Iraq Survey Group Final Report
Procurement Suppliers in the Transition and Miscalculation Phases, 1998 to 2003
For the final two phases in Saddam’s Regime, “Transition” and “Miscalculation,” ISG has identified eight new procurement partners. From the supply side, companies from Russia, North Korea, Poland, India, Belarus, Taiwan, and Egypt have become key trading partners in military or dual-use goods. Like Syria and Turkey in earlier phases, Yemen has become a transshipment facilitator for Saddam’s procurement programs.
- This increase continues the trend observed in the previous phase. This increasing trend most likely occurred because of a lack of international condemnation, poor oversight of supplying companies by their governments, poor export controls, and the high profits to be had from Saddam’s illicit revenue.
- ISG also observes an interesting trend over time as Saddam’s international supporters shifted in the 1998 time-period from former-Soviet and Arab states to some of the world’s leading powers, including members of the UNSC.
Although the Russian Government has denied being involved in supplying weapons to Iraq, there is a significant amount of captured documentation showing contracts between Iraq and Russian companies. In fact, because Russian companies offered so many military items, the MIC and a Russian general named Anatoliy Ivanovich Makros established a joint front company called ARMOS in 1998 just to handle the large volume of Russian business (see also the ARMOS section).The Russian-Iraqi trade was also assisted through bribes to Russian customs officials, according to a former Iraqi diplomat.
This former Iraqi diplomat further described how Iraq’s embassy personnel smuggled illicit goods on weekly charter flights from Moscow, through Damascus, to Baghdad from 2001 until OIF. These prohibited goods included high-technology military items such as radar jammers, global positioning system jammers, night-vision devices, and small missile components. Some flights were not inspected, even though they were reported to the UN. Cash and equipment were reportedly also smuggled into or out of Iraq in bimonthly diplomatic courier runs to Moscow.
In early 2003, the Russian company, Rosoboronexport, offered to sell and deliver several weapons systems to Iraq. Rosoboronexport had Igla-S shoulder-fired SAMs and Kornet anti-tank missiles available for immediate sale to Iraq, and was prepared to sell larger medium-to-long range advanced (SA-11 and SA-15) air defense systems and T-90 tanks, according to the trip report and a high-level source in the former Iraqi Government.
- ISG has recovered documents detailing two trips related to these sales. The first round of negotiations with Rosoboronexport and other Russian companies occurred from 27 January 2003 to 6 February 2003, while the second trip took place from 12 February 2003 until 21 February 2003.
- The Iraqi delegation requested air defense equipment, antitank weapons, and night vision devices. Iraq also desired to upgrade existing air defense equipment (SA-6 and SA-8) and radars.
- According to the trip report, four contracts were signed between Rosoboronexport and four Iraqi companies: Hittin, Al-Karamah, Al-Milad, and Al ‘Ubur.
According to Iraqi documents, Rosoboronexport executives demanded that they be permitted to ship the weapons through a third country with false end-user certificates. The Russian side emphasized that Rosoboronexport is a government agency and it cannot be involved with directly supplying Iraq with weapons. Other Russian officials offered to send equipment and technical experts to Iraq under the cover of OFF contracts. Before returning to Baghdad, the Iraqi delegation stopped in Damascus to obtain false end-user certificates from the Syrian Ministry of Defense for the first items to be shipped, the MANPADS and antitank missiles.
- Although some of the equipment was shipped, we do not know how much of the equipment was actually received in Iraq before Operation Iraqi Freedom.
- ISG has recovered documents detailing two trips related to these sales. The first round of negotiations with Rosoboronexport and other Russian companies occurred from 27 January 2003 to 6 February 2003, while the second trip took place from 12 February 2003 until 21 February 2003.
- The Iraqi delegation requested air defense equipment, anti-tank weapons, and night-vision devices. Iraq also desired to upgrade existing air defense equipment (SA-6 and SA-8) and radars.
- According to the trip report, four contracts were signed between Rosoboronexport and four Iraqi companies: Hutteen, Al-Karamah, Al-Milad, and Al-‘Abur.
Many of the contracts signed with Russian companies, were for technical assistance, according to an Iraqi official with direct access to the information. These offers includedcontracts with TECHNOMASH employees for technical assistance in developing guidance and control systems, aerodynamic structures, and a test bench for missile engines. Iraq also signed a contract for the transfer of technology for the manufacture of laser rods to be used in laser range finders. The Mansur Factory in Iraq was to be the main recipient of this technology. Other contracts with Russian companies are detailed in the following:
- The Russian Company, Systemtech was run by a Russian missile scientist named Alexander Degtyarev. Most of the dealings with this company were connected with missile guidance and control, and contracts were valued at around $20 million.
- According to captured documents, in November 2002, the Umm Al-Ma’arik General Company negotiated two draft contracts with the Russian company Uliss, in support of the “Saddam The Lion” Tank Project. They notified the Commercial Directorate of the MIC that contract number 2002/AM/8 had been concluded. On 10 February 2003, MIC Deputy Director Daghir Muhammad Mahmud approved the contract.
- According to captured documents, four contracts with Russian firms were signed in December 2001. These are detailed in figure 61. A 25 January 2003 letter from the MIC front company Al-Basha’ir complained to the Minister of the MIC that these deliveries had not been completed as of January 2003.
From 1999 through 2002, Iraq pursued an illicit procurement relationship with North Korea for military equipment and long-range missile technology. The quantity and type of contracts entered between North Korea and Iraq clearly demonstrates Saddam’s intent to rebuild his conventional military force, missile-delivery system capabilities, and indigenous missile production capacity. There is no evidence, however, to confirm that North Korea delivered longer-range missiles, such as Scud or Scud-variants.
