Preventing Illegal Exports: Learning from Case Studies*
by David Albright
April 6, 2001
Many countries have sought overseas assistance in their efforts to build nuclear
weapons. Few proliferant states have been able to go it alone in this quest. They have
had to acquire key equipment, materials, and technology.
Foreign assistance takes many forms. It includes government assistance, both
direct and tacit. Companies have exported important items for nuclear weapons
programs both legally and in violation of national export control laws. Governments may
indirectly encourage illegal, or at best questionable exports, by ignoring, or turning a
"blind eye," to a proliferant's procurement efforts, or by having an ineffective or chaotic
export control system. Individuals have acted as procurement agents, middlemen, or
sources of sensitive information.
The amount of foreign assistance required by a particular proliferant state has
varied widely, depending on its technological level and the particular technology chosen
for making nuclear weapons. In general, the pursuit of uranium enrichment technologies
has required more foreign assistance than the pursuit of technologies to separate
plutonium from irradiated fuel.
The level of assistance received by a state has depended on its procurement skills
and the effectiveness of supplier states' or international export controls. One also cannot
ignore the role of chance in locating acceptable suppliers willing to break or bend the
Looking at the historical record, proliferant states have acquired many types of
nuclear facilities through procurement. In some cases, states have obtained complete
nuclear facilities. In the 1950s and 1960s, France provided Israel with both a reactor and
a plutonium separation plant that became the heart of its nuclear weapons program.
France later provided Iraq with the Osirak research reactor that Iraq planned to use to
make plutonium covertly.
Proliferant states have obtained an astonishing number and variety of sensitive
components of uranium processing facilities, uranium enrichment plants, and other fuel
cycle facilities. Countries have also obtained sensitive information about a wide variety
of nuclear activities and facilities.
Of all the countries that have illicitly sought nuclear weapons, only Iraq has
described in detail the methods it used in the 1980s to procure a wide range of items for
its nuclear weapons program. Following the Persian Gulf War the UN Security Council
forced Iraq to dismantle its nuclear weapons program, other weapons of mass destruction
(WMD) programs, and intermediate range ballistic missiles programs. Part of this
process was a multiyear effort by the International Atomic Energy Agency (IAEA)
Action Team to understand Iraq's nuclear accomplishments and failures prior to the Gulf
War. It obtained procurement information from Iraq and systematically checked it
against supplier, commerce, and intelligence records. Because of the Action Team
inspection effort and parallel public and legal investigations into illicit procurement, a
considerable amount of public information exists about Iraq's procurement activities in
No other country has provided such a look at its secret procurement strategies.
However, information exists about other countries' efforts, although it is in general not as
complete as the Iraqi information.
Based on available information, countries have been remarkably persistent in
violating the letter or the spirit of export control laws and regulations, often with the
active assistance of middlemen or corporate officials. Proliferants have proven that they
are willing to devote considerable resources to obtaining items overseas. A recurring
failure of the supplier nations has been to underestimate the determination and
capabilities of proliferant states. In the West, specific export loopholes were closed only
following a major scandal, such as occurred after Iraq's procurement efforts were
exposed after the Persian Gulf War. Vigilance, particularly among corporations, is often
short-lived. Creating a sustainable export control "culture" remains one of the most
difficult challenges in supplier states.
Obtaining Foreign Assistance
Proliferant state's procurement efforts have involved many strategies and
methods. In the last two decades, proliferant states have had little success in acquiring
complete, sensitive fuel-cycle facilities, such as reprocessing and uranium enrichment
plants. Thus, they have focused on acquiring parts, drawings, and the materials to make
Any foreign acquisition attempt involves many steps. The process of obtaining a
clandestine nuclear facility piece-by-piece can require a sophisticated procurement
network. Aspects of a successful procurement effort may include:
- The recruitment of individuals and companies as agents or trusted sources of
technology and key items;
- The acquisition of education, training, and know-how;
- The establishment of off-shore, "front" companies;
- Knowledge of middlemen;
- The creation of overseas bank accounts, which may issue letters of credit;
- The establishment of shipping and transportation networks;
- The maintenance of adequate secrecy;
- An understanding of the strengths and weaknesses of national export control
regulations and laws; and
- Creation of false end-user statements, sometimes through the cooperation of a third
country and the use of off-shore agencies.
To better understand methods used to acquire items overseas, case studies are
discussed. The case studies seek to illustrate several of the specific bullets mentioned
above and the general techniques used by proliferant states to seek items for their nuclear
weapons programs. The case studies will in some case overlap.
