4Poland

1 The World Bank Group, www.worldbank.org/data.2 www.emulateme.com/content/.3 The World Bank Group, www.worldbank.org/data.4 Consumer prices. www.emulateme.com/content/.5 The World Bank Group, www.worldbank.org/data.6 www.emulateme.com/content/.7 Jane’s Sentinel, www.janes.com.

Poland data profile

Population1 38.7 million (2000)

Territory2 312,685 km2

GDP3 S$162.2 billion (2000)

Inflation rate4 8.4% (1999 est.)

Current value of external debt5 $68,198 million (2000)

Unemployment rate6 11% (1999 est.)

Defence budget (percentage of GDP)7 2.0% (1999)

DURING THE COLD WAR, Poland was the third largest military producer within theWarsaw Treaty Organisation (WTO), after the Soviet Union and Czechoslovakia.The defence industry was dominated by a few large companies whose wide productionrange was subordinated to the needs of the Warsaw Pact and, to a lesser extent, to thoseof friendly less developed countries. In 1989, 128 companies were involved in militaryproduction, 39 of which manufactured final products and 89 produced dual-use goodsor were engaged in repairs and maintenance. After the end of the Cold War, asignificant decline in national orders, international agreements on the reduction of

Warsaw

RUSSIA LITHUANIA

BELARUS

UKRAINE

SLOVAKIA

CZECH REPUBLIC

GERMANY

Baltic Sea

4.1Introduction

conventional arms and shrinking foreign markets put military industrial capacityunder pressure and forced massive lay-offs. As a consequence, defence-industryemployment shrank from 180,000 in 1988 to 85,000 in 1995.8

Poland has undergone a process of deep economic and political reform in recent years.Despite the country’s impressive macroeconomic growth, in the late 1990s the armsindustry was struggling to survive. The industry is currently being transformedthrough a combination of restructuring, consolidation, privatisation, foreign invest-ment and strategic partnerships and some government assistance. A new programmeof restructuring and privatisation of the defence industry, which aimed at stimulatinginvestment through specialisation, was approved in early 1999.9 More recently,comments by the Polish Treasury indicate that the privatisation of arms companieswill be tied to the procurement of military equipment for the Polish Armed Forces andoffset agreements. The Treasury claims this is the only method of selling arms and aviation companies; Jozef Nawolski, director of the Department for Companies of theDefence Industry at the Treasury noted that:“Hitherto experience shows that straight-forward selling of arms companies is practically impossible. Investors demand contract guarantees from the government. Once they fail to obtain them, they eitherpull out of bids or submit very unfavourable offers”.10 Reforms within the defence sector have been supported by the ‘Agency for Industry Development SA’, whose maintask is helping companies to adjust to new market-economy conditions.11 The Departments of Export Promotion within the Ministries of Economy and ForeignAffairs have also assisted companies with financial aid in the marketing and export ofPolish military equipment, and the government has placed orders with domestic companies to help the industry survive.

In order to increase co-operation in the defence sector, national defence manu-facturers established a Polish Chamber of Producers for National Defence (PIPROK)in September 1995.12 The chamber, which currently comprises some 200 member companies, is a voluntary and self-governed organisation which aims to increase theproduction potential in the so far narrow range of co-operation products, increaseproduction and supply to domestic and foreign markets and facilitate collection offunds for the restructuring and modernisation of the defence industry. The chamberalso works to prepare Polish industries for integration with NATO and Europeanstructures. It has developed close links with NATO defence-industrial groups (such asthe NATO Industrial Advisory Group) and is developing bilateral links with EU industrial concerns. Since 1998, the chamber has represented Poland’s military industry within NATO.

In 1999, Poland joined the NATO alliance. In 2001, the Polish Parliament approved the2001–2006 Defence Plan to pave the way for the reorganisation and modernisation ofthe Polish Armed Forces to bring them into line with Western standards.13 However,defence experts have raised concerns that the current economic slowdown, in con-junction with defence budget cuts, may kill the modernisation programme and bringthe defence industry to its knees.14 NATO membership has produced mixed reactions.The accession to NATO has created opportunities for the industry, including partici-pation in NATO bids, more orders from the Polish Ministry of Defence and profitsfrom offset agreements.15 However, defence experts have also warned of the danger of

2 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

8 The Bulgarian Defense Industry – Strategic Options for Transformation, Reorientation & NATO Integration, (the AtlanticCouncil of the United States, July 2001), p 15.

9 An earlier programme, the Programme of Restructuring the Defence and Aviation Industries in the Years 1996–2010, wasnot implemented due to lack of funds.

10 ‘Polish Treasury Ministry says offset a precondition for arms plant sales’ [in Polish], Warsaw Rzeczpospolita, 27 December2001, source: David Isenberg’s Weapons Trade Observer.

11 ‘Agency for difficult cases’ [in Polish], Rzeczpospolita, 15 May 2000.12 Polish Chamber of the Producers for National Defence, 1998/1999 catalogue.13 ‘Country briefing – Poland’, Jane’s Defence Weekly, 26 September 2001, p 19.14 Ibid, p 19.15 It is estimated that the benefits resulting from offset agreements in connection with the purchase of multi-function planes

for the Polish Air Force will total $1 billion by 2015. ‘Interview with Witold Misiowiec, Director of the Department for theIndustrial Defence System at the Ministry of Economy’ [in Polish], Michal Likowski, Warsaw Nowe Panstwo, 31 August 2001,pp 13–14, source: David Isenberg’s Weapons Trade Observer.

take-overs and asset stripping by larger EU and US defence firms. The main trend sofar has been for minority shareholding (20–30 percent) by foreign companies.

Legally and politically binding commitmentsundertaken by Poland Year

Nuclear Non-proliferation Treaty 196916

Nuclear Suppliers Group 1975

Zangger Committee 1974

Chemical Weapons Convention 199517

Biological Weapons Convention 197318

Australia Group 1994

Wassenaar Arrangement 1996

Conventional Forces in Europe Treaty 1991

Ottawa Landmine Convention 199719

EU Code of Conduct 1998

EU Joint Action on Small Arms and Light Weapons 1999

OSCE Criteria on Conventional Arms Transfers 1993

OSCE Document on Small Arms and Light Weapons 2000

The Polish Government has introduced various new laws and regulations concerningthe control of transfers of arms and related technology since 1989. A Law On the Rulesof Particular Control of the Foreign Trade in Goods and Technologies in Connectionwith International Agreements and Obligations20 was passed in 1993 and became effective when Poland was removed from the Committee on Multilateral Export Controls restriction list on 25 March 1994.21 This law was supplemented by a Law of11 December 1997 On Administering of the Foreign Trade in Goods and Technologiesand on the Arms Trade.22 A set of executive regulations and instructions created rulesfor the registration of companies which can participate in arms transfers and the documents needed for such transactions.23 The handling of arms exports and importsby Polish companies and the transit of arms through Polish territory24 and exportrestrictions were also covered by the regulations.25

Since 1 January 2001, the international trade in strategic goods, technologies and services has been regulated by a new Law On International Trade in Goods,Technologies and Services of Strategic Significance for State Security and Maintenanceof International Peace and Security.26 The new law makes important changes to Polisharms export controls. The most important elements of the new law are:27

SAFERWORLD ARMS & SECURITY PROGRAMME 3

16 Date ratified.17 Date ratified.18 Date ratified.19 Date signed. Poland signed the Ottawa Landmine Convention in 1997, but has not yet ratified the treaty. Poland has not

revealed information about its stockpiles of antipersonnel mines, and, to the best of the authors’ knowledge, had not begundestruction of its antipersonnel mine stockpiles at the time of writing. The NGO Landmine Monitor describes Poland as acountry likely to have large stockpiles. Landmine Monitor Report 2001 (Landmine Monitor), www.icbl.org/lm/2001/exec/,Executive Summary.

20 Official Journal – Dziennik Ustaw No 129, 1993.21 The Co-ordinating Committee on Multilateral Export Controls (CoCom) was the Cold-War-era organisation which performed

similar functions to the Wassenaar Regime, the export control regime which replaced it in 1995. 22 Dziennik Ustaw No 157, 1997.23 Order of the Minister of Economy On definition of the Pattern of Register of Legal Persons Engaged in Special Trade with

Foreign Countries, Methods of Conducting It, and the Application Procedure for Registration and Definition of the RequiredDocuments and Information, which should be Submitted with the Application’ (19 January 1998, Dziennik Ustaw, No 121998).

24 The Minister of Economy Decision, 22 December 1997, The List of Goods and Services, the Foreign Trade of Which RequiresLicensing (Dziennik Ustaw No 162, 1997).

25 The Council of Ministers’ Decision No 30/94, 27 May 1994 On Limitations in Foreign Special Trade gave the government theauthority to draw up a list of countries subject to embargoes.

26 See appendix 1, section 5.7.1. The new law has replaced the law of 11 December 1997.27 ‘Recent changes in Polish export control law’, SIPRI, www.projects.sipri.se/expcon/natexpcon/Poland/polupdate.htm.

4.2 Normativeand regulatory

framework

4.2.1 Commitments tointernational control

regimes

4.2.2 Legislation governing arms

production and export

� All aspects of export control for conventional arms and dual-use items have beenbrought together under one legal act.

� The introduction of a new licensing system, including Individual Licences, GeneralLicences and Global Licences for trade in dual-use goods.

� The existing state register of enterprises authorised to carry out trade has beenreplaced with a company certification system.

� Companies are obliged to establish internal control systems to ensure compliance withthe law and to collect information that assists in end-user verification, including arequirement to ascertain whether the arms might be used to violate human rights,threaten peace and regional stability and facilitate or encourage terrorism or inter-national crime.

� The law introduces the ‘catch-all’ principle, for the control of technologies that are noton arms control lists but can be used in the production of military goods.

� A comprehensive definition of ‘brokering services’ which are subject to licensingrequirements.28

� The introduction of a mechanism to control intangible technology transfers.

� A more detailed system of criminal and administrative penalties for violations of thelaw.29

The new export control law has been complemented by eight decrees from the Ministry of Economy30 and one from the Ministry of Finance,31 which provide theoperative provisions for the implementation of the legislative framework. The Councilof Ministers Decree of 14 September 1999 on Special Purpose Trade Ban and Limitation has remained in force. The decree lists arms categories whose internationaltrade may be subject to bans and limitations, and includes a ban on the export andtransit of arms and technologies to proscribed countries.32

The Department of Export Controls at the Ministry of Economy is responsible for thearms export licensing process and for regulating the export of military equipment andrelated technology.33 Before authorising an export licence, the Ministry of Economyconsults the Ministries of Foreign Affairs, Defence, Internal Affairs and Administra-tion and the State Protection Office. The licences are examined against Poland’s inter-national obligations, such as embargoes and other restrictions, regional stability,national security and the economic interests of Poland.34

The law provides that trade in strategic goods can be conducted only on the basis of anexport, import or transit licence and a licence for agency, commercial consultancy

4 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

28 These are defined in Article 3 as: agency services, commercial consultancy services, contract negotiation assistance servicesand participation in any way in any type of transportation of strategically significant goods across the border of Poland, inparticular as a result of export, import and transit contract and/or a deed of gift, leasing, loan, cession or contribution in kindto a company, including actions taken outside Polish territory.

29 Penalties for violating arms export regulations vary according to the gravity of the offence and may include fines, seizure ofproperty, restriction of liberty or imprisonment from one to ten years.

