Bulgaria, Israel to Sign Cooperation Deals

SOFIA, Bulgaria - Bulgaria's defense minister will sign two accords with Israel while on a two-day visit to Israel that starts Jan. 16, his office said.

Anu Angelov will ink a deal on increasing cooperation on military training and another on closer ties between the two countries' armaments industries, the Bulgarian defense ministry said.

The defence industry is an important employer in Bulgaria, exporting $380 million (300 million euros) worth of arms in 2011, according to a newspaper report, although the sector is a 10th of the size of during Soviet times.

Bulgaria and Israel enjoy close ties, helped by Bulgaria having been the only ally of Nazi Germany to have saved Jews from the death camps during World War II. Angelov will also visit the Yad Vashem Holocaust memorial and meet with Israeli Defense Minister Ehud Barak on his trip.

India Casts Wider Net for Short-Range Missiles

NEW DELHI - The Indian Army has entered the global market to buy short-range surface-to-air missile (SRSAM) systems for $1.5 billion, a move that could further undercut a four-year effort to develop a system with MBDA of France.

The Army convinced the Indian Defence Ministry there is an urgent requirement for SRSAM, said Army sources, and did not want to wait for the Maitri project conceived four years ago. India and France have not been able to agree on details of the Maitri project, including funding arrangements, the source added.

The Army last month sent global tenders to defense companies in Europe, the United States and Russia including Raytheon of the U.S., Israel's Rafael, MBDA and Thales of France, Diehl Defence of Germany, KBP Tula and Rosoboronexport of Russia, Ukraineexport of Ukraine and LIG NEX1 of South Korea.

The requirements of the SRSAM are similar to those of the proposed Indo-French Maitri project, the Army source said.

The current tender is for two regiments (36 systems, 1,000 missiles) estimated to cost about $800 million each. The total Indian Army requirement is likely to be about eight regiments in the next five to seven years.

The Maitri project was proposed to be jointly developed by India's Defence Research and Development Laboratory and MBDA.

The selected vendor will have to transfer technology of the systems, as well.

The supply will be made in two batches and completed within five years of the signing of the tender, including the launchers, sensors, vehicles for transportation and the missiles. The system must have a service life of at least 20 years and the missiles of not less than eight years.

The SRSAM system should be able to engage multiple targets, including those flying up to 500 meters per second, and have a maximum range of not less than 15 kilometers.

In 2009, India bought two regiments of Spyder quick-reaction surface-to-air missile systems from Rafael. Another Indo-Israeli joint project is the $2.5 billion long-range surface-to-air missile project signed in 2009 and expected to be inducted in 2013, Indian Defence Ministry sources said.

Meanwhile, the Indian Army has begun inducting the homemade medium-range Akash, which has a range of up to 30 kilometers. In 2011, the Indian Army ordered the induction of two Akash regiments at a cost of about $3 billion.

The Army also has been negotiating the purchase of David Sling and Iron Dome missile interceptor systems.

Helsinki OKs Patriot Missile Shipment to S. Korea

HELSINKI - Sixty-nine Patriot missiles impounded in Finland after being found on a merchant vessel in mid-December were headed for South Korea, the Finnish government said Jan. 4, granting their transit through Finnish territory.

"The missiles in question had been sold to the Republic of Korea by Germany," the government said in a statement, adding that it had granted a license to Seoul's "Defense Acquisition Program Administration to transit through Finnish territory 69 Patriot missiles."

The surface-to-air missiles, produced by U.S. firm Raytheon, were discovered on December 15 aboard the British-registered Thor Liberty docked in the southeastern Finnish port of Kotka.

Confusion initially surrounded the shipment.

Finnish police said the goods were bound for China but did not have the necessary authorization to pass through Finland, while a German defense ministry spokesman said the missiles came from the German military and were destined for South Korea.

The spokesman said it was a "legal sale on the basis of an accord between two states at the government level" and that export authorizations were in order.

However a senior Finnish defense ministry official said Finland had not received any transit license application for the missiles from Germany.

A joint team of Finnish customs and police officials removed and impounded the missiles during an investigation for suspected illegal export of defense material.

The vessel's Ukrainian captain and first mate were also detained for questioning and later slapped with a travel ban which is still in effect.

