UNITED24 - Make a charitable donation in support of Ukraine!

Weapons of Mass Destruction (WMD)

Nuclear Black Markets:
Pakistan, A.Q. Khan, and the Rise of Proliferation Networks
Written Testimony by David Albright,
Institute for Science and International Security (ISIS)
Before the House Committee on Foreign Affairs' Subcommittee on the Middle East and South Asia and the Subcommittee on Terrorism, Nonproliferation, and Trade
June 27, 2007

Abdul Qadeer Khan was finally busted in 2004 after he had done a great deal of damage to U.S. and international security. George Tenet, former Director of the CIA, reportedly described Khan as being "at least as dangerous as Osama bin Laden." [1]

Khan's arrest and confession ended a career in nuclear smuggling that lasted more than 30 years. For most of this time, Khan outfoxed Western intelligence agencies and governments in his effort to secure nuclear weapons for Pakistan. His shift in the mid-1980s to supplying other developing countries with the means to make nuclear weapons remained hidden or ignored for years.

At home, he was a much decorated national hero, receiving most of the public credit for Pakistan getting nuclear weapons. No one in Pakistan was willing to put Khan on trial after his arrest or allow other governments or the International Atomic Energy Agency (IAEA) access to him for questioning about his network's far flung illegal activities. Not surprisingly, President Pervez Musharraf pardoned him after Khan made a public apology. Going against public opinion, however, Musharraf did put Khan under indefinite house arrest.

Despite his arrest, shutting down the Khan network has by no means brought a halt to nuclear smuggling, even by Pakistan. A key European corporate official said that after Khan's arrest in 2004 he saw no change in the pace of Pakistan's illicit orders for its own nuclear weapons program. Mohammed El-Baradei, the Director General of the International Atomic Energy Agency and winner of the Nobel Peace Prize, has warned that the Khan network is just the "tip of the iceberg." There is no reason to believe that illicit nuclear trade and the threat it poses have diminished significantly.

Ambassador Abdul Minty, Deputy Director General of the South African Department of Foreign Affairs, has said that the Khan network operated in 30-40 countries, but few of these affected countries have launched any prosecutions of members of the network. Only a handful of Khan's associates were even arrested. As an early opponent of the apartheid regime in the mid-1970s, Minty was one of the first to wage a campaign against South Africa's buying campaign in Europe to outfit its fledging nuclear weapons program. He knows first hand the difficultly of stopping smuggling rings and now worries that the Khan network or portions of it have reconstituted.

Illicit nuclear trade is the scourge at the heart of virtually all efforts by would-be and several defacto nuclear weapons states to build or expand their nuclear arsenals. We must fear Iran, Pakistan, and North Korea because of their success in nuclear smuggling. What makes this smuggling so difficult to stop is that the business is so lucrative for suppliers, who rarely worry about getting caught or, if caught, about receiving severe punishments.

Despite the seriousness of illicit nuclear trade, it is receiving scant attention in the wake of the Khan network's exposure. Where significant resources have been brought to address the threat of fissile material smuggling in the former Soviet Union and elsewhere, the issue of illicit trade, which involves multiple sources and end-users, has receded from the nonproliferation agenda. I believe that a deeper understanding of how such trade occurs and ways to thwart it are critical and should be considered on a par with fissile material protection and control in achieving threat reduction objectives.

The Development of Illicit Nuclear Trade

Back in the early 1970s, Khan was the first to realize that the means to make nuclear weapons could be purchased piecemeal from Western suppliers. He once joked arrogantly in an on-camera interview with a German journalist, "If a supplier refuses to deliver me equipment I need, I ask my friend Tom, and he will get it for me."[2] Khan understood that through reverse engineering and duplication, he could build himself an entire uranium enrichment facility one piece of centrifuge at a time instead of buying a plant in its entirety.

Khan's accomplices did not come from outlaw states, and were not terrorists. They were engineers--his European university chums-or ambitious businessmen out to get rich quick. Urbane and educated, they stashed millions of dollars in secret bank accounts and in some cases handed down the family business to their children. They also drove the business by always being on the lookout for promising new markets.

With his pioneering methods in the late 1970s, he succeeded in getting Pakistan the bomb in a few short years where others in his country had failed. Prior to Khan, countries typically sought to buy complete nuclear facilities, such as reactors and reprocessing plants, under the guise that they were only for civilian purposes, but in fact they would be for producing and separating plutonium for nuclear weapons. By the mid-1970s, under pressure from first the Ford Administration and then by the Carter Administration, the supplier states stopped selling reprocessing plants to developing countries. European suppliers, under U.S. pressure, cancelled their offers to sell reprocessing plants to Taiwan, Pakistan, and South Korea.