North Korean and Iraqi procurement relations began in 1999 when the MIC requested permission from the Presidential Secretary to initiate negotiations with North Korea. In a recovered memo the Secretary approved the plan and directed the MIC to coordinate negotiations with both the IIS and MoD. Recovered documents further suggest that orders for negotiations were also passed from Saddam directly to the Technology Transfer Office at the IIS. Related documents from this time period reveal that the North Koreans understood the limitations imposed by the UN but were willing “to cooperate with Iraq on the items it specified.”
The Director of the MIC formally invited a North Korean delegation to visit Iraq in late 1999. The Director of North Korea’s Defense Industry Department of the Korean Worker’s Party eventually visited Baghdad in October 2000, working through a Jordanian intermediary. Multiple sources suggest Iraq’s initial procurement goal with North Korea was to obtain long-range missile technology.
- August 1999 correspondence between the IIS Director and a North Korean company called the Changwang Group (variant Chang Kwang or Chang Gwang), a known company associated with weapons-related sales, discussed the supply of “technology for SSMs with a range of 1,300 km and land-to-sea missiles with a range of 300 km.” The Changwang Group proposed a multitiered sale of weapons and equipment and “special technology” for the manufacture and upgrade of jamming systems, air defense radar, early warning radars, and the Volga and SAM-2 missiles.
- In a recovered transcript of a telephone conversation prior to the October 2000 meeting, senior officials at the MIC and the IIS noted topics for discussion with the North Korean delegation would be the development of SSMs. The Iraqi delegation at the meeting included SSM Commander Najam Abd’Allah Mohammad. Ensuing discussions during the meeting focused on the transfer of military equipment including a short-range “Tochka-like” ballistic missile that the North Korean firm said could be purchased from Russia.
- A captured MoD memo dated 12 October 2000 summarized the October 2000 meetings, stating that SSM Commander Najam Abd’ Allah Mohammad had discussed Tochka, Scud, and No Dong missiles with a range of 1,500 km.
- Muzahim Sa’b Hasan al-Nasiri, a Senior MIC Deputy and a main player in procurement negotiations with North Korea, in interviews has adamantly denied the discussion of longer-range missiles with the North Koreans.
Documentary evidence shows that, by mid-2001, Iraq had signed $10 million of military- related procurement contracts with North Korean companies.
- The contracts from late 2000 included a deal with the Al-Harith Company, believed to be associated with Iraqi air defense development, and the Al-Karamah State Establishment, known to procure technology for missile guidance development, to improve Iraqi SSM guidance and control technology, and to upgrade the Iraqi Volga missile homing head by adding infrared sensors.
- The missile contracts in 2001 were designed to improve Iraqi missile systems using North Korean parts. These contracts were signed with the Al-Kamarah State Establishment, the Al-Harith Company, and the Hutteen Company, which is associated with the development of Iraqi heavy weaponry. Fifteen percent of this contract was reportedly completed and was paid for through a Syrian company to the North Korean Embassy in Damascus.
- According to documentary evidence, Muzahim Sa’b Hasan al-Tikriti visited North Korea in September 2001 to discuss procurement projects for the Al-Samud missile control system, radio relays for communications, and improvements to Iraqi antiaircraft systems. The trip resulted in four signed contracts with the Al-Karamah State Establishment for potentiometers (missile guidance and control-related technology), missile prelaunch alignment equipment, batteries, and test stands for servos and jet vanes. Ultimately, North Korea backed away from these agreements, informing the Iraqis that they would study the issue. ISG judges that this equipment was intended for use in the al Samud-2 ballistic missile program.
As the Iraqi-North Korean procurement relationship matured, it broadened from missile–related projects to a range of other prohibited military equipment and manufacturing technologies. Recovered documents from November 2001 describe numerous contracts between Hesong Trading Corporation, based in Pyongyang, and the Al-Karamah, Al-Harith, and Hutten Companies. These contracts included deals for:
- Ammunition, communications, potentiometers for short-range surface-to-surface missiles, powder for ammunition, and light naval boats.
- Laser range finders and fire-control systems for artillery, tank laser range finders, and thermal image survey systems.
This series of contracts also specified numerous technology transfers from North Korea to Iraq to allow Saddam to design and implement laser head riding for anti-tank missile applications and to manufacture:
- PG-7 rockets (an Egyptian variant of the Russian RPG-7).
- Night-vision devices.
- Six-barrel 30-mm guns.
- Laser rangefinders for guns.
- Thermo image survey systems and rifling tools for 122-mm and 155-mm barrels.
- Ammunition, jigs, fixtures, dies, parts, liquid-propellant rocket structures, liquid propellant rocket aerodynamics computations, guidance, and control systems.
As with its other suppliers, Iraq used its accustomed methods to obtain illicit goods from North Korea. In short, North Korea’s illicit procurement relationship with Iraq was concealed behind a network of front companies, trade intermediaries, and diplomatic communications.
- The North Korean side of the relationship was represented by the Defense Industry Department of the Korean Worker’s Party through the Changwang Trading Company. The Tosong Technology Trading Corporation and Hesong Company were also used to broker the negotiations.
- The Syrian-based SES International was used as an intermediary in this trading process. Many transactions from North Korea would be orchestrated by the North Korean embassy in Damascus, which would then endorse the shipment to an Iraqi agent in Syria for transshipment to Iraq.
- These intermediaries worked on a commission basis and assisted in facilitating delivery into Iraq for profit.
- Recovered documentation concerning the North Korean negotiations stated that all communications should be sent via the Iraqi embassy in Damascus. Secure communications also took place through the Economic Section of the North Korean Embassy in Damascus.
Transportation Routes From North Korea to Iraq
ISG has found evidence suggesting that North Korea planned to pass goods through Syria to Iraq. Captured documents reveal North Korean ships planned to use Syrian ports to deliver goods destined for Iraq. Occasionally, North Korea would insist on the use of aircraft to Syria to expedite delivery and reduce the risk of discovery of the illicit goods.
