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Canadian Military Procurement – Economic Sanctions for Russia – April 2014

French Amphibious Warfare Ships for Russia?  Economic Sanctions, Coincident Procurement Opportunities, and  the Mistral Class LHDs

An Op-Ed  by Steve Daly, CD

Update Sept 2014: Russian personnel have been training at Saint-Naizaire in advance of the planned October delivery of  the first of two Mistral LHD ships for the Russian Navy. That delivery was confirmed by the French government on 01 Sept 2014.  But,  by 03 Sept,  Paris had performed a volte face, claiming  that the conditions for export "had not yet been met".

Foreign Minister Laurent Fabius described how President Hollande made his decision: "Are the conditions there today for the delivery? No, but we hope that they will be in the future."

Defence News says that the 'cancellation' is only a delay as France buys time to manoeuvre. That fits. Ministère de la Défense officials have described the sale of Mistrals as "a private commercial transaction". But, as IHS Jane's Defence Weekly notes, the 2011 "contract was structured as a government-to-government agreement rather than a direct commercial sale".

CASR had previously noted retiring Conservative Senator Hugh Segal's support for Canada or NATO buying the Mistrals intended for Russia. On the day Sen. Segal made his comment about Mistral, DCNS Technologies Canada Inc opened in Ottawa with an aim to compete in the Canadian Surface Combatant project. If  a Mistral sale to Russia proceeds, DCNS profits. Would Canada reward a partly state-owned DCNS by choosing their frigate design for CSC?

Also see Jim Dorschner's proposal for NATO-owned Mistral leased to Canada for the RCN.

Crimea and Punishment – Canada and an opportunity for sanctions on Russia for Ukraine

The world has watched with a mixture of disgust and trepidation as Vladimir Putin-led Russia has invaded and annexed a portion of the Ukraine. The Crimean Peninsula has been seized, an illegal referendum held, and  then used as a pretext  for the formal annexation of  Crimea.

Not since the end of the Cold War have tensions between Russia and NATO been so high. Russia has been unceremoniously tossed out of the G-8 and sanctions have been emplaced. Counter sanctions have been declared and even the UN deemed the Russian actions illegal. As always, the trouble with such measures is that to be effective they must really affect the person whose actions you are protesting. But Vladimir Putin may care little about anyone's opinion except his own. Sanctions, by themselves, will have little effect on Russian actions.

Something more is needed – Perhaps sanctions on the sale of western warships to Russia?

That something more has to be tangible, something that even an autocrat like Vladimir Putin can't help but notice. Preferably, it needs also to be something that causes embarrassment to the Putin government whose actions (in the eyes of  Russia's people) must be seen to have diminished Russia's international reputation rather than to have enhanced that reputation.

A concrete demonstration of NATO displeasure is feasible (even if it's made of steel and not concrete!).  France's state-controlled  DCNS  [1]  is contracted  to provide two Mistral class amphibious warfare ship to the Russian government. STX France has been building the two LHDs – the Vladivostok and the Sevastopol – in Saint-Nazaire but the near-completed ships have not  been delivered  to the Russian Navy. There has been great concern on both sides of the Atlantic over the French sale of  these vessels to the Russians. Since the start of  the Crimean Crisis, France has  flip-flopped  on whether it would deliver the vessels. And major considerations facing the French are the costs associated with cancelling this Mistral order.

To the French, the Mistral is a projection and command ship (Bâtiments de Projection et de Commandement). DCNS/STX France have built three BPCs to the French Marine nationale: BPC Mistral in 2006, Tonnerre in 2007, and Dixmude in 2009. [2]  In late 2011, a contract was signed with Russia to provide two further Mistral class ships along with associated services which includes technology transfers. As with the Marine nationale vessels, DCNS acted as prime contractor while STX France does the actual assembly as subcontractor. An important difference this time is that STX also has a subcontractor ... in the form of a Russian shipyard.

The St Petersburg-based Baltiysky Zavod (Baltic Shipyard) is responsible for construction of stern section blocks for the two Russian Mistral ships. The completed stern sections were then towed to the STX yard in Saint-Nazaire for mating with the French-built forward sections. The agreed plan is that the third and  fourth planned Mistrals are to be constructed entirely in Russia by Baltic Yards.

