Exclusive: Nuclear Terrorism: ‘It's Not Personal; It's Just Business (Part Two of Ten)

by PETER HUESSY March 24, 2010
“It’s not personal; it’s just business.” So said Michael Corleone in the 1972 film The Godfather. It is also what numerous companies, countries, banks and individuals might very well say if confronted with the evidence that they are selling technology to Iran and Iran-front companies that contribute to Tehran's pursuit of ballistic missiles and nuclear weapons. The only tool, which European and American leaders now believe, will help them stall and perhaps reverse Iran's pursuit of the nuclear bomb is what is often referred to as "crippling sanctions." To be effective, a host of countries and companies will both have to be either shamed or fined into stopping their deadly traffic. The sanctions clock is thus in a race with the nuclear technology clock – the former has never been seriously pursued while the latter, firmly in the hands of the revolutionary elements in Iran, is proceeding with a seriousness not matched by the will of the free nations of the world to bring it to a stop.
The following story tells us some of what we need to know. On a fog-shrouded evening within the last year, an Ilyushin-76 North Korean cargo plane left Azerbaijan, flew to the UAE, then on to Bangkok, then to Pyongyang, back to Bangkok to refuel, where it had planned to fly to Sri Lanka, then back to the UAE, to Kiev, to Tehran and then to Montenegro. The cargo? What the Thai authorities found after impounding the plane, was 35 tons of weapons including shoulder-fired rockets, surface to air missiles, and parts to the Tae-podong-2 long-range ballistic missile, falsely labeled "oil drilling spare parts." The various waypoints in the cargo planes itinerary? Well-known trans-shipment points for weapons to terrorists such as Hezbollah and terrorist regimes such as Iran.
The Ilyishin-76 was registered in Georgia, leased to SP Trading Ltd, a shell company registered in New Zealand, which in turn leased the plane to a Honk Kong company, owned by another Hong Kong firm, owned in turn by a third company in the British Virgin Islands. This company, Overseas Cargo FZE, is based in one of the UAE's emirates, is owned by Svetlana Zykova. Some of the weapons may have been produced in China, sold to North Korea wholesale. The plane traveled over Chinese airspace.
In Venezuela, Moscow is assisting in training nuclear scientists and has discussed helping Caracas with the construction of several nuclear power plants, what former Pentagon official Peter Brooks calls "bomb starter kits." Iran is also helping Venezuela with ballistic missiles, (the distance between Caracas and Miami is 1400 miles, the range of the Iranian Shahab missiles). In turn, Venezuela says it will supply Iran with 182,000 barrels of refined gasoline a day, or 66 million barrels annually, (this compares to the 140,000 barrels of refined petroleum a day Iran now imports), in case the U.S. Congress passes legislation to cut-off refined gasoline sales to Iran.
In January, the Associated Press reported that Turkish authorities had seized 22 containers going to Venezuela from Iran labeled "tractor parts." What they contained, according to one Turkish official, "was enough to set up an explosives lab." However, perhaps the most interesting Iranian venture is a "supposed gold mine not far from Angel Falls, in a remote area known as the Roraima Basin. The basin straddles Venezuela's border with neighboring Guyana, where a Canadian company, U308, thinks it has found the geological look-alike" to Canada's Athabasca Basin. The Athabasca, the company's Web site adds, "is the world's largest resource of uranium."
Consider financing. In January 2008, the Bank of International Development opened its doors for business in Caracas. At the top of its list of its directors, all of whom are Iranian, is one Tahmasb Mazaheri, former governor of the central bank of Iran. As it turns out, the bank is a subsidiary of the Export Development Bank of Iran, which in October 2008 was sanctioned by the U.S. Treasury Department for providing "financial services to Iran's Ministry of Defense and Armed Forces Logistics."
According to Susan Purcell in the 1/4/10 Wall Street Journal, "Brazil is drawing closer to Tehran and hopes to expand its $2 billion bilateral trade to $10 billion". The Brazilian President, Lula, insists, "There is no evidence that Iran is developing nuclear weapons." In the last year, Petrobas (Brazil), Sinopec (China), Eni (Italy), Mitsui Petrochemical (Japan) and Statoil (Norway) all made energy deals with Iran each worth more than $10 million.