Payment Methods for North Korean Contracts
Recovered contracts and records of negotiations identify the use of financial routing via Beirut, Lebanon and Damascus, Syria to conceal Iraq as the end user of the goods. A recovered letter from the Al-Basha’ir to the Tosong Technology Trading Corporation, dated 2 March 2002 dictated that ‘contracts’ would be financed according to the Iraqi-Syrian Protocol. This bilateral trade Protocol used both cash and - credit to pay for commodities via Syria.
A Polish based front company engaged in illicit trade with Iraq played a limited, but important role in Saddam’s efforts to develop Iraq’s missile programs. Equipment supplied by this Polish based front company between 2001 and 2003, such as SA-2 (surface-to-air) Volga missile engines and guidance systems, were necessary for the al Samud-2 missile program.
Iraq acquired Polish SA-2 Volga missile engines for their al Samud II missiles. The Volga engines were the main propulsion system used in the liquid-propellant al Samud II missile, a weapon that exceeded the 150-km-range limit established by UNSCR 687 (1991). While there is some confusion regarding the exact number of Volga missile engines procured by Iraq, ISG estimates that Iraq obtained about 280 missile engines from Poland during this period. ISG has found no evidence that the engines were ever fitted to active missile systems.
- Iraq signed four contracts to acquire Volga SA-2 engines between January 2001 and August 2002.
- These engines were to be procured for the Al-Karamah State Establishment, through the ARMOS Trading Company (an Iraqi-Russian procurement organ) and a company located in Poland called Ewex, a front company supported by the IIS.
- Iraq paid approximately $1.3 million for 96 engines.
- Ewex used Polish scrap dealers and middlemen to gather Volga rocket components from scrap yards in Poland operated by the Polish military property agency.
Former Regime officials corroborate that ARMOS also signed a contract or contracts with the Iraqis to obtain Volga engines from individuals in Poland. The Volga engines were removed from missiles that had been decommissioned. The Volga missile engine procurement was entirely controlled by the IIS, according to debriefs of high-level former Regime officials.
- The MIC was also involved in contracting with Ewex for Volga engines. A high-level official stated that Iraq purchased approximately 200 Volga engines. Many of the Volga engines acquired in this way arrived damaged.
As mentioned in the Higher Education section, Amir Ibrahim Jasim al-Tikriti, a doctorate student in Poland linked to the IIS and SSO, facilitated the procurement of at least 50 more SA-2 engines and as many gyroscopes, missile sensors and acid batteries for missiles from a Polish front company called Ewex in early 2003. Al-Tikriti was the cofounder of Ewex and was supervised by Husan ‘Abd al-Latif, an IIS officer working with the Energy Department of the IIS Scientific and Technical Information Office in Baghdad.
Methods Used To Hide Transshipment to Iraq
According to documentary evidence, dated Jun 2001, the Iraqi Government and the Ewex Company attempted to conceal the illicit procurement of missile engines from the international community. According to open sources, Polish authorities arrested Ewex company officials in 2003 on suspicion of illegal arms deliveries to Baghdad. Documents recovered by Polish police included Ewex contracts with the well-known Iraqi front company called Al-Bashair, shipping documents, extracts from the Polish trade register, payment orders, and letters from Ewex directly to its Iraqi business partners.
A high-level former Regime official stated that MIC Special Office Director Hadi Tarish Zabun, IIS Scientific and Technical Information Branch Officer Hadi ‘Awda Sabhan, and Al-Karamah State Establishment Director General Dr. Muzhir Sadiq Saba’ al-Tamimi met to discuss how to conceal this particular illicit transaction from the UN. Al-Tamimi had previously led the Iraqi long-range missile program. The documents regarding the deal were eventually transferred for safekeeping to Ayyab Qattan Talib, an officer from the IIS M23 directorate that oversees military industry security.
The parties to the transshipment of Volga missiles included personnel from the Iraqi embassy in Warsaw, Iraqi intelligence officers, and Iraqi businessmen. These parties clandestinely transported Volga missile engines through Syria, according to a high-level official in the former Regime. Ewex representative, Amir Ibrahim Jasim al-Tikriti during April 2002, requested an extension of the shipping time for illicit transfers because shipments would have had to proceed via many channels, particularly by circuitous transport routes, in order to conceal the contents from prying UN inspectors or foreign intelligence agencies. In 2002, three shipments of engines and spare parts were transferred; the third shipment arrived in Tartus, Syria, and was moved to Baghdad by the Al-Karamah State Establishment. The third shipment contained 32 Volga engines and 750 related materials. In addition, the MIC contracted to deliver Volga engines to Iraq, from Poland, via Jordan as insurance against the interdiction of Syria-bound shipments. According to multiple sources, Polish missile parts also entered Iraq at the Al-Walid border crossing (see also the border crossings map).
Polish-Iraqi Procurement Financial Flows
Numerous contracts, memoranda, and references detail the transfer of payments for the Volga missiles. In one contract, original date unknown, Ewex transferred $500,080 for the purchase of an unspecified number of Volga missile engines, which were delivered in June 2001. Raja Hasan Al-Khazraji, General Manager of the Commercial Affairs Department, wrote requesting the release of funds for final contractual payments. There are also letters written by Dr. Zabun to settle payment without deductions for damaged materials on condition that compensation will be included in future contracts. A contract also stipulates that ARMOS Trading Company received a commission of $3,750.
Dr. al-Tamimi, wrote a memorandum concerning contract number 2/2001, in which he requests that the MIC transfer $315, 840, equaling 25 percent of the total contract price for 96 engines to account number 500090, National Bank of Jordan, Special Banking Section. The authorized person in control of the account was Abd al-Jabbar Jadi ‘Umar. There is also a MIC memorandum authorizing the payment of $200,690 to Ewex via account number 501133/12, which equals 25 percent of the total contract price for the 61 engines received at Syrian ports. Dr. Zabun approved a contract dated July 2001 with Ewex for 96 engines with the same value and terms as a previous contract for 38 engines.
