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State Department approves sale

The US State Department has approved a license for Honeywell International Corp to provide Taiwan with US$1.1 billion worth of engines for Taiwan’s Indigenous Defense Fighter.

But sources in Washington were quick to distinguish that sale, which extends a previously-issued license, from the nine-month-old freeze on sales of major weapons systems to Taiwan, which is still in force.

The license for the engines was approved as a commercial sale — which is regulated primarily by the State Department — as opposed to a foreign military sale, which involves the State Department, the Pentagon and other agencies of the US government.

Notifications to Congress of Foreign Military Sales are handled by the Defense Security Cooperation Agency, a unit of the Pentagon. The freeze has halted those sales in their tracks all year.

In a letter notifying the Senate Foreign Relations Committee dated Aug. 4, but which came to light only this week, the department said it has approved the contract for Honeywell’s wholly owned subsidy, International Turbine Engine Company, to manufacture components for the TFE 1042 engines for Taiwan’s Aerospace Industrial Development Corp (AIDC), which is developing the aircraft.

The US company was supplying the engines to AIDC under an earlier contract valued at US$997 million, and the new authorization will bring the total value of the contract to US$2.1 billion, the department’s letter of transmittal, signed by acting Assistant Secretary of State for Legislative Affairs Matthew Reynolds said.

“This new agreement will bring all parties into compliance with current Department of State policies and procedures,” the notice said, a copy of which the Taipei Times obtained on Friday.

“The United States Government is prepared to license the export of these items having taken into account political, military, economic, human rights and arms control considerations,” Reynolds wrote in the notice.

The agreement will terminate on May 31, 2017.

Despite the notification, the fate of eight major packages of weapons systems to Taiwan remains in limbo, with no firm indication that the sales will be unfrozen even though they were authorized by US President George W. Bush in April 2001, and the Legislative Yuan approved funding for them last year.

However, the president of the US-Taiwan Business Council Rupert Hammond-Chambers, representing US defense contractor firms that will largely supply the weapons, told the Taipei Times on Friday that he was “optimistic” the sales, with a value of up to US$12 billion, would be unfrozen soon.

He said he felt confident that the Bush administration would send the needed notification to Congress by Sept. 26, the date Congress is scheduled to adjourn its regular session, allowing enough time for a contract to be signed by the end of the year.

The weapons packages, which have been held up since last December, include anti-tank missiles, Apache helicopters, Patriot PAC-3 anti-missile batteries, P-3C anti-submarine aircraft, diesel-powered submarines and sea-launched Harpoon missiles.
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