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Realistic export controls
Because the United States has little diplomatic leverage with Iran, export controls are the main vehicle for impeding Iran's efforts. Unfortunately, the Clinton Administration's decision to slash export controls had made it much easier for Iran to get what it needs.
Dubai is an example. In our database, we have listed 22 Iranian companies operating in Dubai's free trade zone, the main purpose of which is to handle re-exports, frequently to Iran. These companies are legally off-limits to American exporters because of the U.S. embargo against Iran, but the companies are probably getting U.S. goods anyway because U.S. exporters have no way of knowing the companies are Iranian. The U.S. Commerce Department has never published a list of Iranian companies operating in Dubai. In fact, after the Commerce Department's recent decontrol of high-speed computers, U.S. companies can now ship powerful supercomputers (operating at up to 7 billion operations per second) to buyers in Dubai without an export license. And because Dubai has no effective export control system, there is nothing to prevent these supercomputers from going on to Iran or anywhere else. Iran now imports more goods through Dubai than through its own ports. The lesson here is that you cannot slash controls on exports to everyone in the world except the "rogue nations" and expect the rogues not to get things through retransfers.
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THE ANZ BANKING GROUP HAS just signed an agreement providing more than $390 million worth of finance credit to Iran’s five main commercial banks. This is the first time such an accord has been undertaken by an Australian bank. (German and Austrian banks set up similar arrangements in 1996). ANZ has entered into the arrangement with its regional subsidiary ANZ Grindlays Bank. Industrial and other project finance packages can now be arranged for Iranian projects. Funding will be provided for 85% of capital procurement on a specific project. The remaining 15% will represent the down payment.
The packages will only be concluded where export credit agencies (ECAs) of OECD countries provide cover to Tehran. ECA cover will be available to the ANZ because the agreement carries a sovereign guarantee from the Ministry of Economic Affairs and Finance of the Islamic Republic of Iran. Darren Rickards, Senior Corporate Banking Manager, Dubai and Iran, said that ANZ’s role will be as executor of the Framework Agreement and provider of finance. ANZ Investment Bank Australia signed the agreement in Dubai this month.
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2.2 BSA TAHIR
Alleged that BSA TAHIR, a SRI LANKAN businessman based in DUBAI was a trusted and close confidante of the arms expert and was actively involved in supplying centrifuge components for LIBYA’s uranium-enrichment programme; and....
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11. During investigations, BSA TAHIR alleged that his involvement with the nuclear expert started sometime in 1994/1995. That year, the latter had asked BSA TAHIR to send two containers of used centrifuge units from PAKISTAN to IRAN. BSA TAHIR organized the transshipment of the two containers from DUBAI to IRAN using a merchant ship owned by a company in IRAN. BSA TAHIR said the payment for the two containers of centrifuge units, amounting to about USD$3 million was paid in UAE Dirham currency by the Iranian. The cash was brought in two briefcases and kept in an apartment that was used as a guesthouse by the Pakistani nuclear arms expert each time he visited DUBAI.
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12.2
About 1998 to 2002. During this time, several meetings were held between the arms expert, accompanied by BSA TAHIR and the Libyans headed by MOHAMAD MATUQ MOHAMAD. One discussion was held in Casablanca, MOROCCO and several discussions in DUBAI.
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13.3
Project Machine Shop 1001. This was a project to set up a workshop in LIBYA to make centrifuge components which could not be obtained from outside LIBYA. The machines for the workshop were obtained from SPAIN and ITALY. BSA TAHIR said the middleman involved in this project was PETER GRIFFIN, a BRITISH citizen who is believed to have once owned Gulf Technical Industries (GTI) based in DUBAI. PETER GRIFFIN is said to be retired and living in FRANCE. The management of GTI has been taken over by his son PAUL GRIFFIN. BSA TAHIR also said that the plans for the Machine Shop 1001 was prepared by PETER GRIFFIN.
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15.4
SELIM ALGUADIS, a citizen of TURKEY. Also said to be an engineer. Alleged to have supplied electrical cabinets and power supplier-voltage regulator to LIBYA. Two weeks after action against the ship BBC China in Taranto, Italy on 4 Oct 2003, BSA TAHIR is alleged to have arranged the transshipment of electrical cabinets and power supplier-voltage regulator to LIBYA through DUBAI on behalf of SELIM ALGUADIS.