Other correspondence exists between the Commercial Affairs Department General Manager, Raja Hasan Ali, the MIC and Al-Karamah discussing charging late penalties and compensation for damaged items. Further correspondence rejects the charges and authorizes full payment of the contracted amount of $1,263,360 million to Ewex for Volga engines shipped through Syria. Bank accounts used at the Jordan National Bank (Special Banking) to pay for SA-2 Volga missile imports up until at least June 2001, include 501083/14 and 12429.
ISG judges that the Government of India was not directly involved in supplying Iraq with military or dual-use items, but several Indian companies were active in illicit trade, particularly, NEC Engineering Pvt. Ltd. When Indian authorities discovered the company’s activities in 2001, New Delhi launched an investigation to stop the NEC’s trade with the Iraqi Regime. Despite the investigation, NEC continued to sell prohibited materials to Iraq and looked for ways to conceal its activities.
NEC was involved in numerous business agreements with Iraq that were contracted outside the UN OFF program. Several of these contracts with Iraq violated UN sanctions because the material or technology was in direct support of a military system, such as the Iraqi missile program.
Al-Najah was the primary front company in Iraq used by the MIC manufacturing company, Al-Rashid, to import from NEC. In March 2002, Muntasir ‘Awni, Managing Director of Al-Najah Company, submitted several inquiries to Siddharth Hans. Hans has been identified as holding positions with companies in India, including director of NEC Chemicals and, at other times, several positions with NEC Engineers Pvt, Ltd. In each position, Hans has supported only Iraqi projects and inquiries for clients under Al-Najah. Among other things, the inquiries covered:
- A Teflon coating machine.
- Laser range-finding equipment.
- Precision machinery.
- Block and cylinder material.
Prior to the 1991 Gulf war, Iraq had experimented with the use of carbon fibers to provide high strength and light weight for some of its missile components. Al-Rashid was instrumental in missile development prior to the Gulf war and in the years that followed. In May of 2000 NEC contracted with the Al-Rashid General, Co., to provide 40 kg of “Grade A” carbon fibers. Carbon fibers, while dual-use material, have extensive use in missiles and nuclear equipment. Figure 62 is an excerpt from captured documents regarding this contract.
NEC engineers provided Iraq with crucial infrastructure development for its missile program and other programs. For example, NEC designed and built an ammonium perchlorate (AP) production plant for Iraq. AP is an essential ingredient for modern solid propellant production. It is the oxidizer for a solid propellant and constitutes over half of the propellant’s weight.
- NEC imported solid-propellant ingredients for Iraqi surface-to-surface missiles, in addition to other materials.
The excerpt from captured documents in figure 63 details some of the contracts undertaken between the Iraqi front company, Al-Basha’ir, with India’s NEC, on behalf of MIC companies Al-Rashid and 7 Nissan General Company.
When the Indian Government became aware of NEC’s activities in 2001, New Delhi launched an investigation regarding the company’s illicit business with Iraq. Both Hans Raj Shiv and his son Siddharth Hans were implicated in the investigation, which expanded overseas by September 2002. The Indian Government impounded the passports of NEC representatives. Siddharth Hans was taken into Indian custody when he returned to India in mid-June 2003. Pending further court hearings, Siddharth was released from custody in early July 2003.
- In August 2002, NEC was considering changing the name on Iraqi contracts from NEC to Nippon Industrial Equipment or Euro Projects International Limited. These changes were probably in reaction to the Indian Government’s ongoing investigation of NEC.
Other Indian companies involved in supplying Iraq with prohibited items include the Arab Scientific Bureau (ASB) and Inaya Trading. ASB and Inaya Trading were involved in the procurement of chemicals associated with liquid-propellant missile systems and with chemical production and handling equipment. According to documents recovered during an ISG investigation of the ASB, there were numerous inquiries from Iraq and corresponding offers to supply liquid-propellant missile-associated components. Solicited or offered items included:
- Some 50 to 100 tons of 98 to 99 percent nitric acid.
- Hydrofluoric acid.
- One hundred nitric acid pumps for 99.99 percent nitric acid.
- Unsymmetric dimethylhydrazine (UDMH), a liquid fuel use for improved performance in liquid rocket propellants.
- Diethylene triamine (DETA), a liquid fuel used in liquid propellant missiles.
- Other chemicals sought by Iraq included hydrazine, hydrogen peroxide, xylidene, and triethylamine, which are chemicals commonly used for fuels and oxidizers by liquid-propellant missiles.
Belarus was the largest supplier of sophisticated high-technology conventional weapons to Iraq from 2001 until the fall of the Regime. Complicity in this illicit trade was exhibited at the highest levels of the Belarusian Government. Belarusian state establishments and companies implemented cooperation agreements with Iraq to transfer technology, equipment, and expertise to the embargoed Regime.
- The Iraqis constantly worked to improve the illicit trade relationship with Belarus despite the absence of a formal trade agreement between the two countries. The illicit trade relationship allowed Iraq to obtain high-technology military equipment. Belarus was relatively advanced in military research and development including air defense and electronic warfare.
- Belarus acquired hard currency and a market for its post-Soviet defense industry, according to a detainee.
- The intelligence services of both countries helped to facilitate this trade, according to a cooperative source with good access. A detainee debrief affirms that Belarusian aid in radars, laser technology, metallurgy, and electronic warfare systems were the key areas of cooperation.