In response to the Crimean referendum, the then-foreign minister Laurent Fabius considered cancelling the delivery of the Mistral class ships to Russia as part of sanctions agreed to by the US, Canada, and the EU. Then the French government reversed its position, claiming the Mistrals are 'civilian hulls' until Russia armed the ships. But this position may change again. French President, François Hollande, has just accepted the resignation of his entire Cabinet.

France is in a tough position. The 'optics' of delivering a new warship named Sevastopol to the Russians in the midst of  the Crimean Crisis are appalling. But reneging on this contract will have a severe affect on an already shaky French economy  –  not least  because France, gallingly, would be forced to compensate Russia for those St Petersburg-built hull sections.

What France needs is an alternate customer for those semi-completed Mistral class ships

Canada can be that alternative customer. That a Mistral class amphibious warfare, command and control, and power projection ship would fill a huge gap in RCN capability goes without saying. But this isn't primarily a naval decision. It's political. Prime Minister Harper has been one of the more outspoken leaders protesting Russian actions – not surprising as Canada is one of  the countries most isolated  from Russian countermeasures. Much of Russia's power stems from the threat of turning off  the flow of  gas to Western Europe. Russia can't do that to Canada. In fact, shipping Canada's own copious reserves of natural gas to European allies would be the most effective economic sanction Ottawa could impose on Russia over Crimea.

Then there is the possibility of poking Vladimir Putin in the eye by taking over ownership of the Sevastopol. That makes acquiring the Mistral class ship from France a political decision. So what are the factors involved and how would Canada go about buying the Mistral class?

There was an ounce of truth to M. Fabius' claim that the Mistrals are 'civilian hulls'. They are warships built to current  'civilian' standards and  they were to be delivered without weapons systems or communications electronics. That is actually a bonus for Canada as the ship can be sent to a Canadian shipyard for fitting-out with the RCN's preferred systems. At present, the only major Canadian shipyard not tied up in NSPS requirements is the Davie Shipyard in Quebec. In the midst of a provincial election, the Feds' political timing could hardly be better.

Kitting out a 'Big Honkin' Ship' – a Canadian maple leaf on the funnel of the Mistral class

For Canada, it would be a happy accident that Mistrals for Russia were to be delivered without any weapons or comms fitted. This allows the RCN to select the systems offering maximum compatibility with Canada's in-service warships. The RCN  is also in the advantageous position of  being in the middle of Halifax class frigates upgrades (the Halifax class Modernization / Frigate Life Extension program) which means a modern sensor and C4I package are already selected. Canada need only adapt the FELEX electronics to the Mistral and get  Davie to install them.

For France, the stigma of  having sold  warships  to Russia in the midst of a crisis is avoided. France saves face and dodges the huge economic consequences of a cancelled Mistral sale. By offering an immediate purchase of  the Mistral, Canada effectively enforces sanctions on Russia for its actions against Ukraine. And into the bargain, the RCN gains a new capability.

Since the 'Russian' Mistrals are at an advanced stage of construction, Canada could take on the ship (or ships?) in very short order. Vladivostok was to be operational with the Russian Navy in the second half of 2016. Sevastopol was due to arrive in St. Petersburg in Nov 2015.

Even in naming a Mistral, the Government of  Canada would have attractive choices. As an amphibious warfare vessel, HMCS Juno Beach leaps out (and has a French connection). But the Mistral would also have a Canadian Command and Control role. The centenary of World War One (and Canada's emergence on the world stage) suggests another possibility: HMCS Vimy Ridge. HMCS Vimy Ridge would carry her illustrious name well past the centenary. No greater remembrance of a seminal moment, forming the Canadian psyche, can be envisioned.

It should be noted that even the public offer to acquire the 'Russian' Mistral would serve as notice that Canada takes Russian actions against Ukraine seriously and  Canada is willing to commit to concrete action. Acquisition of  the ship would be a most advantageous result but the symbolism of our offer to ease France's burden from sanctions is even more important.[3]

[1] The French Government owns 75% of  DCNS shares; the remainder are owned by Thales. US  Department of  State files comment that the sale to Russia primarily benefits STX France while noting that government-appointed DCNS Director, Patrick Boissier, once headed STX.

[2] BPC Dixmude, the third Mistral hull for the Marine nationale, was ordered in April 2009 as part of an economic stimulus package proposed by the former President Nicolas Sarkozy.

[3] France's Mistral deal with Moscow has been valued at €1.2 billion (or $1.824B Canadian).

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