Case Study 1: Devising a Strategy
Countries spend a considerable amount of time developing strategies to acquire
nuclear technologies. Iraq's secret gas centrifuge enrichment program in the late 1980s
illustrates a program that understood its need for foreign assistance to acquire a gas
centrifuge plant, and it developed a strategy accordingly.
The Iraqi centrifuge leaders realized early that they lacked the capability to
manufacture components for a modern Western gas centrifuge to the required accuracy.1
Centrifuges spin at high speeds, and their manufacture place high demands on a country's
Yet, the Iraqis wanted to reach a point relatively quickly where they could operate
a small cascade of centrifuges. As a result, the Iraqi program set the objective of
acquiring sets of components for 50 gas centrifuges from European companies, procuring
the industrial infrastructure to be able to make centrifuges domestically, and obtaining
sensitive raw materials and parts sufficient to make a few thousand centrifuges.
Obtaining large numbers of parts overseas depended on having component
designs early in the program. These designs were obtained with the help of foreign gas
centrifuge experts. The Iraqis recognized that these parts could become obsolete as the
centrifuge program developed. However, they were more concerned that they would be
unable to get the items later.
In contracting for the construction of the components for the 50 prototype
centrifuges, Iraq provided drawings of individual components to four suppliers, C. Plath
and RO-SCH in Germany, Matrix Churchill in Britain, and Schaublin S.A. in
Switzerland. Iraq had ordered machine tools from some of these companies, and the
components were requested as samples to check the output of a specific machine tool. In
other cases, the company received a drawing of a specific component and made the part.
Case Study 2: Recruiting Trusted Foreign Individuals or Companies
Iraq's gas centrifuge experts have said that their method to obtain assistance from
foreign individuals and companies was based on patience and persistence. According to
an Iraqi centrifuge expert interviewed in 1993, when seeking the assistance of a person,
the strategy is to "feel your way, test his credibility and knowledge, and build up
confidence." Before committing to a larger project, he added, "ask him to make a few
samples, and then a few more." To pursue his strategy, he said, "you must know a lot
yourself." In summary, he stressed that one has to "take guarded steps and never enter
into an immediate contract."
One Iraqi tactic was to involve the targeted supplier first in legal but lucrative
trade. Once confidence is established, the supplier may be more willing to help with illicit
or questionable exports. At least, the supplier will be more likely to reveal how far he or
she is willing to go in supplying items without revealing the true intentions of the end-
user. If a financial dependency can be created, the supplier may find it difficult to say no
to a questionable export.
Iraqi procurement agents in the late 1980s were often willing to provide enormous
sums of money to a company that Iraq was interested in recruiting. This type of
recruiting technique worked extraordinarily well with small companies.
For example, the German firm H&H Metalform obtained a 27.4 million Deutsch
Mark (DM) contract in 1987 to make specialized "flow-forming" machines to make thin
steel tubes for Iraq's ballistic missile program.2 Of this amount, seven million DM were
profit. (Later, H&H would agree to provide a machine tool to make maraging steel rotors
for the Iraqi gas centrifuge program.)
This contract was huge for a firm of only seven people. In 1984, H&H's total
annual sales were about one million DM.
The joint owners of the firm figured that with such a large and profitable contract
in hand, a bank would loan them the money to make the machine tools. However, the
banks said no.
Dietrich Hinze, one of H&H's owners, approached Safa al Haboby, the Iraqi who
offered the contract and was the powerful head of the Nassr General Establishment, a
complex that was responsible for armament technology procurement, located at Taji,
about 80 kilometers northeast of Baghdad. Hinze told him that H&H would have to
refuse the contract. Haboby responded that H&H's offer was 12 million DM cheaper
than that offered by H&H's competition, Leifeld & Co. "How much money do you
need," he said. Hinze replied that he needed 5 million DM. After conducting an audit of
H&H's worth, Haboby said that H&H could borrow 5.5 million DM for ten years, but the
Iraqi company, Al-Arabien Co. Ltd., a subsidiary of Nassr, would own half of H&H
during that ten-year period and share equally in the profits. Hinze was amazed by the
deal, because he knew it would almost certainly lead to more contracts with Iraq. He
agreed, and within days H&H had 5.5 million DM in its account. Soon afterwards, Iraq
reduced the principal to 3 million DM, and H&H had 2.5 million DM in profit before
they made a single machine.
