US approves Israel's historic sale of Arrow 3 to Germany

The United States approved Israel’s sale of its Arrow 3 missile defense system to Germany, with the State Department notifying Defense Minister Yoav Gallant, Defense Ministry Director General Eyal Zamir and Director of the IMOD Directorate of Defense R&D (DDR&D) Dr. Daniel Gold of the Biden administration’s backing.

The Arrow 3 Missile defense system is designed to intercept exo-atmospheric ballistic missiles, making it the long-range missile defense tier of Israel's multi-tier missile defense against Iran, Hezbollah, and others.

The deal is expected to eventually be worth $3.5-4 billion and will include a wide variety of technological infrastructure which Israeli officials said would cover defending all of Germany from missile strikes and not just specific pieces.

A statement from the ministry said, "With its exceptional long-range interception capabilities, operating at high altitudes above the atmosphere, it stands as the top interceptor of its kind. The system employs a hit-to-kill approach for intercepting incoming threats. The Arrow 3 system is co-developed and co-produced by the Israel Missile Defense Organization (IMDO) and the United States Missile Defense Agency (MDA). The industrial team is led by Israel Aerospace Industries (IAI). "

Letter of Committment

Israel and Germany will now move forward with a Letter of Commitment (LOC) signing ceremony, possibly as early as next week, to mark the deal and the already allocated commitment of $600 million will facilitate the immediate initiation of work on the project.

After signing the letter of commitment, Israel, Germany and IAI will finalize the agreement's details, along with various parliamentary approvals, with a full contract expected to be signed by the end of 2023, possibly as early as November.

Initial delivery of the system is expected in 2025, with the system supposed to be fully operational by 2030.  

The negotiations for the procurement agreement are led by the Director of the DDR&D IMDO, Mr. Moshe Patel, together with President and CEO of IAI, Mr. Boaz Levy, and Head of the Arrow 3 to Germany Program, Col. Carsten Koepper.

IAI is the primary contractor, responsible for the development of the weapons system, Arrow interceptors, and radar detection system. Elbit Systems developed the BMC command and control system. Additionally, Tomer - A Government-Owned Company, Rafael Advanced Defense Systems and Stark Aerospace, Inc, - a US subsidiary of IAI are the main subcontractors responsible for the development and manufacturing of the Arrow 3 interceptor.

In a media conference call later Thursday, Patel said that part of the deal involved a requirement that Israel hire new engineers, operators, and logistics people so that production on already-signed deals with the US would not slow down.

In mid-June, the German parliament approved a first advanced payment of €560 million to Israel toward the acquisition of the Arrow 3 anti-missile system.

Israeli Ambassador to Germany Ron Prosor hailed the news at the time, calling it a major positive jump in relations between the two countries. Both Israel and Europe could benefit from the Jewish state’s elite defense industry, he said.

Summer setbacks

The Jerusalem Post had learned prior to that approval, that even as the approvals were likely, there was potential for surprises, just as the process had seen multiple temporary setbacks over the last several months.

Apparently, although the US approved the deal in principle in March, its final signature only came Thursday. Together with questions raised by the German parliament in March, this could have delayed the process more, though Thursday's approval seemed much more final.

Gallant said, "The US government's approval of the delivery of the 'Arrow 3' missile defense system [to Germany] is an expression of confidence in the excellent capabilities of Israel's defense industries. This is a significant decision, which will contribute to Israel’s force buildup and economy. "It is also particularly meaningful to every Jewish person that Germany is acquiring Israeli defense capabilities."

"We are proud of this defense agreement - the largest in Israel's history. This is an opportunity to express gratitude and appreciation to our industries - the engineers at ‘Israel Aerospace Industries’ who have broken new records as a result of their creativity and talent. ‘Arrow - 3’ is a groundbreaking system, the most advanced of its kind in the world, as well as a force multiplier in Israel's air defense - soon in Europe as well," he said.

Further, he stated, "Our cooperation with the US government is essential to the system’s development process and to the achievement of this significant agreement...I would like to express my appreciation to my friend, Secretary of Defense Lloyd Austin, for the United States' central role in this process."

Prime Minister Benjamin Netanyahu said, "Today, we achieved another historic moment. Israel signed the largest security deal in its history...75 years ago, the Jewish nation were crushed into ashes on the soil of Nazi Germany, and 75 years later, the Jewish state is providing Germany, a different Germany, the tools to defend itself."

Responding, Zamir said, "This historic agreement holds far-reaching implications for decades to come. It strengthens the defense relations between Israel and Germany in various areas, as discussed in recent meetings with the State Secretary of the German Federal Ministry of Defense, Mr. Benedikt Zimmer. Part of the proceeds will be dedicated to bolstering Israeli defense systems."

IAI President and CEO Boaz Levy said, "We at Israel Aerospace Industries are happy to have received approval from the US Department of State, alongside our partners in the project, the Israeli Ministry of Defense, to develop the world's finest air defense system, Arrow 3, for Germany. We express our gratitude to the German Parliament for placing their trust in us by selecting a system manufactured by IAI."