Archives


SOURCE: The Financial Express

On 26th May 2021, India celebrated Buddha Jayanti, the anniversary of the great soul obtaining enlightenment. Exactly 47 years ago, on the Buddha Jayanti of 1974, Smiling Buddha ushered India into the nuclear age. By conducting the first confirmed nuclear weapons test by a non-member of the UN Security Council, India caught the entire international intelligence community unawares. Thousands of miles away from the test site in Pokhran, Rajasthan was Almelo, a tiny municipality in eastern Netherlands. As the news of the Indian nuclear test trickled in, a silent storm started brewing in a man’s heart. 1974’s Buddha Jayanti not only heralded India’s geopolitical assent, it also flagged off Pakistan’s steep decline in international status and reputation.

Abdul Qadeer Khan, a Pakistani metallurgical engineer employed in a uranium enrichment plant in Almelo, took India’s successful nuclear test to heart. In his work, Khan got several opportunities to work with Highly Enriched Uranium (HEU) in Netherlands. Khan quickly dispatched a letter to Pakistan’s newly powerful Prime Minister, Zulfiqar Ali Bhutto explaining why HEU was the miracle cure for Pakistan’s struggle with making a plutonium bomb.

After several attempts, Bhutto did give Khan a hearing and was impressed. Thus began a decades-long saga of illegal and criminal transfer of nuclear materials and technologies from across the world into Pakistan and then via Pakistan to other states like Iran and Libya.

Back in the 1970s and 80s, Anti Money Laundering regulations and investigation into Proliferation Finance weren’t as developed as they are today. This allowed Khan and the Pakistan Government to run a complex international network of benami companies and suppliers that have created and helped sustain a nuclear black economy. A deeper study of the proliferation episode makes for interesting reading.

Most of the equipment required for making nuclear weapons would be on export sanctions lists, so it would not be possible to approach prospective suppliers from across the world. Also, designs and scientific formulae would be under strict access control regulations established by the national intelligence agencies and international non-proliferation agencies like the IAEA. Beating these bodies would require significant amounts of resources.

During the initial years, Khan used a simple yet effective mechanism for this. The Pakistani Embassy in Belgium operated as the via-media between Khan’s smuggled information in Netherlands and Chaklala, the test bed site of Pakistan’s nascent nuclear program. Khan’s brother, Quddus, an official working in the KLM Royal Dutch Airlines worked as a suitable courier, employed in too dull a job to draw any attention. The Embassy in Belgium abused the protection provided by law to diplomatic bags, under which they are not checked by Customs authorities and are opened only by the Embassy they are addressed to.

The gulf states, reeling from a defeat handed by Israel, were supportive of the Pakistani nuclear cause. They contributed readily whenever the Prime Minister had requested for funds. The Bank of Credit and Commerce International, the fraud-ridden bank created by yet another Pakistani, Aga Khan, was ever ready to transfer the money to Pakistani government accounts through the use of benami and numbered accounts.

The system worked as shown below,

Soon, the Dutch intelligence agencies begin to monitor Khan concerned about a series of inquiries Khan made about technical information which did not pertain to the specific work allotted to him. Suspicions grew and Khan’s often indiscreet discussions about nuclear equipment raised enough red-flags that his employer moved him to a less sensitive project. Dutch police intensified their surveillance on Khan. Just as the Dutch intelligence were about to pick him up, Khan left Europe and arrived in Pakistan,

Khan’s arrival in Pakistan was not empty-handed. Along with him came blueprints of the Dutch nuclear enrichment program. However, blueprints wouldn’t produce a bomb. Equipment made with high-grade materials at elevated precision levels was required. Pakistan however, at that time, was importing even sewing needles from China. This problem was worked around by importing completely built up enrichment equipment from European suppliers. As counter-intelligence about Pakistani designs developed in Europe, sanctions lists were expanded and enrichment equipment was placed on no-export lists. Khan found a work around yet again. They began purchasing sub-components which were clearly not on any sanction list. These components would then be assembled in Pakistan. Pakistani embassies across the world activated businesses run by Pakistanis to scout for possible equipment on the blueprints. Vacuum Tubes, uranium conversion equipment, yellow cake were being purchased separately from individual suppliers. When one door got closed, another one opened.