The Iraqis were good, correct businessmen. Although Iraq owned 50 percent of
H&H, they never tried to influence the company. Once a year, Haboby came for the
meeting of the shareholders and expressed trust and faith in the management of H&H.
H&H provided many services to Iraq in addition to its flow-forming machines. It
provided components for SCUD missiles, facilitated meetings between Iraqis and
German centrifuge experts and other companies, and acted as an Iraqi agent in acquiring
other types of machine tools and furnaces for the gas centrifuge manufacturing program.
The enormous profits continued until Iraq invaded Kuwait in August 1990. In the
end, H&H received Iraqi business worth about 40 million DM for machines and about 16
million DM in commissions.
Case Study 3: Acquiring Education, Training, and Know-how
A state that wants to build nuclear weapons must acquire a wide range of
technology or "know-how." Even a relatively developed state, such as South Africa,
acquired know-how abroad. A state such as Iraq depended heavily on overseas
procurement of know-how.
A nuclear program must have adequately educated scientific and technical
personnel. To acquire the basic expertise needed for a nuclear program, many states have
sent abroad students and professionals for undergraduate, graduate, and post-graduate
education. Many Iraqis who later became important in the nuclear weapons effort
received their education in the United States, Britain, and Germany.
Acquisition of sensitive know-how can occur by procuring drawings and
documents, having oral discussions with experts, attending training sessions conducted
by companies or institutes, or undergoing training associated with the purchase of
Specialized Training. Specialized training courses can be particularly helpful in
gaining an understanding of fields related to nuclear weapons programs. For example, a
country must master many technologies, including those associated with vacuums,
instrumentation and control, heat transfer, material science, and welding. Although these
courses may not be sensitive by themselves, they can contribute significantly to a
proliferant state's understanding of sensitive information. In addition, if the courses are
taught at organizations or companies that are involved in sensitive technologies, the
participants may have opportunities to acquire sensitive equipment or technology.
In 1989, 22 members of the Iraqi gas centrifuge program took a course at the
German firm Interatom, which also built gas centrifuge enrichment cascades for Urenco,
the European gas centrifuge company. The participants actively sought to deceive
Interatom about their true purpose.
Surreptitiously, an Iraqi obtained entrance into a cascade hall containing piping
and valves where he was able to copy sensitive piping and valve arrangements for gas
centrifuge cascades. From a brochure advertising the course, another Iraqi was able to
determine cascade piping arrangements.
Iraq picked Interatom because of its expertise in uranium enrichment cascade
technologies. However, in their discussions with Interatom representatives, Iraqis were
careful to hide their true intentions. For example, when the goal was training in "cold
traps" for uranium hexafluoride, the Iraqis asked Interatom about cold traps for some
When asking for training in vacuum technologies at Interatom, the Iraqis asked
for vacuum regions far lower than that inside gas centrifuges, knowing full well that
Interatom knew mainly about the pressure region experienced in a gas centrifuge. After
Interatom officials told them that they could only offer vacuum training in this other
region, the Iraqis feigned disappointment, and said, "we will settle for that."
In one case, a suspicious Interatom official came to one of the Iraqi leaders and
said that his colleagues were asking sensitive questions. Alarmed, the Iraqi went to his
colleagues and told them to be more careful.
A senior Iraqi centrifuge expert also received training from the U.S. firm
Mechanical Technology Incorporated (MTI) on the use of computer programs that
calculate rotor dynamics and stability, and that are useful in designing bearings. MTI had
also been involved in the U.S. gas centrifuge program prior to its cancellation in the mid-
This senior Iraqi also visited the University of Virginia, and met with personnel at
the Rotating Machinery and Controls (ROMAC) consortium. The Industrial Projects
Company (IPC), which was in reality a Baghdad-based procurement company for the
Iraqi gas centrifuge program, joined ROMAC in 1989. It is unclear if the Iraqi benefited
from his visit to the university, or by IPC's membership in ROMAC.
Equipment or Technology Demonstrations. States have gained valuable
knowledge when companies present their equipment or software to a prospective
customer. Many companies have included sensitive information or items in their
demonstrations. For example, the German company Leifeld made a demonstration of its
flow-forming equipment in Iraq, anticipating a sale. Leifeld showed Iraq a video
containing sensitive information about producing maraging steel rotors for a gas
centrifuge. When Karl Heinz Schaab, the German gas centrifuge expert, laid out his
products at his company ROSCH in Kaufbeuren to a visiting Iraqi delegation, he included
a highly sensitive carbon-fiber centrifuge rotor.