In 2001 and 2002, two MIC delegations visited Belarus to discuss Belarusian assistance in upgrading Iraqi defense capabilities, particularly air defense and electronic warfare systems. Former MIC Director, Huwaysh, led the Iraqi delegations. The Iraqi delegations also included the former Director of Al-Kindi Dr Sa’ad Da’ud Shamma’, the former Director of the Al-Milad air defense company, Brigadier General Husayn, and several high-ranking Iraqi air defense officials. Huwaysh, however, was the overall manager of the relationship between Iraq (especially MIC) and Belarus according to a detainee debrief.
A former high-ranking Iraqi government official says that diplomatic relations between Belarus and Iraq were so strong that an Iraqi-Belarusian Joint Committee was formed to promote illicit trade. The committee was cochaired by the Iraqi Minister of Finance, Hikmat Mizban Ibrahim al-Azzawi, and Vladimir Zamitalin of the Belarusian Presidential Office. Indeed, the President of Belarus, Aleksandr Lukashenko, consistently supported the political positions and defense needs of Iraq. In a September 2002 meeting, President Lukashenko met MIC and MFA officials to discuss military cooperation. During the meeting, President Lukashenko expressed his willingness to support Iraq and to send air defense experts to help Iraq fight the United States.
Key Belarusian Individuals Linked to Illicit Trade With Iraq
The following Belarusian individuals were instrumental in driving forward the illicit trade with Iraq:
- Vladimir Zamitalin. Ex-deputy to the head of the Presidential Bureau and former head of the Belarusian side of the combined Iraqi-Belarusian Committee for Commercial and Economic Cooperation. He was in charge of the special military cooperation with Iraq and functioned as a secret envoy between President Lukashenko and Saddam.
- Leonid Kozek. Ex-deputy to the head of the Presidential Bureau and member of the Iraqi-Belarusian cooperation committee.
- Nikolai Ivanenko. Current deputy to the head of the Presidential Bureau and last head of the Belarusian side of the combined Iraqi-Belarusian committee for economic cooperation. He had a role in the special military cooperation with Iraq, and is a relative of President Lukashenko. He visited Iraq twice and met with Saddam, carrying a written letter to Saddam from President Lukashenko.
- Vitali Kharlap. Belarusian Minister of Industry.
- Professor Kandrinko. Director of the communications department at a Belarusian concern called AGAT. He played a successful role in negotiations with Salah Al-Din state company and concluded many contracts concerning the manufacture of communication sets.
- Professor Kloshko. A scientist who led the department of telemetric systems for surface-to-surface missiles and had many contracts with the MIC.
- General Petr Rokoshevskiy. Deputy for arming and training in the Belarusian MoD. Rokoshevskiy had a role in activating military cooperation with Iraq. This involved working with the Iraqi MoD, SRG, and the MIC for supplying rocket propelled grenades (RPG-7), munitions, and laser-directed Konkurs antitank rounds. He played a major role in signing a contract with the Iraqi MoD and the MIC for training 20 officer engineers of the SRG in using the S-300 PMU-1 (SA-20) air defense system at the Belarusian military academy. Rokoshevskiy was also involved in signing contracts for supplying engines for T-72 and T-55 tanks, MiG-29 fighter jets, and BMP-1 mechanized infantry fighting vehicles.
Materials, Equipment and Services Provided by Belarus
Belarus exported a range of military goods to Iraq. This illicit trade was organized and executed by a number of Belarusian companies. Captured documents reveal that in December 2002, Balmorals Ventures Ltd.implemented contract 148/2002 with the Al-Kindi General Company to deliver electronic components to the value of $70,367. This price included the cost of delivery to Syria and onward shipment to Baghdad. The goods could have been components for a radar jamming system.
Viktor Shevtsov was the director of Infobank and of another Belarusian company involved in illicit trade with Iraq named BelarusianMetalEnergo (BME). Infobank helped finance deals with Iraq and, according to Huwaysh, may have been run by Belarusian intelligence. BME was involved in supplying castings and machinery for T-72 tanks, and modernizing SA-2 air defense missiles and associated radar systems. BME had many multimillion dollar contracts with Iraq and worked closely with Infobank to finance illicit trade. Shevtsov organized, at his own personal expense, trips on-board Belarusian airlines from Minsk to Baghdad. These flights transported experts and directors of Belarusian companies connected to Iraq as well as technical and military equipment destined for Iraqi ministries.
Alexander Degtyarev was also a major player in the illicit trade business with Iraq.Degtyarev was a Russian scientist whose specialty was missile guidance and control. Shevtsov introduced Degtyarev to the Iraqi MIC. Degtyarev owned the Belarusian companies named Systemtech and ElectricGazCom (EGC), which had contracts with Infobank and Iraq to supply radars plus control and guidance systems for SA-2 missiles. The latter equipment was transported through Syria and paid for through Syrian banking institutions. Degtyarev was a regular visitor to Iraq, traveling there every two weeks according to a high-level MIC official and a mid-level former Iraqi civil servant with direct access to the information.
A high-level MIC official stated that EGC signed contracts with the Iraqi Al-Karamah State Establishment to build a facility for the manufacturing and testing of control and guidance systems for surface-to-surface missiles such as al-Samud. This trade also included the sale of gyroscopes and accelerometer testing stages. In addition, ECG signed contracts with the Al-Batani State Company for the technology transfer of manufacturing systems for an Iraqi satellite research project.
A former Iraqi official revealed that President Aleksandr Lukashenko as a vehicle for illicit trade with Iraq promoted a joint Belarusian-Iraqi company. Lukashenko was anxious that illicit trade should continue on a regular basis and requested that a firm called Belarus Afta be established in Baghdad as a clearinghouse for illicit military trade.