In addition, Germany subsidizes the Iranian LNG business to the tune of $1 billion, the latest of 1,700 state-subsidized export deals to Iran, which have tripled in value to $6.5 billion from 2000-2007. A Swiss bank, Credit Suisse, was fined by the US Treasury some $536 million for helping clients evade existing sanctions, while UK's Lloyds paid $350 million. Credit Suisse actually published a pamphlet for its Iranian clients on how to evade the sanctions and not trigger U.S. filters.
The U.S. Treasury Under Secretary for Terrorism and Financial Intelligence explained the company's agreement to cooperate with the US illustrated the risk banks have of becoming involved in "Iran's proliferation and terrorist activities." (See especially Sol Sanders, “Follow The Money,” January 25th, 2010, Washington Times and Ben Conery, the Washington Times, December 17th, 2009)
Uranium imports to Iran are banned by the UN Security Council. However, Iran cut a secret deal with Kazakhstan's state run uranium company Kazatomprom to import 1,350 tons of "purified uranium ore" at a cost of $450 million. According to AP, the UN said they had no proof or any information of such a deal; other officials said they were aware of intelligence reports of such a deal but "could not yet draw conclusions." Phone calls to the company offices in Moscow were not answered, says AP.
The U.S. Government has awarded more than $107 billion in contract payments, grants and other benefits over the past decade for perfectly legitimate work to foreign and multinational American companies – but we did so while they were doing business in Iran, despite Washington’s efforts to discourage investment there, records show. That includes nearly $15 billion paid to companies that defied American sanctions law by making large investments that helped Iran develop its vast oil and reserves, according to the March 6, 2010 New York Times.
The Wisconsin project on Nuclear Arms Control says Chinese companies banned from doing business in the US for selling missile technology to Iran continue to do a brisk trade with American companies, including 300 shipments from CPMIEC since 2006, a company first sanctioned in 1991 for selling missile technology to Pakistan. Though according to law enforcement it is tough to determine when company names are changed to evade sanctions, in the latest case the address and phone number of the "new" Shanghai company were identical to CPMIEC.
In 2008, a Chinese company commissioned Heli-Ocean Technology of Taiwan to ship pressure transducers from Switzerland to Iran to assist in the precise measurements needed to produce weapons-grade plutonium. Up to that point, international sanctions and controls including those by the Nuclear Suppliers group had prevented such technology from getting into the hands of the Iranian bomb builders, says Investor's Business Daily, (Jan 11, 2010).
A year ago, apparently the mullahs wanted U.S. dollars to purchase ingredients necessary for ballistic missiles and atomic warheads according to an April 2009, 118-count indictment of the Chinese firm LIMMT, brought by the attorney for the City of New York. Lloyds TSB Group was involved in helping Iran transfer funds to correspondent banks in New York. LIMMT, under sanctions for its role in the spread of WMD since 2006, set up shell companies to sell weapons technology to the Iranian Ministry of Defense says the April 9, 2009 edition of the Wall Street Journal.
On October 4th, 2003, the US and its allies intercepted "The BBC China," a German freighter carrying some 13,000 centrifuges and centrifuge parts from Malaysia for Libya and the latter's nuclear weapons program. The A.Q. Khan network, led by the father of the Pakistani nuclear bomb, was the seller. Qadaffi was the buyer. The capture of the vessel led to the unraveling not only of the Libyan nuclear weapons program, but the entire Khan network.
The Proliferation Security Initiative, now with some 100 nation-members, was established as result of this successful interdiction of the BBC China and the end of the Khan network. Although of great benefit to the counter proliferation efforts of the West, it is unclear whether we can rely solely upon the excellent intelligence and coordinated actions of its member nations to stop Tehran from building nuclear weapons.
What we have seen recently may be the re-emergence of a network or cartel, led by the "triple cactus axis" – North Korea, Venezuela and Iran – grafted onto traditional weapons suppliers China and Russia – to assist Iran in building nuclear bombs and the ballistic missiles with which to deliver them. Too many companies and countries apparently exist for which business trumps security, and cash trumps common sense. One major Italian company President, when asked why his company was helping Iran build tunnels in which to hide nuclear weapons work, exploded: "There is no gas in Switzerland!" If reports are true that another round of UN endrosed sanctions will not affect Tehran's energy sector or its banks, the future "arrows of Allah" may indeed be tipped with nuclear weapons.
[We further explore this danger, and the role of sanctions and China, Russia and North Korea, in Part III, "Arrows of Allah"].
FamilySecurityMatters.org Contributing Editor Peter Huessy is President of GeoStrategic Analysis, a defense consulting company in Potomac, Maryland.

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