Factsheet on U.S-India accord on end-use monitoring

End-Use Monitoring Agreement (EUMA): A Backgrounder

Brahma Chellaney India Abroad July 31, 2009

The U.S. had been pressing India to sign three agreements related to defense cooperation:

1. End Use Monitoring Agreement (EUMA).

2. Communications Interoperability and Security Memorandum of Agreement (CIS MoA).

3. Mutual Logistic Support Agreement (MLSA).[*]

All these agreements contain a series of restrictive clauses.

On the eve of U.S. Secretary of State Hillary Clinton’s July 2009 New Delhi visit, the newly appointed U.S. assistant secretary of state for public affairs, Philip J. Crowley, had linked EUMA to the nuclear deal. He told the media in Washington on July 17 that EUMA was “part of the fulfillment of an important initiative that India and the U.S. have signed in the area of nuclear cooperation.”

“We are working with India on an end-use agreement,” said Crowley, the State Department spokesperson. “But clearly, this is part of the fulfillment of an important initiative that India and the United States have signed in the area of nuclear cooperation.” Crowley went on to say that he was “sure” there will be “substantial discussion” during Mrs. Clinton’s visit on “fulfilling the initiative and its various components.”

Contrast this with what Prime Minister Manmohan Singh told the Lok Sabha on July 22, 2008: “Some people are spreading the rumors that there are some secret or hidden agreements over and above the documents made public. I wish to state categorically that there are no secret or hidden documents other than the 123 Agreement, the Separation Plan and the draft of the safeguards agreement with the IAEA.”

Earlier, on August 4, 2005, he told the Rajya Sabha: “Sir, what are the commitments that I have taken? I am very clear in my mind and I can assure the House that there is no secret appendage or secret agreement. Everything that I discussed with the President [Bush] is faithfully stated. There is nothing more to our agreement than what is stated in this Joint Statement.”

EUMA CLAUSES

All these three agreements were designed by the U.S. Congress for ensuring American oversight, right-of-access and on-site inspection in client states — states that are under the U.S. security and nuclear umbrella. For example, there are 32 countries under the U.S. nuclear and security umbrella today. In addition, there are states like Pakistan that are officially classified by Washington as Major Non-NATO Ally (MNNA) — a conferred status that gives the U.S. virtually the same rights over them as it has vis-à-vis states formally under the American military umbrella.

The special rights the U.S. has with client states are understandable because America is responsible for their security and it thus seeks to underpin its own obligations and those of its allies through such agreements.

But India is not a client state, but a strategic partner of the United States. Unlike an ally who has to follow the alliance leader, a strategic partnership is built on the principle of equality. Thus, a strategic partner is an equal, at least in theory.

Yet, the U.S. has succeeded in imposing the End Use Monitoring Agreement (EUMA) on India.

The Pentagon is in charge of implementation of
EUMA, known in U.S.
parlance as the “Golden Sentry” program, with the mission to “monitor the use of defense
articles and services provided to foreign customers or international
organizations through government-to-government programs.”  The Pentagon says the Golden Sentry’s main
objective is to “minimize security risks through compliance with arms-transfer provisions supporting U.S. national
security and foreign-policy objectives
.”

The legal basis of EUMA — or Golden Sentry — is a
1996 amendment to the U.S. Arms Export Control Act (AEC). Section 40A of the
AECA on end-use monitoring of defense articles and defense services calls for
“reasonable assurance” of compliance of U.S. laws and regulations by
recipient states. This is just one example of how the United States
seeks to give extra-territorial jurisdiction to its laws and regulations.

The Pentagon’s Golden Sentry rules
apply to government-to-government defense contracts and impose “cradle-to-grave”
obligations, starting from shipment of a defense article to its use and final
disposition. By contrast, the State Department-run “Blue Lantern” program
focuses on Direct Commercial Sales (DCS)/Export Licensing (USML articles). “Blue
Lectern” end-use checks cover direct military sales and are conducted by U.S. mission personnel abroad or personnel from
the State Department’s Directorate of Defense Trade Controls (DDTC) to verify
the destination and specific end-use and end-users of U.S. commercial
defense exports. The “Golden Sentry,” in contrast,  requires a comprehensive end-use monitoring
program for arms transfers authorized by the Arms Export Control Act (AECA) and the Foreign Assistance Act
of 1961 (FAA), as amended.

Negotiated with New Delhi over a three-year period, the
Indo-U.S. EUMA is controversial.

Some of its clauses may not be a subject of concern, such as prohibitions on second-hand sales without approval of the United States.

But its contentious clauses impose restrictions on what India may do with the equipment it buys from USA.

►EUMA will allow the U.S. to periodically carry out an inspection and inventory of all articles transferred to India. In the negotiations, India strenuously objected to physical inspection and instead sought an inspection of the records and other measures in place. In the end, the Americans had their way, but it was agreed that the physical inspection would be done at a time and place granted by India. Supplying-state officials, in any case, would need visas and other assistance from the recipient state, including about the location of the equipment, to carry out an inspection. So surprise inspections are precluded anyway. But to prevent U.S. personnel from visiting sensitive military sites, the Indian government intends to move U.S.-origin defense equipment to a non-sensitive place before any inspection.

►The U.S. will have the right to check that India is using any purchased weapon for the purpose for which it was intended. This could mean that a weapon system bought by India to bolster defenses against China cannot be deployed against Pakistan, a failing state American policy just won’t let fail.

►EUMA restricts what the purchasing country, India, can do with the U.S.-origin defense equipment, even within its own borders.

►Under the terms of EUMA, India cannot modify the purchased defense article or system in any form.