30 Decree on the list of goods of strategic importance, 23 May 2001(Dziennik Ustaw No 77, item 660/2001); Decree on themanner of introducing a register for trading in strategic goods, 16 March 2001 (Dziennik Ustaw No 77, item 199 / 2001);Decree on the list of bodies entitled to certify and control the control system and trade management, 16 March 2001(Dziennik Ustaw No 17, item 200 / 2001); Decree on the method of running the register of individual licences and companiesusing global and general permits, 16 March 2001 (Dziennik Ustaw No 17, item 201 / 2001); Decree on individual licences fortrading strategic goods and a pattern of import certificate, 9 February 2001 (Dziennik Ustaw No 10, item 78 / 2001); Decreeon fees for individual licences permitting trade in goods of strategic importance, for the issue of import certificates andconfirmation of end user’s declaration, 9 February 2001 (Dziennik Ustaw No 10, item 79/2001); Decree on the sample of acertificate verifying the supplies and the method of certificate records, 9 February 2001 (Dziennik Ustaw No 64, item 648/2001).

31 Decree on the list of customs offices where export, import and transit of goods of special importance may take place, 1 June2001 (Decree by Minister of Finance on the list of customs offices where export, import and transit of goods of specialimportance may take place, 1 June 2001 (Dziennik Ustaw No 64, item 648/ 2001).

32 See appendix 2, section 4.7.2.33 Between 1989 and 1996 arms exports were licensed and controlled by the Department of Special Trade. In 1997, as part of a

comprehensive reform of the central administration, the Department of Special Trade and the department responsible forthe control of dual-use equipment were unified to form a new Department of Export Control.

34 Two additional bodies are consulted during the decision-making process: the Main Customs Inspectorate and the NationalNuclear Agency.

4.2.3 The decision-making process and

administrative structure for policy

implementation

and/or contract assistance services.35 In the case of dual-use goods, such permits maybe of three kinds:

� individual licences, which cover either a specific dual-use good or a related service, andthe country (countries) with which the applicant enterprise may enter into trade

� general licences, which cover a type or category of dual-use goods which may be traded with one or more countries

� global licences, which cover a type or category of dual-use goods which may be traded to unspecified countries

Global and general licences are issued by the Minister of Economy by way of decree.They can only be granted to companies which can prove the existence of an internalsales control and management system for at least three years.

Any trading activity, or intermediary service in connection with arms and ammuni-tion, requires an individual licence, issued by the Department of Export Controls,which is non-transferable and valid for a period of one year. Each export applicationneeds to be accompanied by an import certificate and/or end-user declaration whichincludes, amongst others, a clause prohibiting the transfer of goods to any other consignees without prior consent of the trade control authority.

A new electronic system of recording, processing and circulating all the documenta-tion required in the licensing process was introduced in 1996. Since 1997, the new sys-tem, called PELTS (Polish Export License Tracking System), has linked the Ministry ofEconomy with the Ministry of Foreign Affairs, the Ministry of Defence, the Ministry ofInternal Affairs and Administration, the State Security Office and the Chief CustomsOffice.36

Poland is a signatory of the EU and OSCE documents on SALW, and participated inthe UN Conference on the Illicit Trade in Small Arms and Light Weapons in All ItsAspects, in New York in July 2001. In Poland’s statement at the conference, their representative highlighted concerns regarding the links between criminality andSALW trafficking. Poland actively participated in work on the UN Convention onTransnational Organised Crime, with the Polish draft of the convention providing abasis for discussions. The law enforcement aspect of export controls also featured inthe Polish statement, and the dangers of the often unclear distinction between legaland illegal trade were emphasised. Poland noted that:“National export control systems should be harmonised and mutually compatible in order to restrict freedomof action in the ‘grey area’. It is high time for the countries that have not done this sofar… to institute, as rapidly as possible, efficient export-control systems”.37

The Polish Government co-hosted two regional conferences in Warsaw in 2000devoted to SALW. The first, ‘Controlling Small Arms and Light Weapons Flows Fromand Through an Enlarged EU: Developing a Joint Action Programme for EU and Candidate Countries’, was organised jointly with Saferworld and Polish NGO theInstitute for Public Affairs. This conference resulted in the ‘Warsaw Call for Action’, inwhich the participants appealed for greater collaboration between European countriesto combat the uncontrolled spread of SALW. The second conference was convenedjointly with Canada under the Euro-Atlantic Partnership Council (EAPC) initiative,Disarmament and Peacekeeping Operations, and reflected the importance ofincorporating the SALW issue in the mandates of peacekeeping operations.38

SAFERWORLD ARMS & SECURITY PROGRAMME 5

35 Law of 29 November 2000 Concerning International Trade in Goods, Technologies and Services of Strategic Significance forState Security and Maintenance of International Peace and Security, and Amending Selected Laws, article 6, paragraph 1.

36 The system was created with the help of foreign governments, particularly the USA.37 See appendix 4, section 4.7.4. Statement by HE Mr Stefan Meller, Undersecretary of State Ministry of Foreign Affairs,

Republic of Poland, United Nations Conference on the Illicit Trade in Small Arms and Light Weapons in All Its Aspects, New York, 11 July 2001

38 Ibid.

4.2.4 Governmentguidelines and official

policy on small armsand light weapons

In recent times, general information on the Polish arms industry has become morewidely available. Although the information is rarely comprehensive, especially withregard to SALW transfers, public transparency has increased in comparison with previous years when all information on military production was treated as strictlyconfidential.

The Ministry of Economy, the Treasury and the Ministry of Defence have made publica range of information on the defence industry and its performance: information isusually disseminated at defence-related events, such as the launching of the Programme of Restructuring the Arms Industry. The Ministry of Economy publishesperiodical reviews of the state of the economy, reporting on the performance of all sectors including the defence industry.39 Data about the defence sector can also beobtained from the publications on industry and trade produced by the Central Statistics Office.40 In addition, some information can be obtained from defence companies’ promotional and advertising materials, such as exhibition and defence catalogues and a growing number of military magazines and other periodicals.41

The Polish press, from newspapers to magazines and specialists’ publications, hasreported on the state of the defence industry.42 Unofficial data presented by the mediaprovides an opportunity to verify official data and statements, as well as to highlightthose activities that would fall under the ‘illicit trade’ category. Corruption is also a concern: Polish newspapers have published articles containing allegations or suspicions of corruption in the areas of defence tenders and the privatisation process.43

In a positive development in public transparency, the Polish Government has beenworking on its first annual report on arms exports which will contain informationabout Poland’s policy on arms export controls and non-proliferation as well as statistical data on arms exports. The report is due to be published in 2002.

Poland is one of the largest arms producers amongst the EU associate countries ofCEE. The Polish defence industry currently employs some 63,000 workers who repre-sent about 2.5 percent of total employment in the industrial sector, and it producesapproximately 1.3 percent of total goods and services. Since 1990, 38 companies, inwhich the state holds a controlling proportion of shares, have been considered the coreof the Polish defence industry.44 In July 1999 the Polish Parliament passed two bills forthe privatisation and restructuring of its defence industry: the first bill foresaw the government maintaining a controlling interest in seven of the plants, and the secondtied larger foreign purchases to offset deals promoting domestic defence industry.While advantageous for the defence industry, the new offset law is rather off-puttingfor suppliers to the Polish Government, and was held responsible for ‘killing’ a radarcontract.45

The major shake-up following this reform will involve the sale of factories, the writingoff of large debts, thousands of redundancies and the injection of foreign capital.46

6 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

39 Poland’s Report: Economy in 1998 (Ministry of Economy, Warsaw, 1999); Poland’s Report: Foreign Military Trade in 1998(Ministry of Economy, Warsaw, 1999); Poland’s Report: Industry in 1998 (Ministry of Economy, Warsaw, 1999).

40 Yearbook of Industrial Statistics and the Statistical Yearbook.41 For example, Polska Zbrojna, Mysl Zbrojna, WojskoIWychowanie, the monthly Raport: Wojsko, Technika, Obronnosc, or

Wprost, Polityka, Zycie Gospodarcze and the weekly Nowe Zycie Gospodarcze.42 Rzeczpospolita, Gazeta Wyborcza, Trybuna, Polityka, Wprost, Przeglad, Zycie Gospodarcze, Polska Zbrojna, Wojskowy

Przeglad Logistyczny, Nowa Technika Wojskowa Raport.43 ‘Mr Minister’s Moneymaker’ [FBIS translated text], Warsaw Nie, 9 November 2000, source: David Isenberg’s Weapons Trade

Observer; ‘Romauld Szeremietiew’s assistant demanded bribes on his behalf from arms firms’ [in Polish], WarsawRzeczpospolita, 7 July 2001.

44 ‘Poland’, Pawel Wieczorek and Katarzyna Zukrowska, Arms Procurement Decision Making, (SIPRI, Oxford University Press2000), vol 2, p 123. See appendix 3, section 5.7.3, for a full list of Polish arms manufacturers.

45 ‘Poland passes privatisation bills’, Jane’s Defence Weekly, 7 July 1999; ‘Polish offset law kills ITT’s radar contract’, Jane’sDefence Weekly, 1 August 2001.

46 Op cit Jane’s Defence Weekly, 7 July 1999.

4.3Transparency

andparliamentary/

publicaccountabilityarrangements

4.4 Armsproduction

Three companies, Cenrex, Cenzin and Bumar will remain fully state-owned, the statewill retain 100 percent of shares in one company and more than 50 percent in anothereight, while private capital will be allowed to have a controlling interest in the remaining 22 enterprises. The revenues from privatisation will be allocated to coverrestructuring costs and additional purchases for the Polish armed forces.47 There arefew private defence companies in Poland as yet. In recent times, the Polish Treasury hassucceeded in privatising PZL Warszawa-Okecie,48 while the privatisation of PZL Swidnik has been postponed.49

Poland has been a traditional developer of military equipment for land, air and navalforces. The 1998/99 PIPROK catalogue lists eight companies specialising in the production or repair/maintenance of aircraft, including PZL Warszawa-Okecie SA,50

WSK 51 PZL Mielec SA and WSK PZL Swidnik SA52 Two companies are listed as concen-trating on ship building: the naval shipyard Stocznia Marynarki Wojennej in Gdyniaand the northern Stocznia Polnocna SA in Gdansk.53 The catalogues lists 18 companiesspecialising in armour and vehicle production, including:54

� Huta Stalowa Wola (HSW),which currently employs 14,000 people and produces awide range of products, including building machines, as well as tracked and wheeledcombat vehicles, howitzers, and armoured personnel carriers. The Polish Army is toreceive new 98mm mortars from HSW, together with 122mm rockets for multiple-launch rockets systems and ammunition for 122mm self-propelled howitzers. In September 2000 HSW and Italy’s OTOBreda signed an agreement for the developmentof a new light turret intended for use on a Polish Army IFV, and HSW has also concluded agreements with the German Rheinmetall DeTec for the licensed production of 35mm guns to be used on the new Polish Loara anti-aircraft system.55

� Zaklady Mechaniczne Bumar – Labedy SA mechanical works, producer of a range ofarmoured equipment, including the PT-91 ‘Hard’ main battle tank, a locally builtupgraded variant of the Russian-designed T-72M1.56

Twenty-four companies are listed as providing electronic, opto-electronic and communication equipment.57 In an interview with Polska Zbrojna in September 2001,Slawomir Kulakowski, chairman of the Polish Chamber of Manufacturers for NationalDefence, highlighted the importance of the electronic and communication sectors forthe Polish defence industry:“We should concentrate on the domains in which we canexport successfully. We could specialise in computer optics (PCO) and radar systems(given our two leading research and production centres, Radwar and the IndustrialInstitute of Telecommuncations). We are doing well in telecommunications systems(for example, Radmor has transmitted the manufacturing technology for the 3501radio station to the Czech Republic and Lithuania, and it has an opportunity to launchthe manufacturing of these products in Slovenia, Romania and India)”. Indeed PCO,the Industrial Centre for Optics, is preparing to sign a contract to modernise Indian T-72 tanks by equipping them with night vision cameras and fire control systems.

SAFERWORLD ARMS & SECURITY PROGRAMME 7

47 ‘Polish privatisation presses ahead’, Jane’s Defence Weekly, 17 March 1999.48 PZL stands for Panstwowe Zaklady Lotnicze, or National Aviation Works.49 According to Jane’s Defence Weekly, the only bidder, the Italian Finmeccanica/Agusta has not presented a final offer yet.