Last week the customs service said it planned to widen the investigation.

"Next week ... we will want to hear more suspects or persons of interest in the case. It is possible there may be others of interest," the head of the Finnish customs anti-crime unit, Petri Lounatmaa, told AFP.

Finnish transport safety officials have cleared the Thor Liberty to leave Finland, but the vessel has remained in port due to the travel ban imposed on its first officers, and the removal of its cargo.

Iran Keeps Tensions High Over Oil Strait

TEHRAN - Iran kept tensions simmering Dec. 31 over its threat to close the Strait of Hormuz to oil tankers by readying war game missile tests near the entrance to the Persian Gulf.

AN IRANIAN WAR-BOAT fires a missile Dec. 30 during the 'Velayat-90' navy exercises in the Strait of Hormuz. (Ali Mohammadi / AFP via Getty Images)

Washington has warned a closure of the strait "will not be tolerated" after Iranian Vice President Reza Rahimi's threat this week that "not a drop of oil" will pass through the channel if more Western sanctions are imposed over Tehran's nuclear program.

Iran has brushed off the warning from the United States, which bases its Fifth Fleet in the Gulf, with Iranian navy chief Adm. Habibollah Sayari saying it would be "really easy" to close the strait.

A spokesman for the Iranian navy, Commodore Mahmoud Mousavi, told state television on Dec. 31 that, "in the next days, we will test-fire all kinds of surface-to-sea, sea-to-sea and surface-to-air as well as shoulder-launched missiles" in the final stages of the war games.

He did not say exactly when the launches would start, but explained they would involve tests of "medium- and long-range missiles" to evaluate their operational effectiveness.

The navy exercises started Dec. 24 and are due to end on Jan. 2.

Twenty percent of the world's oil moves through the Strait of Hormuz, at the entrance of the Gulf, making it the "most important chokepoint" globally, according to information released Dec. 30 by the U.S. Energy Information Administration.

Around 14 crude oil tankers per day pass through the narrow strait, carrying a total 17 million barrels. In all, 35 percent of all seaborne oil transited through there this year.

On Dec. 29, a U.S. aircraft carrier and an accompanying missile cruiser passed through the zone where the Iranian navy was conducting its drill. U.S. officials insisted it was a routine passage.

No confrontation occurred, though an Iranian military aircraft flew in close to record video of the aircraft carrier, which was then shown on state television.

Analysts and oil market traders have been watching developments in and around the Strait of Hormuz carefully, fearing that the intensifying war of words between arch foes Tehran and Washington could spark open confrontation.

With tensions rising, the United States said it has signed a $29.4-billion dealto supply Iran's chief rival in the Middle East, Saudi Arabia, with 84 new fighter jets.

The sale was a "strong message" to the Gulf region, Washington said.

Iran is subject to four rounds of U.N. sanctions over its nuclear program, which many Western countries allege is being used to develop atomic weapons.

Tehran denies the allegation.

The United States and its allies have also imposed unilateral sanctions on Iran's economy.

The last lot of unilateral sanctions triggered a demonstration in Tehran that led to members of the Basij militia controlled by the Revolutionary Guards ransacking the British embassy. London reacted by closing the mission and ordering Iran's embassy in Britain closed.

More sanctions are on the way.

U.S. President Barack Obama is expected to soon sign into law additional restrictions on Iran's central bank, which acts as the main conduit for Iranian oil sales.

The European Union is considering other measures that could include an EU embargo on Iranian oil imports, with foreign ministers to meet on the issue in a month's time.

Iran's oil minister, Rostam Qasemi, told the Aseman weekly that sanctions "will drive up the price of oil to at least 200 dollar" per barrel.

Iran's top nuclear negotiator, Saeed Jalili, was quoted by the Iranian media telling Islamic republic's envoys who have been gathered in Tehran that "we will give a resounding and many-pronged response to any threat against the Islamic Republic of Iran."

But he and other officials also left the door open to resuming long-stalled talks on Iran's nuclear program.

Addressing world powers involved in the talks, Jalili said: "We officially told them to come back to the negotiation based on cooperation."

Iran's ambassador to Germany, Alireza Sheikh-Attar, told the Mehr news agency on Dec. 31 that "we will soon send a letter, after which (new) talks will be scheduled."

