Volume 1 - Iraq Watch

• A foreign intelligence service revealed in 2002 thatthe IAEC was pursuing procurement contracts froma South African company for HF communicationssystems and 16,000 channel receivers.• Captured documents dated 2002 show direct negotiationswith several Indian institutions for medicaland chemical technology transfers.• Other documents dated 2002 reveal contracts toobtain vacuum furnaces manufactured in Russia.Documentary evidence and debriefings, however,reveal that the IAEC also used the MIC, MIC frontcompanies, and the IIS to procure foreign materialsand technologies.• Internal memoranda dated January 1995 reveal thatthe IAEC was reviewing procurement contractswith the Al-Basha’ir Company, the Latif Company,and the Al Jubayl Office. These contracts werebased on oil bartering—common practice beforethe UN OFF Program was accepted in 1996.• In July 1996,MIC, Al-Basha’ir Company, Ministryof Industry, and IAEC were passing correspondenceregarding overdue debts to Al-Basha’ir totaling$14.2 million.• According to a former Iraqi scientist, the IAECasked the MIC to obtain $3.5 million worth of computercards in 1998.• Improvement of the IAEC’s nonnuclear technicaland manufacturing capabilities.• Budget increases that resulted in ten-fold salaryincreases and new recruiting efforts for IAEC scientists.The IAEC’s procurement relationship with the IISdates back to the late 1990s. The IIS procurementchannel was reportedly reserved for sensitive foreigntechnical information and items prohibited bythe UN sanctions. March 2002 IIS internal documentsdescribe the creation of a committee to obtainresources for the IAEC.Ministry of Transport and CommunicationThe Ministry of Transportation and Communication(MoTC) also facilitated and participated in the procurementof prohibited items for the former Regime.The MoTC transshipped sensitive commodities intoIraq using a range of deceptive practices designed tofoil international monitoring efforts. The MoTC alsoserved as a benign cover end user for the acquisitionof dual-use items for the MoD and other Iraqi securityservices. The MoTC procured prohibited fiber-opticmaterials to improve the Iraqi telecommunicationsinfrastructure. By evaluating these contributions, wejudge that the MoTC played a small but importantrole in Iraq’s illicit procurement programs.Regime Financeand ProcurementIn January 2002, according to a detained senior MICofficial, Saddam directed the MIC to assist the IAECwith foreign procurement. On a few occasions theIAEC used MIC to procure goods, ostensibly as partof the IAEC modernization project. At this time,Saddam Husayn also directed the IAEC to begina multi-year procurement project called the IAECModernization Program. This program, which wasstill functioning up to the Coalition invasion in 2003,strove to revitalize the IAEC capabilities. The chiefimprovements under the program included:• Creation of new machine tools workshop atTuwaitha outfitted with new generic machine tools,including CNC machines (see Figure 49).Mission and Key Procurement Companies underthe MoTCThe MoTC was responsible for all internal movementof commercial goods in and out of Iraq. The MoTCaccomplished this mission through 14 state-ownedenterprises known as “General Companies”. Threeof these stand out as playing key parts in facilitatingillicit procurement for Iraq.• The Iraqi Land Transportation General Company(ILTC), which controlled all surface transport inand out of Iraq with the exception of fuel transportand railways.• The Iraqi-Syrian Land Transportation Company hadoffices near customs points at Tartus port in Syriato assist in the movement of goods into Iraq. This83