestments → Folksam (Swedish Insurance) → Achmea (Netherlands) → PKZH(SwissPension Fund) → KBC(Belgianbank-insurance group) → Presbyterian Church USA → PFA → Folio Investing → Fonds (French) deReserve → SPOV StichtingPensioenfonds Openbaar Vervoer → NBIM → Nordea → Menzis → TKPInvestments → Folksam (Swedish Insurance) → Achmea (Netherlands) → PKZH(SwissPension Fund) → AP7(Swedish Pension Fund) → KBC(Belgianbank-insurance group) → PFA → SPOV StichtingPensioenfonds Openbaar Vervoer → NBIM → Nordea → Menzis → TKPInvestments → Folksam (Swedish Insurance) → Achmea (Netherlands) → PKZH(SwissPension Fund) → AP7(Swedish Pension Fund) → KBC(Belgianbank-insurance group) → Presbyterian Church USA → PFA → NBIM → Nordea → Menzis → TKPInvestments → Folksam (Swedish Insurance) → Achmea (Netherlands) → PKZH(SwissPension Fund) → AP7(Swedish Pension Fund) → KBC(Belgianbank-insurance group) → Presbyterian Church USA → PFA → Folio Investing → NBIM → Nordea → Menzis → MNHuisfondsen (Netherlands) → TKPInvestments → Folksam (Swedish Insurance) → Achmea (Netherlands) → PKZH(SwissPension Fund) → AP7(Swedish Pension Fund) → KBC(Belgianbank-insurance group) → Presbyterian Church USA → PFA → Folio Investing 71

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Triodos Bank excludes allcompanies involved inarms-related activities. ThyssenKrupp Thales Triodos Lockheed Martin Rheinmetall Raytheon Northrop Grumman MBDA Exclude companies directly manufacturing cluster weapons, themanufacture ortesting ofnuclear explosive devices, manufacturing ofanti-personnel mines New Zealand Superannuation Fund 72 → Defence contracts → Military-related Production → Anti-personnel mines → Producer ofweapons inbreach of → Nuclear Weapons → White Phosphorus → Involvement withmanufactures → Defense contracts → Military-related production → Cluster Weapons → Nuclear Weapons → Defence contracts → Military-related production → Cluster munitions → Depleted Uranium → Controversial Weapons → Nuclear Weapons → Defense contracts → Military-related production → White Phosphorus → Nuclear Weapons nuclear weapons Oslo andOttawa Conventions of biological, chemical or → SPOV StichtingPensioenfonds Openbaar Vervoer → Spoorwegpensioenfonds → Schroders → SEB → FDC → Danske Bank → Nykredit (Denmark) → Pensioenfonds Horeca &Catering (Netherlands) → PKA (DanishPension Fund) → PFZW → PGGM → Delta Lloyd Asset Management → Pension Funds PNOMedia(Netherlands) → KLP → ABP(Dutch Pension Fund) → KBC(Belgianbank-insurance group) → SPOV StichtingPensioenfonds Openbaar Vervoer → Pension Funds PNOMedia(Netherlands) → SPOV StichtingPensioenfonds Openbaar Vervoer → Spoorwegpensioenfonds → SEB → FDC → ATP → Pensioenfonds Horeca &Catering (Netherlands) → PKA (DanishPension Fund) → PFZW → PGGM → Delta Lloyd Asset Management → Pension Funds PNOMedia(Netherlands) → KLP → ABP(Dutch Pension Fund) → SPOV StichtingPensioenfonds Openbaar Vervoer → Spoorwegpensioenfonds → SEB → FDC → Danske Bank → Pensioenfonds Horeca &Catering (Netherlands) → PKA (DanishPension Fund) → PFZW → PGGM → Delta Lloyd Asset Management → Pension Funds PNOMedia(Netherlands) → KLP → Aegon → ABP(Dutch Pension Fund) → BPMT(Dutch Pension Fund) → Spoorwegpensioenfonds → SEB → PME → Pensioenfonds Horeca &Catering (Netherlands) → PKA (DanishPension Fund) → PFZW → PGGM → Delta Lloyd Asset Management → Pension Funds PNOMedia(Netherlands) → ABP(Dutch Pension Fund) → NBIM → Fonds pourlesRetraites deRéserve (France) → Nordea → Menzis → TKPInvestments → Folksam (Swedish Insurance) → Achmea (Netherlands) → PKZH(SwissPension Fund) → AP7(Swedish Pension Fund) → KBC(Belgianbank-insurance group) → Presbyterian Church USA → PFA → Folio Investing → Fonds (French) deReserve → Fonds pourlesRetraites deRéserve (France) → Nordea → Menzis → TKPInvestments → Folksam (Swedish Insurance) → Achmea (Netherlands) → PKZH(SwissPension Fund) → AP7(Swedish Pension Fund) → KBC(Belgianbank-insurance group) → Presbyterian Church USA → PFA → Folio Investing → Fonds (French) deReserve → NBIM → Fonds pourlesRetraites deRéserve (France) → Nordea → Menzis → TKPInvestments → Folksam (Swedish Insurance) → Achmea (Netherlands) → PKZH(SwissPension Fund) → AP7(Swedish Pension Fund) → KBC(Belgianbank-insurance group) → Presbyterian Church USA → PFA → Folio Investing → Fonds (French) deReserve → Nordea → Menzis → MNHuisfondsen (Netherlands) → TKPInvestments → Achmea (Netherlands) → PKZH(SwissPension Fund) → AP7(Swedish Pension Fund) → KBC(Belgianbank-insurance group) → Presbyterian Church USA → SPOV StichtingPensioenfonds Openbaar Vervoer The below listisanindicative listofsomethecompanies unmannedsystems developing for applications. military Thesecompanies are → General Atomics Aeronautical Systems, Inc. → G-NIUS Ltd → Foster-Miller ofQinetiQ Group (subsidiary Plc) → FNHerstal → ElbitSystems Ltd → Defence Electronics Application Laboratory → DassaultSystemes SA → DassaultAviation → Cobhamplc → ChinaAerospace Science andTechnology Corporation → BoeingCo → BAE Systems Plc → AleniaAeronautica ofLeonardo) (subsidiary → AirbusSE → AeroVironment Inc → Lockheed MartinCorp → Leonardo SpA → Kongsberg Defence &Aerospace ofKongsberg Group) (subsidiary → IAI(Israel Aerospace IndustriesLtd) → HanwhaTechwin → General DynamicsCorp → GIWS (owned by DiehlandRheinmetall)

Heading Towards Autonomy? APPENDIX 4: weaponsdeveloping withautonomous features ofautonomy orwithsomelevel orautomation intheirproducts. Thislistisnotexhaustive. A Potential Watchlist (and parent General Atomics) → DoDaamSystems Ltd → WBElectronics → JSCKalashnikov Concern → Turkish Aerospace Industries,Inc.(TAI) → Thales → Textron Inc → SaabABB → STM SavunmaTeknolojileri Mühendislikve Ticaret A.Ş. → SEEGRIDCorporation → RussianAircraft Corporation MiG → Rosoboronexport → Rolls-Royce plc → Rheinmetall AG → Raytheon Co → Rafael Advanced Defense Systems Ltd. → RUAG HoldingAG → QinetiQ Group Plc → Oshkosh Corp → Northrop GrummanCorp → Milrem Robotics → NEXTER Group → MBDA (private company) 73

FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 Turkey Yemen Syria South Sudan Sudan Somalia Saudi Arabia Source:** UAE Iraq Iran Mauritania Libya Lebanon Egypt Bahrain ** Note (final category is poverty and military spending this applies to none of the MENA region countries)

Azerbaijan APPENDIX 5:ASSESSMENT FOR MIDDLEEAST ANDNORTH AFRICA (MENA)REGIONCOUNTRIES 74 UN armsembargo UN andEUarmsembargo EU andUNarmsembargo EU andUNarmsembargo EU andUNarmsembargo EU armsembargo EU armsembargo EU armsembargo EU andUNarmsembargo EU andUNarmsembargo Arms embargo Vision ofHumanity. Uppsala Database 2018and Global Peace Index 2018by Armed Conflict Armed Conflict Armed Conflict Armed Conflict Armed Conflict Armed Conflict Armed Conflict Armed Conflict Armed Conflict Armed Conflict Armed Conflict Armed Conflict Armed conflict Armed Conflict Armed conflict Unfree country Unfree Authoritarian Regime Unfree Authoritarian Regime Unfree Authoritarian regime Unfree Authoritarian Regime Unfree Authoritarian Regime Unfree Authoritarian Regime Unfree Authoritarian regime Unfree Authoritarian Regime Unfree Authoritarian Regime and Democracy Index No data Data 2017 Freedom HouseIndex 2018

Transparency International Defence Index 2015 Corruption Corruption Corruption Corruption Corruption Corruption Corruption Corruption Corruption Corruption Corruption Corruption Corruption Corruption Corruption in Corruption Corruption (The Fund for Peace) Fragile States Index 2018 Fragile State Fragile State Fragile State Fragile State Fragile State Fragile State Fragile State Fragile State Fragile states 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Endnotes https://data2.unhcr.org/en/situations/syria Regional Refugee Response. 09 Apr. UNHCR Refugee Situations (2019): Syria https://www.unhcr.org/ (Accessed 14.04.2019) UNHCR: Internally Displaced People. (Accessed 13.04.2019) Feb. https://data2.unhcr.org/en/country/yem NHCR Refugee Situations (2019): Yemen. 19 13.04.2019) ? Jul. https://www.caat.org.uk/ (Accessed CAAT (2018) An introduction to the arms trade. 10.04.2019) https://www.clingendael.org/ (Accessed monitoring, sources and obstacles. ? Jan. Clingendael (2018): International arms flows: (Accessedcrisisgroup.org/ 12.04.2019) and Yemen Update #3. 8 Feb. https://www. International Crisis Group (2019): Crisis Group www.sipri.org/ (Accessed 12.04.2019) conflict 14 Dec. https:// in the Middle East. SIPRI (2018): Saudi Arabia, armarments and 13.04.2019) plained/index.php/Asylum_statistics (Accessed https://ec.europa.eu/eurostat/statistics-ex Eurostat (2019): Asylum statistics. 