France to close military office in Taiwan: report

31st May 2010, Comments 0 comments

France has decided to close a low-key military liaison office in Taiwan in retaliation over a ruling in a controversial arms deal, Taiwanese media said Monday.

The office, which arranges visits by military personnel and facilitates the island's acquisition of French-made weaponry, will be shut in July, the Liberty Times newspaper reported.

The office is part of the French Institute in Taiwan, the de facto embassy of France in the absence of formal diplomatic ties.

The institute declined comment when approached by AFP.

The report came after a decision by an international court earlier this month to order French group Thales to pay back a huge sum that it overcharged Taiwan in a 1991 warship sale.

A Paris-based court of arbitration said the money was to make up for unauthorised commissions paid to help Thomson-CSF, which later became Thales, win a deal to sell six Lafayette frigates to Taiwan.

Lawyers at Taiwan's defence ministry said Thales would pay an estimated 861 million US dollars to Taiwan, including 591 million dollars for damages and 270 million dollars in interest and legal expenses.

The arbitration results also led France to scrap its plan of arming the six Lafayette frigates with Aster, a French-made air defence system, the Liberty Times said.

The Thales company spearheaded the sale, but the main stake in the contract was held by French state-owned shipbuilder DCN. Several sources said the French state would have to pay 70 percent of the penalty.

In 2001, Taiwan's highest anti-graft body concluded that as much as 400 million dollars in kickbacks may have been paid throughout the course of the deal.

In 2008 a French judge ordered the dismissal without trial of one of France's biggest graft cases involving massive kickbacks in the frigate sale to Taiwan, citing a lack of evidence.

© 2010 AFP

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