quarta-feira, 18 de dezembro de 2013

Brazilian new military procurement laws and Sweden's Jet Fighters - It is all connected (plus, Thor 2 and NDTAs)

Our president is on fire today! She just (sort of) denied a visa to Snowden. And about now has chosen the new Brazilian jet fight.

I will use this opportunity to comment on the new Brazilian rules on military purchases.

The law that set out the new policy for acquisition of strategic defense equipment is not brand new. It has been published in March this year. But the decrees and regulations that have details it and named the first strategic gears are very recent.

The new rules set out a clear policy, aimed at:

1. Attracting relevant technology to Brazil, on o permanent basis. 

 Suppliers must set foot in Brazil. Demonstrations of irrevocable transference of technology are greatly appreciated, and favored by the law.

2. Assuring continuity of production in Brazil

The law states that, whatever the equipment being used, the Armed Forces must be able to escalate the production of it, in case they need to.

3. Control must be in the hands of a Brazilian national

The factories or re-sellers dealing in strategic equipment must be Brazilian nationals, or companies controlled by Brazilian nationals.

This is actually a very strong requirement, since the Brazilian constitution does not allow for differentiation between Brazilians and foreigners, except in the most extreme cases, such as national security.

Be sure to check my advice on Joint Ventures with Brazilians!


I have always bet on the Swedish jets. Let's be honest:

-Sweden has a non-double taxation agreement with Brazil (which France also had, while the US did not);
-Queen Silvia's mother is a Brazilian;
-Thor 2 has been wildly successful in the Brazilian theaters.

And, most importantly:

SAAB has created a Brazilian-Swedish Technology Institute, in Brazil, just to show goodwill! And their bid strongly mentioned transference of technology.  It has been, by far, the bidder that demonstrated more commitment to Brazil.

The new rules on military procurement were not yet published when SAAB created the Institute (that is, this purchase may be regulated by previous rules). But is is clear that they understood the atmosphere surrounding the Armed Forces and leaned towards what would become the new standard.

(I'm not naive to the point of missing that some secret terms were also involved in the deal. But, as European philosphers say: Wovon man nicht sprechen kann, darüber muss man schweigen*).

Also, Vikings are cool and everybody loves them.

*Whereof one can not speak, thereof one must be silent

3 comentários:

  1. Adler, Acertou! Parabens! Interesting post....and I wonder if Boeing in now talking to the Obama administration about national security. Ha!

  2. Will most of these fighters be stationed in Anapolis, GO?
    Is there any effort to end double-taxation as to the United States?
    Will this purchase of fighters cause other South American countries to try to follow suit?

    1. I don't know.

      The only question I can answer is about the Brazil-USA NDTA. It is not going well.


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