Op cit Jane’s Defence Weekly, 26 September 2001, p 23.50 On 17 October 2001, two Spanish firms, CASA (Construcciones Aeronauticas SA) and Avia System Group, completed the

acquisition of 51 percent of the shares of PZL Warszawa-Okecie as part of the offset agreements with the Polish governmentin their purchase of eight CASA C-295 military transport aircraft. Over the next two years, CASA, which is part of the largestEuropean aviation company EADS (European Aeronautic, Defence and Space Company), will increase its stake in the Polishaircraft company to 85 percent, with the remaining 15 percent in the hands of the company’s employees. ‘EADS CASA takescontrolling interest in Polish aircraft company’, 22 October 2001, www.defence-data.com/current/page12491.htm; ‘Spanishfirm buys majority stake in Polish aircraft maker’ [in English], Warsaw PAP, 1553 GMT, 28 August 2001; ‘EADS Takes OverPolish Aircraft Manufacturer: Executive Board Announces Expansion of Transatlantic Business’ [in German], GerhardHegmann, Financial Times Deutschland, 30 August 2001, p 7.

51 Stands for Wytwornia Sprzetu Komunikacyjnego, or Transport Equipment Corporation.52 PIPROK 1998/1999 Catalogue, pp 1–16.53 Ibid pp 17–22.54 Ibid pp 23–56.55 Op cit Jane’s Defence Weekly, 26 September 2001, p 20; ‘HSW and OTOBreda to develop light 25mm turret for BMP-1’,

Jane’s Defence Weekly, 27 September 2000; ‘Poland’s HSW ready to produce KDA air defence guns’, Jane’s Defence Weekly,29 November 2000.

56 Op cit PIPROK pp 23–56.57 Ibid pp 79–120.

Worth $100 million, this will be one of the biggest Polish arms contracts in recentyears.58

In April 2000 the Czech Republic and Poland formed a joint commission to ease co-operation in the defence sector; both countries see room for co-operation in theexisting modernisation of infantry fighting vehicles and T-72 main battle tanks.The commission will also promote further co-operation between the armed forces ofthe two countries which both became members of NATO in 1999, and promote theinterests of the two in introducing new members to NATO.59

A number of companies are also engaged in the manufacture of SALW and ammuni-tion. In 1999, the major small arms producer was Zaklady Metalowe Lucznik SA, whichemployed a workforce of about 1,600 people and manufactured a range of small arms,including pistols, assault rifles and submachine guns. Despite attempts by the government to rescue the company by placing an order for 4,000 assault rifles for thecountry’s border guards, it was declared bankrupt in November 2000.

Other manufacturers whose range of products also includes SALW are: Fabryka BroniGucznik, which is to provide all Polish services with a new generation of assault riflesand submachine guns;60 Zaklady Mechaniczne ‘Tarnow’ SA, which produces anti-aircraft guns, machine guns and grenade launchers; H. Cegielski – Poznan SA, whoseproduction range includes PKM machine guns; and Zaklady Metalowe Dezamet SA.Poland’s major small arms ammunition producers include Zaklady Metalowe MeskoSA, which has long experience in manufacturing military ammunition, and ZakladyTworzyw Sztuczynych Pronit SA.61

According to SIPRI data, between 1992 and 2001, Poland exported the following majorweapons (see table opposite).

The main clients of Polish arms and military equipment are the states that use post-Soviet technology, in particular Asian and African countries.62 For many years, onesolid market has been India, which Poland supplies with finished products, spare partsand repair services. But Poland has also been active in South East Asia, includingMalaysia and Indonesia. In March 2002, the Malaysian government confirmed that itwould buy a significant number of Polish PT91 main battle tanks.63 In March 2001,there were reports that Indonesia was considering buying a wide range of Polish armaments, including fighter jets, under counter-trade agreements. The IndonesianDefence Minister, Muhammad Mahfud, was quoted as saying:“Poland and Russiahave offered armaments to us on easy terms, without money, through counter-trade orin exchange for sea or mining exploration licences”.64 New markets are also emergingin South America. Over the past few years, Poland has sold M-28 Skytruck light transport aircraft to Venezuela and officials hope that Poland will be able to pay off itsdebt to Brazil through the export of military equipment.65

According to SIPRI, in 1995 the value of Polish exports totalled $187 million, exactly the

8 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

58 ‘Interview with Slawomir Kulakowski’ [in Polish], Ryszard Choroszy and Maciej Janislawski, Polska Zbrojna 2 September2001, source: David Isenberg’s Weapons Trade Observer; ‘Quiet hopes for new orders’ [in Polish], Z.P., AMAC and A.B.,Warsaw Rzeczpolita, 10 October 2001, source: David Isenberg’s Weapons Trade Observer.

59 ‘Czechs and Poles form joint commission’, Jane’s Defence Weekly, 19 April 2000.60 Op cit Jane’s Defence Weekly, 26 September 2001, p 24.61 ‘Small Arms Survey 2001 – Profiling the Problem’, Small Arms Survey, p 36.62 Op cit Warsaw Nowe Panstwo, 31 August 2001.63 ‘Malaysia yesterday confirmed that it will buy the PT91 main battle tank from Poland’, The Star, Kuala Lumpur, 24 March

2002, source: David Isenberg’s Weapons Trade Observer.64 ‘Indonesia mulls counter-trade in arms with Poland and Russia’, AFP, Jakarta, 13 March 2001, 0706 GMT.65 Ibid.

4.4.1 Small arms andlight weapons

production

4.5 Armsexports

SAFERWORLD ARMS & SECURITY PROGRAMME 9

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ac

(199

5)19

951

Ind

ia(1

)TS

-11

Iskr

aJe

t tra

iner

airc

raft

(199

8)19

98(1

)Ex

-Pol

ish

Air

Forc

e

12TS

-11

Iskr

aJe

t tra

iner

airc

raft

1999

1999

12Ex

-Pol

ish

Air

Forc

e; d

eal w

orth

$5.

1 m

44W

ZT-3

ARV

1999

Dea

l wor

th $

31.1

m

Iran

104

T-72

M1

Mai

n ba

ttle

tank

(199

3)19

94–9

510

4

Latv

ia(4

)M

i-2/H

oplit

eLi

ght h

elic

opte

r(1

994)

1995

–97

(4)

Seco

nd-h

and

(2)

BRD

M-2

Recc

e ve

hicl

e(1

992)

1992

2Ex

-Pol

ish

Arm

y

Lith

uan

ia5

Mi-2

/Hop

lite

Ligh

t hel

icop

ter

1996

1996

5Ex

-Pol

ish

Air

Forc

e; g

ift

11BR

DM

-2Re

cce

vehi

cle

(199

4)19

9511

Ex-P

olis

h A

rmy;

gift

10M

T-LB

APC

(200

0)20

0010

Ex-P

olis

h A

rmy;

aid

3P-

37 B

ar L

ock-

ASu

rvei

llanc

e ra

dar

1996

1996

3D

esig

natio

n un

cert

ain;

ex-

Polis

h A

ir Fo

rce

2P-

40 K

nife

Res

t-B

Surv

eilla

nce

rada

r19

9619

962

Ex-P

olis

h A

ir Fo

rce

2PR

V-11

/Sid

e N

etSu

rvei

llanc

e ra

dar

1996

1996

2D

esig

natio

n un

cert

ain;

ex-

Polis

h A

ir Fo

rce

Mya

nm

ar22

Mi-2

/Hop

lite

Ligh

t hel

icop

ter

(199

0)19

90–9

222

Ru

ssia

1Ro

puch

a C

lass

Land

ing

ship

(198

0)19

921

Orig

inal

ly o

rder

ed b

y So

viet

Uni

on a

nd d

eliv

ered

to R

ussi

a af

ter e

nd o

f Sov

iet U

nion

Sud

an20

T-55

AM

-2M

ain

batt

le ta

nk(1

998)

1999

20Ex

-Pol

ish

Arm

y; e

xpor

t lic

ence

s fo

r 50

give

n fo

r del

iver

y to

Yem

en b

ut a

fter

firs

t 20

illeg

ally

di

vert

ed to

Sud

an th

e re

st k

ept i

n Po

land

.

Tog

o20

BMP-

2IF

V(1

996)

1997

20Pr

obab

ly e

x-Po

lish

Arm

y

Ug

and

a7

MiG

-21b

is/F

ishb

ed-N

Figh

ter a

ircra

ft(1

999)

1999

7Ex

-Pol

ish;

dea

l wor

th $

8.5

m (t

o fu

nd P

olis

h Su

-22

22 m

oder

nisa

tion

prog

ram

me)

; inc

l. 1

2 M

iG-2

1UM

trai

ner v

ersi

on; m

oder

nise

d in

Isra

el b

efor

e de

liver

y

Uru

gu

ay(3

)M

T-LB

APC

(199

8)19

993

Ex-P

olis

h A

rmy;

del

iver

ed v

ia C

zech

Rep

ublic

; No

deliv

ered

cou

ld b

e 6

Ven

ezu

ela

2M

-26

Iski

erka

Trai

ner a

ircra

ft19

9719

982

For N

atio

nal G

uard

6M

-28

Skyt

ruck

Ligh

t tra

nspo

rt a

c(1

995)

1996

–97

6Fo

r Nat

iona

l Gua

rd

12M

-28

Skyt

ruck

Ligh

t tra

nspo

rt a

c19

9719

99–2

000

(12)

Dea

l wor

th $

20 m

; for

Nat

iona

l Gua

rd

(18)

M-2

8 Sk

ytru

ckLi

ght t

rans

port

ac

(199

9)20

00–0

1(1

2)

Yem

en3

Deb

a C

lass

Land

ing

craf

t19

9920

013

Dea

l wor

th $

50 m

; inc

ludi

ng L

ublin

Cla

ss la

ndin

g ve

ssel

1Lu

blin

Cla

ssLa

ndin

g sh

ip19

99

66 This register lists major weapons on order or under delivery, or for which the licence was bought and production was underway or completed during 1992-2001. ‘Year(s) of deliveries’ includes aggregates of all deliveries and licensed production sincethe beginning of the contract. Sources and methods for the data collection, and the conventions, abbreviations andacronyms used, are explained in SIPRI Yearbooks. Entries are alphabetical, by supplier, recipient and licensee.

same as Czech exports, while in 1999 sales decreased to the value of $51 million. 1999saw contracts for the supply of 43 WZT-3 armed technical support vehicles and 12 usedIskra jet trainers to India, seven MiG-21s to Uganda, and 20 T-55AM tanks to Yemen.67

Exports in 2000 fell to $40 million. Sales included individual modern radars from theWarsaw-based Industrial Institute of Telecommunications which were sold to India,while PZL Mielec completed the supply of 24 M-28 Skytrack planes to Venezuela.In addition, Poland exported explosive materials, firearms and ammunition.68 In 2001,in addition to ten new MT-LB armoured personnel carriers and various other materielsold to Lithuania, Poland reportedly sold two landing crafts, as well as several hundredStar military trucks to Yemen, as part of two contracts concluded in 1999. The firstcontract involved the sale of 550 military trucks made by the Star Starachowice com-pany and worth approximately $20 million. The second contract, signed by the NavyShipyard in Gdynia, consisted of the export of four landing craft worth approximately$50 million. The government provided state treasury guarantees for the two contractsand the Handlowy Bank reportedly lent $70 million. The Central Bank of Yemen is dueto pay off the loan over a 10-year period.69 In recent years, a large portion of Poland’sexport proceeds has come from military equipment and arms withdrawn from service.Poland has exported significant quantities of decommissioned armaments to variouscountries. In August 1998, the trading company Cenzin signed a contract to sell 50 T-55tanks to Yemen. The first 20 tanks were exported to Yemen in April 1999.70 However,when it emerged that the tanks had been re-exported to Sudan, a country which hasbeen under an EU arms embargo since 1994, Poland cancelled all further deliveries toYemen. A year later, recalling the sale of tanks to Yemen, Bronislaw Komorowski,Chairman of the Sejm Defence Commission, declared:“Poland should conduct tradewith Yemen just like with all the countries that are not under embargo. However, itshould conduct the trade in a way that would not threaten our interests. That isbecause it is generally believed that Yemen is a kind of black hole out of which arms aresent in various directions, including to countries under embargo. This is why individual contracts and recipients ought to be verified. The profit from selling a couple of tanks is smaller than the serious consequences that Poland may face if itstanks go to an embargoed country”.71

One of the most lucrative transactions in surplus weaponry was the sale of seven fullyserviceable and equipped MiG-21 II planes to Uganda in 1999. The planes were sold forapproximately $1 million each.72 The Baltic states have also been an important marketfor decommissioned Polish weaponry and provide market opportunities for thefuture. Equipment such as assault rifles, mortars, BRDM-2 reconnaissance cars, radiostations and Mi-2 helicopters, has gone to Lithuania. The Military Property Agency(AMW), the government body responsible for selling excess weapons, is expected toreceive several hundred T-55 tanks that the army is to withdraw from its armouredunits. Many of them are in good condition and will either be sold abroad or destroyedin line with CFE obligations. According to Marian Luczak, Director of the SpecialTurnover Team at the AMW:“it is better to sell than to destroy”. In Luczak’s opinion,there is still some demand for T-55 tanks, particularly in developing countries and thesale of 200–250 tanks would be a success.73

10 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

67 ‘Nostalgia for Past Glory’ [in Polish], Michal Likowski, Warsaw Nowe Panstwo, 31 August 2001, source: David Isenberg’sWeapons Trade Observer.