Foreign Minister Ali Akbar Salehi was also quoted by a website of the state broadcaster as telling a visiting Chinese foreign ministry official that "Iran is prepared for the continuation of nuclear negotiations" on the basis of a Russian proposal.

Finland to Widen Missile Shipment Inquiry: Customs

HELSINKI - Finland wants to widen an inquiry into the illegal transit of 69 Patriot missiles through its territory aboard a regular merchant vessel, Finnish customs said Dec. 30.

Two Ukrainians - the ship's captain and the first mate - remained in Finland and were subject to a travel ban during the ongoing investigation.

"Next week ... we will want to hear more suspects or persons of interest in the case. It is possible there may be others of interest," the head of the Finnish customs anti-crime unit, Petri Lounatmaa, told AFP.

The surface-to-air missiles, produced by U.S. firm Raytheon, were discovered last week on the British-registered Thor Liberty docked in the southeastern Finnish port of Kotka and bound for the Chinese port city of Shanghai, according to Finnish police. Finnish customs are investigating the case as one of illegal export of defense material.

Lounatmaa said customs and police investigators had "been in contact with several countries" and the information gathered would help them "focus ... investigations in the right direction."

He declined to provide any details on the nature of the information received, noting only that some of it had come in the form of intelligence briefs.

More official information would be needed as evidence if the case goes to criminal proceedings, he said.

Last week, a German defense ministry spokesman said the missiles came from the German military and were destined for South Korea, not China. He said it was a "legal sale on the basis of an accord between two states at the government level" and that export authorizations were in order.

However, a senior Finnish defense ministry official said Finland had not received any transit license application for the missiles from Germany.

On Dec. 26, Finnish transport safety officials cleared the Thor Liberty to leave Finland, after the missiles and most of the cargo of 150 tons of explosives had been unloaded from the vessel.

However, the vessel remained grounded by the travel ban on its first officers.

Finland: Missile Ship Free to Depart Port

HELSINKI - Finland has removed a cargo of 69 Patriot missiles found aboard a merchant ship that docked in the country and allowed the vessel to leave, transport safety officials said Dec. 26.

Thor Liberty was detained Dec. 15 in Kotka, southeast Finland, and was later found to be carrying 150 tons of explosive material, as well as the surface-to-air Patriot missiles and missile propellant charges.

"A Trafi check on 26.12.2011 has revealed that the improperly loaded explosive material has been offloaded from the vessel, with the exception of two properly loaded containers, and the detention order has been lifted," the Finnish Transport Safety Authority Trafi said in a statement.

However Trafi noted that the ship was still unable to continue on its journey because Finnish customs had placed the Ukrainian captain and first mate under a travel ban pending an investigation into the missiles.

Trafi added that customs had also impounded the explosives still on board the ship in two containers.

The missiles, discovered Dec. 21 aboard the British-registered ship, were bound for the Chinese port city of Shanghai, according to Finnish police. Finnish customs are investigating the case as one of illegal export of defense material.

A German defense ministry spokesman said the Patriot missiles, produced by Raytheon, came from the German military and were destined for South Korea.

He said it was a "legal sale on the basis of an accord between two states at the government level." He said the transaction had received an official export authorization and was reported to customs authorities.

However Finland said Dec. 23 it had not received the paperwork required from Germany.

China Rejects Link to Patriot Missiles in Finland

BEIJING - Beijing on Dec. 23 denied that a ship docked in Finland with more than 69 surface-to-air Patriot missiles on board had anything to do with China.

Finnish authorities are investigating after the missiles, produced by U.S. firm Raytheon, were discovered on a British-registered ship bound for the Chinese port city of Shanghai.

Finnish customs are investigating the case as one of illegal export of defense material. Two Ukrainians - the ship's captain and the first mate - have been detained.

"I don't see the ship transporting the missiles having anything to do with China," Chinese foreign ministry spokesman Liu Weimin told a regular briefing.

"I don't know why there is always someone who likes to link certain kinds of things with China and I have noticed the relevant report and I hope to clear up this event."

Germany's defense ministry has said the missiles came from its military and were destined for South Korea. A spokesman said the shipment was a "legal sale on the basis of an accord between two states at the government level".

He said the transaction had received an official export authorization and was reported to customs authorities.