When a U.S. high explosive expert visited South Africa to demonstrate his latest
software to a civilian company in South Africa, he was unwittingly caught in an effort by
South Africa's nuclear weapon program to acquire assistance. Without him knowing, the
South African group included a member of South Africa's nuclear weapons program,
which was the true end-user interested in purchasing this U.S. software.
Technology Transfer as Part of Hardware or Software Acquisition. Often the
supply of equipment or software has been accompanied by training in the use of the
supplied item. For example, the supplier may train personnel to operate the equipment at
its factory or in the proliferant country after the equipment has been installed.
Schaab was involved in an agreement by the Swiss company Alwo to provide the
Iraqi gas centrifuge program with a carbon fiber winding machine. Schaab agreed to
program the machine to make carbon-fiber centrifuge rotors. He anticipated spending
several weeks in Iraq after delivery of the machine to do the programming. Iraq's
invasion of Kuwait and the subsequent international sanctions on Iraq prevented Iraq
from receiving this machine.
Members of Iraq's weaponization program benefited from overseas training
associated with the purchase of equipment. Iraqis received training on the construction of
flash X-ray machines in Sweden. They received training from the British company
Hadland Photonics on high speed photography, and from the Japanese company
Hamamatsu on the operation of streak cameras. These are but a few examples.
Case Study 4: Off-shore companies
A common strategy has been to use off-shore companies that purchase equipment,
materials, or technology under a civil cover, and then ship these items to the proliferant
state. These companies may be just a post office box or a major institution involved in
producing many items in their own right. In some cases, the companies were owned in
whole or part by the proliferant country.
In a June 22, 1999 interview in the Egyptian newspaper Al-Ahram, A. Q. Khan,
the father of Pakistan's gas centrifuge program, said that his program depended mainly
on purchasing items for the gas centrifuge program through a number of off-shore front
companies, including companies in Japan and Singapore. He added that these other
companies "purchased the equipment and supplied it to us for additional commissions
ranging between 15 and 25 percent of the original price."
Case Study 5: Acquiring Nuclear Weapon Manufacturing Equipment
In 1987, Iraq decided to build a set of facilities that could make nuclear weapons
out of highly enriched uranium (HEU). Although Iraq had started an illicit program to
make HEU in 1981, it had been slow in starting the nuclear weaponization process itself.
Iraq developed a list of needed items for its weaponization program by studying
declassified information from the U.S. Manhattan Project. Because of uncertainties about
both the accuracy and completeness of this information, Iraq planned to conduct an
extensive testing program of each major component of an implosion fission device.
Iraq selected a weaponization site roughly 100 kilometers southwest of Baghdad,
which is the Al Atheer site destroyed by the IAEA Action Team in the early 1990s. To
obtain the necessary equipment for the site, Iraq decided to shop overseas. The Iraqis
were well aware of how hostile international reactions could be to an Iraqi nuclear
weapons effort, and planned to proceed in secret.
Ali Abdul Muttalib, the Iraqi commercial attaché in Bonn, received a list of
equipment from the nuclear weapons program. Ali, who was a key European coordinator
for Iraqi procurement, made initial contacts with several German companies. They
responded with many questions about the purpose and specifications of the desired
equipment, and said that this equipment was sensitive, requiring export licenses. Because
of the complexity of the questions, the attaché suggested that Iraqis from the weapons
program should negotiate directly with the companies.
Khidir Hamza, then the head of the Iraqi weaponization program, led a delegation
to Germany in August 1987 to conduct negotiations for a wide variety of items for the
weaponization program under the pretense of non-nuclear cover stories.
The main item sought by Hamza's team was equipment to process natural
uranium and HEU into nuclear weapon components. For these items, Ali had approached
Degussa and Leybold, who were not only interested but were among the best companies
within the European Community for these items. Because Hamza had represented Iraq at
the meetings of the IAEA, he could not risk being linked to procurement efforts that
claimed to be for non-nuclear purposes.
With Hamza kept out of sight, two of his aides met with representatives of
Degussa and Leybold in the Iraqi embassy to discuss the acquisition of a foundry. Iraq
told the Germans that the foundry would be used to melt, purify, cast, and machine
tungsten, a common refractory metal. The Iraqis never mentioned that the actual planned
use for the foundry was to process both natural uranium and HEU. The equipment would
include vacuum induction furnaces, crucibles, computer-numerically-controlled (CNC)
machines, and an iodine-based purification process. Initial estimates put the equipment
for the foundry over $100 million. Buildings and personnel training were not included in
these rough estimates.