12 Mar. tionGuidingPrinciples.pdf Documents/Issues/Business/Interpreta- sector. June 2017 https://www.ohchr.org/ Human Rights in the context of the banking of the UN Guiding Principles on Business and BankTrack for advice regarding the application (2017): OHCHR response to request from UN High Commissioner for Human Rights tionGuidingPrinciples.pdf Documents/Issues/Business/Interpreta- sector. June 2017 https://www.ohchr.org/ Human Rights in the context of the banking of the UN Guiding Principles on Business and BankTrack for advice regarding the application (2017): OHCHR response to request from UN High Commissioner for Human Rights tionGuidingPrinciples.pdf Documents/Issues/Business/Interpreta- sector. June 2017 https://www.ohchr.org/ Human Rights in the context of the banking of the UN Guiding Principles on Business and BankTrack for advice regarding the application (2017): OHCHR response to request from UN High Commissioner for Human Rights arms-trade all-publications/case-study-controversial- https://www.paxforpeace.nl/publications/ Arms Trade. 18 June. PAX for Peace (2015): Case study: Controversial DEU/INT_CESCR_CSS_DEU_32288_E.pdf org/Treaties/CESCR/Shared%20Documents/ and Cultural Rights https://tbinternet.ohchr. International Covenant on Economic, Social rights Extraterritorial Obligations under the transfers on economic, social and cultural ECCHR (2018): The impact of Germany’s arms ty-intl/index.html middleeast/middle-east-report-2018-amnes https://edition.cnn.com/2019/02/26/ Amnesty says. CNN. 26 Feb. contributing to Middle East crackdowns, Qiblawi,T (2019): ‘Global indifference’ default/files/2018-03/fssipri_at2017_0.pdf transfers 2017. https://www.sipri.org/sites/ SIPRI (2018): Trends in international arms for-uae-missile-launching-system technology/413516-raytheon-wins-15bn-deal- https://www.arabianbusiness.com/ ness. 18 feb. for UAE missilelaunchingsystem. Arabian Busi- Brudge, D (2019): Raytheon wins $1.5bn deal 5N16H3AQ reuters.com/article/norway-swf-arms-idUSL robots. Reuters. 11 March. https://www. watchdog warns firms not to make killer EXCLUSIVE-Norway wealth fund’s ethics Dagonborg, J and Fouche G (2016): fordert-verbot-von-autonomen-waffen/ antonio-guterres-ceo-der-vereinten-nationen- killer-roboter-stoppen.de/2018/11/ verbot von Autonomen Waffen. http://www. Guterres CEO der Vereinten Nationen fordert Killer Roboter Stoppen (2018): Antonio http://mwatana.org/en/four-years-of-war/ Campaign. 26 March. into Saudi/Emirati-Led Coalition Yemen Mwatana for Human Rights (2019): Four Years arms-trade/ charts-that-reveal-the-state-of-the-global- https://www.weforum.org/agenda/2019/03/5- Economic Forum. the global arms trade. 14 March. World SIPRI (2019): 5 charts that reveal the state of

- - - 35 34 33 32 31 30 29 http://www.reachingcriticalwill.org/images/ 28 27 26 25 24 23 22 21 20 41 40 39 38 37 36 Connected to Military. (2017): Leaked Video of Extrajudicial Killings The Tahir Institute for Middle east policy http://www.ucdp.uu.se/#/country/651 Uppsala Conflict Data Program 2018: Egypt egypt arms_embargoes/egypt/eu-arms-embargo-on- www.sipri.org/databases/embargoes/eu_ SIPRI (2018): Arms embargo on egypt https:// org/2017/01/11665/. accessed 2017, http://www.adhrb. 27 January Human Rights in Bahrain, 2017, 26 January protests,” Americans for Democracy and with live ammunition in attack on Diraz “Bahraini forces critically wound protester org/report/freedom-world/2018/azerbaijan index 2018 Azerbaijan https://freedomhouse. Freedom House (2019): Freedom in the World lations/8E8CC29419AF2EF403EA02ACACFCF223 tems-and-changing-norms-in-international-re al-studies/article/autonomous-weapons-sys org/core/journals/review-of-internation- S0260210517000614 https://www.cambridge. Studies, 44(3), 393-413. doi:10.1017/ international relations. Review of International weapons systems and changing norms in Bode, I., & Huelss, H. (2018). Autonomous documents/Publications/wilpf-guide-aws.pdf troversial-arms-trade publications/all-publications/case-study-con- Trade https://www.paxforpeace.nl/ PAX (2015): Case Study: Controversial Arms Rheinmetall and ThyssenKrupp Leonardo) company involving Airbus, BAE and (joint Leonardo, Thales. We will also cover MDBA General Dynamics Corp, Airbus Group, Systems (and BAE UK), Northrop Grumman, Lockheed Martin, Boeing, Raytheon, BAE arms_industry_2017_0.pdf www.sipri.org/sites/default/files/2018-12/fs_ military services companies, 2017 https:// SIPRI (2018): The top 100 arms-producing and