‘Smuggling’ goods for N-programme: US Justice Department indicts five Pakistanis

January 18, 2020

A Justice Department statement said five men exported the goods to Pakistan’s Advanced Engineering Research Organization (AERO) and the Pakistan Atomic Energy Commission without export licenses in violation of US federal laws

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WASHINGTON/ISLAMABAD: The US Department of Justice has indicted five businessmen associated with a Pakistan-based front company for allegedly operating a network that exported US origin goods to Pakistan for its nuclear programme.

A Justice Department statement said five men exported the goods to Pakistan’s Advanced Engineering Research Organization (AERO) and the Pakistan Atomic Energy Commission without export licenses in violation of US federal laws.

The indictment identified 38 separate exports from the US that the defendants caused, involving 29 different companies from around the country. Three of those companies are in New Hampshire. None of the US companies is alleged to have been complicit in the illegal exports.

Each defendant is charged with two felony counts of conspiracy. Although arrest warrants are pending, none of the five defendants has thus far been apprehended.

According to the indictment, the defendants attempted to conceal the true destinations in Pakistan of the US-origin goods by using the conspirators’ network of front companies as the supposed purchasers and end users of the goods and as the apparent source of payments for the goods, even though the goods were ultimately received in Pakistan and paid for by AERO or PAEC.

The defendants caused the US companies to file export documents that falsely identified the Ultimate Consignees of the shipments as entities other than AERO and PAEC. The defendants never applied for or obtained an export license from the Department of Commerce authorizing the export of goods to AERO or PAEC in Pakistan.

“The defendants smuggled US origin goods to entities that have been designated for years as threats to US national security for their ties to Pakistan’s weapons programs,” Assistant Attorney General for National Security John Demers said, adding, “This indictment puts the world on notice not to do business with these defendants and demonstrates our commitment to holding them accountable.”

The front company has been identified as “Business World” based in Rawalpindi and the defendants were named as Muhammad Kamran Wali, 41, of Pakistan; Muhammad Ahsan Wali, 48, and Haji Wali Muhammad Sheikh, 82, both of Mississauga, Ontario, Canada; Ashraf Khan Muhammad of Hong Kong; and Ahmed Waheed, 52, of Ilford, Essex, UK.

All were indicted in the federal court for conspiracy to violate the International Emergency Economic Powers Act and the Export Control Reform Act. The grand jury had returned the indictment on Oct 16, 2019, and was unsealed this week.

According to the indictment, between September 2014 and October 2019, the defendants operated an international procurement network of front companies that existed to acquire US-origin goods for the Advanced Engineering Research Organization (AERO) and the Pakistan Atomic Energy Commission (PAEC), and to cause those goods to be exported from the United States to the entities without export licenses in violation of federals law.

Both AERO and PAEC were on the Commerce Department’s Entity List, which imposes export license requirements for organizations whose activities are found to be contrary to US national security or foreign policy interests.

The PAEC was added to the Entity List in 1998. AERO was added to the Entity List in 2014, after the US government found that it had used intermediaries and front companies to procure items for use in Pakistan’s cruise missile and strategic UAV programs.

“The alleged behavior of these five individuals presented more than a violation of US export laws, it posed a potential threat to the national security interests of the United States and to the delicate balance of power among nations within the region,” said Jason Molina, Acting Special Agent in Charge, Homeland Security Investigations - which is a counter-proliferation group that proactively works investigations into US import-export licensing laws violations because of the threat it could pose to national security.

“Federal export control laws are vital tools that help prevent items from being exported overseas where they could be used in ways that can jeopardize our national security,” said US Attorney Scott W. Murray for the District of New Hampshire.

“In order to protect the safety and security of the American people, we work closely with our law enforcement partners to identify those who violate these important laws. We will continue to be vigilant in our efforts to identify individuals whose actions may jeopardize the national security of the United States.”

The matter was investigated by the Department of Commerce’s Office of Export Enforcement; the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service; and Immigration and Customs Enforcement’s Homeland Security Investigations.

The case is being prosecuted by Assistant US Attorney John Davis and Trial Attorney Nicholas Hunter of DOJ’s Counterintelligence and Export Control Section, National Security Division.

Meanwhile, Pakistan said it had received no official information from the United States that its five national had been indicted for allegedly running a network that purchased US products for its nuclear programme.

“We have seen reports about the indictment of five individuals alleged to have exported items to some Pakistani entities on the US Department of Commerce Entity List, but have received no official information from the US and are trying to ascertain facts,” Foreign Office spokesperson Aisha Farooqui commented.

“The identities of individuals have not been shared with us. There has been no effort to verify any facts from us,” she said. Farooqui said the Foreign Office at the moment was not in a position to comment without having details, though there have been instances in the past when restrictions have been placed on Pakistani entities on mere suspicion.

“In many cases denials have been made based on ‘catch-all’ provisions for items which were not even on any control lists and were intended for purely peaceful uses and socio-economic development,” she said. Pakistan, said the spokesperson, had genuine socio-economic development needs involving utilization of equipment, items and technologies, some of which might also be dual-use technologies. “In such cases, we ensure that we follow all end-use certification requirements and provide guarantees against any misuse or diversion. If there are any additional requirements/guarantees required, we are always willing to consider those,” she added.

As far as denial of technology to Pakistan is concerned, the Foreign Office states that it finds references to delicate regional balance as specifically objectionable and frivolous considering the fact that one country in the region has been given waivers and special status for access to sensitive technologies. “This has led to development of advanced military weaponry and is threatening strategic stability in South Asia,” she said without naming India.

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