Commission to Assess the Ballistic Missile Threat to the United States
Appendix III: Unclassified Working Papers
System Planning Corporation: "Non-Proliferation Issues"
Germany
Executive Summary
Germany does not pose a direct ballistic missile threat to the United
States. Germany does not possess ICBM's, and there is no evidence in the
unclassified literature suggesting that it plans to acquire an
intercontinental capability by 2015. Germany possesses, however, an
indigenously developed aerodynamic missile, the AS 34 Kormoran 1 & 2, which
could pose a threat to the United States if launch from air-borne or
sea-borne platforms. In addition, the unclassified literature suggests that
Daimler-Benz aerospace, the nation's largest aerospace firm, is developing
the ASS 500, a missile that can carry a 500 kg payload to a range of 500
km. Reports suggest that this missile will be fielded by 2015. Like the AS
34 Kormoran, it will only present a threat to the United States if launched
from airborne or seaborne platform.
This does not suggest, however, that Germany's behavior has not threatened
U.S. national security interests. Germany's export policies have been
extremely problematic. German equipment, technology and technical know-how
were used in Iraq's nuclear, chemical and biological weapons programs as
well as ballistic missile programs prior to the Gulf War. Furthermore,
German companies helped Libya construct several chemical weapons facilities
during the 1980's, illustrating the willingness of German industry to
assist foreign WMD programs during the 1980's.
While Germany has attempted to strengthen its export control system since
the Gulf War, reports suggest that German companies continue to supply
material and technology to Syria, Iraq and Iran for use in their ballistic
missile programs. These nations continue to obtain dual-use equipment from
German companies, and frequently apply them for military purposes. Nations
like Iran have attempted to exploit weaknesses in Germany's export control
system by setting up international procurement networks throughout Western
Europe in order to obtain equipment for its ballistic missile programs.
Although the German government has taken steps to abolish such activity,
its efforts have proved largely ineffective.
Arms Expenditures, Sales and Cooperation With other European Nations
Germany's defense industry, like the defense industries of other Western
European nations, has experienced a rapid mutation since the end of the
Cold War. European economic integration has forced significant changes in
the structure and activities of Germany's defense firms. A falling domestic
defense budget, defense production overcapacity and shrinking defense
exports have catalyzed profound structural reorganization of Germany's
defense industry.
Although Germany has reduced the total manpower strength of its armed
forces to 340,000 (a drop of 40 percent since 1990), and domestic military
expenditures have fallen consistently in recent years, Germany still ranked
sixth worldwide in military expenditures in 1995, spending more than $41
billion on total defense operations.
Germany exported more than $1.2 billion in armaments and related military
technologies in 1995. While this figure is $235 million less than in 1994,
and 55 percent lower than in 1991, it still places Germany as the fifth
largest arms exporter in the world, accounting for 12 percent of Western
European and 4 percent of world sales. 1 Between 1993-1995, Germany
exported 38 percent, or $1.6 billion worth of arms to East Asia (virtually
all of which went to South Korea), 27 percent or $1.1 billion to Western
Europe, and 11 percent or $500 million to Australia.
Consolidation in the German Aerospace Industry: The Creation of
Daimler-Benz Aerospace
Since 1990, there has been considerable consolidation within Europe's
defense and aerospace sectors. The process of consolidation is typified by
mergers in Germany's aerospace industry. Messerschmitt-Bolkow-Blohm (MBB),
the product of previous mergers, was combined with Dornier to form Deutsche
Aerospace, which in turn was united with Daimler Benz Aerospace. The
activities of the Daimler-Benz Group in the fields of aircraft, space,
defense systems and aircraft engines have been concentrated in Daimler-Benz
Aerospace AG (DASA, Munich) ever since the latter's foundation on May 19,
1989. Daimler-Benz has asserted itself in recent years as one of the
world's most preeminent actors in the aerospace industry.
Daimler-Benz Aerospace operates on a worldwide basis. It is an equal
partner in a large number of international alliances such
as Airbus, Ariane, Eurocopter, and several engine programs like
the V2500, Eurojet, and ADP. Daimler-Benz Aerospace makes
75 percent of its total turnover by means of international cooperative
programs. The know-how and activities of the original companies have been
assigned to Dasa's six Business Units: Civil Aircraft, Military Aircraft,
Space Infrastructure, Satellites, Defense and Civil Systems, and
Aero-Engines.
Civil Aircraft
In the field of large passenger aircraft, Daimler-Benz Aerospace holds a
share of 37.9 percent in the European Airbus Industrie consortium through
Daimler-Benz Aerospace Airbus GmbH (Hamburg) and is the principal partner
together with Aerospatiale (France). British Aerospace holds 20 percent and
Casa of Spain
4.2 percent. Daimler-Benz Aerospace Airbus supplies major assemblies for
the Airbus family and is also in charge of the entire interior equipment of
these aircraft.