►Also, to prevent the buyer country from freeing itself from dependency on the United States for maintenance, EUMA restricts India from getting U.S.-origin defense equipment serviced by any another country without prior American permission. Even spare parts need to be sourced only from the United States.

These "cradle-to-grave" restrictions arm Washington with continuing leverage over the recipient country. After all, any equipment or system needs maintenance. Such leverage, in turn, can help ensure that the recipient country cooperates with Washington on larger political matters.

THE AGREED TEXT

A key element of U.S. Secretary of State Hillary Clinton’s India trip was the announcement that the two sides had reached accord on EUMA. Although the "Golden Sentry" is a Pentagon program, Mrs. Clinton’s desire to show her visit as successful prompted her to exert sufficient pressure on India to clinch EUMA during her stop in New Delhi. The Joint Statement issued at the end of her visit recorded: "External Affairs Minister Krishna announced that both sides had reached agreement on End-Use Monitoring for U.S. defense articles."

The agreed text of EUMA was exchanged by External Affairs Minister Krishna and Clinton on July 20, 2009. It, however, was not formally signed because it takes the form of agreed language to be included in contracts for all future U.S. defense sales to India.

Although the agreed language deviates in some aspects from the standard EUMA text applicable to client states, the United States managed to get India to accept the core conditions.

The United States already has been including end-use monitoring rights for itself in the sale of all defense equipment to India. Such end-use monitoring rights have been incorporated in the Letter of Offer and Acceptance (LOA) relating to every defense contract with India in recent years, including the contracts for:

(i) USS Trenton — a 1971-vintage amphibious transport ship, bought by India in 2007 for $50 million and renamed “INS Jalashva.”

(ii) The $2.2 billion deal with Boeing for eight P-8I maritime patrol aircraft.

(iii) Six C130-J Hercules military transport aircraft worth more than $1 billion.

(iv) Three VVIP Boeing business jets.

The U.S. right to end-use monitoring is also incorporated in the export contracts of U.S. high-term items to India, starting with the Cray X-MP-14 supercomputer in the late 1980s. But EUMA relates to defense-equipment transfers and contains detailed and elaborate restrictions.

Now the EUMA language agreed to between India and the U.S. will become the standard in all future Indo-U.S. defense contracts. "We have agreed on the end-use monitoring arrangements that will henceforth be referred to in letters of acceptance for Indian procurement of US defense technology and equipment,” External Affairs Minister S.M. Krishna told Parliament on July 21, 2009. “This systematizes ad hoc arrangements for individual defense procurements from the USA entered into by previous governments.”

EUMA comes as a major boost to American arms companies like Lockheed Martin Corp., Boeing Co. and Northrop Grumman Corp. eying megadeals in India, one of the world’s largest importers of conventional weapons.

Indeed, EUMA opens the path for the U.S. and India to agree to the terms of the Communications Interoperability and Security Memorandum of Agreement (CIS MoA), which is still under negotiation.

As its name suggests, that agreement seeks to promote interoperable
tactical communications (“comms”) systems, including Spread Spectrum
comms systems, and to institute secure comms interoperability between the two
sides through the U.S.
supply of Communications Security (COMSEC) equipment and services.

OFFICIAL CONCERN IN INDIA

The Indian government has embraced EUMA despite concerns expressed within the official establishment over its restrictive and invasive clauses.

For example, Navy chief Admiral Suresh Mehta had publicly described EUMA as “intrusive.” Speaking at an April 2008 conference organized by the London-based International Strategic Studies Institute in New Delhi, Admiral Mehta said:

"There are certain things we can’t agree to. As a sovereign nation, we can’t accept intrusiveness into our system, so there is some fundamental difficulty."

He added: “The U.S. may have this kind of (end user) agreements with everyone. I don’t believe in that. We pay for something and we get some technology. What I do with it, is my thing.’‘

In fact, India’s Comptroller and Auditor General (CAG) in a March 2008 report criticized the end-use monitoring clauses in the contract for USS Trenton/INS Jalashva. (No sooner the U.S. had transferred that transport ship to India than a gas leak killed an Indian officer and five sailors on board.)[†]

The CAG report stated: “Restrictive clauses raise doubts about the real advantages from this deal… For example, (there are) restrictions on the offensive deployment of the ship and permission to the (U.S.) government to conduct an inspection and inventory of all articles transferred under the end-use monitoring clause of the LOA (Letter of Offer and Acceptance issued by the US government).”

Note that
the contract contains even “
restrictions on the offensive deployment of
the ship.”

Given this background, the Indian government ought to have taken Parliament into
confidence on the EUMA, rather than place on record just the two sentences on the
agreement found in Krishna’s statement on Mrs.
Clinton’s visit.
While
Prime Minister Manmohan Singh’s government fights shy to reveal the terms of
the agreement to Parliament and to answer specific concerns, State Department
has called the EUMA with India “a landmark event,” with spokesman
Robert
Wood going on to say: “We’re very proud, and we believe that this agreement
between the U.S. and India is important in our overall global nonproliferation
efforts, and we believe that this agreement has brought India into the nuclear
nonproliferation mainstream.”  


[*] The MLSA envisages exchange of services and logistics. If it gets signed, the Indian and American militaries will provide logistic support, berthing and refueling facilities to each other’s warships and aircraft on a barter or equal-value exchange basis. But given that the Indian military, including the navy, has no deployments or operations outside the region, the MSLA, in effect, would be a one-sided arrangement.

[†] The purchase of the USS Trenton was severely criticized by the Comptroller and Auditor General, which in its report raised several questions, including why the ship was bought when the U.S. Navy itself had concluded in 2003 that the ship was not suitable for modernization and ought to be decommissioned by 2006. The report pointed out that gas leaks on board other Trenton-type ships had killed three American sailors.

(c) India Abroad

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