Germany Prolongs Afghan Mandate

BONN - The German Cabinet decided Dec. 14 to extend the Bundeswehr's mission in Afghanistan by one more year, until Jan. 31, 2013, but also reduced the maximum number of troops to be deployed from 5,350 to 4,900 soldiers. The decision still has to pass the parliament.

The reduction is partly achieved by scrapping the flexible force reserve. However, the remaining 4,900 will also include German personnel of the Airborne Warning and Control System reconnaissance aircraft operated by NATO over Afghanistan. Before the end of this mandate's period, the government wants to further cut troop numbers to 4,400.

One day earlier, the control of the first of two German Provincial Reconstruction Teams (PRT) in the northern part of Afghanistan was handed over to a civil official. The Defense Ministry is no longer responsible for the PRT Feyzabad; instead, a diplomat of the country's foreign office in Berlin is in charge.

"This forms part of the changing nature of international commitments in Afghanistan," German Foreign Minister Guido Westerwelle said in a press statement. "They are increasingly taking on a civilian face, as is the case with the incremental transfer of responsibility for security to Afghan authorities and the reduction in international troop numbers."

However, German combat troops might stay in Afghanistan after the planned drawback in 2014. Defense Minister Thomas de Maizière confirmed this in a joint interview together with the foreign minister about two weeks ago. In the newspaper Bild am Sonntag, he mentioned the possibility that German troops would remain in the country to help train local forces.

Alenia, Cassidian To Explore UAV Cooperation

PARIS - In a bid become major industrial players, Italy's Alenia and EADS defense and security unit Cassidian have signed a preliminary agreement to explore cooperation in medium-altitude, long-endurance and combat UAVs, the companies said in a Dec. 14 statement.

"A Memorandum of Understanding was signed between Cassidian on behalf of EADS Deutschland GmbH and Alenia Aeronautica SpA to jointly investigate the potential cooperation in the field of medium-altitude long-endurance (MALE) unmanned aerial systems (UAS) and unmanned combat aerial vehicles (UCAV)," a joint statement said.

"Alenia and Cassidian are aiming to strengthen their technological know-how in order to establish a leading role in the UAS market," the companies said. "Thanks to this agreement, the two companies will analyze the requirements expressed by each of their respective governments in the UAS sector with the objective to create a strategic partnership and to expand their global UAS market share.

Cassidian sought the agreement with Alenia to extend its work on the Talarion advanced UAV.

"We look forward to investigating further collaboration with Alenia Aeronautica around a next-generation MALE UAS, like for instance the Talarion, which is of outmost importance for Europe's military aviation industry," Cassisian chief operating officer Bernhard Gerwert said in the statement.

France, Germany and Spain have shown no willingness to sign a development contract for the Talarion after EADS delivered its 60-million euro risk reduction study.

Alenia sees cooperation with EADS as a way of staying current in the UAV market.

"The UAS sector has a strategic importance for the future of Alenia Aeronautica's programs, and we are convinced that this agreement will allow us to become even more competitive in this quickly expanding market," Giuseppe Giordo, chief executive of Alenia Aeronautica and Alenia Aermacchi, said.

An Anglo-French cooperation military treaty, which includes collaboration in UAVs and UCAVs, has sparked concern in Germany, Italy and Spain that the agreement is exclusively bilateral and locks out other European partners.

ThyssenKrupp Concentrates Shipbuilding on Military Sector

BONN, Germany - ThyssenKrupp AG will concentrate its Marine Systems on military surface ship and submarine building in the future, the company announced Dec. 12, adding that it will sell all its civil shipbuilding activities to British company Star Capital Partners.

The contract, signed with the London-based financial investor company on Dec. 11, includes the large yard builder Blohm + Voss Shipyards, Blohm + Voss Repair, Blohm + Voss Oil Tools and Blohm + Voss Industries, including its subsidiaries. According to ThyssenKrupp, the new investor wants to continue the business at all sites.

"The sale is an essential step to further focus the activities of ThyssenKrupp Marine Systems," Hans Christoph Atzpodien, CEO of ThyssenKrupp Marine Systems AG, said in a news statement. "At the same time, with the new owner, an important course-setting to secure the work places and the future of the shipbuilding at the locations of Blohm + Voss has been taken for the employees."

