Arab Organization for Industrialization (AOI)

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Last Updated: February 1, 2011
Other Name: N/A
Location: Nasr City
Subordinate To: Ministry of Defense
Size: Unknown
Facility Status: Oversees missile production facilities

The Arab Organization for Industrialization (AOI) supervises nine military factories, including the Arab-British Dynamics Company, the Helwan Aircraft Factory, the Helwan Engine Factory, the Kader Factory for Developing Industries, and the Sakr Factory for Developed Industries.[1]

In 1975, intending to surpass Israeli military production by combining forces, Egypt, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) formed the AOI. Egypt also viewed the AOI as an opportunity to use Gulf capital and Western technology to transform itself into a major arms.[2] Following the 1979 Camp David Accords with Israel, however, Egypt's Arab partners largely withdrew from the consortium and the AOI nearly collapsed.[3] Yet the AOI managed to survive as a result of American and French monetary assistance. Egypt concluded a bilateral arrangement under which a limited number of aircraft would be purchased from France but assembled by the AOI, and American aid flowed to the AOI as part of a larger push to strengthen military ties with Egypt.[4] In 1994, Egypt won a 15-year legal dispute, becoming the sole owner of the AOI after forcing the UAE, Saudi Arabia, and Qatar to cede their remaining shares.[5]

In March 1999, the U.S. State Department applied two-year sanctions on three of the AOI's subsidiaries for transferring dual-use U.S. technology, including missile components, to North Korea. Under the terms of the sanctions, the Clinton administration denied the Arab-British Dynamics Company, the Helwan Company for Workshop Tools, and the Kader Factory for Developed Industries the right to export licenses for items listed in the 1987 Missile Technology Control Regime (MTCR), as well as U.S. government contracts for MTCR items. [6] Some U.S. and Israeli intelligence officials believed that these Egyptian firms sent missile technology obtained from the United States and other Western countries to North Korea, and that North Korea used the technology in its Taepodong-1 ballistic missile program.[7] In return, North Korea allegedly provided these AOI subsidiaries with advanced missile components destined for Egypt's medium-range ballistic missile program.[8]

Sources:
[1] Hammam Nasr, "Egypt: Military Factories," International Market Insight, 1998, www.fas.org.
[2] Andrew Rathmell, "Egypt's Military-Industrial Complex," Jane's Intelligence Review 6, No. 10, 1 October 1994, www.janes.com.
[3] Andrew Rathmell, "Egypt's Military-Industrial Complex," Jane's Intelligence Review 6, No. 10, 1 October 1994, www.janes.com.
[4] "Cairo Military Exposition Scheduled," Aviation Week and Space Technology, 8 June 1981, p. 181; Edward Cody, "Egyptian Says U.S. Would Supply F15s; Egyptian Defense Chief Asserts U.S. Would Supply F15 Fighters," The Washington Postem, 22 February 1980, p. A17; "Egypt and America; Your very good friend," The Economistem, 12 January 1980, p. 46.
[5] "End of Legal Rangle Gains Egypt Dlrs 1 Billion From Gulf States," Associated Press Worldstream (Cairo), 20 October 1994.
[6] "Israel, USA claim Egyptian missile links with N Korea" Jane's Defense Weekly 33, No. 8, 23 February 2000; "Egypt: Production Capability," Jane's CBRN Assessments, 5 December 2008, www.janes.com.
[7] "Janes: Egypt Sending Missile Technology to DPRK," Open Source Center, 22 February 2000, www.opensource.gov.
[8] "Janes: Egypt Sending Missile Technology to DPRK," Open Source Center, 22 February 2000, www.opensource.gov.

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