Roadmap to Responsible Export Controls:
Learning from the Past

Institute for Science and International Security (ISIS)

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Illicit exports have contributed to many countries' secret nuclear weapons programs and continue to be critical to secret weapons programs in Iraq, Iran, North Korea, and other countries. Illegal exports could also allow terrorists to obtain items needed to make nuclear weapons.

Underdeveloped or unenforced export controls lead to the illicit export of sensitive nuclear or nuclear-related equipment, materials, or technology. To prevent nuclear proliferation, states must maintain effective and ever improving export controls.

The purpose of export controls is to limit the ability of unauthorized users to obtain unlawful commodities. To minimize exploitation of the system, loopholes in laws and regulations need to be eliminated, corporate internal compliance systems must be improved, and vigilance and political support has to be sustained.

A failure to recognize the possibility or consequences of illicit sales is dangerous. Past cases of nuclear proliferation have depended heavily on illicit foreign assistance. Proliferant states and terrorist groups are adept at identifying and exploiting weak or poorly enforced export controls in supplier states. Therefore, establishing and implementing effective export controls is imperative to stopping the proliferation of nuclear weapons.

Creating an adequate export control system is complicated, with significant problems to overcome. Often there is an overemphasis on "landing the deal" without adequately weighing the security risks posed by a sensitive export. Too often sales are viewed as essential to the survival of a company and too little attention is paid to the effort to prevent illicit procurement. However, the long-term viability of companies can be threatened if they are found responsible for conducting illegal exports. The goal, therefore, is to create a sustainable system of effective controls without unduly hampering legitimate trade.

To this end, describing how proliferant states illicitly obtained key items and technologies in the past can help in the development and implementation of controls to prevent such transfers in the future. This information can also help in promoting governmental and corporate understanding of the need for effective export control systems.

Prompted by national and international requests, ISIS decided to produce an electronic report to provide such information. These requests emphasized the lack of case studies about illicit procurement and the problems facing companies in creating effective internal systems to prevent illegal sales.

The audience for this information is primarily those who are establishing or seeking to improve export controls systems in companies or governments. It is useful to officials and scientists in private companies and nuclear facilities that sell sensitive items, officials from nuclear facilities that are seeking to implement nuclear export controls, government officials, customs officials, members of the academic community, other experts, and the public.

This report strives to help those who want to develop and foster an export control "culture." This aspect of an export control system, which has taken on added importance in the last decade, focuses on the attitude of people who work in this field. It emphasizes preventing nuclear proliferation over specific sales and contracts. In companies, this means the willingness of employees to raise questions about a sale and management's willingness to require and support such efforts.

This report does not provide detailed information about export control laws and regulations or explain international export control systems. Many excellent references exist on these subjects. Instead, this report presents unique information that can increase awareness of the challenges to creating an effective export control system.

This report is divided into three sections:

1. Case Studies -- This section discusses several examples of illicit procurement by companies and individuals and describes methods used by countries to exploit weak export controls or obtain items illicitly. Most of the cases involve Iraq's efforts in the late 1980s and early 1990s to acquire the wherewithal to make nuclear weapons. Iraqi cases have been favored because detailed information about these cases is available. In particular, Iraq has released a significant amount of information about its illicit procurement efforts and prosecutions of individuals accused of illicit exports in Germany have resulted in even more information about these Iraqi efforts. Cases involving Pakistan and al Qaeda are also included. Original documentation, photos, and figures are included throughout the text.
2. Key Elements of an Effective Export Control System -- This section discusses governments' role in developing policies to better regulate export controls and creating an environment supportive of nonproliferation efforts; industry's role in developing internal compliance systems to ensure strict adherence to governments' policy; and the need for companies and governments to work together to enforce those policies. Although not a detailed explanation of national and international export control systems, the section provides information and resources for the implementation of export control systems. It includes a model for a corporate internal compliance system based on a system created by the Leybold company in Germany in the early 1990s. Leybold developed its extraordinarily rigorous system after several problems with its exports during the 1980s and early 1990s. This system has served as a model for many companies including Leybold's own divestments.
3. Supplemental Material -- This section includes documents and reports that supplement the information provided in the two main sections of this report. It includes background information about Iraq's nuclear weapons program prior to the Persian Gulf War. The section also includes presentations from workshops co-sponsored by ISIS, including "Nonproliferation, Nuclear Security, and Export Controls: Lessons and Challenges," with the Center for Export Controls in Moscow, and "International Seminar on Export Controls and Nuclear Proliferation" and "Second International Workshop on Nuclear Export Controls" with the Institute of Physics and Power Engineering in Obninsk.