What is the End-Use Monitoring Agreement?

The US had been pressing India to sign three agreements related to defense cooperation:

1. End Use Monitoring Agreement (EUMA).

2. Communications Interoperability and Security Memorandum of Agreement (CIS MoA).

3. Mutual Logistic Support Agreement (MLSA).[*]

All these agreements contain a series of restrictive clauses.

On the eve of US Secretary of State Hillary Clinton's July 2009 New Delhi visit, the newly appointed US assistant secretary of state for public affairs, Philip J Crowley, had linked EUMA to the nuclear deal. He told the media in Washington on July 17 that EUMA was 'part of the fulfillment of an important initiative that India and the U.S. have signed in the area of nuclear cooperation.'

'We are working with India on an end-use agreement,' said Crowley, the State Department spokesperson. 'But clearly, this is part of the fulfillment of an important initiative that India and the United States have signed in the area of nuclear cooperation.' Crowley went on to say that he was 'sure' there will be 'substantial discussion' during Clinton's visit on 'fulfilling the initiative and its various components.'

Contrast this with what Prime Minister Manmohan Singh told the Lok Sabha on July 22, 2008: 'Some people are spreading the rumours that there are some secret or hidden agreements over and above the documents made public. I wish to state categorically that there are no secret or hidden documents other than the 123 Agreement, the Separation Plan and the draft of the safeguards agreement with the IAEA.'

Earlier, on August 4, 2005, he told the Rajya Sabha: 'Sir, what are the commitments that I have taken? I am very clear in my mind and I can assure the House that there is no secret appendage or secret agreement. Everything that I discussed with the President (Bush) is faithfully stated. There is nothing more to our agreement than what is stated in this Joint Statement.'

EUMA CLAUSES

All these three agreements were designed by the US Congress for ensuring American oversight, right-of-access and on-site inspection in client States -- States that are under the US security and nuclear umbrella. For example, there are 32 countries under the US nuclear and security umbrella today.

In addition, there are States like Pakistan that are officially classified by Washington as Major Non-NATO Ally (MNNA) -- a conferred status that gives the US virtually the same rights over them as it has vis-a-vis States formally under the American military umbrella.

The special rights the US has with client States are understandable because America is responsible for their security and it thus seeks to underpin its own obligations and those of its allies through such agreements.

But India is not a client State, but a strategic partner of the United States. Unlike an ally who has to follow the alliance leader, a strategic partnership is built on the principle of equality. Thus, a strategic partner is an equal, at least in theory.

Yet, the US has succeeded in imposing the End Use Monitoring Agreement (EUMA) on India. The EUMA is highly controversial.

Some of its clauses may not be a subject of concern, such as prohibitions on second-hand sales without approval of the United States. Its contentious clauses impose restrictions on what India may do with the equipment it buys from the USA.

EUMA will allow the US to periodically carry out an inspection and inventory of all articles transferred to India. In the negotiations, India strenuously objected to physical inspection and instead sought an inspection of the records and other measures in place. In the end, the Americans had their way, but it was agreed that the physical inspection would be done at a time and place granted by India. Supplying-State officials, in any case, would need visas and other assistance from the recipient State, including about the location of the equipment, to carry out an inspection.

The US will have the right to check that India is using any purchased weapon for the purpose for which it was intended.

EUMA restricts what the purchasing country, India, can do with the US-origin defense equipment, even within its own borders.

Under the terms of EUMA, India cannot modify the purchased defence article or system in any form.

Also, to prevent the buyer country from freeing itself from dependency on the United States for maintenance, EUMA restricts India from getting US-origin defence equipment serviced by any another country without prior American permission. Even spare parts need to be sourced only from the United States.

These 'cradle-to-grave' restrictions arm Washington with continuing leverage over the recipient country. After all, any equipment or system needs maintenance. Such leverage, in turn, can help ensure that the recipient country cooperates with Washington on larger political matters.

THE AGREED TEXT

A key element of Clinton's India trip was the announcement that the two sides had reached an accord on the EUMA. The Joint Statement issued at the end of her visit recorded: 'External Affairs Minister Krishna announced that both sides had reached agreement on End-Use Monitoring for US defence articles.'