68 Op cit Warsaw Nowe Panstwo, 31 August 2001. 69 ‘Trade under special supervision’ [in Polish], Warsaw Rzeczpospolita, Anna Marszalek, Piotr Adamowicz, DK and ZP, 3 March

2000, source: David Isenberg’s Weapons Trade Observer.70 Ibid.71 Ibid; ‘Yemen receives Russian and Czech main battle tanks’, Jane’s Defence Weekly, 26 July 2000.72 ‘Decommissioned armaments up for grabs’ [in Polish], Zycie Warszawy, 5 April 2001, source: David Isenberg’s Weapons

Trade Observer.73 Ibid.

According to customs data transmitted to the UN COMTRADE database, the averageannual value of military firearms exported through Polish customs between 1994 and1998 was $5 million. Recent reports have highlighted that Poland has 30 million roundsof surplus ammunition of various calibre in its stocks.74 The army has handed over allredundant ammunition to the AMW, which has, so far, exported 20 percent of all surplus equipment. Buyers have been countries in Africa and, less frequently, in Asia.75

Three arms exhibitions are held in Poland every year: the Logistics Fair and the Inter-national Exhibition of the Defence Industry (IDIE/MSPO),76 both of which take placein Kielce, as well as the Baltic Military Expo, which is held in Gdansk.77 Another armsfair, the Radom Air Show, was held in the town of Radom in September 2001. TheMSPO, which is held in Kielce every two years in September, has become the biggestand most comprehensive presentation of Polish military hardware and its foreignexhibitors have grown in number since Poland joined NATO. The September 2001exhibition moved MSPO to the forefront of arms exhibitions in Central Europe, and 250 firms from 22 countries were represented.78

Polish companies also participate in exhibitions of military equipment abroad. InMarch 2001, a dozen Polish arms companies presented their products at the Idex 2001international defence exhibition held in the United Arab Emirates (UAE).79 The Meskoplant presented Grom anti-aircraft missiles, while Radwar displayed the Nur 22M self-propelled radar station, and Huta Stalowa Wola showed the Chrobry howitzer (manu-factured in co-operation with the UK). The 3501 radio station produced by Radmorwas expected to be an export hit. The Polish Ministry of Economy provided financialsupport to cover part of the participation costs, as the UAE exposition is not only oneof the biggest, but also one of the most expensive in the world, with 1m2 of exhibitionspace costing as much as $1,000.The exhibition of Polish goods was co-ordinated bythe national industry lobby, PIPROK, which has been promoting the arms industry forthe last five years.

Polish military producers have attended other military exhibitions, such as Eurosatoryin Paris, IDET in Brno, LIMA in Malaysia and IDEF in Ankara. The table overleafdetails the attendance of Polish companies at the main arms fairs and exhibitionsbetween 1990 and 2000.

The new arms trade law, which came into force in January 2001, introduces importantchanges and helps provide the framework for an improved arms export control regimein Poland. Significantly, it requires companies to collect information that assists inend-user verification. Along with the development of the legal basis for arms exportcontrols and the structures responsible for their implementation, the Polish Govern-ment has given priority to the need for strengthening awareness of the new regulatoryframework amongst exporters of defence goods. In recent years, the Export ControlDepartment at the Ministry of Economy has organised several information campaignsfor this purpose. Poland’s electronic mechanism of recording and circulating documentation on arms exports, PELTS, has also contributed to the creation of a moremodern and effective arms export control system.

SAFERWORLD ARMS & SECURITY PROGRAMME 11

74 Ibid.75 Ibid.76 MSPO stands for International Defence Industry Exhibition.77 The next exhibition is planned for June 2002. The fair is small and attended mainly by Polish firms. However, according to

defence analysts it may increase in significance.78 ‘Development despite government destruction’ [in Polish], Warsaw Raport, 26 October 2001, source: David Isenberg’s

Weapons Trade Observer.79 ‘Our people in the Emirates’ [FBIS translated text], Warsaw Trybuna, 15 Mar 2001, p 11.

4.5.2 Arms fairs andexhibitions

4.5.1 Small arms andlight weapons exports

4.6 Conclusions

12 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

Arm

s Fa

ir

Afr

ica

Def

ence

Aer

ospa

ce

Serv

ices

Euro

-M

SPO

/&

Def

ence

Def

endo

ryA

sia

Sato

ryEx

pom

ilFI

DAE

Hem

usId

eas

IDEF

IDET

IDEX

Mili

pol

IDIE

Shot

Sho

w

Czec

hC

om

pan

ySo

uth

Afric

aG

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alay

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ance

Rom

ania

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aria

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stan

Turk

eyRe

publ

icUA

EFr

ance

Pola

ndUS

A

“Gam

rat”

Zakl

ady

Twor

zyw

19

99Sz

tucz

nych

SA

Alb

i Sp

z oo

Join

t Ven

ture

1998

Besk

idzk

i Ins

tytu

t Tek

styl

ny19

98

Bydg

oski

e Za

klad

y El

ektr

o-19

98m

echa

nicz

ne B

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a SA

CNPE

P Ra

dwar

SA

2001

2001

Cenr

ex Tr

adin

g Co

mpa

ny L

td20

01

Cenz

in C

o Lt

d 19

9819

97

1999

(For

eign

Trad

e En

terp

rise

)19

95

H.C

egie

lski

-Poz

nan

SA

1999

1998

(Zak

lady

Prz

emys

lu

Met

alow

ego

H.C

egie

lski

)

Hut

a St

alow

a W

ola

SA20

0020

0120

0119

98

Mili

tary

Com

mun

icat

ion

1998

Inst

itut

e/W

ojsk

owy

Inst

ytut

Lac

znos

ci

Mili

tary

Inst

itut

e of

20

0119

98A

rmam

ent T

echn

olog

y

Mili

tary

Inst

itut

e of

19

98En

gine

erin

g

Mor

atex

ITW

W20

01

MU

T –

Mili

tary

Uni

vers

ity

1998

of Te

chno

logy

/Woj

skow

a A

kade

mia

Tech

nicz

na

Obr

um20

01

Polis

hCh

ambe

roft

hePr

oduc

ers

1999

1998

for N

atio

nal D

efen

ce

Pols

kie

Zakl

ady

Lotn

icze

Co

Ltd

2000

SAFERWORLD ARMS & SECURITY PROGRAMME 13

Pron

itSA

(Pla

stic

Wor

ks“P

roni

t”20

0019

98Jo

int S

tock

Com

pany

)

Prze

dsie

bior

stw

o H

andl

u 20

01Za

gran

iczn

ego

(Bip

rom

asz

Bipr

on Tr

adin

g Co

Ltd

Prze

mys

low

e Ce

ntru

m O

ptyk

i 20

0020

0119

98SA

(PCO

SA

War

szaw

a)

Radm

or S

A20

0120

01

Rese

arch

and

Dev

elop

men

t 20

0119

98Ce

ntre

“Sk

arzy

sko”

Tloc

znia

Met

alli

Pres

sta

SA/

2001

Pres

s PL

ant P

ress

ta S

A

Wifa

ma/

Wid

zew

skie

Zak

lady

19

98M

aszy

n W

loki

enni

czyc

h

Zakl

ady

Mec

hani

czne

20

0119

98Ta

rnow

ZM

T

Zakl

ady

Met

alow

e D

ezam

et

1999

1998

SA/M

echa

nial

Fac

tory

D

ezam

et S

A

Zakl

ady

Met

alow

e Lu

czni

k SA

2000

2001

2001

1998

Zakl

ady

Met

alow

e M

esko

20

0119

98SA

/Met

al W

orks

Mes

ko

Zakl

ady

Prod

ukcj

i Spe

cjal

nej

2001

(ZPS

) SP

zoo

(Spe

cial

Pro

duct

ion

Plan

t

Zakl

ady

Sprz

etu

Prec

yzjn

ego

1998

Nie

wia

dow

SA

/Nie

wia

dow

SA

Pr

ecis

ion

Zakl

ady

Twor

zyw

Szt

uczn

ych/

2001

1998

Erg-

Bier

un S

A/P

last

ic W

orks

JSC

ZCh

Nit

ro C

hem

SA

2000

2001

20

0119

9819

99

ZE W

arel

SA

2001

ZM P

ZL W

ola

SA20

01

Not

e: T

his

tabl

e on

ly p

rovi

des

an il

lust

ratio

n of

the

com

pani

es th

at h

ave

atte

nded

a s

elec

tion

of M

SP e

xhib

ition

s (M

ilita

ry,

Secu

rity,

Pol

ice)

bet

wee

n 19

90 a

nd 2

001.

It d

oes

not p

rovi

de a

tota

lly c

ompr

ehen

sive

list

of c

ompa

nies

or e

xhib

ition

s.M

any

com

pani

es w

ill h

ave

atte

nded

oth

er e

xhib

ition

s an

d m

ay h

ave

atte

nded

the

sele

cted

exh

ibiti

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in d

iffer

ent y

ears

.

Tabl

e pr

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y th

e O

meg

a Fo

unda

tion.

Poland has been involved in various international initiatives devoted to SALW at theUN, the OSCE and EAPC, and has also collaborated with NGOs on the issue.The country has played an important role in efforts to improve dialogue between theEU and the countries which have aligned themselves with the EU Code of Conduct.In January 2001, it hosted a meeting for EU and EU associate country officials tostrengthen information exchange and co-operation in arms export controls.The meeting initiated the so-called ‘Warsaw Process’.

While these are important steps forward, there remains scope to further tighten armsexport controls in Poland. The government has only partly addressed the purposes ofexport controls by requiring companies to consider a number of export criteria beforeapplying for an export licence. However, the criteria are not nearly as comprehensiveas those in the EU Code of Conduct and the responsibility for their assessment will liewith the arms companies and not the government.

In a welcome development of public transparency and government accountability, thePolish Government is due to release its first annual report on arms exports. It is to behoped that the quantity and quality of the information provided will be sufficient toenable parliamentarians and the public to assess how the government is implementingnational export controls and the EU Code’s criteria. This is particularly crucial at atime when, after years of decline, exports of new military equipment are rising andsignificant quantities of armaments are being decommissioned and could be soldabroad.

