Lessons From Iraq About Germany’s Export Policies Or Is ‘Nukem’ What Genscher Has In Mind When He Speaks Of ‘German Industry’s Good Name’?

Introduction

This week, West German Foreign Minister Hans-Dietrich Genscher responded to damning evidence that German companies have provided Iraq with equipment and know-how related to chemical, biological and nuclear weaponry. He said, "West German industry should turn away from those who broke laws to earn money by helping the dictator of Baghdad [President Saddam Hussein]. The good name of German industry is at stake here." (Emphasis added.)

The truth is that, deplorable as it is, such companies’ deadly trade with the Iraqis are hardly the only blemish on the "good name" of German industry. Indeed, the Federal Republic of Germany has chronically been among the weakest links in the Western effort to deny potential adversaries militarily relevant high technology.

For years, U.S. officials charged with maintaining effective technology security through multilateral export control arrangements have been confounded by Bonn’s reluctance to create real constraints on German trade in equipment and know-how with "dual-use" applications. What is more, where such constraints have been created (primarily of an East-West character, pursuant to agreements reached in the Coordinating Committee for Multilateral Export Controls, or COCOM), federal authorities in Bonn have been largely unwilling to enforce them vigorously or to impose meaningful penalties on violators.

Worse yet, the German government has undertaken a strenuous effort in recent months to dismantle many of those multilateral export controls that were imposed over the past decade. Citing reduced tensions with the Soviet Union and the need to resuscitate East European economies, the Germans have demanded (with considerable success) that whole categories of strategically sensitive technologies be decontrolled.

Bonn’s attitude appears to reflect that of many German companies: ‘What is good for business is good for Germany.’ The fact that German security may ultimately suffer — along with that of the rest of the Western world — is all too frequently not permitted to interfere with transactions that will enrich individual Germans or their enterprises.

‘Nukem:’ What German Companies Offer Iraq

Today’s Washington Post contains an article, entitled "Bonn Probes Firms on Sales to Iraq," that offers insights into the extraordinarily serious implications of such German policies. It starts with the following, staggering revelations:

• West Germany, which claims to have the world’s toughest laws against weapons exports to countries that are likely to become involved in warfare, is investigating allegations that more than 1,000 German businesses have illegally sent arms and military technology to Third World countries, including Iraq, a [West German] Foreign Ministry source said.

   

 

• Public prosecutors are looking into the activities of at least 50 companies alleged to have sold the Iraqis equipment or know-how that could be used to build chemical, biological and nuclear weapons. (Emphasis added.)

   

The Post identifies three companies alleged to have engaged in such transactions: Pilot Plant (reputed to have sold two laboratories compatible with chemical weapons production(1) and situated at the Iraqi poison gas facility northwest of Baghdad); H&H Metalform (said to have sold Iraq equipment used to build enrichment plants for weapons grade uranium); and a firm with the remarkable name of Nukem (accused of selling Iraq uranium in various forms in the course of last year).

Two well-worn — if implausible — excuses for irresponsible German technology transfers like these appear in the Post article. First, "Bonn’s Federal Economic Office, which reviews export applications, says it does not have a staff large enough to examine thoroughly all 75,000 annual requests for permits." Evidently, rather than employing the necessary number of personnel, West Germany wants to handle this shortfall by simply eliminating the need for German companies to seek permits for the many of militarily relevant technology.

Second, Pilot Plant’s managing director, Dieter Backfisch, is quoted as saying that, "If we supply the Sudan today or Malaysia tomorrow, we cannot know if someday they will have a dictator who goes to war. (Emphasis added.)" On the face of it, such a comment is absurd in the context of a sale to Iraq, given the long and consistently aggressive character of Saddam Hussein’s rule. And yet, it is indicative of the shortsighted and irresponsible attitude frequently exhibited by German businessmen when it comes to sensitive technology transfers.

The Washington Times put the issue succinctly yesterday in a lead editorial stimulated by a recent Center for Security Policy paper entitled ‘Fool Me Twice’: Imhausen Believed Building Second Poison Gas Factory in Libya. Decrying new evidence that the German firm, Imhausen, which helped Moammar Gadhafi acquire its enormous chemical weapons plant at Rabta has subsequently supplied him with plans for a second facility, the Times called on President Bush to "let [German Chancellor Helmut] Kohl know that the United States won’t permit state-sponsored terrorism in any form, even when the sponsor is West Germany."