- Radar technology and air defense were the most crucial export commodities to Iraq from Belarus. Captured documents and a mid-level Iraqi military officer with direct access to the information affirm that there was joint Belarus-Iraqi development of an improved P-18 (Mod Spoon Rest) early warning radar between November 2000 and March 2003. This radar was employed at Al-Habbaniyah Air Defense Center against Coalition aircraft during OIF.
- Systemtech provided assistance in the fields of research, testing, and project implementation. Dr Raskovka was the senior Systemtech official helping the Iraqis, visiting Iraq every 3 to 4 months for 3 years. The Iraqis wanted to purchase an S-300 air defense system. Contracts were signed and training undertaken, but the pure logistic problems of supplying the system without alerting the international community were insurmountable.
Other interviewees revealed that Belarus provided numerous supplies of illicit goods to Iraq. These included equipment for T-72 and T-55 tanks; Volga, Pechora (SA-3) and other air defense missile systems; Mi-17 helicopters; spares and repairs for MiG-23, -25 and -29 plus Sukhoi 25 jets; laser guidance systems; fiber optics; infrared spare parts; GPS jammers; and radios.
IAEC-MIC Cooperation for the Procurement of CNC Machines
Based on interviews with Fadil Al Janabi, former head of the IAEC, and 'Abd-al-Tawab Al Mullah Huwaysh, former Minister of Military Industrialization, it is evident that the MIC procured CNC machines for the IAEC as part of a "special project" for modernizing Iraq's scientific infrastructure in 2001.
- According to interviews with Fadil Al Janabi, presidential secretary 'Abd Hamid Mahmud Al Khatab Al Nasiri was approached in 2001with a proposal for a modernization program that included procurement of new machinery and equipment, enabling the IAEC to create molds and manufacture specialty parts in-house. Al Janabi wanted to procure these CNC machines through the MIC to bypass foreign supplier's reluctance to sell manufacturing equipment to the IAEC.
- Huwaysh recalled that in 2001, Al Janabi and Khalid Ibrahim Sa'aid contacted him with a presidential order to assist the IAEC with a "special project." The MIC was not to be involved with establishing technical specifications or providing funding, but was to serve as a functional link.
- During this initial meeting, which was also attended by Munir Al Kubaysi, Director General of MIC's Al-Basha'ir Company, Huwaysh claimed he was informed that he did not need to know what was being procured. He further remembered the relative high cost of the machines, costing approximately half the budget of the entire special IAEC modernization project.
IAEC scientists and employees, in contrast, have claimed that CNC machines procured from Taiwan were not high precision and were the same as those used at the Al Badr General Company.
- A source with access stated that the most precise machines were capable of 5-micron accuracy, but none of the machines were five to six axes because this would have "broken sanctions and all of the machines were declared to inspectors." The IAEC employee stated that these high-precision machines were installed at Tuwaitha and information regarding these machines was provided to the UN and IAEA in the declaration given in December 2002.
- ISG has found Iraqi documents that corroborate this assertion, showing that the IAEC had prepared UN forms (OMV Form 22.5/ MOD.2) for eight CNC machines, all of which were identified as three-axes machines. The descriptions in the declarations are consistent with the statements of the mid-level managers.
It is important to note, however, that these IAEC sources referred to the MIC manufacturing company Al Badr and not Al-Basha'ir, the MIC front company involved in negotiations with Huwaysh. In the interchange between the IAEC and the MIC, Al Janabi was explicitly ordered that all transactions and communications on this procurement project were to go through Munir Al Kubaysi and Al-Basha'ir. ISG judges it is probable that this "special project" procurement was carried out by Al-Basha'ir as a separate classified channel for IAEC precision machinery. This assessment supports Huwaysh's claim of the sensitivity surrounding the "classified" nature of the IAEC modernization project in 2001.
Even during the prelude to OIF, the illicit Belarusian military trade with Iraq did not stop as shown by captured documents. Belarus provided PN-5 and PN-7 night-vision devices for Iraq through the Al-Basha’ir front company. Three months before the onset of the conflict, President Lukashenko instructed the Belarusian Ministry of Defense to allow Iraq to purchase any goods from Belarusian military supplies.
Payments From Iraq to Belarus
The main revenue stream for funding illicit trade with Iraq came from the Iraq-Syria Trade Protocol. The amount of illicit military trade between Belarus and Iraq was significant according to captured documents, with Belarusian Governments receiving nearly $114 million in payments from Iraq.
According to a detainee, the critical financial element in the illicit trade process between Belarus and Iraq was Infobank. Belarus demanded to be paid 75 percent of the contract price in hard currency before delivery of any goods. Iraq did not agree to this. Therefore, Infobank agreed to provide bridging funds, including the 75 percent up-front fee, to finance illicit deals between Belarus and Iraq for a fee of 15 percent of any contract. According to a high-level Regime source with direct access, kickbacks paid to Iraq by Belarusian companies for exports to Iraq under the UN OFF Program were kept at the Infobank to fund future illicit Iraqi imports from Belarus. A senior former executive in the Iraqi MIC believes that Infobank had a total of $7 million of Iraqi money in its accounts before OIF. Infobank also financed illicit military trade between Iraq and Yugoimport-FDSP of Serbia, paying equivalent up-front fees, according to a former senior executive in the MIC.
Although a limited supplier of prohibited goods to Iraq, companies from Taiwan negotiated for conventionally military goods and provided critical CNC machines to the Regime from 2001 to 2003. These machines provided Iraq with a means to improve its military-related production.
The earliest evidence of Iraq’s procurement relationship with Taiwan dates back to January 2001, when Iraq sought military equipment and dual-use goods from companies in Taiwan. In an apparent attempt to circumvent UN sanctions, Dr. Kahalid Sulaiman of the Iraq-based company ETIK for General Trading Limited approached the Taiwanese arms brokerage firm, Epnon International Limited, seeking 150 engines for T-72 and T-55 tanks, 200 engines for the T-62 tank, and 100 engines for the BMP-1 and BMP 2 armored personnel carriers.The engines were to be in complete and new condition.