The deal still has to be approved by oversight committees. ThyssenKrupp expects the deal to be completed at the end of the first quarter of 2012. The transaction reflects its strategic development concept unveiled May 13. It is supposed to improve the Essen-based company's competitive position and offer a sustainable future.

In August, there had been media speculation about a joint venture involving ThyssenKrupp Marine and French ship-building group DCNS. This was strongly denied by the German company at that time, which said that it saw little promise of close cooperation in the submarine or surface naval vessel sector.

Australia Courts 3 Firms for Sub Fleet

SYDNEY - Australia said Dec. 13 it had invited three companies from France, Germany and Spain to submit designs for its new submarine fleet, a project expected to span the next 30 years.

Defence Minister Stephen Smith said Canberra had asked French naval defense firm DCNS, Spain's Navantia and HDW of Germany - a ThyssenKrupp subsidiary - to submit designs for the program, which will see 12 new submarines built.

"The Future Submarine Project is a major national undertaking and is of a scale, complexity and duration never before experienced within (the) Defence (Department)," Smith said, adding that Australia would need a "significant amount of help from overseas."

"The submarines will be constructed over the course of the next three decades."

Jason Clare, minister for defence materiel, said the Future Submarines Project would involve hundreds of companies, thousands of workers and many skills that "do not currently exist in sufficient numbers."

"Some of those skills are available overseas, others will have to be grown here. Now is the time to develop a plan to make sure we have the skills we need when we start designing and building the submarines," he said.

Australia unveiled plans in 2009 to spend more than $70 billion boosting its military capability over the next 20 years.

Rheinmetall, Thales Win Australia Vehicle Deals

SYDNEY, Australia - Germany's Rheinmetall MAN and French company Thales won contracts Dec. 12 worth billions of dollars to supply thousands of new military vehicles for the Australian Defence Force.

Rheinmetall MAN Military Vehicles Australia will provide up to 2,700 protected and unprotected medium and heavy vehicles, Defence Minister Stephen Smith said.

There will be an option for approximately 1,000 more for training purposes.

"The new vehicles will improve performance and protection, as well as provide commonality across the fleet which will improve Army's training and logistic support requirements," said Smith.

He declined to say what the contract was worth, saying only that it was expected to be more than an original budget estimate from August 2007, when the government targeted about 3 billion Australian dollars for replacement vehicles.

In addition, Thales Australia's Hawkei unit was selected as the preferred supplier for a 1.5 billion-Australian-dollar contract to supply up to 1,300 protected and unprotected light vehicles, Smith added.

No further details were given.

Austria Balks at Selling Old Tanks to Canada

VIENNA - Austria is in talks to sell 40 secondhand Leopard 2A4 tanks back to their German manufacturer after Vienna balked at the Canadian military buying them, a press report said Dec. 12.

Austrian Defence Ministry spokesman Michael Bauer confirmed only that talks with the firm, Krauss-Maffei Wegmann, were "going well, although nothing has been signed yet."

The Austrian daily Kronen-Zeitung said the Canadian military had also expressed interest in buying the 15-year-old tanks, which Krauss-Maffei will buy back for 400,000 euros ($532,300) each and then modernize.

"But that would have meant so much red tape, since the Canadians are fighting in Afghanistan, meaning that the sale would not have been approved," the paper cited an unnamed army insider as saying.

This created consternation among some partners in the NATO military alliance, although "as luck would have it" Canada decided it was no longer interested, the daily added.

The paper said Austria bought the tanks for 1.3 million euros each in 1996.

U.S. Vacates Air Base in Pakistan: Officials

QUETTA, Pakistan - The United States vacated a Pakistani airbase following a deadline given by Islamabad in the wake of anger over NATO air strikes last month that killed 24 soldiers, officials said Dec. 11.

A U.S. AIR Force plane carrying U.S. personnel and equipment prepare to take off from Pakistan's Shamsi airbase on Dec. 11. (Inter Services Public Relations via AFP)

Pakistan's military said in a statement that the last flight carrying U.S. personnel and equipment had left Shamsi airbase, in the southwestern province of Baluchistan, completing a process that began last week.

Islamabad's fragile alliance with the United States crashed to new lows in the wake of the Nov. 26 NATO air strikes that killed 24 Pakistani soldiers and which the Pakistan military called a deliberate attack.

