Israeli government likely to tighten its control over arms sales. US-Iran affair exposes dangers of lax policies

Israel's controversial involvement in United States arms sales to Iran may lead to further tightening of political controls over this country's burgeoning weapons export business. The revelation of Israel's role and charges that its ``representatives'' were involved in transferring Iranian payments to contras in Nicaragua have exposed the dangers of the government's lax control over the country's arms export network, which sells approximately $1 billion worth of arms annually to some 60 countries.

Although it is highly centralized, the arms sales network operates without formal policy guidelines.

In Israel, top-level government decisions on defense and foreign affairs have traditionally been made in smaller forums than the full Cabinet, and arms sales have been no exception. Key decisions on the Iran arms deal were apparently made after consultation solely between the prime minister and his foreign and defense ministers and were not reported to the Knesset (Israel's parliament).

``Arms sales hardly go through the full Cabinet anymore,'' says Gerald Steinberg, an expert on Israel's military industries at Hebrew University in Jerusalem. ``The sales are governed by ad hoc procedures and are carried out on a case-by-case basis with no inter-agency approval or parliamentary control. In fact, there is no orderly conduct of arms sales,'' he notes.

Mr. Steinberg says this situation stands in sharp contrast to the US, where arms sales are governed by specific legislation and are carefully monitored by Congress.

Past controversies in Israel over arms sales to certain countries have led to the establishment of a ministerial committee on arms transfers. And at times, the Foreign Ministry has exerted pressure against sales to countries with which such transactions would be diplomatically risky.

Nevertheless, analysts say, both the ministerial committee and the Foreign Ministry have exerted little effective influence on day-to-day arms policy, which, in practice, is set only by the Defense Ministry. The Defense Ministry sales office, operating under the acronym SIBAT, has handled government-to-government arms transfers, and it licenses private individuals in Israel to mediate arms deals.

Analysts say SIBAT's decisions are usually affected more by specific circumstances surrounding each deal and the personalities involved than by policy guidelines and long-range planning.

Israel's loosely controlled arms sales system has left the door open for unsupervised weapons deals by private Israeli arms merchants licensed by the Defense Ministry. Foreign press reports estimate that there are more than 200 of these salesmen. Most prominent among them are former Israeli Army generals who use personal connections to sell weapons.

These dealers apparently do not need approval from the Defense Ministry if they market weapons that are stockpiled in another country.

``Since there is no one known procedure in these matters, someone who is caught in an illegal deal can say he represents Israel, the Israeli government could say he doesn't, and both sides could be right.'' Steinberg says.

The embarassing arrest in the US earlier this year of an Israeli reserve general, Avraham Baram, on charges of selling arms to Iran led to a Defense Ministry announcement in October that it was tightening regulations on arms sales by former generals. Under the new regulations, specific Defense Ministry approval is required for both preliminary contact and negotiations for any arms deal. A specific permit is required to conclude a deal.

The damage caused to Israel by the Iran arms sales controversy and demands by Knesset members and Cabinet members for a full accounting by the government of such deals will apparently lead to even tighter restrictions on such transfers, according to Aaron Klieman, an expert on arms sales at Tel Aviv University.

``The current arms sales system has evolved over time, and not much thought has been given to changing it because it was considered to be the most efficient,'' Mr. Klieman says.

Traditionally, there has been tolerance in Israel of limited legislative monitoring of arms sales - because of a perception here that they are of vital national interest. But new criticism of Israel's relatively indiscriminant arms sales policy is percolating.

``Now,'' Klieman says, ``it appears there will definitely be a tightening of political controls over bureaucratic decisions.''

At the same time, efforts to open the US and European markets to Israeli arms may work to reduce Israel's dependence on arms shipments to unpopular dictatorships in the third world.

``There's been a tendency recently to avoid deals which bring relatively small financial gain and are politically highly risky,'' Steinberg says. ``Such small deals could be counterproductive because their disclosure could endanger larger, less problematic transactions with other nations,'' he adds.

Israel's arms production first accelerated after France imposed an embargo on weapons shipments to Israel following the 1967 Arab-Israeli war.

Dubbed ``the biggest business in Israel,'' the expanding arms industry employs, according to foreign reports, at least 60,000 persons - about 20 percent of the country's industrial workforce. There are more than 100 Israeli firms involved in manufacturing military hardware, including the giant Israel Aircraft Industries and Israel Military Industries.

The cost of arms production and the limited demand at home have pushed the industry to seek export markets in order to obtain funds to keep assembly lines rolling. Arms sales have also served to offset the cost of importing weapons from the US and Europe. Israel's arms sales, which began in the mid-'50s, are now officially put at some 15 percent of total exports.

Israel has sold weapons to countries in almost every corner of the globe regardless of ideological considerations. Its buyers have included a number of unpopular dictatorships that were later toppled.

According to international arms directories, it has sold fighter planes to Argentina, Ecuador, and Honduras, Galil rifles to Guatemala, other light weapons to Ethiopia and Zaire, and missiles to Taiwan and Thailand. More recently, companies here have won bids to supply communications systems and mortars to the US Army and have sold tank ammunition to Switzerland. According to foreign reports, Israeli arms shipments have also been sent to China.

Israeli arms analysts note that a major motivation for Israel's wide-ranging arms business is a perception that such sales are an overriding national interest necessary for the maintenance of Israel's vital defense capacity in a hostile environment. Arms exports have been viewed as the major means to bolster Israel's defense industry - promoting self-sufficiency, as well as research, development, and production of Israeli arms.

Analysts also say there is a keen consciousness here of competition from other sellers to the world arms market and a feeling that ``if we don't sell, others will.''

Arms sales have also been viewed in Israel as a diplomatic tool to promote relations and initiate wider trade with certain countries.

Concern for the fate of Jewish communities in countries such as Iran and Ethiopia has been behind arms sales to those states. And there have been foreign reports that Jews were allowed to emigrate from those countries as a result of the supply of Israeli arms.

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