Airbus is considering legal action against Germany for the Saudi ban

BERLIN (Reuters) – Airbus plans to sue the German government because of its freeze on arms exports to Saudi Arabia, which would prevent it from setting up a border security system for the Gulf, said two people close to the case.

In October, Germany decided to reject future weapons export licenses to Saudi Arabia following the assassination of journalist Jamal Khashoggi, and to freeze the shipments of already approved equipment, which angered its allies and companies.

Airbus plans to file a lawsuit against Berlin for the border security system between Saudi Arabia and Yemen – a contract of about 3 billion euros (3.36 billions of dollars), of which about 1 billion euros remain open, said these sources.

"We are considering an action for failure to act," said a source close to the case, speaking on Sunday under cover of anonymity. "We want to force the federal government to make a decision now."

Airbus declined to comment.

The German government stated that it could not comment on any potential compensation claims from companies as a result of the ban on Saudi arms exports until any decision is taken.

We did not know immediately where in Germany or when a suit would be brought.

At the end of March, Germany extended the ban on arms exports to Saudi Arabia until the end of September, with a few exceptions.

The border system for Saudi Arabia includes radars, drones and command posts for guards.

"We are not talking about an offensive weapon here, but about a border security system," the source said.

Airbus, which was to make a provision for risk of 300 million euros due to the breach of the contract, feels compelled to take legal action to show its customers, shareholders and suppliers that He is making every effort to complete the contract, the source said.

In February, the company's sources told Reuters that Airbus had decided to redefine the C295 military transport aircraft it was building in Spain in order to remove German components following the freeze in the US. German arms exports to Saudi Arabia.