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[Attempt to Purchase a Uranium Foundry from DeGeussa and Leybold]

Proliferant states place a high priority on keeping many of their procurement efforts secret. The need for operational security means that contacts and assistance provided by foreign companies and individuals have been carefully managed. However, nuclear weapon programs in the developing world are usually highly dependent on foreign assistance, which increases the risk of their discovery.

To help keep their programs secret, proliferant states have often developed elaborate cover stories to hide their nuclear weapons program behind civil applications. Cover stories have taken many forms, primarily false statements about the true purpose or end-user of an item. These cover stories have usually been developed by a proliferant's procurement organization and have been effective in many cases.

The office of administration and engineering services in Iraq's nuclear weapons program conducted lectures on illicit procurement for members of the program. These lectures taught people in the nuclear weapons program how to order equipment deceptively. The nuclear weapons program, which at the time of this 1986 memo was under the Iraq Atomic Energy Commission, was highly successful in acquiring items for its clandestine EMIS enrichment program. This extensive procurement effort was not detected until after the Gulf War. A major reason was the careful work done by the procurement officials in this nuclear weapons program.

A country may decide that foreign assistance is too risky. Regarding the development of high explosive lenses, Khidhir Hamza remarked that "we could not bring in an expert to tell us what to do … that might expose the program. Iraq had a large nuclear program, and if Iraq were going in the direction of lenses it would signal a bomb program. So were very careful not to get outside expertise, but rather tried to develop the expertise ourselves." 1

Despite all the precautions, procurement efforts may not work, and foreign companies may realize the truth about phony cover stories. The following example shows that Iraq took such potential breaches of security seriously.

Attempt to Purchase a Uranium Foundry from DeGeussa and Leybold

In 1987, Iraq decided to build a set of facilities that could make nuclear weapons once it had a supply of highly enriched uranium (HEU). Although Iraq had started an illicit program to make HEU in 1981, it had been slow in starting the nuclear weaponization process or the creation of nuclear warheads.

Iraq developed a list of needed items for its weaponization program by studying declassified information from the U.S. Manhattan Project. Because of uncertainties about both the accuracy and completeness of this information, Iraq planned to conduct an extensive testing program of each major component of an implosion fission device.

Iraq selected a weaponization site roughly 100 kilometers southwest of Baghdad at the Al Atheer site, which was destroyed by the IAEA Action Team in the early 1990s. To obtain the necessary equipment for the site, Iraq decided to shop overseas. The Iraqis were well aware of how hostile international reactions could be to an Iraqi nuclear weapons effort, and therefore planned to proceed in secret.

Ali Abdul Muttalib, the Iraqi commercial attaché in Bonn, received a list of equipment from the nuclear weapons program. Ali, who was a key European coordinator for Iraqi procurement, made initial contacts with several German companies. They responded with many questions about the purpose and specifications of the desired equipment, and said that this equipment was sensitive, requiring export licenses. Because of the complexity of the questions, the attaché suggested that Iraqis from the weapons program should negotiate directly with the companies. Khidir Hamza, who was then head of the weaponization program, led a delegation to Germany in August 1987 to conduct negotiations for a wide variety of items for the weaponization program using non-nuclear cover stories.

The main item sought by Hamza's team was a foundry to process natural uranium and HEU into nuclear weapon components. Ali had approached Degussa and Leybold, who were not only interested, but also were among the best companies within the European Community for this equipment. Because Hamza had represented Iraq at many IAEA meetings, he could not risk being linked to procurement efforts that claimed to be for non-nuclear purposes.

With Hamza kept out of sight, two of his aides met with representatives of Degussa and Leybold in the Iraqi embassy to discuss the acquisition of the foundry. Iraq told the Germans that the foundry would be used to melt, purify, cast, and machine tungsten, a common refractory metal. The Iraqis never mentioned that the actual planned use for the foundry was to process both natural uranium and HEU. The equipment would include vacuum induction furnaces, crucibles, computer-numerically-controlled (CNC) machines, and an iodine-based purification process. Initial estimates put the equipment for the foundry over $100 million. Buildings and training were not included in these rough estimates.

Hamza summarized the reaction of the company representatives in a trip report to his superior, Hussein Kamel, Saddam Hussein's powerful son-in-law:
"During the negotiations, we suddenly realized that the companies were willing to sell these technologies to us. At the same time, they warned us they were complicated, expressed astonishment that we were entering such a field and indicated that the cost would be high. At first, this move on the part of the companies was puzzling for us, since it seemed the companies were prepared even to disregard the requirement for an export license by making special arrangements and packing the equipment under covers, which made the export process seem natural. At the same time, they stated openly that they knew the purpose of the equipment. They even indicated that they knew the equipment was not for peaceful purposes…We were astonished to see that the companies were actually helping us find covers for some of the required technologies."

The behavior of the Germans startled Hamza's team. They concluded that the companies either had already obtained permission from the German government to agree to provide a foundry to Iraq or just wanted the huge sums of money involved in such a deal. If the former case were true, then the Iraqis believed that the companies could be acting as spies for Western intelligence agencies. Many Germans would need to visit Al Atheer during the construction phase of the project, enabling them to discover the extent of the nuclear weapons program, its location, and the Iraqi personnel involved. On the other hand, Leybold officials had said that they were having financial difficulties. Hamza later accepted this latter explanation for the company's behavior.

Iraq received the final bid from the companies several months later. The foundry would cost about $120 million. For $200 million, the companies would supply a "turn-key" facility, including process buildings and equipment.

In the end, Iraq declined the bid. After Hamza reported back home that the Leybold and Degussa representatives had seen through Iraq's cover story, his superiors and colleagues were upset. Confronted with the escalating projected cost of the entire weaponization project, which was over $1 billion by this time, Saddam Hussein ordered a review of the entire project, including the bid from Leybold and Degussa. The reviewers, who included Jaffar Dhia Jaffar and other senior nuclear officials, branded the foundry project "another Osirak," the French-supplied reactor bombed by Israel in 1981. They said that the location of Al Atheer would be exposed to Germany and eventually the rest of the world, because it would not make sense to keep a foundry location secret.

The team sent to Germany suffered reprisals. One of the Iraqi negotiators was jailed.2 Partly as a result of this trip, Hamza gave up his position as head of weaponization.

After 1989, Iraq used the bid as a guideline to procure equipment for a foundry piecemeal from several countries. It also used the design of the foundry supplied by the Germans to design its uranium processing facility at Al Atheer.


1Interview with Kevin O'Neill, May 6, 1999. [back to the text]

2According to Hamza, the Iraqi negotiators "were not very careful." For example, they would speak to each other in Arabic, without first knowing if any of the representatives from either Degussa or Leybold spoke Arabic, or if there were audio recordings made of the meetings. Interview with ISIS staff, May 12, 1999. [back to the text]

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