14 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

Law of 29 November 2000 concerning international trade in goods,technologies and services of strategic significance for state security andmaintenance of international peace and security and amending selectedlaws80

Section 1 – General Provisions

Article 1

The law lays down principles of the international trade in goods, technologies and services ofstrategic significance for state security and maintenance of international peace and security. It alsodefines principles of control and record keeping of the aforementioned trade and terms of legalresponsibility for unlawful trade in these goods, technologies and services.

Article 2

Foreign trade mentioned in article 3(8) is prohibited by law, unless the requirements and restrictions laid down in this law, other laws and other international agreements and covenants,have been met.

Article 3

Terms referred to in the law shall be construed as follows:

1) Dual use goods: goods and technology that can be used for both civilian and military purpose,listed in the catalogue referred to in article 6(2)(1).

2) Munitions: armament, ammunition, explosives, products and parts thereof, and technologies, listed in the catalogue referred to in article 6(2)(2).

3) Strategic goods: dual use goods and/or munitions.

4) Polish customs the territory of the Republic of Poland.territory:

5) Exports: actions taken in order to place strategically significant goods out of the Polish customs territory, including re-exporting and transmission thereof, in particular by telephone, fax and other electronic media.

6) Import: actions taken in order to place strategically significant goods in the Polish customs territory including transmission thereof, in particular by telephone,fax and other electronic media.

7) Transit: a procedure laid down in article 97(1)(1) and (2) of the Law of 9 January 1997The Customs Code (Journal of Laws of 1997 No 23 item 117, No 64 item 407,No 121 item 77, No 157 item 1026 and No 160 item 1084, of 1998 No 106 item 668and No 160 item 1063, of 1999 No 40 item 402 and No 72 item 802, and of 2000No 22 item 269).

8) Trade: a) any type of transportation of strategically significant goods across the border of the Republic of Poland, in particular as a result of export, import and transit contract and/or a deed of gift, leasing, loan, cession or contribution in kind to a company,

b) agency services, commercial consultancy services, contract negotiation assistance services and participation in any way in actions referred to in subparagraph (a), including actions taken outside the territory of the Republic of Poland.

9) Enterprise: shall be construed in the meaning of the Law of 19 November 1999The Business Law (Journal of Laws of 1999, No 101 item 1178.

10) Trade control an authority of the minister responsible for economic affairs.authority:

11) Advisory bodies: bodies of the minister responsible for international affairs, Minister ofDefence, minister responsible for internal affairs, Chief of the Office of State Protection, Chairman of the Central Customs Administration, Chairman ofthe State Nuclear Agency and Chairman of the Customs Chief Inspectorate.

Article 4

Import into the Polish customs territory, export from the Polish customs territory and transitthrough the Polish customs territory of arms and ammunition by individuals for a purpose otherthan commercial and industrial shall be governed by separate regulations.

Article 5

To matters regulated by this law, provisions of the Code of Administration Procedure shall apply,unless otherwise provided for in the law.

SAFERWORLD ARMS & SECURITY PROGRAMME 15

80 www.projects.sipri.se/expcon/natexpcon/Poland/law001129.htm.

4.7 Appendices

4.7.1 Appendix 1

Section 2 – Licences for trade in strategic goods

Article 6

1. Trade in strategically significant goods may be effected exclusively on the basis of and within thescope laid down in an export, import or transit licence, and a licence for agency, commercial consultancy and/or contract assistance services, and a licence for any participation in actionsreferred to in article 3(8)(a), further referred to as a “licence”, without prejudice to article 19(1).

2. The minister responsible for economic affairs, in consultation with the minister responsible forinternational affairs and the Minister of Defence, having taken advice by the Chief of the Office ofState Protection, shall prescribe, by way of decree the following:1. Catalogue of dual-use goods, for which a licence is required,2. Catalogue of munitions, for which a licence is required,

– taking into account relevant international catalogues.

3. The Council of Ministers shall, by way of decree, prescribe a list of countries, to which export ortransit through the Polish customs territory of strategic goods shall be prohibited or restricted,taking into account:1. important interests of the foreign policy of the Republic of Poland,2. issues related to defence and security of the Republic of Poland,3. important economic interests of the Republic of Poland,4. obligations of the Republic of Poland arising out of international agreements, including

agreements concerning non-proliferation and control of strategic goods.5. The enterprise shall apply for a licence for export or agency services, in connection with the

export of goods not listed in the catalogues referred to in paragraph 2, when it is aware or hasbeen notified that the goods to be exported will or may be used, wholly or partially, for the purpose or under the circumstances mentioned in a

6. article 10(1).

Article 7

1. Following licences shall be granted for trade in dual-use goods:individual licences: covering a specific dual-use good or a service pertaining to such, and a country(countries), with which the particular enterprise may enter into trade;general licences: covering a type or a category of dual-use goods, in which trade may be conductedwith one or multiple countries specified therein;global licences: covering a type or a category of dual-use goods, in which trade may be conductedwithout specifying a country with which trade may be conducted.

2. For trade or services in connection with munitions, solely individual licences shall be granted.

Article 8

1. The minister responsible for economic affairs shall grant global and general licences by way ofdecree.

2. Enterprises which can prove existence of an internal sales control and management system referredto in article 10 paragraph 2 without prejudice to article 50 paragraph 2 for at least three years areentitled to licences referred to in paragraph 1. The enterprise in question shall submit to the controlling authority a declaration of commencement of international trade in strategic goods.

Article 9

1. Individual licences shall be available if applied for by the enterprise.

2. The authority responsible for the issuance of individual licences, without prejudice to article 19paragraph 1, shall be the trade control authority.

3. The application for individual licence shall include:1. identification of the enterprise, its registered office and address;2. identification number on the enterprise in the Register of Enterprises referred to in separate

regulations;3. specification of nature and scope of business of the said enterprise;4. identification of exporter and importer, his registered office and addresses;5. identification of manufacturer and end-user, their registered offices and addresses;6. specification of the strategically significant goods or services in question, their description,

quantity and value;7. information on the method of use of the strategically significant goods by end-user;8. specification of destination country;9. declaration that the enterprise will undertake any necessary steps to ensure that goods referred

to in the application reach the end-user and that the enterprise will notify the foreign importerthat the change of use or of the end-user requires a prior consent by the Polish trade controlauthority;

10. other information provided for in the regulation issued in accordance with provisions ofparagraph 6.

4. To the application for an individual licence for trade in strategically significant goods theenterprise shall enclose in particular:1. declaration that the transaction does not involve circumstances referred to in article 10(1);

16 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

2. copy of a licence to engage in business, the nature of which is trade in explosives, arms andammunition and military and police products and technologies as set forth in separate provisions;

3. draft of the trade contract;4. copy of the certificate referred to in article 11 paragraph 4;5. in case of exports, import certificate and or end-user statement;6. other documents, which, in the opinion of the enterprise, might be relevant for the processing

of the matter.

5. A sworn translation into Polish must be enclosed with a document executed in a foreign language.

6. The minister responsible for economy shall by way of decree specify the following:1. other information, to be provided in the application for an individual licence;2. specimens of application forms for individual licence for export, import or transit of strategic

goods, agency, business consultancy, contract assistance services, as well as for participation inactions referred to in paragraph 4 that shall be enclosed with the application mentioned inparagraph 3,

3. specimens of individual licences for trade 4. taking into account the types of goods and forms of trade.

Article 10

1. Prior to applying for an individual licence, the enterprise is held responsible for ascertainmentwhether:1. the end-user intends to use the said munitions to violate or suppress human rights and

fundamental freedoms;2. the delivery of the munitions poses a threat to peace or becomes detrimental in other ways to

stability in the region;3. the destination country supports, facilitates or encourages terrorism or international crime;4. the munitions may be used for another purpose than the satisfaction of reasonable defence and

security needs of the recipient country.

2. In order to fulfil the obligation mentioned in paragraph 1, the enterprise shall establish and implement an internal control and management system for trade in strategic goods, hereinafterreferred to as the “internal control system”.

3. In the event where the enterprise, exercising due care, is unable to ascertain the absence ofcircumstances referred to in paragraph 1, it may apply to the trade control authority for a bindingexplanation of the said matter. The trade control authority shall give the said binding explanationwithin three months as of application date. In justified circumstances, this deadline may be postponed to six months.

Article 11

1. Within the framework of the internal control system, there shall be laid down, among others, theresponsibilities of the enterprise’s departments, key responsibilities in the area of trade control andmanagement for each position, principles of cooperation of the enterprise with governmentadministration in regard thereto, as well as guidelines for recruitment, data archiving, training,internal control and order execution.

2. The internal control system shall be subject to a certification procedure according to the ISO 9000standard and to principles laid down in paragraph 1.

3. Certification procedures referred to in paragraph 2 shall be carried out by accredited units underthe national accreditation scheme, which needs to be established pursuant to the law of 28 April2000 concerning the system for compliance evaluation and accreditation and amending other laws(Journal of Laws No 43, item 489).

4. The certificate of compliance with the requirements referred to in paragraph 1 shall be issued bythe units listed in paragraph 3.

5. The certificate referred to in paragraph 4 shall be valid for three years.

6. During the validity period of the said certificate, the authorised inspection authorities shall carryout at least 5 inspections of the controlling and management system for internal trade to verify itscompliance with the requirements set forth in paragraph 1 and 2.

7. The minister responsible for economic affairs shall, by way of decree, define a list of certificationunits competent to carry out certifications and inspections of the trade controlling and manage-ment system amongst the accredited units of the national accreditation scheme.

Article 12

1. Upon consultation with advisory bodies, the trade control authority may grant an individuallicence when it recognises that the relevant legal requirements are complied with.

2. The individual licence shall be issued by way of executive decision.

3. The advisory bodies elaborating their opinion referred to in paragraph 1, may request informationfrom the enterprise which will allow the data specified in the application for individual licence tobe validated.

4. Prior to making a decision on granting an individual licence, the trade control authority:1. shall summon the enterprise to complete until a specified deadline the application or missing

SAFERWORLD ARMS & SECURITY PROGRAMME 17

documentation certifying that the legal requirements for trading in strategic goods have beencomplied with;

2. may conduct a random check of the information provided in the application by the enterprise.

5. Provisions of article 29 paragraph 4 and article 30 paragraph 1 and 2 of this law shall apply to therandom check validation referred in paragraph 4(2).

6. The enterprise shall notify the trade control authority of any changes of the data provided in theapplication within 14 days following the occurrence of such changes.

Article 13

In the event when the enterprise is informed or has justified grounds to suspect that the strategic-ally significant goods in question were or might, wholly or partially, be used for the purpose orunder circumstances referred to in article 10 paragraph 1, it should undertake all possible actions to establish the actual use of the goods and notify the trade control authority.

Article 14

1. The individual licence and the ensuing rights are inalienable.

2. The individual licence for trade in strategically significant goods is a customs relevant document.

3. The original individual licence certificate shall be enclosed with the customs declaration with thecustoms destination form.

4. Issuance of an individual export or transit licence or an export or transit agency licence may beconditional upon meeting additional requirements and terms laid down by the trade controlauthority, in particular upon the declaration by the foreign end-user of the purpose of the strategically significant goods in question or upon submittal of an international import certificate.

5. The individual licence specifies its validity period, which shall be no longer than one year.

6. For the issuance of an individual licence, a fee shall be charged which is a revenue of the nationalbudget.

7. The minister responsible for economic affairs shall, in consultation with the minister responsiblefor finance define by way of decree the amount of fees for the issuance of an individual licence.Such fees shall be set at a level, which corresponds with actual expenses incurred by the trade control authority for the issuance of an individual licence.

Article 15

1. The trade control authority shall refuse by way of an administrative decision to issue a tradelicence, if:1. the specific trade interferes with the obligations of the Republic of Poland arising from inter-

national agreements and covenants;2. so required due to an important interest of the foreign policy of the Republic of Poland;3. so required due to national defence or security interests of the Republic of Poland;4. so required due to an important economic interest of the Republic of Poland;5. the business integrity of the enterprise does not guarantee legality of the business operations in

question.