After Khan paved the way in the late 1970s and early 1980s, many countries followed his path. Iraq, Iran, North Korea, Brazil, India, and South Africa all encountered difficulty buying complete nuclear facilities, and thus systematically pursued the illicit route to acquiring high-tech items for their nuclear weapons programs from Western suppliers, many of whom were all too willing to help for a large profit.

The process of illicitly obtaining a clandestine nuclear facility piece-by-piece typically requires a sophisticated procurement network. Based on a series of case studies developed at ISIS, illicit nuclear trade can be seen as involving a set of fairly complicated actions, including:[3]

  • Developing a national illicit procurement infrastructure that can organize and obtain the necessary items for a secret nuclear weapons program;
  • Recruiting or connecting with key foreign players that can sell both legal and illicit items, or can act as agents or trusted sources of critical technology. Such recruitment efforts have involved off-shore agents or companies, middlemen, or nuclear experts, and partial or complete control of foreign companies;
  • Acquiring specialized know-how;
  • Gaining the necessary education and training of program personnel;
  • Developing secret logistics, including banking and financial transfers and transportation;
  • Keeping secret the procurement efforts and the construction of the nuclear facilities;
  • Exploiting weaknesses and loopholes of national export control regulations and laws. Supplier nations too often have weak laws or create loopholes in the laws, and there can be weak coordination within governments to reduce the threat of illicit nuclear trade; and
  • Mastering the creation of false end-user statements.

Khan's Unprecedented Transnational Illicit Supply Organization

Always the pioneer, Khan charted a new pathway to nuclear proliferation in the mid-1980s. He started to sell centrifuges and nuclear weapon designs to other developing countries with nuclear ambitions, starting with Iran. With few moral or political constraints and a touch of ideology, Khan realized that other developing countries would pay handily for sensitive nuclear technology, particularly nuclear equipment he had tested and improved upon in his own nuclear weapons effort. He was helped in realizing this potentially lucrative market by Western company officials who had been key suppliers to Pakistan's nuclear weapons program and saw the prospect of greater profits. He eventually reached the point in the late 1990s of being able to sell a turn-key gas centrifuge plant to Libya. Figure 1 illustrates this approach.

Khan's success can be traced to his creation of international manufacturing and smuggling operations, always seeking businessmen eager to make money and countries with weak export controls. For example, the Khan network organized the acquisition of machine tools in Europe and their shipment to Malaysia for use in making centrifuge components, which were exported to Dubai and then to Libya. Agents of the Khan network arranged for a centrifuge subcomponent to be made by an unsuspecting company in Switzerland using raw materials from Russia or Italy that had been ordered by a trading company in Singapore. The agents then arranged for the subcomponent to be sent from Switzerland to Turkey where other key players in the Khan network integrated it with other parts into a centrifuge component that was sent first to Dubai and then Libya.

One of Khan's most dangerous innovations was his ingenious marketing of sensitive nuclear equipment, materials, and detailed designs and manufacturing instruction booklets. According to a senior IAEA official, Khan developed packages containing key equipment and documentation, often digitized, sufficient to achieve one step in the process of building a nuclear weapon. The packages were offered to prospective customers, who could pick a few or all of them, maximizing Khan's profits and efficiency. However, these packages remain a proliferation threat. It is unknown who has them and who may use them in the future to build nuclear weapons. Although the danger that such detailed designs would emerge on the internet has not been realized, a greater, largely unnoticed danger may have already come to pass. Digitized information critical to developing a nuclear weapon program may be in the hands of unknown smugglers who ironically would jealously protect this information so that they can sell them for maximum profit, possibly to our enemies.

The Khan network has highlighted the danger posed by transnational nuclear smuggling rings to U.S. and international security. Yet the conditions that gave rise to the Khan network and illicit nuclear trade in general have not receded. There remains a global black market in nuclear weapons technology that is larger, more dangerous and more difficult to stop than is currently understood. Similar networks may already exist or may emerge in the coming years.