Hamza summarized the reaction of the company representatives:
"During the negotiations, we suddenly realized that the companies were willing to
sell these technologies to us. At the same time, they warned us they were
complicated, expressed astonishment that we were entering such a field and
indicated that the cost would be high. At first, this move on the part of the
companies was puzzling for us, since it seemed the companies were prepared
even to disregard the requirement for an export license by making special
arrangements and packing the equipment under covers, which made the export
process seem natural. At the same time, they stated openly that they knew the
purpose of the equipment. They even indicated that they knew the equipment was
not for peaceful purposes…We were astonished to see that the companies were
actually helping us find covers for some of the required technologies."
The behavior of the Germans startled Hamza's team. They concluded that the
companies either had already obtained permission from the German government to agree
to provide a foundry to Iraq or just wanted the huge sums of money involved in such a
deal. If the former case were true, then the Iraqis believed that the companies could be
acting as spies for Western intelligence agencies. Many Germans would need to visit Al
Atheer during the construction phase of the project, enabling them to discover the extent
of the nuclear weapons program, its location, and the Iraqi personnel involved. On the
other hand, Leybold officials had said that they were having financial difficulties. Hamza
later accepted this latter view.
Ali attended some of these meetings, which helped convince the company
representatives to take the offer seriously. Because the preparation of a bid is time-
consuming and expensive, the Germans wanted assurances that Iraq was serious about
acquiring a foundry.
Iraq received the final bid from the companies several months later. The foundry
would cost about $120 million. For $200 million, the companies would supply a "turn-
key" facility including process buildings and equipment.
In the end, Iraq declined the bid. After Hamza reported back home that the
Leybold and Degussa representatives had seen through Iraq's cover story, his superiors
and colleagues were upset. Confronted with the escalating projected cost of the entire
weaponization project, which was over $1 billion by this time, Saddam Hussein ordered a
review of the entire project, including the bid from Leybold and Degussa. The reviewers,
who included other senior nuclear officials, branded the foundry project "another
Osirak," the French-supplied reactor bombed by Israel in 1981. They said that the
location of Al Atheer would be exposed to Germany and eventually the rest of the world,
because it would not make sense to keep a foundry location secret.
The team sent to Germany suffered reprisals. One of the Iraqi negotiators was
jailed. Partly as a result of this trip, Hamza gave up his position as head of
After 1989, Iraq used the bid as a guideline to procure equipment for a foundry
piecemeal from several countries. It also used the design of the foundry supplied by the
Germans to design its uranium processing facility at Al Atheer.
These case studies provide a window into how proliferant states seek to acquire
sensitive items for nuclear weapons programs. They also highlight the importance of
ensuring adequate and realistic export controls on nuclear and nuclear-related items.
Critical to the successful implementation of export laws and regulations is an
adequately staffed and funded export licensing bureaucracy, backed by a central
government strongly committed to the implementation and enforcement of export
controls. This bureaucracy must acquire a deep understanding of the capabilities and
products of domestic companies and establish an effective working relationship with
Companies for their part need to develop an adequate set of internal policies and
rules that minimize the chance of questionable or illegal exports. They must develop and
maintain a culture supporting effective export controls.
Too often overlooked is the critical role technically competent experts can play in
the success of a proliferant state's nuclear weapons program. The information they may
provide about sensitive technology, key suppliers, "tricks of the trade," or ways to
overcome bottlenecks in a project can determine the success or failure of a nuclear
weapons program. An expert can provide this assistance without leaving home. Export
controls thus need to regulate such transfers of specialized, sensitive information.
Many German companies were highly embarrassed by the revelations about their
exports following the Persian Gulf War. Individuals were arrested, and some were jailed.
This embarrassment led Germany to dramatically tighten its export control system. One
legal reform required companies to create stringent internal export control systems that
would make it significantly harder for company executives to pursue business with
potential or actual nuclear weapons programs.
*Presented at the following conferences: (1) "Non-Proliferation, Nuclear Security and Export Control: Lessons and Challenges," sponsored by ISIS and the Center for Export Control, Moscow, April 19-20, 2001, and (2) "International Seminar on Export Controls and Nuclear Proliferation," sponsored by ISIS and the Export Control Laboratory of the Institute of Physics and Power Engineering, Obninsk, April 23-24, 2001. [Back to the top]
1The Iraqi centrifuge experts were apparently unaware in the late 1980s of the Russian centrifuge program. [Back to the text]
2About $12.5 million, at a 2001 conversion rate.[Back to the text]