In order to help confuse intelligence agencies, several nations in the Islamic world came to help Pakistan in the acquisition of material and equipment. The route to obtain yellow-cake is interesting. Yellow-cake is the raw material which produces Uranium Fluoride gas that is then pumped into centrifuges to separate Uranium 235 from Uranium 238. Germany, the main exporter of yellow cake place it in the no-export list. Khan simply scouted for another source. Niger boasted of huge Uranium deposits in the middle of the Sahara desert. However, Khan had no reach to Niger’s political corridors. In came Colonel Gaddafi who helped one of Niger’s warring factions in a coup that brought them to power. Gaddafi liasioned with Niger’s leading military leader, arranged for airstrip close to the mines and got the yellow cake to Pakistan.

As years progressed, Khan used his contacts to obtain components from across the world, expanding Pakistan’s chances of testing their first nuclear bomb. At the same time, the West, unmindful of Khan’s dogged belief in his experiment and Pakistan’s tenacious resolve to match India kiloton-for-kiloton, took a laid-back and lackadaisical route to control the black nuclear economy that Pakistan was helping create. Eventually, his endearing nature and Pakistan’s resolute support, Khan managed to assemble all the components required to make his nuclear dream go live.

However, Khan’s dream did not end with making Pakistan a formidable opponent to India in the nuclear battlefield. Khan expanded his activities deeper into the illegal and immoral world of nuclear proliferation. He helped create a market where any budding nuclear adventurist could order from a list of raw materials which could be sourced from any of the reliable suppliers across the world. A “Flipkart for Nuclear dummies” was born. This market place operated from the following places,

Khan Research Laboratories in Pakistan and SMB Computers in Dubai (a front company) operated as the hub and the rest were all procurement or delivery centres. An investigation by the Malaysian Police into one such transaction revealed the inner workings of the network. The same is presented below in 8 steps.

Icon Source

Libya had long sought nuclear capabilities. Khan’s Network was the only feasible option thanks to the IAEA and other international regulators tightening screws. Libya had also helped Khan obtain yellow cake during the development of Pakistan’s own bomb. Khan sought BSA Tahir, a Srilankan businessman based out of Dubai to supply the crucial centrifuge parts to Libya. Tahir had several front companies in Dubai under the names of Desert Electrical Equipment Factory, Gulf Technical Industries, etc.

Diversification was key. Tahir outsourced the production of the centrifuge parts to SCOMI Precision Engineering (SCOPE), a company owned by the son of a former Malaysian Prime Minister. SCOPE was also asked by Tahir to obtain the services of Swiss citizen Urs Tinner who, an integral part of the Network was well-versed with the procurement and production of high quality components. Through the use related entities, Tinner helped SCOPE obtain critical components from across the world. SCOPE manufactured the products under Tinner’s directions and dispatched the goods to a front company in Dubai. This entity, controlled indirectly by Tahir, in-turn exported the goods to Libya through Chinese ships. One such ship was, on the basis of intelligence, detained in an Italian port in 2003 and on investigation was found to be carrying several centrifuge parts to Libya.

The most important link that connected the entire network was the fact that, apart from the core individuals, no entity had a clue what was being produced and for whom.

The fraud continued for a while. On a fateful day in 2004, the US exposed the outlines of the world’s largest nuclear proliferation ring. In a dramatic television appearance Feb. 4, Abdul Qadeer Khan, the father of the Pakistani bomb, acknowledged that he had secretly provided North Korea, Libya, and Iran with crucial building blocks for making nuclear weapons. Khan, considered a national hero, apologized to the people of Pakistan for what he had done and was pardoned by the then Pakistani President Gen. Pervez Musharraf shortly afterward.

On this Buddha Jayanti, the story of AQ Khan should alert sanctions compliance organisations across the globe to the new challenges like the need to transition to a low carbon energy economy, introduction of advanced materials and growth of underground markets through the dark web. International organisations should re-dedicate themselves to technology, co-operative diplomacy, Exchange of Information and cross-cultural capacity building to ensure rogue proliferators and black markets don’t emerge in newer and more sophisticated areas of crime.