Current Situation

Some countries, such as Brazil and South Africa, dropped out of the illicit trade business, as they abandoned their secret nuclear weapons efforts around 1990. But others continue. I have already mentioned Pakistan. Iran continues to seek items illicitly overseas for its gas centrifuge program using trading companies or phony companies that arise from a long-standing, nationally directed smuggling operation. India pursues a middle way between a legal approach and a full-blown illegal operation in its effort to obtain critical items for its nuclear weapons program. North Korea has long pursued items for its own nuclear program illegally and is suspected of acting as an intermediary in procuring key items for the nuclear programs of other states. Concern remains that North Korea may seek to sell off its nuclear expertise, materials, and equipment to others.

Nuclear smuggling has developed into a sophisticated operation over the last 30 years. It involves phony front companies, ingenious marketing strategies, and a continuous search for loopholes in laws prohibiting or controlling the export of sensitive technology to other states. Such "tricks of the trade" help nuclear smugglers avoid detection, maintain their flow of revenue and, not coincidently, make the world a far more dangerous place in which to live.

Smugglers continue to corrupt seemingly incorruptible businessmen, particularly in developing countries where governments are unable to monitor or control their activities. Illegal businesses can be hidden inside legitimate ones and the enormous growth of global trade provides the perfect cover to hide the black market's transnational transactions.

Some of the current methods of illicit procurement include:

  • Front companies or state procurement agencies falsely acting as a private company to get around other countries' laws or regulations banning the sale of direct or dual use nuclear items to a proliferant state's secret nuclear or military programs;
  • Domestic and overseas trading companies;
  • Ostensibly legitimate suppliers, increasingly located in developing countries, that provide dual-use items and function as buying agents of other items for the proliferant state; and
  • Transnational, illicit brokers, which specialize in acquiring and selling sensitive equipment through circuitous routes to proliferant states' military and nuclear programs.

Easing the task of illicit procurement is that technology continues to improve and spread throughout the world, making it easier to obtain the materials, equipment and know-how to make nuclear weapons. More countries, many of which are still considered developing nations, have sophisticated manufacturing and machine tool capabilities that can be exploited to make items for nuclear weapons. In addition, detailed classified information about nuclear weapons and how to make them continues to leak. Sensitive information has spread to shady entrepreneurs determined to make a profit. Experts with experience in producing fissile material and nuclear weapons are now spread throughout the world, potentially providing a pool of expertise for terrorist efforts to build nuclear weapons. New technologies could also emerge that would simplify the task of making fissile material or producing nuclear weapons.

John M. McConnell, Director National Intelligence, testified before the Senate Armed Service Committee on February 27, 2007: "The time when only a few states had access to the most dangerous technologies has been over for many years. Dual-use technologies circulate easily in our globalized economy, as do the scientific personnel who design and use them. As a consequence, it is more difficult for us to track efforts to acquire, for nefarious purposes, these widely available components and technologies."[4]

"We are watching several states for signs of nuclear weapons aspirations, in part because of reporting of past contact with A. Q. Khan and his network when it was active. We also are concerned about rogue or criminal elements willing to supply materials and technology--alone or with a network-- without their government's knowledge."

There is a growing danger that terrorist groups will soon be able to build their own atomic bombs. A secret U.S. government study in the 1960s demonstrated that two newly minted physicists could design a crude weapon. Their inability to make the components of a nuclear weapon, however, dampened concern that a terrorist group could make a crude nuclear weapon, particularly the more complicated implosion-type nuclear device. Because of the unbridled sales of technology and know-how by black marketers, that conclusion must now be reevaluated. Terrorists may be able to buy detailed nuclear weapon designs from black marketers and find it far easier to build a much wider range of crude atomic bombs.

Khan demonstrated that it is possible for a shady network of scientists, industrialists, and businessmen to sell turn-key nuclear weapons production facilities. An undeveloped country could save years in its quest for nuclear weapons. In the future, hostile groups in failed states could buy the facilities to make nuclear explosive material and fashion a crude atomic bomb. According to Tenet, "In the current marketplace, if you have a hundred million dollars, you can be your own nuclear power."[5]

Policy Challenges and Recommendations

The following is a summary of several of the major challenges governments and international organizations face in addressing illicit trade:

PSI is not a panacea: The Bush Administration has placed too much reliance on the Proliferation Security Initiative (PSI). Lack of actionable intelligence has severely undercut the usefulness of the PSI. International legal problems in intercepting ships on the high seas also inhibit its practical application. For example, the UN Security Council resolution on North Korea highlighted the risk of a military confrontation breaking out if a North Korean ship is intercepted by the U.S. Navy, undermining support for one of the main stated rationales of PSI.

