Iraq: U. S. Thwarts Saddam’s Smuggling Efforts

Recent U.S. efforts to control the spread of weapons of mass destruction have paid off, with a guilty plea from the man who arranged the shipment of 30 tons of rocket fuel to Iraq probably for long-range missiles and the arrests of two other men who allegedly financed the deal.

The case is significant, said John Despres, U.S. Commerce Department assistant secretary for export enforcement, because it “shows that U.S. persons are subject to U.S. criminal law even if and when they confine themselves to transactions outside of the United States with non-U.S.-origin items.” The case also marked the first time the 1991 Enhanced Proliferation Control Initiative (EPCI) regulations have been extended to acts outside the United States.

The rocket fuel was ammonium perchlorate, which is controlled for export under the Missile Technology Control Regime (MTCR).

The shipment could have been destined for missiles or to extend the range of artillery shells, said Tim Trevan, special advisor to the U.N. Commission on Iraq. The “huge amount” involved and the powder’s grain size was consistent with missile use, Trevan said, adding that Iraq’s poor economy made it unlikely that Baghdad would pay for 150,000 new artillery shells the amount that could be produced from 30 tons of ammonium perchlorate.

Iraq is allowed to have short-range missiles, but is forbidden to have any missile with a range greater than 150 kilometers. Iraq never sought approval from the U.N. sanctions committee to import the chemical, and has denied trying to buy it, Trevan said.

The cargo, which came from China via Hong Kong, was seized from a German ship, the Asian Senator in a Saudi Arabian port in December 1993. The chemical was intentionally mislabeled as ammonium sulphate, a water purifying agent, and was being sent to a company in Jordan run by Zeid Khorma, a 34-year-old Jordanian that U.S. officials say was doing Iraq’s international shopping. Khorma ran another company, Zak and Partners, specifically for funneling illegal shipments to Iraq, officials said.

“They would give him a shopping list and his business was to get it,” said Michael Nestor, a U.S. Customs agent in New York.

Storm Kheem, a U.S. exporter, went to Iraq in January 1992 to meet Khorma’s Iraqi contacts, according to the complaint filed in U.S. district court in New York. In late 1993, Kheem allegedly used his Long Island company, Bkesco Inc., to arrange the rocket fuel shipment through an agent in Hong Kong, the Chemical Import Export Corporation of Guangdong. U.S. officials were tipped to the shipment by the People’s Republic of China.

Kheem pleaded guilty in January 1995 to failing to get a license required by U.S. nonproliferation laws and breaking the embargo on sales to Iraq. He faces a maximum penalty of $250,000 or five years jail for each offense. Zeid Khorma’s father and brother, Ahmad Khorma, 61, a Jordanian citizen, and Mosab Khorma, 29, a naturalized U.S. citizen, were arrested for financing Zeid Khorma’s operation. As the Risk Report went to press, they had not entered a plea.

Ammonium Perchlorate
This solid rocket fuel is used in virtually all modern missiles, including Iraq’s small tactical missiles and artillery rockets.

Listed in Missile Technology Control Regime Annex. Exporters in MTCR states must obtain an export license before shipping this material.