Although Epnon’s prices were higher than other sources, ETIK learned that it did business without the need for official papers. The deal was originally structured as cash only; however, under-the-table transaction with the payments made in advance occurred, and an agreement was eventually reached for half the payment for the engines to be in cash, and the other half in oil.
- ISG has found no evidence that these engines were delivered to Iraq.
There is limited information on the supply of CNC machines to Iraq, but during UNSCOM’s tenure, UN inspectors confirmed Iraq had obtained CNC machines manufactured by companies in Taiwan.
- During an inspection in 1998 of the Al Rasheed General Company’s Tho Al-Fekar Plant at the Taji Metals Complex, UNSCOM inspectors found four new Hartford vertical machining centers, with one machine installed and being used on Ababil-50 motor bulkheads. The four machines, made by the She Hong Machinery Company Limited, were three-axis vertical machining center with an indexing fourth axis and a 20-tool carousel.
- The inspectors considered these modern, standard quality CNC machines suitable for good quality aerospace and missile-related applications. Later in 1998, another inspection at the Tho Al Fekar Mechanical Plant reported another four Hartford CNC machines milling Ababil-50 rocket nozzles. The team identified that three of these machines possessed a computer-controlled turntable.
- ISG cannot confirm that these CNC machines were purchased directly from sources in Taiwan. It is equally likely that these machines were obtained from unknown third parties.
In 2001, the IAEC and MIC were working to obtain CNC machines to modernize Iraq’s scientific infrastructure. By 2002, documentary evidence shows Iraqi front companies soliciting bids and contracting for CNC machines from companies in Tawian. The CNC machines procured from Taiwan by Iraq consisted of three or more axes, suggesting potential use in weapons production.
- In early May 2002, the Baghdad-based Iraqi firm, Aldarf Company, represented by Ali Albakri, sought tilting rotary tables for two machining centers. She Hong Industrial Company, one of Taiwan’s largest manufacturers of machine tools, acknowledged the Iraqi company’s need for accessories and stated that rotary tables manufactured by Taiwan’s Golden Sun industrial Company Limited, Taichung could be added to both machines that Iraq already possessed.
- Recovered correspondence from the Al-Basha’ir Company revealed a deposit of $900,000 into the account of Mr. ‘Abd al Razzaq Al Falahi and Brothers to execute a contract for importing machine tools from Taiwan. This money was then transferred into the account of She Hong Industrial Company.
- In July 2002, Iraq asked a Jordanian company to seek a new quote from a company in Taiwan for a gun-drilling machine, earlier quoted at a price of $146,000.
- January 2003 bids for CNC wire-cutting machines from Taiwan were also revealed in documentation from the Al Badr State Company, a subsidiary of the MIC.
Iraq took active measures to ensure that illicit trade for machine tools from Taiwan was concealed. Recovered correspondence from Al-Basha’ir expressed that the wording of the contract conducted by Mr. ‘Abd al Razzaq Al Falahi should not make reference to Al-Basha’ir and that monies should be deposited in a static account for all transactions. Correspondence from a MIC-run company also indicated that bids from companies in Taiwan were under the auspices of the Iraqi and Syrian agreements, implying that goods obtained from Taiwan would be transshipped through front companies operating out of Syria or that Syrian front companies would act as intermediaries and facilitate delivery of the procured equipment.
Since 1990,illicit procurement activity between Iraq and Egypt provided Baghdad with a limited amount of materials that the Regime found difficult to acquire outside UN sanctions. Materials that Iraq acquired through its relations with Egypt, outside UN sanctions and resolutions, included nitric acid, stainless steel and aluminum alloys.
Egyptian and Iraqi procurement relations began in the early 1980s when Baghdad provided Cairo with $12 million in 1981 in return for assistance with production and storage of chemical weapons agents. At this time Baghdad also entered into a series of contracts with the Government of Egypt to procure the two-stage Badr-2000 missile and to provide the technological infrastructure to build the missile indigenously, before it attempted to extend the range of its Scud-B/8K-14 missiles.
Following Operation Desert Storm and UN sanctions, procurement from Egypt was limited. Nevertheless, Iraq used its ties with Egypt to procure key items that were difficult to procure elsewhere.
- The MIC, through its front company Al-Husan, had a $5 million contract with an Egyptian firm for stainless steel, forged steel, and aluminum in 2003.
Trade in nitric acid, a precursor in the manufacture of solid propellant also flourished following the destruction of the Al Qa’Qa State Company Nitric Plant in December 1998, during Operation Desert Fox.
- A senior official from the MIC stated that Iraq had a secret agreement with Egypt during 2001 to 2002 to have nitric acid shipped from Egypt through Syria to Iraq. It is unclear how many tons of nitric acid Iraq received from this secret agreement.
Many transactions for prohibited goods were orchestrated through a trade protocol sponsored by the Iraqi MoO. The second Deputy Director for the MIC, Dagher Mahmoud, was responsible for monitoring these transactions.
- A source with direct access estimated that there was approximately $50 million in the trade protocol account. Goods and materials were occasionally procured on a cash basis from Egypt, but the majority of the protocol was based on oil transshipped through Jordan.
- M-23 officers from Balad, Iraq often accompanied MIC personnel to Egypt and between 2000 and 2003. M-23 was responsible for the physical security of MIC facilities and personnel. Abd al-Hamid Sulayman Al Nasiri, the Director of M-23, personally went to Egypt under the auspices of the IAEC about six months before OIF.
According to a senior Iraqi official from the MIC, the Egyptian state was involved in illicit trade with Iraq. Known Syrian procurement agents for Iraqi front companies also assisted in some of these transactions. It is also apparent that the Syria-Iraq Trade Protocol facilitated illicit trade from Egypt. Individual brokers and Iraqi foreign nationals in Egypt may have also initiated illicit trade, motivated by the lure of corporate and individual profits.