The base was widely believed to have been used in covert CIA drone attacks against the Taliban and al-Qaida commanders in northwest Pakistan's tribal areas, which border Afghanistan.

"The control of the base has been taken over by the Army," the statement said.

A senior security official requesting anonymity earlier told AFP: "The Americans have vacated the Shamsi air base and it has been handed over to the Pakistani security forces."

Another official in Baluchistan confirmed that the last batch of U.S. officials left in two flights on Dec. 11.

Following the November air strikes, Pakistan closed two border crossings to Afghanistan to U.S. and NATO supplies and gave American personnel until Dec. 11 to leave Shamsi airbase.

U.S. Ambassador to Islamabad Cameron Munter told a Pakistan television channel last week: "We are complying with the request."

A security official said the U.S. aircraft left the Pakistani airfield around 3:00 pm with the remaining group of 32 U.S. officials and material.

U.S. President Barack Obama on Dec. 4 expressed condolences to Pakistan's President Asif Ali Zardari for the soldier deaths and said the NATO airstrikes that killed them were not a "deliberate attack."

But the incident has rocked Washington's alliance with its counter terrorism ally Islamabad, though officials say neither country can afford a complete break in relations.

U.S. officials and intelligence analysts have said the covert drone war would not be affected by the closure of the base as Washington could fly Predator and Reaper drones out of air fields in neighboring Afghanistan. But the Shamsi air base was supposed to be particularly useful for flights hampered by poor weather conditions.

Islamabad has tacitly consented to the covert U.S. drone campaign, which many Pakistanis see as a violation of their country's sovereignty.

Nearly half of all cargo bound for NATO-led forces runs through Pakistan. Roughly 140,000 foreign troops, including about 97,000 Americans, rely on supplies from outside Afghanistan for the decade-long war effort.

Pakistan has shut off the border over previous incidents, partly to allay popular outrage, but the latest closure had entered a third week.

Islamabad has so far refused to take part in a U.S. investigation into the deadly November air strikes, and decided to boycott the Bonn Conference on the future of Afghanistan earlier this month.

Berlin to Start Afghan Troop Pull-Out in Februaryger

BERLIN - Germany, which has over 5,000 troops in Afghanistan, will withdraw 200 soldiers at the start of February, a German weekly reported Dec. 11.

Germany plans to whittle its forces in Afghanistan to 4,900 next year against 5,350 at present. The NATO-led forces are due to be pulled out in 2014.

Berlin is drawing up its withdrawal plans, which will start on Feb. 1 and involve 200 troops, Bild am Sonntag said, without naming any sources.

Germany, which has the third-biggest force in Afghanistan behind the United States and Britain, said at the start of the year that it aimed to begin pulling its military forces out, eyeing 2014 for complete withdrawal.

Polls have shown the mission, the first major Bundeswehr deployment outside of Europe since World War II, has been consistently unpopular in the country.

Germany Hands Over Anti-Piracy Mission Command

BONN, Germany - Spain is the new lead nation of maritime task force 465 on an anti-piracy mission in the waters around the Horn of Africa. German flotilla Adm. Thomas Jugel handed the command of the European Union's flotilla Atalanta over on Dec. 6 to Spanish Capt. Jorge Manso.

Jugel had been commanding the task force of six ships and eight helicopters from Germany, Spain, the Netherlands and France for the past four months.

In a report issued by the German military, he spoke about the decline in the number of successful pirate raids from 50 in 2010 to 20 so far in 2011. According to the German admiral, more and more ships are passing the area registered and preferably in a convoys. In addition, the EU warships in May were granted a more offensive mandate to tackle the situation.

German Defense Minister Thomas de Maizière, who visited the troops in Djibouti for the occasion, said he regarded the operation so far as a success. However, he warned that the military mission only fights the symptoms. A final solution requires that constitutional structures be established in Somalia, and the pirate masterminds had to be found and their cash flows cut off, he said.

Just a few days before the change in command, the German parliament voted to extend the country's participation in Atalanta for one more year. In the coming month, the German Navy will take part with about 500 troops, one frigate and a P3-C Orion maritime patrol aircraft. The upper limit of the mandate is 1,400 troops.