Documents/Publications/HR.PUB.12.2_En.pdf an interpretive guide. https://www.ohchr.org/ RESPONSIBILITY TO RESPECT HUMAN RIGHTS: Commissioner (2012): THE CORPORATE UN Human Rights Office of the High ter-munitions-investments/44590536 the-bomb-_report-reveals-huge-drop-in-clus https://www.swissinfo.ch/eng/-don-t-bank-on- munitions investments. Swissinfo.ch. Bradley, S (2018): Huge drop revealed in cluster lations/8E8CC29419AF2EF403EA02ACACFCF223 tems-and-changing-norms-in-international-re al-studies/article/autonomous-weapons-sys org/core/journals/review-of-internation- S0260210517000614 https://www.cambridge. Studies, 44(3), 393-413. doi:10.1017/ international relations. Review of International weapons systems and changing norms in Bode, I., & Huelss, H. (2018). Autonomous F8E3/$file/CCW_MSP_2018_WP3.pdf sets)/810B2543E1B5283BC125834A005E- ch/80256EDD006B8954/(httpAs autonomous weapons. https://www.unog. of the Group of Governmental Experts on lethal provisional agenda Consideration of the report Geneva, 21-23 November 2018 Item 8 of the Injurious or to Have Indiscriminate Effects. Which May Be Deemed to Be Excessively the Use of Certain Conventional Weapons Convention on Prohibitions or Restrictions on Meeting of the High Contracting Parties to the al-humanitarian-law mous-weapon-systems-under-internation- www.icrc.org/en/document/autono under International Humanitarian law. https:// ICRC (2018): Autonomous Weapon Systems arms_embargoes/libya/libya_2011 www.sipri.org/databases/embargoes/un_ SIPRI (2018): Arms embargo on libya https:// http://www.ucdp.uu.se/#country/660 Uppsala Conflict Data Program 2018: lebanon un_arms_embargoes/lebanon https://www.sipri.org/databases/embargoes/ SIPRI (2018): Arms embargo on lebanon http://www.ucdp.uu.se/#country/630 Uppsala Conflict Data Program 2018: Iran arms_embargoes/iran www.sipri.org/databases/embargoes/eu_ SIPRI (2018): Arms embargo on Iran https:// arms_embargoes/iran www.sipri.org/databases/embargoes/un_ SIPRI (2018): Arms embargo on Iran https:// ed-to-military/ leaked-video-of-extrajudicial-killings-connect https://timep.org/esw/reports-briefs/

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------70 69 68 67 66 65 64 63 62 61 60 59 58 57 56 55 54 53 52 51 50 49 48 47 46 45 44 43 42 eling-deal-war-with-yemen en/20181110-saudi-led-coalition-ends-us-refu- 7.3.19) https://www.france24.com/ US refueling deal in war with Yemen (Accessed France24 (10.11.17): Saudi-led coalition ends skyrocket.de/doc_sdat/helios-2a.htm Helios 2A, 2B (Accessed 7.3.19) https://space. Gunters Space Page (last updated on 11.12.17): egypt-looming-humanitarian-crisis-sinai https://www.hrw.org/news/2018/04/23/ Humanitarian Crisis in Sinai (Accessed 7.3.19) HRW (April 23, 2018): Egypt: Looming com/defence/a400m.html of need (Accessed 7.3.19) https://www.airbus. and Airbus (n.d.): to A400M Delivery the point https://www.airbus.com/defence/c295.html Tactical Transport aircraft (Accessed 7.3.19) Airbus (n.d.): C295 The most versatile and prosperous-world.html tainability/contributing-to-a-safer-and-more- www.airbus.com/company/responsibility-sus prosperous world (Accessed 7.3.19) https:// Airbus (n.d): Contributing to a safer and more try_2017_0.pdf default/files/2018-12/fs_arms_indus (Accessed 7.3.19) https://www.sipri.org/sites/ and military services companies, 2017 Sipri (2018): The Sipri top 100 arms-producing www.airbus.com/defence.html Airbus (2019): Defense and Security https:// syria-turkey-backed-groups-seizing-property https://www.hrw.org/news/2018/06/14/ June. Turkey-Backed Groups Seizing Property. 14 Human Rights Watch (2018): Syria: want/a-41211604 do-the-us-russia-turkey-and-iran- https://www.dw.com/en/syria-conflict-what- Welle. 