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U.S. moves to sell advanced spy drones to South Korea

WASHINGTON (Reuters) - The Obama administration formally proposed a controversial sale of advanced spy drones to help South Korea bear more of its defense from any attack by the heavily armed North.

Seoul has requested a possible $1.2 billion sale of four Northrop Grumman Corp (NOC.N) RQ-4 "Global Hawk" remotely piloted aircraft with enhanced surveillance capabilities, the Pentagon's Defense Security Cooperation Agency said in a statement dated on Monday and distributed on Tuesday.

South Korea needs such systems to assume top responsibility for intelligence-gathering from the U.S.-led Combined Forces Command as scheduled in 2015, the security agency said in releasing a notice to U.S. lawmakers.

"The proposed sale of the RQ-4 will maintain adequate intelligence, surveillance, and reconnaissance capabilities and will ensure the alliance is able to monitor and deter regional threats in 2015 and beyond," the notice said.

The United States has agreed with Seoul to turn over the wartime command of Korean troops later this decade. Current arrangements grew from the U.S. role in the 1950-1953 Korean War that repelled a North Korean takeover of the South.

Seoul has shown interest in the high-altitude, long-endurance Global Hawk platform for at least four years. The system, akin to Lockheed Martin Corp's (LMT.N) U-2 spy plane, may be optimized to scan large areas for stationary and moving targets by day or night and despite cloud cover.

It transmits imagery and other data from 60,000 feet (18,300 meters) at near real-time speed, using electro-optical, infrared and radar-imaging sensors built by Raytheon Co. (RTN.N)

The possible sale has been held up by discussions involving price, aircraft configuration and a go-slow on release of such technology subject to a voluntary 34-nation arms control pact.

The Defense Department began informally consulting Congress on the possible Global Hawk sale in the summer of 2011, only to withdraw it pending further work on the make-up of the proposed export to Seoul amid lawmakers' arms-control concerns.

The formal notification to Congress came less than two weeks after a North Korean space launch of a satellite atop a multi-stage rocket, a first for the reclusive state, widely seen as advancing its ballistic missile program.

A White House statement denounced the December 12 launch as a "highly provocative act" that would bear consequences for violations of United Nations resolutions. The North is banned from testing missile or nuclear technology under international sanctions imposed after its 2006 and 2009 nuclear weapons tests.

In October 2008, then-U.S. Defense Secretary Robert Gates told reporters that the United States was "very sympathetic" to South Korea's interest in Global Hawk. But he cited issues that had to be overcome because of the so-called Missile Technology Control Regime, or MTCR.

The pact, established in 1987, has been credited with slowing the spread of ballistic missiles and other unmanned delivery systems that potentially could be used for chemical, biological and nuclear attacks.

Pact members, including the United States, agree to curb their exports of systems capable of carrying a 500-kilogram (1,102-pound) payload at least 300 kilometers (186 miles). The Global Hawk falls under a strong presumption against export under MTCR guidelines.

The notification to Congress did not mention that a U.S. government waiver for such an export would be required.

Arms-control advocates fear that this could fuel instability and stir regional arms-race dynamics as well as provide diplomatic cover for an expansion of such exports by Russia, China and others.

The Obama administration agreed earlier this year to let South Korea, a treaty ally, stretch the range of its ballistic missile systems to cover all of North Korea, going beyond the voluntary pact's 300 km (186 miles).

The congressional notification is required by U.S. law and does not mean that a deal has been concluded.

If a sale takes place, it would be for the third generation of Global Hawk drones known as Block 30, the security agency's notice to Congress said.

The Pentagon, in its fiscal 2013 budget request, proposed mothballing its own Block 30 Global Hawks and ending plans to buy more of that generation. Doing so would have no effect on the administration's plans to acquire other versions of the long-range drone.

South Korea's possible Global Hawk purchase would mark the system's first sale in the Asia-Pacific region. It has already been sold to the North Atlantic Treaty Organization (NATO).

Australia, Japan and Singapore each have shown interest in buying Global Hawk systems, Northrop Grumman officials have said. Company representatives had no comment on the Christmas holiday on the proposed sale to Seoul.

(Reporting By Jim Wolf; Editing by Sandra Maler)