2. The trade control authority shall refuse by way of administrative decision to issue a licence fortrade in strategically significant goods if such goods may wholly or partially be used illegally or incontradiction to the interest of the Republic of Poland, for the purpose of implementation,production, operation, maintenance, storage, detection, identification or proliferation of weaponsof mass destruction, in particular of chemical, biological or nuclear munitions and for implemen-tation, production, maintenance or storage of delivery equipment for such weapons.

Article 16

The trade control authority may by way of an administrative decision refuse issuance of an individual licence for trade, if:

1. there is a risk of change in the end-use or destination of the strategic goods;

2. in the course of its past business, the enterprise has violated regulations concerning trade in strategic goods.

Article 17

1. The trade control authority, having consulted advisory bodies, may at any time, by way ofadministrative decision, revoke or change an individual licence, if:1. so required due to an important interest of the foreign policy of the Republic of Poland;2. so required due to the defence or national security interests of the Republic of Poland;3. so required due to an important economic interest of the Republic of Poland;4. so required in order to fulfil obligations of the Republic of Poland arising out of international

agreements and covenants;5. there is a risk of change in the end-use or end destination of the strategic goods;6. the enterprise has been carrying out the transaction contrary to the conditions set out in the

licence;7. the enterprise has lost wilfully its credibility to guarantee the legality of trade.

2. The revocation or alteration of an individual licence due to reasons for which the enterprise isresponsible, shall not entitle the latter to compensation claims.

18 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

Article 18

The enterprise from whom an individual licence was revoked due to reasons referred to in article17(1)(6), may reapply for such a licence not earlier than three years as of the date when the revocation decision became effective.

Article 19

1. Transit of non-domestic dual-use goods which is supposed to finish outside of the Polish customsterritory, shall require a permit from the Director of the Competent Border Customs Office.

2. The permit mentioned in paragraph 1, shall be issued upon request filed by the carrier.

3. The minister responsible for public finance, in consultation with the minister responsible for economic affairs, shall by way of decree define, the specimen of the application form referred to inparagraph 2 and the specimen of the permit for transit of dual-use goods.

4. The specimens of the application form and of the permit referred to in paragraph 3 shall include inparticular: export licence number, country of origin, carrier name, number of bill of lading, nameand address of exporter, name and address of consignee, name and full description of goods and/ortechnologies, reference number, quantity and value, name of border crossing point via which thegoods are supposed to enter the Polish customs territory and a declaration by the carrier that thegoods which are subject to international control shall be transported across the Polish customs territory on the basis of an export licence from the exporting country for the specified consigneeand in the same condition as they were upon entering the Polish customs territory.

Article 20

1. Export, import or transit of strategically significant goods shall be processed only in appointedcustoms offices.

2. The minister responsible for public finance in consultation with the minister responsible for economic affairs shall by way of decree specify customs offices referred to in paragraph 1, in orderto assure adequate control of export, import or transit of strategic goods.

Article 21

1. A register of granted individual licences and enterprises, which have met the requirements referredto in article 8(2), hereinafter referred to as “register”, shall be established.

2. The register shall be kept by the trade control authority.

3. Individual licences shall be entered into the register immediately upon their issuance. Enterprisesshall be entered into the register immediately upon submission of the declaration referred to inarticle 8(2).

4. the minister responsible for economic affairs shall by way of decree define the method of recordkeeping, in particular taking into account types of issued licences and quantity and value ofstrategically significant goods subject to licensing.

Section 3 – Import certificate and end-user statement

Article 22

1. If so required by the authorities of the exporting country, the trade control authority may uponrequest of the enterprise issue an import certificate or duly confirm the end-user statement.

2. To the import certificate application, provisions of article 9(3) to (5) shall apply.

3. The import certificate and the end-user statement are documents, which shall be produced onrequest by the respective foreign authorities. Both documents confirm the business integrity of theimporter and that the transaction concerning the strategically significant goods in question is subject to control by the competent bodies of the Republic of Poland.

4. For issuance of an import certificate and for confirmation of the end-user statement, a fee shall becharged which is a revenue of the national budget.

5. The minister responsible for economic affairs acting in consultation with the minister responsiblefor finance shall by way of decree define the amount of the fee for the issuance of an importcertificate. Such a fee shall be set at a level which corresponds to actual costs incurred by the tradecontrol authority for the issuance of the import certificate and the confirmation of the end-userstatement.

6. The trade control authority may refuse the import certificate or confirmation of the end-userstatement, if verification of the facts referred to in paragraph 3 is not possible due to failure by theenterprise to guarantee legality of trade in strategically significant goods and/or to apply aninternal control system.

7. The minister responsible for economic affairs shall by way of decree define the specimen of theimport certificate.

8. The specimen of the import certificate referred to in paragraph 7 shall in particular contain: nameof the importer, name of the exporter, their registered offices and addresses, name and descriptionof the strategic goods, reference number, quantity and value, description of the end-use of thestrategic goods, and the declaration that the importer:1. assumed responsibility for placement of the strategically significant goods mentioned in the

certificate on the Polish customs territory and for notification of the trade control authority ofany changes in the terms and conditions of the contract;

SAFERWORLD ARMS & SECURITY PROGRAMME 19

2. provided a statement declaring his awareness that the re-export or change of end-user ordeclared end-use of the goods require prior consent by the trade control authority;

3. in consultation with the end-user, is held responsible for co-operating with any actions taken bythe trade control authority, with possible involvement of representatives of authorities of theexporting country, to verify that the use of the goods at location of end-use remains in compliance with the terms of the licence over the entire period of presence of the goods on thePolish customs territory.

Article 23

1. For the purpose of export of strategic goods, the trade control authority shall request the enterprise to submit an import certificate and/or end-use declaration confirmed by the competentauthorities of the country of the importer.

2. The end-user declaration shall be issued by the foreign end-user. Its contents shall be in compliance with the requirements specified by the trade control authority.

3. The declaration referred to in paragraph 2 shall be authenticated by the foreign importer and competent authorities of the destination country.

4. The declaration referred to in paragraph 2 shall contain in particular:1. Declaration of the destination country;2. Name and address of the foreign end-user;3. Specification of the strategic goods, their description, quantity and value;4. Description of the end-use of the strategic goods;5. Reference to transient consignees and buyers;6. Prohibition clause concerning transfer of strategically significant goods to any other consignees

without prior consent of the trade control authority.

Article 24

1. Within 30 days as of the release of the strategic goods, the enterprise which received an importcertificate shall apply to the Director of the Customs Office which is competent with regard to theseat of the end-user of the goods, for a certificate that the aforementioned goods were duly andactually placed on Polish customs territory, hereinafter referred to as the “delivery verificationcertificate”.

2. Issuance of a delivery verification certificate is governed by the provisions of chapter 7 of the Codeof Administrative Procedure.

3. The enterprise shall cover the costs incurred by the Customs Authorities in the course of proceed-ings for the issuance of the said delivery verification certificate.

4. The minister responsible for economic affairs shall in consultation with the Chairman of the Central Customs Administration define by way of decree a specimen of the delivery verificationcertificate and set out the method of recording issued certificates.

5. The specimen of the delivery verification certificate shall include in particular: name of importer,name of exporter, their registered offices and addresses, name and description of the goods or technologies, reference number, quantity and value, description of end-use of the goods or technologies, SAD number, number of consignment document, bill of lading, or any other document confirming import of the said goods or technologies and that the importer supplied areliable proof of delivery and duly placed the goods and technologies mentioned in the certificateon the Polish customs territory.

6. In case of export of strategic goods, the trade control authority may request from the enterprisesubmission of a verification certificate by the competent authorities of the importing country.

Section 4 – Records concerning trade in strategically significant goods and information relating thereto

Article 25

1. The enterprise engaging in trade in strategically significant goods shall keep transaction records.

2. The minister responsible for economic affairs shall by way of decree, prescribe methods of keepingthe records referred to in paragraph 1 taking into account the requirements which an internal control system shall comply with.

Article 26

1. The enterprise engaging in trade on the basis of a general and/or global licence shall be heldresponsible for providing the trade control authority with transaction results at least every sixmonths.

2. The minister responsible for economic affairs shall by way of decree define the scope ofinformation referred to in paragraph 1, including in particular quantity and value of the goods,specification of the trading partner country, name of importer and exporter, their registered officesand addresses.

Article 27

If applied for by the advisory bodies, the trade control authority shall forward to those advisorybodies information on transactions concerning trade in strategic goods.

20 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

Section 5 – Trade control

Article 28

1. The trade is subject to control.

2. The control shall concentrate in particular on:1. ascertainment of compliance of the trade with the licence, including validation of transactions

after completion;2. functioning of the internal compliance system;3. correctness of the records referred to in article 25.

3. Control inspections may be performed by the trade control authority in cooperation with the bodies referred to in article 29(2).

4. The trade control authority may apply to other competent governmental control authority to carryout the inspection.

Article 29

1. In order to perform an inspection referred to in article 28(1), the trade control authority mayappoint an inspection team, hereinafter referred to as the “team”.

2. Acting on a proposal by the minister responsible for economic affairs, minister responsible for foreign affairs, Minister of Defence, minister responsible for public finance, minister responsiblefor internal affairs, Chief of the Office of State Protection, Chairman of the State Nuclear Agency,Chairman of Central Customs Authority and Chief Customs Inspector shall second police andmilitary personnel and officials from their subordinated or otherwise controlled organisations tothe team. The minister responsible for economy may also appoint registered experts and specialistsas members of the team.

3. The trade control authority shall appoint the team leader responsible for coordination ofinspection activities and elaboration of an inspection protocol.

4. Inspection activities shall be carried out on the basis of an inspection authorisation form by way of decree. The specimen shall include in particular reference to person, type and number of his/herID document, validity date of the authorisation form, and information that upon request by thebearer of the inspection authorisation performing the said inspection, directors, members of themanagement boards and staff of the inspected enterprises are held responsible for provision ofinformation and documents.

Article 30

1. Team members may in particular:1. Enter premises, buildings, rooms or parts thereof where the enterprise is engaged in business, at

usual business hours.2. Demand verbal or written explanations, documents, and other information media, and request

access to data which is in connection with the subject of inspection.

2. Inspection shall be performed in presence of the inspected person, deputy of the inspected personor an employee thereof, and, in case of absence of the aforementioned persons, in presence of awitness.

3. The team leader shall submit the inspection protocol to the trade control authority.

Article 31

1. Should irregularities in the trade be found, the trade control authority shall summon the enterprise to restore the trade status to on compliant with this law within one month of the receiptof the summons.

2. After the expiry of the correction period referred to in paragraph 1, the trade control authority shallrevoke the individual licence by way of administrative decision. In case of general and globallicences, the trade control authority may issue an administrative decision prohibiting the enterprise from making further use of the licence.

3. In the event referred to in paragraph 2, the enterprise may obtain another individual licence ormake use of a general or global licence not earlier than three years as of the date when the revocation decision of the individual licence and the ban on making use of a general and/or a global licence became effective.

Article 32

All matters not regulated in this section shall be governed by the provisions of the Law of28 September 1991 concerning Fiscal Inspection (Journal of Laws No 54 item 572, No 83 item 931and of 2000 No 70 item 816) in its part regarding inspection procedures.

Section 6 – Penal provisions, fines

Article 33

1. Every person who engages in trade without a licence or violates the conditions set out in the licenceshall be subject to imprisonment from one to ten years.

2. If the perpetrator who engages in trade in violation of conditions set out in the licence, does sounintentionally and provided that he restore the status referred to in article 31 paragraph 1, he is

SAFERWORLD ARMS & SECURITY PROGRAMME 21

subject to a fine, restriction of liberty or imprisonment for up to two years.

3. Every person who commits the act referred to in paragraph 1 or 2 shall be subject to the penaltyreferred to in paragraph 1.

