Arms Trade

Basic Information

The international trade in weapons is currently worth in excess of $35 billion per year. Some weapons producers are state owned. But advances in international communication and the end of the Cold War helped consolidate manufacturing across national boundaries in private hands, now dominated by a small number of Western multinational corporations. America and Europe currently account for about 94% of arms sales. In fact, the United States is the world's leading arms exporter—with a 63% market share that is more than all other competing nations combined. Other major arms exporters include Russia, France, the United Kingdom, Germany, Canada, China, and Israel. Nations such as Iran are often portrayed in the news media as a major supplier of arms to militant Islamic groups, but this role is often as an intermediary since many of those weapons were originally produced in other countries.

The figures above are informed estimates because of the failure to create an effective international system to mark or trace exchanges, especially for small and light arms. Unlike a jet fighter, SA/LWs have many legitimate buyers including individuals and police forces in addition to military clients. As unpleasant as it might be to think about, law enforcement needs armored vehicles, CS and pepper gas, electric shock batons and leg irons, execution equipment, guns and ammunition, rubber bullets, security and surveillance equipment, water canons, and so on. There are also many participants in the arms system, with SA/LW production occurring in over 90 countries and with more than 1,200 companies involved in some aspect of the trade (from production to repair). Putting controls on the arms market is further complicated by the lack of transparency in most such deals. SA/LWs are especially easy to hide, pass along, smuggle, steal, and capture from the enemy. In the conventional weapons category alone there are also multiple (and often conflicting) sources of data for the many levels of trade. The bottom line is that weapons are very easily available from a variety of different sources.

Illegal Transfer of Weaponry

One area of concern is the illegal transfer of weaponry. Although unlawful, an active and highly profitable underground armaments marketplace exists. Ironically, the vast majority of small arms on the black market were originally manufactured and marketed legally before being diverted into an illicit network. This diversion occurs via a number of ways, including the following:

• “Straw purchases” in countries such as the United States without limitations on the number of weapons a person can legally buy or own at one time, and the illegal resale of some of those arms either domestically or in other nations where gun laws are more restrictive
• Theft from civilian gun owners
• Accidental loss and misplacement by governments
• Theft from government weapons stockpiles
• Looting of military and police arsenals during periods of instability
• Soldiers selling their weapons because they haven't been paid or have sympathy to a rebel cause
• Violating arms embargos by bribing officials in one country not on a debarred list to allow transshipments to a sanctioned country

Weapons might be sold for cash; bartered for hostages, drugs, or any marketable commodity; or countertraded for oil or food. The deals can be transacted by [Page 110]unscrupulous go-betweens who are equally comfortable in shipping toxic waste to the horn of Africa, smuggling illegal immigrants to the United States, or trafficking in counterfeit computer chips to Europe. This trade requires access to cargo ships typically registered in a “flag-of-convenience” nation noted for its openness to corruption through low registration costs, dummy commercial ownership rules, and banking secrecy. Ultimately, the money payments and commodity sales are moved through international networks of so-called ghost companies and coded bank accounts in tax haven countries, which benefit by protecting all financial transactions against prying regulatory scrutiny. Constantly attempting to keep ahead of investigators (usually successfully), these clandestine networks thus are conduits for an incredible variety of goods and services.

...