False End-User Statements
Proliferant states have been masters at creating false end-users, inventing cover stories for both the use and location of sensitive items. The number of examples is almost limitless, although the following offers a sampling of false end-uses given by various countries and companies.
In the 1970s, Pakistan referred to its gas centrifuge facility
as a textile factory, using a spinning top as the company's logo
on its stationary. Over the years, the unsafeguarded Pakistani nuclear
program generated hundreds of domestic companies as end-users of
sensitive items. Keeping track of all these companies is a challenge,
even for the United States. In 1999, the United States published
"The Entities List" that contains a list of end-users in China,
India, Israel, Pakistan, and Russia that present an unacceptable
risk of diversion to developing weapons of mass destruction or the
missiles used to deliver those weapons. A U.S. exporter is required
to apply for a license under the "catch-all" provisions of the Export
Administration Regulations to transfer any item to these end-users.
The list for Pakistan contains over 90 companies, and the list for
India has triple the number of companies of Pakistan. For more information
click here.
The case of the German company H+H Metalform provides many examples of deceptive end-user statements.
- In a 1985 German license application for a vertical flow-forming machine for the Brazilian gas centrifuge program, H+H Metalform listed the end use as manufacturing tubes of diameters 150, 176, and 296 millimeters. The actual use was the production of gas centrifuge rotors and missile casings.
- In the mid-1980s, H+H sold a flow-forming machine to the Russian company Standopress. The end-use was stated as manufacturing train brake cylinders and hydraulic and pneumatic cylinders. The suspected use was the production of rocket engine casings and gas centrifuge rotors.
- In 1987, H+H sold Iraq nine flow-forming machines for military purposes, mostly
rocket casings. Anticipating that German export control officials
would never permit the export of such machines for military purposes,
H+H and Iraq invented an end-use of milk and oil separators (see
letters between H+H and Nassr). Every subsequent export application
contained this end-use, and Iraq willingly provided supporting
information.
A visit by a senior Iraqi scientist to U.S. national laboratories helped Iraq to create better cover stories for its exports. By learning about current major areas of nuclear research, Iraq could disguise purchases by hiding them in these research areas.
Companies have gotten sloppy in listing end-uses on their export applications. In Germany in the 1980s, however, such sloppiness was sometimes overlooked by export control officials. In examining an application from H+H Metalform to India, the German export officials relied without questioning on the stated end-use on the application, which was listed as "separator parts." However, the application included drawings with stamps and confirmation by the customer that together pointed to the end-user as an "engine division" at Hindustan Aeronautics. The parts were actually rocket combustion chamber and nozzle parts for the engine of the Prithvi rocket. In fact, the name Prithvi was stamped on one of the drawings.