23 Jan. US, Russia, Turkey and Iran want? Deutsche Pearson, A (2019): Syria conflict: What do the http://www.ucdp.uu.se/#country/640 Uppsala Conflict Data Program 2018: Turkey Yemen http://www.ucdp.uu.se/#country/678 Uppsala Conflict Data Program 2018: North go-on-yemen eu_arms_embargoes/yemen/eu-arms-embar https://www.sipri.org/databases/embargoes/ SIPRI (2019): EU arms embargo on Yemen. ates report/freedom-world/2018/united-arab-emir index 2018 UAE https://freedomhouse.org/ Freedom House (2019): Freedom in the World report/freedom-world/2018/syria index 2018 Syria https://freedomhouse.org/ Freedom House (2019): Freedom in the World http://www.ucdp.uu.se/#country/652 Uppsala Conflict Data Program 2018: Syria go-on-Syria arms_embargoes/syria_LAS/eu-embar www.sipri.org/databases/embargoes/eu_ SIPRI (2018): Arms embargo on Syria. https:// se/#country/625 se/#country/626 and http://www.ucdp.uu. Sudan and Sudan http://www.ucdp.uu. Uppsala Conflict Data Program 2018: South arms_embargoes/sudan www.sipri.org/databases/embargoes/eu_ SIPRI (2018): Arms embargo on Sudan https:// arms_embargoes/sudan www.sipri.org/databases/embargoes/un_ SIPRI (2018): Arms embargo on Sudan https:// report/freedom-world/2018/sudan index 2018 Sudan https://freedomhouse.org/ Freedom House (2019): Freedom in the World report/freedom-world/2018/somalia index 2018 Somalia https://freedomhouse.org/ Freedom House (2019): Freedom in the World http://www.ucdp.uu.se/#country/520 Uppsala Conflict Data Program 2018: Somalia eu_arms_embargoes/somalia https://www.sipri.org/databases/embargoes/ SIPRI (2018): Arms embargo on Somalia. un_arms_embargoes/somalia https://www.sipri.org/databases/embargoes/ SIPRI (2018): Arms embargo on Somalia. org/report/freedom-world/2018/saudi-arabia index 2018 Saudi Arabia https://freedomhouse. Freedom House (2019): Freedom in the World se/#statebased/14595 Government of yemen http://www.ucdp.uu. Uppsala Conflict Data Program 2018: se/#country/435 Mauritania http://www.ucdp.uu. Uppsala Conflict Data Program 2018: report/freedom-world/2018/libya index 2018 Libya https://freedomhouse.org/ Freedom House (2019): Freedom in the World http://www.ucdp.uu.se/#country/620 Uppsala Conflict Data Program 2018: Libya

- - - - - 71 91 90 89 88 87 86 85 84 83 82 81 80 79 78 77 76 75 74 73 72 www.dontbankonthebomb.com/ Weapon Producers (Accessed 7.3.19) https:// PAX (n.d.) Dont Bank on the Bomb Nuclear tems_1117_1.pdf opment_of_autonomy_in_weapon_sys files/2017-11/siprireport_mapping_the_devel- https://www.sipri.org/sites/default/ Autonomy in Weapons systems (page 48-50) Boulanin/Verbruggen 2017: Mapping Wrapper&cid=1434554703868 Layout&rendermode=preview&pagename=UK tailPageCnt_C&childpagename=UK%2FBAE- dargs=WEBROOTNAME%3Den_uk&c=BAEDe baesystems.com/cs/ContentServer?packe controls (Accessed 7.3.19) https://www. BAE Systems (n.d.): Regulations and external flourishes-in-the-middle-east/ training-sim/2018/02/20/trainer-jet-market- https://www.defensenews.com/ flourishes in the Middle East (Accessed 7.3.19) Agnes Helou (20.2.18): Trainer jet market com/en/product/hawk-ajt (Accessed 7.3.19) https://www.baesystems. BAE Systems (n.d.) Hawk Advanced Jet Trainer freedom-world/2018/saudi-arabia https://freedomhouse.org/report/ 2018 Saudi Arabia profile (Accessed 7.3.19) Freedom House (n.d.): Freedom in the World campaigns/stop-arming-saudi/companies (Accessed 7.3.19) https://www.caat.org.uk/ 11.2.18): Target Saudi’s arms suppliers Campaign Against Arms Trade (last updated on deals/ edu/corruptarmsdeals/the-al-yamamah-arms- Corruption (Accessed 7.3.19) https://sites.tufts. Arms Deals- Compendium of Arms Trade World Peace Foundation (n.d.) The Al Yamamah 8134d35a-126a-11df-8d73-00144feab49a https://www.ft.com/content/ case. end bribery Financial Times (2010): BAE to pay $450m to AnnualReports/PDF/LSE_BA_2017.pdf http://www.annualreports.com/HostedData/ BAE Systems (2018): Annual Report 2017. try_2017_0.pdf default/files/2018-12/fs_arms_indus (Accessed 7.3.19) https://www.sipri.org/sites/ and military services companies, 2017 SIPRI (2018): The SIPRI top 100 arms-producing bots-weapons.html com/2018/11/15/magazine/autonomous-ro (Accessed 14.3.19) https://www.nytimes. Autonomous Weapons. The New York Times. the Future of War? Parsing the Facts on Kelsey D. Atherton (15.11.18): Are Killer Robots mbda-systems.com/product/mmp/ MBDA (nd): Product MMP. https://www. ugv/ mbda-and-milrem-robotics-unveil-anti-tank- co.za/joint/science-a-defence-technology/ (Accessed 14.3.19) https://www.defenceweb. Robotics unveil anti-tank UGV. Defence Web. defenceWeb (19.2.19): MBDA and Milrem men-vorgestellt/ abwehr-ugv-mit-mmp-panzerabwehrsyste meldungen/land/10739/idex-panzer tank systems. https://esut.de/en/2019/02/ IDEX: Anti-tank UGV presented with MMP anti Europäischer Sicherheit und Technik (2019): future-of-air-power.html airbus.com/newsroom/news/en/2018/04/ Airbus (2019): Future Airpower. https://www. tary-leaders com/jrnl/art/primer-artificial-intelligence-mili- (Accessed 