India Lifts Ban On Italian Firm Linked To Agusta Scam – Free PDF Download

What has happened?

• The Union government has decided to lift the ban on dealings with Italian defence giant Leonardo SpA, earlier known as Finmeccanica,
• Whose subsidiary had been involved in the alleged scam surrounding the Rs 3,500-crore VVIP chopper deal, a senior official said.

On certain condition

• The official, who is from the Defence Ministry, stressed that the lifting of the ban was based on certain conditions the company will have to comply with.
• The main clause will be that the company cannot raise any commercial claims or file civil litigation against India for any of the earlier deals.
• Also the investigation against the company by the Central Bureau of Investigation and the Enforcement Directorate would continue.

What was the scam?

• As per a 2010 deal, subsidiary firm AgustaWestland International was supposed to supply 12 VVIP choppers.
• But in 2012, it was alleged that the company had paid bribes worth Rs 360 crore to Indian politicians, bureaucrats and Indian Air Force officers to swing the deal in its favour.
• India had put on hold the dealings with the company in 2013-14 when European agencies arrested individuals for their role in the Rs 3600 crore deal to supply 12 AW-101 helicopters to India for ferrying VVIPs.
• CBI had registered cases against former Air Force Chief Air Chief Marshal SP Tyagi.
• Italian prosecutors had alleged that Tyagi had tweaked the specifications of the tender to help AgustaWestland, and had received bribes through his cousins.
• The CBI has also filed cases against former Chief Executive and Chairman of Finmeccanica SpA, Giuseppe Orsi, who was arrested in Italy in 2013.

14 others on ban list

• Leonardo SpA is one of the 15 companies under the “put on hold/ suspended” list —From which procurement is not allowed — as of September 29.

Is it related to Modi’s visit to Italy?

• The removal of the ban comes just days after Prime Minister Narendra Modi met his Italian counterpart, Mario Draghi, during his recent visit to Rome on the sidelines of the G20 Summit on October 29.
• The defence official, however, said that it would not be correct to link the two developments.
• He said any such decision involves deliberations by a high-level committee and consultation with various stakeholders, including the Law Ministry.
• This official said that the meeting between the two leaders had just happened a week ago, and that the decision to remove the ban cannot happen so quickly.
• Leonardo SpA had recently put in a request to lift the ban, after which the process had begun.
• The Italian government owns around 30% of the company.

significance

• The ban on the company had also impacted Indian forces, which have been interested in some products, besides the VVIP choppers, produced by Leonardo SpA.
• The foremost of such products is the Black Sharp heavyweight torpedo to be used in the Scorpene submarines which are being produced in India.
• Additionally, the company also produces radars, electronic warfare suits, and communication systems, some of which are of interest to the Indian military.

• After the VVIP chopper deal scam, the government had cancelled in 2016 a deal with a Leonardo SpA subsidiary,
• To acquire 98 Black Shark torpedoes for the French Scorpene Class submarines being built at Mazagon Dockyards Ltd.
• The search for a replacement has been on since.

Renewal of ties

• The lifting of the ban would lead to a “relaunch” of ties between the two countries, said the Italian envoy.
• Over the past few years, bilateral relations have been held up over the helicopter case as well as the case of the Italian marines accused of killing Kerala fishermen, and Mr. Modi’s first visit to Rome has seen the formal burial of both issues.
• Also, it can help in achieving the India-EU trade agreement which is pending from long.
• It is a signal of the relaunch of the partnership of the two countries, on that is based on reinforced multilateralism, cooperation against the pandemic, energy transition, and defence ties.

Q) Which among the following is busiest ocean trade route?

1. North Atlantic route
2. Suez canal
3. Panama canal
4. South China sea route

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