The prominent German firearms manufacturer Heckler & Koch (H&K) said it will no longer sell its products to countries that are considered corrupt or undemocratic.

In addition, it said, it would limit its sales to North Atlantic Treaty Organisation (Nato) and European Union (EU) member states and its “equivalents”, such as Switzerland, Australia, New Zealand and Japan.

“Heckler & Koch does not intend to generate new business with countries outside Nato’s sphere of influence; only so-called ‘green countries’ should be served, ie those that are democratic, not corrupt and either Nato states or their equivalents,” it said in the official English translation of its 2016 annual report published earlier this year.

Malaysia will be among the countries excluded by the criteria.

H&K manufactures a wide variety of small arms, such as the MP5 submachine gun that has been the staple firearm for law enforcement units worldwide, including use in the Malaysian police’s patrol cars, at roadblocks and by sentries.

One MP5 was used in the fatal shooting of the 15-year old Aminulrasyid Amzah following a police car chase in 2010.

Other Malaysian security forces also field the MP5 alongside a small number of other H&K firearms such as the MP7 personal defence weapon and the HK416 carbine.

Since 2014, the Malaysian police have been phasing out the MP5 in favour of the Czech-made Scorpion EVO 3 submachine gun.

The H&K annual report states that it would continue to fulfil orders from non-green countries if an export licence can be obtained. However, it would not participate in tenders in non-green countries.

Green countries are determined based on a country’s Nato or equivalent membership, its performance on Transparency International’s Corruption Perception Index (CPI) and its performance on the Economist Intelligence Unit’s Democracy Index.

The report did not disclose how the three criteria would be weighed. However, a map contained in its April 2017 investor update excluded Turkey as a potential customer, despite being a Nato member.

Malaysia a 'flawed democracy'

Malaysia is currently ranked 55 out of 176 countries on the CPI. On the Democracy Index, Malaysia is ranked 65 out of 167 countries and is classified as a “flawed democracy”.

In terms of military alliances, Malaysia is a member of the Five Power Defence Arrangements, under which the UK, Australia, New Zealand, Malaysia and Singapore would consult one another immediately to decide on a response if Malaysia or Singapore is attacked or threatened with an attack. Unlike Nato, there is no commitment to military intervention.

Meanwhile, the German broadcaster Deutsche Welle quoted an H&K spokesperson saying that the company had started on the new business strategy since Spring 2016.

The report, dated Aug 31, said the shift meant that H&K has become the first arms manufacturer to have a more ethical export policy than its own government. It said the company is also considering setting up a compensation fund for families of victims of its products.



H&K’s annual report said revenues in non-green countries had shrunk from 10 percent of total revenue in 2015 to a mere four percent last year. Meanwhile, total revenue grew from €177 million (RM893 million) to €202.4 million (RM1.02 billion).

Meanwhile, UK’s The Guardian newspaper said H&K’s new policy was mentioned in its annual report in March, but this was not confirmed until its annual general meeting on Aug 15.

The Guardian quoted a spokesperson for the movement ‘Action Outcry – Stop the Arms Trade’ claiming that the change was in part due to 30 years of campaigning, including blockades on H&K’s manufacturing facilities and legal challenges.

However, a spokesperson for the ruling Social Democratic Party (SPD) reportedly attributed the change to Germany’s increasingly restrictive export controls on arms sales.

“The SPD has tried to tread on the brakes and limit arms exports, especially in regions that aren’t considered safe…

“A company like that makes decisions based on economic questions, and the restrictive policies of SPD ministers has led to certain profit margins dwindling, because they could no longer be sure that the contracts would really happen,” The Guardian quoted the spokesperson as saying in its Sept 8 article.

The report also noted that the success of Germany’s arms export restrictions was questionable, since the country’s total arms exports had hit record highs in 2015 and 2016.

Deutsche Welle noted that H&K has been under scrutiny over the past few years due to the illegal sale of G36 assault rifles to Mexico between 2006 and 2009.