7.3.19) https://smallwarsjournal. on Artificial Intelligence for Military Leaders Stoney Trent and Scott Lathrop (n.d.) A Primer /00963402.2017.1290879 https://www.tandfonline.com/doi/pdf/10.1080 Scientists, 73:2, 96-101 (Accessed 7.3.19) of swarming drones, Bulletin of the Atomic Lachow (2017) The upside and Irving downside Drohnen-ueber-Ostsee de/Nachrichten/MV-aktuell/Airbus-testet- (Accessed 7.3.19) http://www.ostsee-zeitung. (8.10.18) Airbus testet Drohnen über Ostsee Matthias Hoenig and Carsten Hoffman craft-and-space-technology become-a-testbed-for-airbus-unmanned-air www.sae.org/news/2018/10/new-zealand-will- and space technology (Accessed 7.3.19) https:// become a testbed for Airbus unmanned aircraft William Kucinski (31.10.19) New Zealand will /00963402.2017.1290879 https://www.tandfonline.com/doi/pdf/10.1080 Scientists, 73:2, 96-101 (Accessed 7.3.19) of swarming drones, Bulletin of the Atomic Lachow (2017) The upside and Irving downside nuclear-weapon-producers/

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- - - 122 121 120 119 118 117 116 115 114 113 127 126 125 124 123 ments/63265270/68487135/body_5_Leonar leonardocompany.com/docu- 2017 (Accessed 14.3.19) https://www. Leonardo Company Annual Financial Report try_2017_0.pdf default/files/2018-12/fs_arms_indus (Accessed 14.3.19) https://www.sipri.org/sites/ and military services companies, 2017 SIPRI (2018): The SIPRI top 100 arms-producing the-line publications/all-publications/where-to-draw- and Trends https://www.paxforpeace.nl/ Autonomy in Weapon Systems – Technology PAX (2017): Where to draw the line: Increasing tems-Join-Forces ment-General-Dynamics-Land-Sys home/20181008005240/en/AeroViron- https://www.businesswire.com/news/ Vehicles. Missile Systems with Armored Combat Integrate Unmanned Aircraft and Tactical General Dynamics Land Systems Join Forces to Business Wire (2019): AeroVironment and tainability_report.pdf www.gd.com/sites/default/files/2018_gd_sus Sustainability Report (Accessed 7.3.19) https:// General Dynamics (n.d.): Corporate coup-170702072016494.html features/2017/07/egypt-worse-indicator-2013- https://www.aljazeera.com/indepth/ Jazeera (Accessed 7.3.19) crushed’ five years after military coup. Al Zena Tahhan (2.7.18): ‘Egyptian society being belltitem1 why-are-houthis-rebelling?rebelltitem=1#re https://www.wearethemighty.com/ best tank (Accessed 7.3.19) rebels are kicking the crap out of the world’s We Are the Mighty (20.11.18): Why Houthi Documents/EUR2190382018ENGLISH.PDF https://www.amnesty.org/download/ (Accessed 7.3.19) French arms were used to crush dissent Amnesty International (2018): Egypt: how deadly-crackdowns/ al-law-by-continuing-to-export-arms-used-in- news/2018/10/egypt-france-flouts-internation- https://www.amnesty.org/en/latest/ (Accessed 7.3.19) to export arms used in deadly crackdowns France flouts international law by continuing Amnesty International (16.10.18): Egypt: (Accessedarms_industry_2017_0.pdf 7.3.19) www.sipri.org/sites/default/files/2018-12/fs_ and military services companies, 2017 https:// SIPRI (2018): The SIPRI top 100 arms-producing insula.html egypt-soldiers-extrajudicial-killings-sinai-pen- nytimes.com/2017/04/20/world/middleeast/ Times. (Accessed 14.3.19) https://www. Killing Unamred Men in Sinai. The New York Video Appears to Show Egyptian Soldiers ons-deal/529689/ and Matthew Haag (20.4.17): archive/2017/06/saudi-arabia-weap https://www.theatlantic.com/international/ Autocrats. The Atlantic. (Accessed 14.3.19) Evan Hill (13.6.17): The Dangers of Arming fighting-ypg-a8225506.html death-assad-regimes-rebels-kurdish-turkey- middle-east/syria-civil-war-afrin-civilian- www.independent.co.uk/news/world/ (AccessedThe Independent. 14.3.19) https:// forces raise stakes in Kurdish-Turkish conflict. civilian deaths in Afrin condemned as Assad Bethan McKernan (23.2.18): Syria: ‘Unlawful’ turkey/ germany-faces-calls-to-end-arms-exports-to- 14.3.19) https://www.politico.eu/article/ end arms exports to Turkey. Politico. (Accessed Ginger Hervey (24.1.18): Germany faces calls to sce-al-global-compact leonardocompany.com/en/-/leonardo-aderi- (Accessed 14.3.19) https://www. commitment to sustainable development Nations Global Compact and consolidates its Leonardo (9.10.18): Leonardo joins the United dia-agustawestland arms-trade-corruption-claims-uk-italy-in- com/commentisfree/2018/jun/08/ (Accessed 14.3.19) https://www.theguardian. corruption. Why not the UK? The Guardian. Other countries tackle claims of arms trade gal-payments.html and Paul Holden (8.6.18): leonardo-responds-to-allegations-of-ille space.com/articles-view/verbatim/4/193817/ (Accessed 14.3.19) http://www.defense-aero Responds to Allegations of Illegal Payments Defense-Aerospace (11.6.11): Leonardo do_RFA_ING_2017_03.05.18.pdf

