The German arms corporation Rheinmetall is allegedly continuing to trade with Saudi Arabia through its Italian and South African subsidiaries, despite Berlin’s export freeze to the Gulf kingdom, a joint investigation by the magazine Stern and public broadcaster ARD suggests. The outlets cite Rheinmetall executive Helmut Merch, who reportedly said during a documented telephone conference with bank analysts in mid-November, that these deliveries have "not been affected" by the recent German export ban, imposed after the killing of journalist Jamal Khashoggi in the Saudi consulate in Turkey.
Merch estimated the annual sales at over 100 million euros. Incidentally, the head of Rheinmetall’s Italian subsidiary, RWM Italia, Fabio Sgarzi, spoke in a July interview about the current expansion of the company’s factory on the Italian island of Sardinia, which would allow it to triple its production capacity.
In addition to the Italian subsidiary, Rheinmetall’s joint venture in South Africa, promoting its production with its "extraordinary lethality", has reportedly caught the attention of the Saudi state-owned arms holding SAMI. The Gulf kingdom's company is attempting to buy a share there in a bid to develop its own independent weapons industry.
SAMI is headed by former Rheinmetall Divisional Director Andreas Schwer. The publication suggests that besides him, at least three other former Rheinmetall managers are apparently working for the Saudi company.
With arms exports amounting to $472.6 million between January and September 2018, Saudi Arabia is Germany's second largest customer after Algeria. In October, Berlin approved further exports to the kingdom valued at some €254 million.
However, after the death of Jamal Khashoggi, a Washington Post journalist, German Chancellor Angela Merkel announced that Berlin would stop arms exports to Riyadh amid the ongoing scandal surrounding his death. German Economic Affairs Minister Peter Altmaier also urged EU member states to follow in Berlin's footsteps and stop deliveries to Riyadh due to questions raised amid Khashoggi’s case.
US President Donald Trump, who has suggested that Saudi Crown Prince Mohammed bin Salman "had knowledge" about Khashoggi's murder, said the US would remain a strategic partner for Riyadh despite the ongoing scandal. He noted that it would be "foolish" to terminate weapons exports contracts with the kingdom.
Khashoggi was last seen entering the Saudi consulate in Istanbul on 2 October. Later, Saudi authorities announced that a preliminary investigation had shown that Khashoggi was dead. Following more than two weeks of denial, Riyadh admitted that he had been killed in a brawl inside the consulate. According to Saudi authorities, some 21 individuals were arrested following an investigation of the murder, with 11 of them already facing charges. 5 of those charged face the death penalty if they are found guilty of the charges. It was also reported that the assassination was premeditated.
Saudi officials have denied the involvement of the royal family, specifically of the crown prince, in Khashoggi's killing. Riyadh insists that he was murdered as a result of a "rogue operation".