4. In case of conviction for the offence referred to in paragraph 1 to 3, the jury may adjudge forfeitureof strategically significant goods or other objects that were used or intended for use at or resulteddirectly or indirectly from the offence, including in particular payment tenders and securities, evenif they are not property of the perpetrator.

Article 34

Every person failing to fulfil the obligations and/or comply with conditions set out in article 27paragraph 1, is subject to a fine.

Article 35

Every person obstructing the inspection referred to in article 28 paragraph 1, is subject to a fine.

Article 36

Decisions on matters referred to in article 34 and article 35 shall be made according to the provisions of the Code of Delinquency Procedure.

Article 37

An enterprise engaging in trade without a valid licence, which is not a private person, shall be finedby the trade control authority in the amount of PLN 200,000 by way of administrative decision.

Article 38

An enterprise engaging in trade in violation of conditions set out in the licence, which is not a private person, shall be fined by the trade control authority in the amount of PLN 100,000 by wayof administrative decision.

Article 39

An enterprise failing to fulfill obligations and/or comply with conditions set out in article 24paragraph 1 or in article 26 paragraph 1, shall be fined by the trade control authority in the amountof PLN 200,000 by way of administrative decision.

Article 40

1. The enterprise shall be exempted from the above-mentioned fine after five years as of the datewhen the liability set out in article 37 to 39 were established.

2. The above-mentioned fine shall not be collected after five years as of the date when the decisionbecame effective.

Article 41

1. The payment term of the above-mentioned fine shall be 30 days as of the date when the decisionbecame effective.

2. Overdue fines and due interest are subject to compulsory collection procedure pursuant to provisions concerning collection proceedings in administration.

Article 42

In the event when the payment of the inflicted fine within the period specified in article 41paragraph 1 considerably restricts or makes impossible any further business by the enterprise thetrade control authority, acting upon request by the enterprise, may issue an administrative decisionof reprieve for the payment or divide the payment into installments, for a period not longer thanone year.

Section 7 – Amendments to existing regulations

Article 43

Article 14 paragraph 6a of the Law of 9 January 1997 Customs Code (Journal of Laws No 157 item1026, No 160 item 1084, of 1998 No 106 item 668, No 160 item 1063, of 1999 No 40 item 402, No 72item 802 and of 2000 No 22 item 269) shall be replaced by the following:

“Paragraph 6a. To the licences referred to in paragraph 6, provisions of article 17, 18 and 20 of theLaw of 11 December 1997 concerning administration of foreign trade in goods and services shallapply (Journal of Laws No 157 item 1026, of 1999 No 55 item 587, No 101 item 1178).”

Article 44

The Law of 11 December 1997 concerning administration for foreign trade in goods and servicesand special trade (Journal of Laws No 157 item 1026, of 1999 No 55 item 587, No 101 item 1178) shallbe amended as follows:

1. in the title, the words “and special trade” shall be deleted;

2. in article 1 paragraph 1 the words “and special trade” shall be deleted;

3. article 3 paragraph 3 shall be deleted;

4. sections 4 to 6 shall be deleted;

22 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

5. article 55 shall be deleted.

Article 45

Article 3 (5) of the Law of 10 September 1999 concerning specific compensation agreements in relation with delivery agreements for state defence and security (Journal of Laws No 80 item 903)shall be replaced by the following:

“5) of munitions and/or military equipment, to be construed as munitions within the meaning ofthe Law of .... concerning foreign trade in goods, technologies and services of strategic significancefor state security and maintenance of international peace and security and amending selected laws(Journal of Laws ).”

Article 46

Article 4 subparagraph 6 of the Law of 7 October 1999 concerning support for restructuring of theindustrial defence resources and technological modernisation of the Armed Forces of the Republicof Poland (Journal of Laws No 83 item 932) shall be amended as follows:

“6) of munitions and/or military equipment, to be construed as munitions within the meaning ofthe Law of ..... concerning foreign trade in goods, technologies, and services of strategicsignificance for the state security and maintenance of international peace and security and amending selected laws (Journal of Laws ).

Section 8 – Transitional and final provisions

Article 47

Proceedings initiated under provisions of laws referred to in articles 44 and 51, which have not beencompleted as of the date of entry into force by way of final decision, shall be discontinued.

Article 48

1. Licences for import, export, and/or transit of goods and technologies listed in the catalogues ofgoods and technologies subject to special control, which were issued pursuant to the provisions ofarticle 3(1) of the Law of 2 December 1993 concerning principles of special control of foreign tradein goods and technologies related to international agreements and obligations (Journal of Laws No 129 item 598, of 1996 No 106 item 496, of 1997 No 88 item 554, and No 157 item 1026, and of 1999No 70 item 775 and No 83 item 931) shall become individual licences within the meaning of article7(1)(1) as of date of entry into force of this law and shall remain in force over the period for whichthey were issued, however no longer than 31 December 2001.

2. Licences issued pursuant to the provisions to article 38(1) of the Law of 11 December 1997 concern-ing administration of foreign trade in goods and services and concerning special trade (Journal ofLaws No 157 item 1026, of 1999 No 55 item 587, No 101 item 1178) within the scope of special trade,shall become individual licences within the meaning of article 7(1)(1) as of date of entry into forceof this law and shall remain in force over the period for which they were issued, however no longerthan until 31 December 2001.

Article 49

Executive provisions relating to catalogues of goods and technologies subject to special foreigntrade control rules, which came into force before this law on the basis of existing provisions shallremain in force until new executive provisions pursuant to this law are enacted, however no longerthan six months following the entry into force of this law.

Article 50

1. Pending entry into force of the provisions of article 9(4)(1) and (4) and article 10(1), individuallicences may be issued to enterprises, which were entered into the Register of Enterprises engagedin special foreign trade before the date of entry into force of this law pursuant to the provisions ofarticle 33 for the Law of 11 December 1997 concerning administration of foreign trade in goods andservices and concerning special trade, and to enterprises which submit the certificate referred to inarticle 11(4).

2. Pending entry into force of the provisions of article 8(2), solely individual licences shall be issuedfor dual-use goods.

Article 51

The Law of 2 December 1993 concerning special control of foreign trade in goods and technologiesin relation with international agreements and covenants (Journal of Laws No 129 item 598, of 1996No 106 item 496, of 1997 No 88 item 554 and No 157 item 1026, and of 1999 No 70 item 775 and No 83item 931) shall be repealed.

Article 52

The law shall enter into force as of 1 January 2001, with the exception of:

1. article 8(2), which shall enter into force three years following its publication,

2. article 9(4)(1) and (4) and article 10(1) which shall enter into force as of 1 January 2002.

SAFERWORLD ARMS & SECURITY PROGRAMME 23

List of armament categories that might be subject to bans and restrictionsin terms of special category trade with foreign countries (Annex No 1 to aDecree by Council of Ministers dated 14th September 1999)

Category A – Arms and Ammunition

1. Arms and automated guns of 12.7 calibre and less;

2. Arms and armoury of 12.7mm calibre and plus

3. Ammunition

4. Bombs, torpedoes, missiles and bullets;

5. Fire guiding equipment;

6. Tanks and self-propelled vehicles;

7. Toxic agents;

8. Military explosives;

9. Forges, casts and semi-products for the production of items enumerated in items 1, 2, 3, 4 and 6above;

10. Silencers for the arms under 1;

11. Arms systems operating on a guided basis;

12. Arms systems based on high velocity and kinetic energy.

Category B – Armament media

1. Armed, armoured cars or such that have been adjusted for arms mounting

2. Warships, special purpose marine equipment

3. Combat aircraft along with gear

4. Forges, casts and semi-products for the production of items enumerated in 3 above.

Category C – Means of Transport and Non-armoured Technical Vehicles

1. The vehicles enumerated below have been specially designed and modified to fit military needs:a) Armoured trainsb) Wheel-caterpillar vehiclesc) Armoured transport cars and artillery tractorsd) Armoured vehicles for evacuation and repair purposese) Haul or ammunition transport vehiclesf) Amphibian vehicles and those destined for overcoming deep water obstacles g) Mobile repair workshop, specially designed for military purposesh) All other vehicles specially designed or modified for military purposes

2. Special purpose armoured equipment

3. Forges, casts and semi-products for the production of items enumerated in

item 1 above

Category D – Auxiliary equipment

1. Equipment based on image reinforcement, thermovision and infrared image processors, speciallydesigned for military purposes

2. Projectors and spot-lights and their controllers

3. Unmanned aircraft

4. Electronic equipment specially designed for military purposes

5. Photographic and electrooptic equipment for imaging

6. Specialist equipment for military training or for military operation simulations

7. Miscellaneous equipment listed below:a) Individual diving and submerged devices b) Building equipment designed for military purposes and for aircraft c) Special outdoor lining, roofing and technologies for the purpose of reduction of emission,

electromagnetic radiation reflexion, acoustic vibrations concentration and other, adjusted tomilitary needs

d) Field engineering equipment designed for military purposes to be applied for combat situations

8. Kriogenic superconductive equipment

9. Special purpose software for:a) Modelling, simulations and assessment of military armament systemsb) Development, monitoring, maintaining and upgrading of software used by military arms

systemsc) Modelling or simulations of military operations not mentioned in item 6

24 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

4.7.2 Appendix 2

d) Commanding, communicating, guiding and reconnaissancee) Estimating the results of conventional, nuclear, chemical or biological weapons.

List of countries under ban of special purpose trading (Annex No 2 to the Council of Ministers Decree dated 9th September 1999)

Categories Item Country of armament Comment

1 Angola ABCD Applies only to UNITA

2 Iraq ABCD

3 Yugoslavia ABCD

4 Liberia ABCD

5 Rwanda ABCD Does not apply to Rwanda government

6 Sierra Leone ABCD Does not apply to Sierra Leone government

7 Somalia ABCD

List of countries under restrictions for special purpose trading (Annex No 3 to the Decree by Council of Ministers dated 9 September 1999)

Armament Item Country category Comment

1 Afghanistan ABCD

2 Bosnia Hercegovina ABCD Does not apply to cat. A-1 & A-3 armament which is for police and engineer forces

3 China AB Applies also to Taiwan

4 Croatia ABCD Does not cover sapper equipment

5 Eritrea ABCD

6 Ethiopia ABCD

7 Iran

ABD

8 Democratic Republic ABCDof Congo

9 Korean People- ABCDDemocratic Republic

10 Cuba AB

11 Libya ABCD

12 Former Yugoslav ABCD Does not apply to sapper equipmentRepublic of Macedonia

13 Myanmar ABCD

14 Sudan ABCD

15 Syria ABD

SAFERWORLD ARMS & SECURITY PROGRAMME 25

Polish arms manufacturers81

1) BELMA SA Bydgoskie ZakDady Elektromechaniczne – Bydgoszcz (antitank scattered mines, anti-landing troop mines, mine and grenade fuses, missile fuses)

2) H. Cegielski Poznan SA – Poznan (cal. 7,62mm firearms, barrels for hunters’ rifles, vessel engines)

3) RADWAR SA Centrum Naukowo-Produkcyjne Elektroniki Profesjonalnej – Warszawa (militarysearch radar stations; automated air and anti-aircraft defence systems; fire control andidentification systems, navigation radars)

4) DAEWOO Motor Polska Sp z oo – Lublin (land and transport vehicles)

5) DGT Sp z oo – Gdansk (digital communications systems)

6) Fabryka Broni – Arms Production Plant (d.ZakFady Metalowe Eucznik SA) – Radom (pistols andsubmachine guns, assault rifles, hunting rifles, sport guns)

7) „SHL” Fabryka Samochodów Specjalizowanych – Kielce (special purpose cars, fire engines,cisterns and car-cisterns)

8) „Gamrat” SA ZakDady Tworzyw Sztucznych – JasFo (missile charges, squibs, artillery and mortarnitro-glycerine powder)

9) Huta Stalowa Wola SA – Stalowa Wola (cal. 122 and 155mm artillery systems, armoured vehicles,cal. 60–98mm mortars)