------145 144 143 142 141 140 139 138 137 136 135 134 133 132 131 130 129 128 get-drone-wingmen/))/ com/2018-the-year-u-s-fighter-pilots-could- jets-423682/))%20((http:/warisboring. pentagon-touts-loyal-wingman-for-combat- https://www.flightglobal.com/news/articles/ Wingman” for combat jets. Flight Global (2016): Pentagon touts “Loyal no-pilot-no-problem-180963050/ www.airspacemag.com/daily-planet/ Space Smithsonian (Accessed 14.3.19) https:// Now Deal With Threats on Their Own. Air & Zach Rosenberg (27.4.17): Military Drones Can EiVL5U.99 no-pilot-no-problem-180963050/#7KK67ghZei- https://www.airspacemag.com/daily-planet/ Air&Space Smithsonian (Accessed 14.3.19) Now Deal With Threats on Their Own. Zach Rosenberg (27.4.17): Military Drones Can a26028/f-16-drone-have-raider-ii/ popularmechanics.com/military/research/ (Accessed 14.3.19) https://www. F-16 Fighter into a Drone. Popular Mechanics. Kyle Mizokami (11.4.17): The Air Force Turned a tems_1117_1.pdf opment_of_autonomy_in_weapon_sys files/2017-11/siprireport_mapping_the_devel- research https://www.sipri.org/sites/default/ development of autonomy in systems. SIPRI Boulanin and Verbruggen (2017): Mapping the mil/dtic/tr/fulltext/u2/a412721.pdf nitions (Accessed 14.3.19) https://apps.dtic. behavior for autonomous widearea search mu- Orhan Gozaydin (n.d.): Analysis of cooperative tack-system-tested-(nov-4).html release/3/64138/low_cost-autonomous-at defense-aerospace.com/articles-view/ Attack System (Accessed 14.3.19) http://www. Successfully FlightTests Low-Cost Autonomous Defense Aerospace (3.11.05): Lockheed Martin search-collaboration mit-lockheed-martin-launch-long-term-re (Accessed 14.3.19) https://robotics.mit.edu/ launch long-term research collaboration Robotics @ MIT (n.d.): MIT, Lockheed Martin Contract-View/Article/1815651/ https://dod.defense.gov/News/Contracts/ Contracts for April 16, 2019 Department of Defense (2019): Airforce. ment-saudi-arabia-announcement.html statements-speeches/2017/ceo-state www.lockheedmartin.com/en-us/news/ Announcement (Accessed 14.3.19) https:// Statement on U.S. – Kingdom of Saudi Arabia Lockheed Martin (n.d.): Lockheed Martin CEO ots-intercepted-over-100-tbms-since-2015/ show/2017/11/14/raytheon-saudi-based-patri- news.com/digital-show-dailies/dubai-air- News. (Accessed 14.3.19)https://www.defense tactical ballistic missiles since 2015. Defense Arab-operated Patriots intercepted over 100 Barbara Opall-Rome (14.11.17): Raytheon: Worth__1_12B_To_Bahrain#.XFG8Hc9KgWp tin_To_Supply_F_16_Block_70_Fighter_Jets_ defenseworld.net/news/22756/Lockheed_Mar To Bahrain (Accessed 14.3.19) http://www. Supply F-16 Block 70 Fighter Jets Worth $1.12B Defense World (23.6.18): Lockheed Martin to manRightsInBahrain.pdf ArmsTransfers/AmericansDemocracyAndHu- org/Documents/Issues/RuleOfLaw/ rights (Accessed 14.3.19) https://www.ohchr. HRC on the impact of arms transfers on human ADHRB (n.d.): NGO Submission: Report of the ty_Report_Full_2017.pdf sustainability/Lockheed_Martin_Sustainabili- lockheed-martin/eo/documents/ lockheedmartin.com/content/dam/ Report 2017 (Accessed 14.3.19) https://www. Lockheed Martin Corporation Sustainability annual-reports/2017-annual-report.pdf lockheed-martin/eo/documents/ lockheedmartin.com/content/dam/ 2017 (Accessed 14.3.19) https://www. Lockheed Martin Corporation Annual Report our-technologies/autonomous-systems leonardocompany.com/en/innovation/ (Accessed 18.04.2019) https://www. Leonardo (nd): Autonomous Systems. tack-idUSKBN1KY1XQ cern-over-red-sea-security-after-houthi-at us-yemen-security-egypt/egypt-voices-con- 14.3.19) https://www.reuters.com/article/ Red Sea security after Houthi attack (Accessed Reuters (13.8.19): Egypt voices concern over controlli-sulle-esportazioni-e-paesi-sensibili chi-siamo-about-us/etica-compliance/ www.leonardocompany.com/en/ sensitive countries (Accessed 14.3.19) https:// Leonardo (n.d.): Controls on exports and ------147 146 164 163 162 161 160 159 158 157 156 155 154 153 152 151 150 149 148 https://www.globalsecurity.org/wmd/world/