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15.7 SWITZERLAND
FRIEDRICH TINNER, mechanical engineer, alleged to have had dealings with the nuclear arms expert since 1980s. FRIEDRICH TINNER was reported to have prepared certain centrifuge components, including safety valves, and he sourced many of the materials that were made in several companies in Europe. FRIEDRICH TINNER did not keep the stock himself but arranged for the supply to reach DUBAI and then on to LIBYA. FRIEDRICH TINNER is also the President of CETEC, a company in SWITZERLAND; and
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ROLE OF BSA TAHIR
19.1
Sometime in 2001, BSA TAHIR is alleged to have planned to manufacture components with GUNAS JIREH in TURKEY. However, BSA TAHIR later changed his mind and offered a new business plan said to be legitimate to produce components for petroleum and gas to SCOPE. The staff were under the impression that the production was for petroleum and gas intended for DUBAI.
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MANUFACTURE AND EXPORT
24. The materials obtained from Bikar Metal i.e. aluminium round tube and aluminium round bar are semi-finished products that were sent to the SCOPE factory in SHAH ALAM for machining to be made into components for export. The order from BSA TAHIR was a one-off production estimated at about RM13 million and was sent in four stages to DUBAI. This was not a long-term contract on a continuing basis.
25. The SCOPE factory records show that a total of 14 types of components were manufactured. The components were sent in four stages i.e. in the month of Dec 2002 to Aug 2003. All four shipments were sent to DUBAI to Aryash Trading Company.
26. Though a document, delivery note/packing list, dated 1 Aug 2002 (Appendix “A”) shows that SCOPE had sent a shipment addressed to Gulf Technical Industries LCC, P.O. Box 29576, Dubai, UNITED ARAB EMIRATES, the consignment was directed to Desert Electrical Equipment Factory, P.O.Box 51209, DUBAI on the instructions of URS TINNER. Documents related to the delivery to Desert Electrical Equipment Factory is as at “B".
27. From the document retrieved such as ‘delivery note and packing list’, it has been found that SCOPE only shipped the components to DUBAI. No document was traced that proved SCOPE had delivered or exported the said components to LIBYA. Only BSA TAHIR and URS TINNER are said to know any preparation or arrangements to LIBYA.
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SEARCH ON BBC CHINA VESSEL
28. As explained, on 4 October 2003, a vessel, BBC CHINA, was searched at the Taranto port, ITALY where a total of 5 containers to LIBYA was seized following allegations it contained certain components for ‘centrifuge.’ The containers were sent by BSA TAHIR from DUBAI. Several items inside the container that is said to be components of a ‘centrifuge’ are as follows....
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29. All the above items, were made of ‘quality aluminium’ and were in wooden boxes with the SCOPE logo. This was part of the ‘transshipment’ delivered by SCOPE to Aryash Trading Company, DUBAI. The shipment of the items or components by BSA TAHIR to LIBYA via the vessel BBC CHINA was outside the knowledge of the management of SCOPE.
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31.1
BSA TAHIR claimed that’ together with the seized components on board BBC CHINA on October 4, 2003, was a consignment sent by GUNAS JIREH, a Turkish national who supplied ‘aluminum casting and dynamo’ to LIBYA for its ‘machine shop 1001’ project. These items were delivered through DUBAI using the services of TUT Shipping (TS) via vessel BBC CHINA. It is surprising that the consignment from GUNAS JIREH direct to LIBYA was allowed without any action; and
31.2
Two weeks after action taken against BBC CHINA, BSA TAHIR claimed to have arranged a ‘transshipment of electrical cabinet and power supplier-voltage regulator’ to LIBYA through DUBAI on behalf of SELIM ALGUADIS. These transshipment too arrived in LIBYA without any obstruction and this is unusual. SELIM ALGUADIS is said to have known AQK since the 1980s’.
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February 2004: Organization for the Prohibition of Chemical Weapons (OPCW) begins inspections of Libyan chemical weapons.
IAEA details history of Libya's nuclear program in a public report and finds its past activities noncompliant with its NPT obligations, but commends its recent cooperation.
Malaysian investigators report that the Khan network shipped partly enriched uranium, as well as designs and technology for making a nuclear bomb, to Libya on Pakistani planes in 2001 and 2002. The report also says entities from Turkey, Germany, Switzerland, Britain, Dubai and Malaysia were involved in Libya's nuclear program.
U.S. eases sanctions against Libya.
Libya tells the IAEA it wants to retain at least three nuclear facilities, including a uranium conversion plant that the U.S. wants dismantled and removed.