- Nitric acid supplies were reportedly the responsibility of the Dr. Asif Shalish, Director of the Syrian SES International, who dealt regularly with Iraqi procurement companies. All payments of the nitric acid were handled under the Syrian protocol and the head of Al-Basha’ir, Munir Mamduh Awad al-Qubaysi.
ISG, however, judges that the most likely transshipment routes through Jordan and Syria were based on the ties to the trade protocols.
Improving bilateral relations between Sana’a and Baghdad in the late 1990s resulted in direct Yemeni participation in Iraq’s illicit procurement schemes.
After 2000, Yemen became a state trade intermediary for Iraq, providing Baghdad with “end-user” cover for military goods prohibited by UN sanctions and resolutions. There is no evidence, however, that Yemen was complicit in the procurement of WMD-related commodities.
Throughout the 1990s, Yemeni President Ali ‘Abdallah Salih publicly supported UN sanctions against Iraq, but he remained concerned about the humanitarian impact on Iraq’s citizens. Starting in February 1997, senior members of the Yemeni Government privately argued that Yemen should unilaterally abrogate the UN sanctions on Iraq. They contended that lifting the embargo would help to provide the Iraqi people with much-needed humanitarian assistance and enhance regional stability. By 1999, President Salih was beginning to publicly criticize the United States and the UK for the imposition of no fly zones over Iraqi airspace and the UN embargo.
Opening Conventional Trade With Yemen for Oil and Cash
In addition to increasingly pro-Iraqi rhetoric, Yemen and Iraq also built closer trade ties in 1999. Through regularly scheduled Iraqi-Yemeni Joint Committee meetings, Iraq and Yemen had signed trade agreements and Memoranda of Understanding aimed at strengthening bilateral ties, sparking economic growth, and exchanging energy experts in the field of natural gas and petroleum exploration. The two countries also signed a customs treaty, whereby no duties would be paid on the transfer of goods between Iraq and Yemen. Although these agreements werewithin the guidelines set forth by UNSCR 986, they provided an avenue for increasing trade coordination and eventually led to sanctions violations.
- The Iraq Government signed a $9 million deal in November 2000 with the Yemeni Hayal Sa’id group of companies to provide Iraq with food and medical- related goods in exchange for hard currency derived from Iraqi oil sales.
- On 29 September 2000, President Salih authorized one of the first commercial airline flights to Baghdad. Salih had rejected earlier calls by Yemeni opposition parties for this action out of fear of a US government reaction. After a Royal Jordanian Airlines flight landed in Baghdad on 27 September, however, Salih decided he could deflect Western criticism by claiming the flight was on a humanitarian mission. It was expected that Yemen would allow additional flights to Baghdad in the future.
By November 2000, another session of the Yemeni Iraqi Joint Committee, led by ‘Abd-Al-‘Aziz Al-Kumaym, was held in Baghdad. The meetings again centered on improving bilateral relations, but mainly dealt with increasing economic activity between the two countries. The joint committee reached agreement in a number of areas, including the purchase of Iraqi oil at below market prices for cash using unnamed Yemeni businessmen instead of the Yemeni Government. This kind of transaction was very profitable for Yemen, but violated UN sanctions. In addition to the profits earned by this trade, Saddam’s Regime also agreed:
- To provide 60 scholarships for Yemeni students to study at Baghdad University.
- To the exchange of experts to take place in the fields of agriculture and telecommunications.
Yemen Emerges as an Intermediary for Iraqi Illicit Imports
Several high-ranking Iraqi, Yemeni, and Syrian Government officials met to discuss the establishment of an illicit trade protocol between February and July 2001. The purpose of these particular meetings centered on formulating and implementing a plan that would allow Iraq to acquire Russian-manufactured military spares through a complicated supply chain and front company network. The main participants in the meetings were the Iraqi Ministry of Defense General Secretary, the Yemeni Ambassador, and Firas Tlas, the son of the former Syrian Defense Minister Lt. Gen. Mustafa Tlas. A Yemeni businessman named Sharar Abed Al-Haq brokered the illicit Yemeni business transactions.
- Lt. Gen. Mustafa Tlas, while absent from the meeting, provided a letter, which stated that he recently met Dimitrof Mikhail, president of Russian Company of Iron Export. Dimitrof, a former senior Russian intelligence official, had agreed to supply spare parts without requesting the identity of the end user.
- Al-Haq agreed to transport military supplies from Yemen to Iraq using the illicit trade networks.
- According to the letters, Iraq provided Al-Haq a list of requirements, signed by the Iraq Defense General Secretary. This list included spares for the following: MiG-17, MiG-21, MiG-23, MiG-25, MiG-29, Su-22, Iskandri missiles with a range of 290 kilometers, updated parachutes, L-39 combat capable trainers, Bell 214st helicopters, T-55 and T-72 tanks, armored cars, BMP-1 and BMP-2 armored personnel carriers, and other cars and trucks. The total value of the contract was $7,287,213. The contract outlined a transportation scheme to take the prohibited items from Singapore to Sana’a, Yemen to Damascus, Syria, to Baghdad with payment to be made through the International Bank of Yemen.
According to recovered documents, President Salih called his brother, the Yemeni Air Force Commander, after this meeting and told him to provide Iraq with spare parts even if they needed to take them from Yemeni stocks. He also ordered his brother to acquire more materials from Russia.
- Reportedly, in early December 2001, the Iraqi Air Force had received spare parts for MiG-29 fighter aircraft, mainly through Tartus, Syria. No further information is available as to the origin of the aircraft parts. It is likely that these items were purchased via the Russian/Yemen/Syria supply chain.
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