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FACING FINANCE | DIRTY PROFITS 7 | 2019 FACING FINANCE | DIRTY PROFITS 7 | 2019 UK Parliament: Written Evidence from the Foreign 257 256 255 https://www.scribd.com/docu- 254 253 252 251 250 249 248 247 246 245 written/31698.html use-of-ukmanufactured-arms-in-yemen/ committees-on-arms-export-controls/ committeeevidence.svc/evidencedocument/ data.parliament.uk/writtenevidence/ and Commonwealth Office (UKY 13) http:// war-and-is-anyone-planning-to-stop/ peace/2018/02/28/who-is-arming-the-yemen- https://sites.tufts.edu/reinventing - Peace Foundation. war? (And is anyone planning to stop?). World Freeman, S (2018): Who is arming the Yemen ship-300461082.html itary-industries-announce-strategic-partner news-releases/raytheon-and-saudi-arabia-mil- 14.3.19) https://www.prnewswire.com/ strategic partnership. Cision. (Accessed Saudi Arabia Military Industries announce Raytheon Company (20.5.17): Raytheon and S/2018/68 (Jan. 31, 2018) President of the Security Council U.N. Doc. resolution Yemen mandated by Security Council 26 January 2018 26 January perts-Yemen N. Security Council, Letter dated ment/372556569/Final-Report-UN-Panel-of-Ex nomic-structures# saudi-coalition-airstrikes-yemens-civilian-eco report/2016/07/11/bombing-businesses/ (Accessed 14.3.19) https://www.hrw.org/ Yemen’s Civilian Economic Structures Businesses – Saudi Coalition Airstrikes on Human Rights Watch (11.7.16): Bombing strikes-target-civilian-factories-yemen news/2016/07/11/saudi-coalition-air (Accessed 14.3.19) https://www.hrw.org/ Airstrikes Target Civilian Factories in Yemen Human Rights Watch (11.7.16): Saudi Coalition isis-fight/ ment-in-munitions-replenishment-for-anti- air/2017/04/13/paveway-iv-leads-uk-invest https://www.defensenews.com/ 14.3.19) Defenseanti-ISIS fight. News. (Accessed investment in munitions replenishment for Andrew Chuter (13.4.17): Paveway IV leads UK men/ european-responsibility-for-war-crimes-in-ye 14.3.19) https://www.ecchr.eu/en/case/ ECCHR (n.d.): War crimes in Yemen (Accessed Case_474 https://complaints.oecdwatch.org/cases/ Lockheed Martin. Filed. 23 June. OECD Watch (2016):ECDHR et al vs Boeing & school-bus-yemen us-supplied-bomb-that-killed-40-children- theguardian.com/world/2018/aug/19/ Guardian. (Accessed 14.3.19) https://www. killed 40 children on Yemen school bus. The Julian Borger (19.8.18): US supplied bomb that index.html middleeast/us-saudi-yemen-bus-strike-intl/ 14.3.19) https://edition.cnn.com/2018/08/17/ strike was US-supplied by the US (Accessed CNN (17.8.18): Bomb in Yemen school bus saudi-arabia/ us-clears-sale-of-air-to-ground-weapons-to- defensenews.com/air/2015/11/16/ Defense News. (Accessed 14.3.19) https://www. Air-to-Ground Weapons to Saudi Arabia. Aaron Mehta (16.11.15): US Clears Sale of saudi-arabia/ us-clears-sale-of-air-to-ground-weapons-to- defensenews.com/air/2015/11/16/ Defense News. (Accessed 14.3.19) https://www. Air-to-Ground Weapons to Saudi Arabia. Aaron Mehta (16.11.15): US Clears Sale of default/files/report_pdf/yemen0716web.pdf (Accessed 14.3.19) https://www.hrw.org/sites/ Yemen’s Civilian Economic Structures Businesses – Saudi Coalition Airstrikes on Human Rights Watch (n.d.): Bombing html port-says/GF9CiBu3B8oanDqiNIub8O/story. bombs-killed-more-than-yemeni-civilians-re world/2019/03/06/american-and-british- 14.3.19) https://www.bostonglobe.com/news/ civilians. The Washington Post. (Accessed British bomb killed more than 200 Yemeni Sudarsan Raghavan (7.3.19): American and 78

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Financial Smith, P (2019): BlackRock stakes claim on fab38ad94134a78ae31a2c538353 PRI-reporting-framework-2018/1#c2be https://reporting.unpri.org/surveys/ BlackRock, PRI Reporting Framework 2018, Principles for Responsible Investment (2018): cf556f4603976e2_1 ing-framework-2018/=1#6a739fe772e9496bb reporting.unpri.org/surveys/PRI-report fab38ad94134a78ae31a2c538353 ; https:// PRI-reporting-framework-2018/1#c2be https://reporting.unpri.org/surveys/ BlackRock, PRI Reporting Framework 2018, Principles for Responsible Investment (2018): id=4048287 (Accessed 20.03.2019) PDF?O=PDF&T=&Y=&D=&FID=1001247206&i- blackrock.com/Cache/1001247206. 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