Illicit nuclear trade is pervasive: Governments and publics have been unable or unwilling to recognize the pervasiveness of illicit nuclear trade. Illicit trade is conducted by U.S. enemies, such as Iran and North Korea, but also by U.S. allies such as India and Pakistan. Many newly developing countries resent the controls of industrialized countries and resist efforts to crack down on smuggling operations in their own countries. Although worldwide intelligence cooperation is improving, more effective coordination is needed to uncover smuggling rings

Prosecutorial Ineffectiveness: National prosecutions have been reluctant to work together to bring individuals to justice that are part of transnational smuggling rings. International cooperation among prosecutors and law enforcement officials is critical in investigating illicit trade, developing evidence, and convicting smugglers. Yet, the prosecutions of key figures of the Khan network have shown that such cooperation occurs far too infrequently. Remarkably, illegally helping outfit a nation with nuclear weapons is not treated as a crime against humanity, even though the outcome could be the slaughter of hundreds of thousands of innocent people in a nuclear explosion.

Need to strengthen the first line of defense--the private sector: Companies are the first line of defense against nuclear smuggling. Yet, many companies are not doing enough to thwart such sales or alert authorities about suspicious trade. The ethic of greed rather than non-proliferation remains dominant in most companies. In addition, governments and their intelligence agencies need to cooperate more with businesses in figuring out and thwarting the elaborate strategies of smugglers to obtain nuclear and nuclear-related goods.

UNSC Resolution 1540 is poorly implemented: UN Security Council Resolution 1540 is an important resolution that has created a requirement for all countries to create export control laws. However, the export control requirements in the resolution remain poorly implemented.

Loopholes in Export Controls: Generic problems, such as uneven application and poor enforcement, undermine the effectiveness of national and international export controls, particularly "catch-all" clauses. Current export controls have a major loophole that allows trading companies to buy many dual-use items from legitimate suppliers using a false but believable end-use. Then, without the knowledge of the suppliers, these companies send the items either directly or increasingly through other trading companies to secret nuclear programs. Few companies have the resources or desire to check all these trading companies. Even fewer are willing to take the step of banning all commerce with trading companies, probably the only step that can plug this loophole under existing national and international arrangements.

Need to control sensitive information better: Countries control sensitive nuclear information differently. Highlighting this concern, we at ISIS saw first hand the inadvertent leakage of sensitive gas centrifuge design information from India that would be far better protected in Europe and the United States. There is a need to reach an international agreement with key countries about the exact information that needs to be kept secret and the level and type of protection this information requires. In addition, the United States and its allies should expand their efforts to retrieve sensitive information in the hands of illicit trade networks.

Lack of empowerment of the IAEA: The IAEA needs a mandate to track illicit nuclear trade. Because of its investigations of Iran, Libya, and the Khan network, it has developed extensive expertise in tracking nuclear smuggling. Because of the growth of the nuclear black market, the IAEA has established an elite investigative unit inside the IAEA. Its purpose is to develop ways to better detect black marketers and their customers. However, this effort is not integrated into the IAEA's normal safeguards operation. If integrated into the safeguards program of the IAEA, this effort could dramatically increase the chances of detecting and thwarting illicit nuclear trade, while improving the ability of the IAEA to detect undeclared nuclear facilities and materials.


The arrest of Khan and his lieutenants should have been a call to arms. Instead, the response has been tepid and is in disarray. Ambassador Minty worries that the lack of action against members of the Khan network shows a lack of commitment to stopping the spread of nuclear weapons. Since the Khan network was exposed, a number of reforms have taken place. But these steps have not confronted the root of the problem. Illicit nuclear trade remains the well-trodden path to nuclear weapons for both today's enemies and allies. Yet, few are even aware that this problem exists, let alone committed to solving it.

[1] Douglas Jehl, "CIA Says Pakistanis Gave Iran Nuclear Aid," The New York Times, November 24, 2004.

[2] Interview with Egmont Koch, August 1998.

[3] For more information on some of these case studies and the characteristics of illicit nuclear trade, see www.exportcontrols.org.

[4] Statement of John M. McConnell Director, National Intelligence

Committee on Senate Armed Services, February 27, 2007

[5] George Tenet, At the Center of the Storm, (New York: HarpersCollins, 2007), p. 287.

Join the GlobalSecurity.org mailing list