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Arms Trade: Qatar

Question for Department for International Trade

UIN 183221, tabled on 24 October 2018

To ask the Secretary of State for International Trade, what the breakdown of the £4.5 billion in financing support for the export of Typhoon and Hawk aircraft to the Government of Qatar is.

Answered on

29 October 2018

UK Export Finance (UKEF) has carried out due diligence and robust risk assessment on this transaction, concluding that the overall risk in relation to the transaction was low. This risk assessment is commercially sensitive.

The basis of UKEF’s normal underwriting criteria is a framework agreed with HM Treasury that allows UKEF to provide support where it is needed for UK exporters while managing potential risks to the Exchequer arising from both individual transactions and across its portfolio. Due to the quantum of support (particularly to a single obligor), the long risk horizon and the nature of the transaction, its financing did not fit within UKEF’s normal underwriting criteria. In these circumstances, Ministers can instruct UKEF to support transactions which are judged to be in the national interest.

The UK and Qatar share a close defence and security relationship. The defence contracts with the Government of Qatar were announced alongside a package of training and co-operation between the British and Qatari Air Forces. Both BAES and MBDA UK are significant employers in the UK and this contract will support BAES, its nearly 35,000 employees and the 9,000 companies in its supply chain, many of whom are in highly skilled design and manufacturing roles.

The breakdown of the £4.5bn in financing support to the Government of Qatar is: £3.5bn in loan guarantees and an offer of £1bn in direct loans. In addition to the £4.5bn referred to by the Secretary of State for International Trade in his letter of 15 September to the Chair of the International Trade Committee, UKEF has provided further support for the contract in the form of export insurance bringing the total value to around £5bn in support.

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