Meanwhile Back at the Ranch: Moscow’s Continuing Tech Theft Campaign

Dangerous and deplorable as they are, some German companies’ relaxed attitudes about selling sensitive dual-use technologies do not stop with Third World renegade states. Such companies — and, for that matter, the Bonn government — appear even less concerned about the risks associated with Soviet efforts to acquire militarily relevant equipment and know-how from the West. Worse still have been the many instances of German complicity (witting or unwitting) in direct and indirect transfers of such technology to the USSR. Examples include: high accuracy machine tools, deep underground tunneling machines, telecommunications equipment, underwater surveillance gear, sophisticated computers, manufacturing equipment associated with microelectronics, advanced composites and super-alloys.

Events subsequent to the East European revolutions of 1989 have greatly exacerbated this tendency. The Berlin Wall’s demise, progress toward German reunification and the desire to satisfy Moscow’s political and economic price for acquiescing in it — all have created unprecedented opportunities for the Soviet Union to acquire and exploit Western high technology.

This point was brought home by a powerful article concerning the continuing activities of East German spy master, Markus Wolf, featured in the 12 August 1990 New York Times Magazine. This article, entitled "Where Have All His Spies Gone" and written by Steven Emerson, suggests that agents of East Germany’s dreaded secret police — known as the Stasi — continue to operate against Western interests throughout Germany and beyond. For example:

"There is no doubt that the Stasi still has many spies in West Germany, including in [the German counter-intelligence organization] the Office for the Protection of the Constitution," says Peter Frisch [that organization’s vice president]. "And we know that East German intelligence agents have received instructions to gather intelligence against NATO. The information is being passed on to the…East German…army — and then on to the [Soviet] army."

 

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Even though the cold war is winding down, and restrictions on transferring Western technology to the East have been eased, intelligence officials maintain the cash-starved East bloc countries are still trying to steal high-tech military and industrial secrets. American officials say that Star Wars technology, for example, continues to rank high on the Soviet list."

The activities of former Stasi agents in the Soviet Union’s employ and working in both halves of Germany will be but one of the means at Moscow’s disposal for securing such high priority, militarily relevant technology from the West. Another may be found in the Bonn government’s decision that, in the future, no distinctions would be made between East and West Germany with respect to technology controls. Given that many thousands of Soviet military and intelligence personnel will remain in the eastern sector for at least five years, it will be child’s play for the USSR to divert or otherwise acquire sensitive dual-use technology.

Conclusion and Recommendation

The Center for Security Policy believes that the reckless German approach to control of sensitive dual-use technology now coming to light in Iraq is the rule, not the exception. The willingness of some unscrupulous German entrepreneurs to disregard elementary common security interests in order to make a profit and of the Bonn government to accommodate — even, in some ways, to facilitate — such practices, is simply unacceptable.

The Center calls on President Bush to utilize authority available to him under existing U.S. law to impose import sanctions against German companies judged to have violated regulations controlling exports. It also urges Congress, immediately upon its return from the August recess, to hold hearings into German export practices and to examine with care the real risks posed to American and Western security interests — and the additional costs imposed on U.S. defense expenditures — as a result of access to extremely sensitive technologies afforded the military establishments of the Soviet Union, Iraq, Libya and other potential adversaries by Germany.

Finally, the United States must ensure that its own house is in order with respect to the transfer of militarily relevant technologies to countries like Iraq. The public is entitled to know what licenses have been granted to U.S. companies by the Commerce Department for sales of dual-use equipment to Baghdad.

In this regard, the Center urges Congress to amend Section 12 (c) of the Export Administration Act concerning the protection of proprietary information, which has been abused by the Commerce Department to deny the American people — and even other agencies of the U.S. government — information about such transactions. Such an abuse occurred most recently when Commerce tried to keep the Defense Department and others from blocking the sale to Iraq of state-of-the-art furnaces useful for manufacturing ballistic missile components.

1. For six years, the West German prosecutor’s office has been investigating the degree to which the Pilot Plant facilities can be used for chemical warfare purposes instead of the purported task of manufacturing pesticides. This torturous process only partly reflects the German government’s reluctance to act against its nationals engaged in dangerous or illegal technology transfers. It also underscores the insuperable problems that confront any effort to create an effective international regime banning chemical weapons. Today, Bonn announced that seven people were arrested in connection with this transaction, including several employees of Pilot Plant.