The agreed text of the EUMA was exchanged by External Affairs Minister Krishna and Clinton on July 20, 2009. It, however, was not formally signed because it takes the form of agreed language to be included in contracts for all future US defence sales to India.

Although the agreed language deviates in some aspects from the standard EUMA text applicable to client States, the United States managed to get India to accept the core conditions. The United States already has been including end-use monitoring rights for itself in the sale of all defenve equipment to India. Such end-use monitoring rights have been incorporated in the Letter of Offer and Acceptance (LOA) relating to every defence contract with India in recent years, including the contracts for:

i. The USS Trenton -- a 1971-vintage amphibious transport ship, bought by India in 2007 for $50 million and renamed INS Jalashwa.

ii. The $2.2 billion deal with Boeing for eight P-8I maritime patrol aircraft.

iii. Six C130-J Hercules military transport aircraft worth more than $1 billion.

iv. Three VVIP jets.

The US right to end-use monitoring is also incorporated in the export contracts of US high-term items to India, starting with the Cray X-MP-14 supercomputer in the late 1980s. But EUMA relates to defense-equipment transfers and contains detailed and elaborate restrictions.

Now the EUMA language agreed to between India and the US will become the standard in all future Indo-US defence contracts. 'We have agreed on the end-use monitoring arrangements that will henceforth be referred to in letters of acceptance for Indian procurement of US defence technology and equipment,' External Affairs Minister S M Krishna told Parliament on July 21, 2009. 'This systematises ad hoc arrangements for individual defense procurements from the USA entered into by previous governments.'

EUMA comes as a major boost to American arms companies like Lockheed Martin Corp, Boeing Co and Northrop Grumman Corp eying megadeals in India, one of the world's largest importers of conventional weapons.

Indeed, EUMA opens the path for the US and India to agree to the terms of the Communications Interoperability and Security Memorandum of Agreement (CIS MoA), which is still under negotiation.

OFFICIAL CONCERN IN INDIA

The Indian government has embraced EUMA despite concerns expressed within the official establishment over its restrictive and invasive clauses.

For example, Navy chief Admiral Suresh Mehta had publicly described EUMA as 'intrusive.' Speaking at an April 2008 conference organised by the London-based International Strategic Studies Institute in New Delhi, Admiral Mehta said: 'There are certain things we can't agree to. As a sovereign nation, we can't accept intrusiveness into our system, so there is some fundamental difficulty.'

He added: 'The US may have this kind of (end user) agreements with everyone. I don't believe in that. We pay for something and we get some technology. What I do with it, is my thing.'

In fact, India's Comptroller and Auditor General (CAG) in a March 2008 report criticized the end-use monitoring clauses in the contract for the USS Trenton/INS Jalashwa. (No sooner the US had transferred that transport ship to India than a gas leak killed an Indian officer and five sailors on board.)[]

The CAG report stated: 'Restrictive clauses raise doubts about the real advantages from this deal... For example, (there are) restrictions on the offensive deployment of the ship and permission to the (US) government to conduct an inspection and inventory of all articles transferred under the end-use monitoring clause of the LOA (Letter of Offer and Acceptance issued by the US government).'

Note that the contract contains even 'restrictions on the offensive deployment of the ship.'

Against this background, the Indian government ought to have taken Parliament into confidence on the EUMA rather than place on record just the two sentences on the agreement found in Krishna's statement on Clinton's visit.

[*] The MLSA envisages exchange of services and logistics. If it gets signed, the Indian and American militaries will provide logistic support, berthing and refueling facilities to each other's warships and aircraft on a barter or equal-value exchange basis. But given that the Indian military, including the navy, has no deployments or operations outside the region, the MSLA, in effect, would be a one-sided arrangement.

[] The purchase of the USS Trenton was severely criticized by the Comptroller and Auditor General, which in its report raised several questions, including why the ship was bought when the US Navy itself had concluded in 2003 that the ship was not suitable for modernization ought to be decommissioned in 2006. The report pointed out gas leaks on board other Trenton-type ships in which three American sailors lost their lives.