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Procurement requires payments and transportation arrangements. Because many of the purchases for a proliferant state's nuclear weapons program are illegal or bound to raise suspicions, proliferants have created complicated payment and smuggling schemes.
Funding
Many purchases are paid by letters of credit or bank transfers. In other cases, cash payments are used. Sometimes, extremely complicated arrangements are used to pay customers or acquire foreign companies for illicit procurement.Payments to Iraqi suppliers were often done via letters of credit issued by various banks. The gas centrifuge program frequently used the German Dresdener Bank and Iraq's central bank. Other times, Iraq paid its suppliers in cash. In some cases, payments were made to secret Swiss bank accounts.
Iraq established a special relationship with the Atlanta branch of Banca Nationale de Lavoro (BNL) that enabled Iraq to obtain credit and borrow about $2.16 billion for its procurement of Western industrial commodities. These funds went to build both its civilian and military infrastructure. For more information on Iraq's relationship with BNL, click here.
Transportation Arrangements
Transportation arrangements vary widely. Many items are sent by ship. In other cases, the item may be sent back by a country's national airline. The latter can be risky, because customs and intelligence officials may carefully monitor the cargo on certain countries' airlines.For certain sensitive items, a proliferant's representative picked up an item from an expert or a company in a foreign country and delivered it to the proliferant embassy, where it can be sent home via a diplomatic pouch. This method was used by Iraq to transport classified documents and possibly gas centrifuge components.
Some shippers are actually smugglers and can help deliver sensitive items in secret or in violation of an embargo. After Iraq invaded Kuwait in August 1990 and the United Nations Security Council imposed an embargo, Iraq worked to find ways to transport much needed items for its nuclear weapons program. In October 1990, representatives of the nuclear weapons program met a representative of the Gulf Water Maritime Services Company to discuss illicit shipments. This company, based in the United Arab Emirates, maintained a large fleet of ships. According to an Iraqi report on the meeting, the company purchased embargoed material held at Kaskraab ports at about 5-10 percent of its original value. The company "has special means to deliver it to any country." The Iraqis recommended, as an experiment, to have the company transport one of the shipments being held in Turkey. Iraq had two shipments of manually-controlled valves valued at 30,000 Dinars moving through the "w'ayn channels." The meaning of the "w'ayn channel" is unknown.
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