10) MORATEX Instytut Technicznych Wyrobów WDókienniczych – Eódz (bullet-proof vests and helmets)

11) JMD Daniel Technologie – Warszawa (design and production of armouring systems for bullet-proof vests, helmets, vehicles and facilities, bullet-proof, splinter-proof and knife-proof vests,splinter-and bullet-proof helmets)

12) PZL – HYDRAL Kombinat – WrocFaw (among others: hydraulic systems for aviation and armouredequipment)

13) LAMINA S.A. ZakDady Elektronowe – Piaseczno (microwave lamps for radar search equipment)

14) MASKPOL S.A. Przedsiebiorstwo Sprzetu Ochronnego – Konieczki (respiratory track protectionequipment)

15) Polskie ZakDady Lotnicze S.A. – Mielec (training aircrafts, light transport aircrafts)

16) Polskie ZakDady Optyczne S.A. – Warszawa (observation periscopes, tank aiming devices,periscope aiming pieces)

17) PRONIT SA ZakDady Tworzyw Sztucznych – Pionki (tank ammunition, artillery and lengthenedcharges, nitrocellulose, nitro-glycerine and black powders for artillery and shooting ammunition)

18) PREXER-PROJEKT SA Przedsiebiorstwo Innowacyjno-Wdrozeniowe – Eódz (among others: airbombs, telescope aiming pieces for bombs, flares)

19) PREXER Sp z oo Przedsiebiorstwo – Eódz (handguns, tachometer hindsights; observationperiscopes)

20) PrzemysDowe Centrum Optyki SA – Warszawa (fire control systems for tanks, observation andaiming night vision devices, laser range-finders, artillery equipment and gear, laser warningdevices)

21) PrzemysDowy Instytut Telekomunikacji – Warszawa (radar search stations, control and commanding systems)

22) PZL Swidnik SA – Swidnik (helicopters)

23) PZL Warszawa-Okecie SA (training and communication aircrafts)

24) STAR TRUCKS Sp z oo – Starachowice (trucks up to 8–16 ton, chassis for special purposes)

25) Stocznia Marynarki Wojennej – Navy Shipyard, Gdynia (minesweepers and mine destroyers,patrol landing crafts)

26) Stocznia PóDnocna SA – Gdansk (warships, patrol and auxiliary boats)

27) Stomil-Poznan SA – Poznan (various rubber products, including helicopter and aircraft tyres)

28) PRESSTA SA TDocznia Metali – Bolechowo (cal. 122mm missiles; tank ammunition metal elementscal. 125mm; shells cal. 40–152mm; ammunition belts)

29) Unimor-Radiocom Sp z oo – Gdansk (VHF/UHF transceivers for aircraft, base station for groundand naval craft, aerodrome radio beacon, VHF/UHF base, mobile and naval antenna, radio-telephones)

26 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

81 9th International Defence Industry Exhibition, under the auspices of the Prime Minister of the Republic of Poland – MSPO2001, Kielce, Poland, 3–6 September 2001.

4.7.3 Appendix 3

30) PZL-WARSZAWA II SA Wytwórnia Sprzetu Komunikacyjnego – Warszawa (aircraft gear,automation and control devices based on giroscopic and electronic technologies, steer telemanipulators for marine vessels)

31) Wytwórnia Sprzetu Komunikacyjnego PZL Rzeszów SA – Rzeszów (aircraft engines, aircraftgears)

32) NITRO-CHEM S.A. ZakDady Chemiczne – Bydgoszcz (explosives, ammunition elaboration)

33) WAREL SA ZakDady Elektroniczne – Warszawa (among others: laser shooting and tactics practicesimulators)

34) BUMAR-CABEDY S.A. ZakDad Mechaniczny – Gliwice (tanks, combat armoured vehicles, technicalprotection vehicles, caterpillar chassis)

35) ZakDady Mechaniczne PZL-Wola SA – Warszawa (among others: high pressure engines, also fortanks)

36) TARNÓW SA – Tarnów (12.7mm machine guns; 40mm grenade launchers; mortars; cannons)

37) WIFAMA Sp z oo ZakDady Mechaniczne – Eódz, (revolvers; cartridge links and belts; swords,knives)

38) DEZAMET SA ZakDady Mechaniczne-Nowa Deba (aircraft bombs; medium calibre artilleryammunition; 60mm mortar ammunition; grenade launcher cartridges of 40 m; hand grenades;fuses)

39) MESKO SA – ZakDady Metalowe, Skarzysko-Kamienna – (portable anti-aircraft missile sets;small, medium calibre hunter, gas and blank ammunition; missile and their elements; fuses; tracersand primers).

40) RADMOR SA ZakDady Radiowe – Gdynia (tactics radio-stations; radiolines; professional radio-telephones).

41) JELCZ SA ZakDady Samochodowe – Jelcz-Laskowice (trucks; buses and coaches; special purposechassis).

42) NIEWIADÓW SA ZakDady Sprzetu Precyzyjnego – Ujazd (wide range of ammunition, anti-tank inparticular; non-guided missiles; disposable grenade launchers; armoured and non-armoured anti-tank mines).

43) ERG-BIERUN SA ZakDad Tworzyw Sztucznych – Bierun (among others: denotators for artillery andshooting ammunition; electric fuses; igniting primers)

SAFERWORLD ARMS & SECURITY PROGRAMME 27

Statement by HE Mr Stefan Meller Undersecretary of State Ministry of Foreign Affairs Republic of Poland and Head of the Delegation

at the United Nations Conference on Illicit Trade in Small Arms and LightWeapons in All Its Aspects

New York, July 11 2001

Mr Chairman,

Please accept my congratulations in connection with your election to the post of chairman. I amconvinced that with you in the chair we shall bring about a successful conclusion of this conference.

Mr Chairman, Distinguished Delegates,

Illicit trade in SALW has become one of the greatest challenges to the security of mankind in the21st century. Poland is deeply convinced that the effects of uncontrolled spread of SALW,particularly the extreme suffering of defenceless and innocent civilian population – the elderly,women and children – require urgent adoption of international agreements, incorporating suitable preventive measures.

Mr Chairman, Distinguished Delegates,

There is a clear link between the illicit trade in SALW – and such non-military threats as terrorism,trafficking in drugs and people and organised crime. Bearing that in mind, Poland has actively participated in the work on the UN Convention against Transnational Organised Crime. The Polish draft of the convention was adopted by the UN as the point of departure for its work. Webelieve that the Program of Action, to be adopted by the conference, and the Protocol against IllicitManufacturing of and Trafficking in Firearms, their Parts and Components and Ammunition,supplementing the convention, are interconnected. Therefore, we expect that that fact will bereflected in the final documents of the conference.

Mr Chairman, Distinguished Delegates,

We feel that the illicit trade in SALW frequently takes its beginning from legal trade, especially ifthe latter is not properly controlled. Hence, Poland’s emphasis on concentrating the work of theconference on ‘all aspects’ of the problem of SALW.

Poland attaches top priority to effective export controls for strengthening international securityand peace. National export control systems should be harmonised and mutually compatible inorder to restrict freedom of action in the ‘grey area’. It is high time for the countries that have notdone this so far – particularly those on the demand side of the arms trade – to institute, as rapidlyas possible, efficient export-control systems. Their efforts ought to be supported by multilateral aidprograms – as an expression of international solidarity. Poland, as a country that has establishedover the past 11 years an export control system meeting the most advanced standards, is ready toshare its experience.

Poland attaches high significance to transparency. We feel that introduction of regional registers oflegal transfers of SALW, as well as confiscated arms, would contribute to determination of the actual scale of the problem.

Mr Chairman, Distinguished Delegates,

Poland has taken active part in the preparations for the conference as one of the co-chairs of thePreparatory Committee. At this point I would like to convey my government’s congratulations toAmbassador Dos Santos, whose efforts ensured success of the committee’s endeavours.

I also wish to congratulate Ambassador Peggy Mason of Canada, chairwoman of the UN govern-mental experts group, which prepared a feasibility study on restricting trade and manufacturing ofSALW to the manufacturers and dealers authorised by states. That is the first ever analysis on thisscale of the activity of arms-trade brokers. We therefore call on the conference participants toadopt the report.

Mr Chairman, Distinguished Delegates,

Poland is involved in numerous international initiatives devoted to SALW at the UN, the OSCEand the EAPC. Confiscation, storage and destruction of SALW within the framework of the Disarmament, Demobilisation and Reintegration process are key objectives of our peace forces,particularly in the Balkans. Poland’s commitment to the work of the EAPC, as well as the KFORand SFOR peace operations in the Balkans, reflects our striving to widen the zone of stability

28 ARMS PRODUCTION, EXPORTS AND DECISION-MAKING IN CENTRAL AND EASTERN EUROPE

4.7.4 Appendix 4

around Poland. Emphasising the importance of regional initiatives, we call for support of themoratorium declared by ECOWAS.

As part of the preparations for the conference, the Polish Government last year cohosted tworegional conferences in Warsaw, devoted to SALW. The first had as its subject ‘Controlling SALWFlows from and through an Enlarged EU: Developing a Joint Action Programme for EU and Candidate Countries’. It was organised jointly with Saferworld and reflected our commitment tocloser cooperation with nongovernmental organisations. The conference adopted the ‘Warsaw Call for Action’ – a document in which the participants appealed for greater collaboration betweenEuropean countries in combating the uncontrolled spread of SALW. The second conference,convened jointly with Canada, under the EAPC initiative ‘Disarmament and Peacekeeping Operations’, reflected the significance we attach to incorporating the issue of SALW in the mandates of peace-keeping operations.

Mr Chairman, Distinguished Delegates,

International cooperation is of enormous importance for resolving the problem of SALW. The relevant threats are primarily of an international character. Mutual contacts between internationalforums involved in initiatives dealing with SALW, could make it easier to combat those threats. Atthe OSCE seminar on SALW, held in April 2000, Poland proposed the creation of an internationalnetwork of national contact points and liaison officers of regional organisations, designed to facilitate such collaboration.

In Poland SALW are subjected to the same strict licensing procedures as other types of arms.Certain categories of SALW, because of their potential use by terrorists, are subjected to particularsecurity measures. We attach special importance to proper marking of weapons, safeguarding ofstorage facilities and the procedures for destroying redundant weapons.

Mr Chairman, Distinguished Delegates,

Poland believes the Programme of Action should include the following provisions:

– that the arms trade will be restricted exclusively to entities authorised by states,

– that arms exports will be verified according to the so-called export criteria, foremost among them – the question of respecting human rights by the importer. The adoption, in the year 2000, ofthe OSCE Document demonstrated that the member countries of that organisation, representinghighly diversified regions, are capable of reaching broad agreement concerning the criteria,

– that export controls, also applying to arms-trade brokers, will become a standard element of thestructure of every state;

– that the violation of international arms embargoes will be treated as a crime by all countries andwill be severely punished;

– that all SALW being the object of trade will be properly marked, to facilitate the struggle againstillicit trade in arms.

The conference is the long-awaited culmination of efforts by the respective countries, regions, aswell as political and NGOs. We believe that the conference, while concluding a certain stage ofendeavours, will initiate coordinated actions on a global scale, leading to improved internationalsecurity and most of all – to less suffering by the defenceless civilian population.

SAFERWORLD ARMS & SECURITY PROGRAMME 29

Saferworld's research project on arms and security in EU Associate Countries

This chapter is part of a wider Saferworld report, entitled Arms production, exports and decision making in Central andEastern Europe concerned with seven EU associate countries, namely: Bulgaria, the Czech Republic, Hungary, Poland,Romania, Slovakia and Slovenia. The report analyses the role of each country in the regional and international arms trade,including destinations, transit routes and end-users of concern; it also examines the progress achieved in strengthening legalcontrols and their actual implementation.The complete report can be purchased for GBP 20 including postage and packaging. For further information please contact: general@saferworld.org.uk or www.saferworld.org.uk