Canada supplies Croatia.

In another instance of unregulated Canadian equipment exported to military end-users, Canada will supply the Croatian military with training helicopters beginning in early 1997. In November, the Washington-based Defense News reported the sale of 10 Bell 206B-3 Jet Ranger helicopters worth $15-million (US) to the Croatian Air Force. Although the report referred to the purchase as the Croatian military's "first buy of US equipment," the Jet Ranger helicopters will be produced by Bell Helicopter Textron Canada at its plant in Mirabel, Quebec. All North American Jet Ranger helicopters have been assembled in Mirabel since production was transferred to the plant by the US Bell Helicopter Textron corporation in 1987.

The Croatian military sale illustrates a major loophole in Canada's export controls. Because the Jet Ranger helicopter has received civilian certification, and most of its sales are to commercial customers, the government does not require export permits for overseas sales, even in the case of military end-use. And since the sale does not require an export permit, it will be neither subject to government review nor reported in Ottawa's annual listing of military exports. (See Ploughshares Monitor, September 1996, for other recent examples of sales through this loophole.)

The likely delivery route of the Jet Rangers illustrates another export control loophole. The Croatian sale may involve the intermediate purchase of the Canadian-assembled helicopters by the US parent plant in Fort Worth, Texas. Under the terms of the US-Canada Defence Production Sharing Arrangements, cross-border trade in military goods does not require export permits. Hence, even if direct delivery from Canada to Croatia required an export permit, routing the helicopters through the US would not, and regulation of the sale would rest entirely with the US government. With US military exports currently equal to those of the rest of the world combined, Washington is not known for its strict export control regime.

The Bell Jet Ranger has proved to be a popular military training helicopter. The Canadian military has used Jet Rangers (designated CH-139s) for pilot training since 1981. In 1993, the US Army ordered over 100 Bell 206-B Jet Rangers under the designation TH-67 Creek New Training Helicopter (NTH). (The US Army helicopters are assembled in Mirabel and shipped to Fort Worth for installation of radios and instruments.) In 1994, Slovenia, like Croatia a state that was formerly part of Yugoslavia, ordered two Jet Rangers for military training purposes. In May 1996 Taiwan requested 30 TH-67 Creek helicopters from the US, also for pilot training.