Military Aircraft
Currently, the focal point of the activities in the Military Aircraft
business unit lies in the development of the European fighter aircraft,
Eurofighter, and the preparations for this aircraft to go into series
production. The first prototype successfully completed its maiden flight in
March 1994. In February 1997, the second German prototype commenced test
flights powered by the EJ 200 engine and equipped with the ECR90 radar,
this being the status as yet closest to that of the final series aircraft.
Since 1997, all seven Eurofighter prototypes have been participating in the
practical demonstrations given in all four partner countries to prove that
the aircraft is ready to go into production. Confirmation was then given on
December 22, 1997 when the Memorandum of Understanding was signed giving
the
go-ahead for the Production Investment and Production phases, participants
in the program being DASA, British Aerospace (Great Britain), Alenia
(Italy) and Casa (Spain).
The Military Aircraft Business Unit is also involved in the tri-national
Tornado program (Germany, Britain, Italy). Series production has now been
completed, DASA having been responsible for the complete center sections of
the fuselage and for final assembly of the Tornadoes destined for the
German Air Force including 35 ECR Tornadoes, a special electronic warfare
and reconnaissance version of the aircraft. Currently, the company is
responsible for maintenance and repair work as well as carrying out combat
efficiency improvement on these aircraft.
Aero-Engines
The Aeroengines Business Unit is synonymous with the Dasa subsidiary MTU
Motoren- und Turbinen-Union München. MTU
has the leading position in this branch in Germany, developing, producing
and maintaining engines for passenger and transport aircraft, helicopters,
turboprop aircraft and combat and training aircraft. Within the framework
of international cooperation, MTU
is active in all essential areas of technology for an engine such as
compressors, combustion chambers, high- and low-pressure turbines or
control. MTU is systems integrator for the military programs of the German
Armed Forces.
In the field of engines for passenger and business aircraft, MTU
particularly cooperates with the renowned American engine manufacturer
Pratt & Whitney and with the U.S. General Electric corporation. Since March
1991, an agreement has been in effect with Pratt & Whitney, in which the
companies classify one another as "preferred partners" in commercial
programs. MTU cooperates with European partners on military aeroengines.
Defense and Civil Systems
The Defense and Civil Systems Business Unit offers a wide range of defense
electronics and is involved in a whole host of European and transatlantic
guided missile programs. The main area of effort comprises radar,
communication, command and reconnaissance systems. Dasa is further engaged
as a service enterprise in the areas of munitions disposal and logistics.
This business unit is utilizing the expertise gained in defense technology
also in new civil products and systems. In the course of its strategic
orientation in the defense technology field, Dasa has acquired the Siemens
Defense Electronics Unit based in Munich-Unterschleissheim.
As a key subsidiary, LFK-Lenkflugkörpersysteme GmbH (LFK GmbH) develops and
manufactures guided missile systems, primarily within the framework of
international collaborative programs. Such systems encompass firing units,
missiles and peripheral equipment.
Providing corporate authorities and government regulators give their
assent, Matra BAe Dynamics will acquire a 30% minority holding in LFK GmbH.
This represents an important step in the direction of European
restructuring, which is essential to increasing competitiveness in the
world's markets. The existing European and transatlantic collaborative
projects of LFK GmbH will continue unaffected.
Germany's Space Programs
German space endeavors have always been a part of wider European and
international activities. The nation has never attempted to develop an
independent space program. After France, Germany is the largest contributor
to the European Space Agency (ESA), accounting for over 20 percent of the
organization's total annual funding. 2 Although budgetary restrictions
related to German reunification have forced Germany to scale back its ESA
contributions, Germany has still managed to increase its ESA payments by
2.5 percent annually for much of the decade. The DARA space agency holds
sole authority over Germany's space plans, with the exception of the
hypersonic technology program that falls under the jurisdiction of the
Ministry of Research & Technology's aeronautics activities.
Germany does not possess an independent space launch capability. Although
its has been one of the largest contributors to the development of the
Ariane family of SLV's (Germany has provided 22 percent of the funding for
Ariane 5), and has played a leading role in the development of the
Sanger-Horus spaceplane that will serve as the successor to the Hermes
craft, it has focused its space activities in recent years almost
exclusively on improving its Earth observation capabilities.
Daimler-Benz Satellite Systems
Daimler-Benz's Satellite Systems Business Unit has virtually total control
over Germany's satellite development programs. The unit comprises Dornier
Satellitensysteme GmbH (DSS), with production facilities in Friedrichshafen
and Ottobrunn, and also the Operation and Services sector. The company is
responsible for the development, construction and marketing of satellite
systems, payloads, instruments, subsystems and components for civil,
security and defense operations in the fields of science, Earth
observation, meteorology, communications and navigation. DSS is also active
in the field of satellite data utilization and offers its own customer data
service.
The activities of DSS also embrace the ERS-1 and ERS-2 remote sensing
satellites and the SIR-C/X-SAR multi-frequency radar instrument. As a
systems integrator, DSS also develops and constructs instruments for the
scientific exploration of space such as the Ulysses solar probe, the Rosat
X-ray satellite or the Huygens Titan probe. For the German Aerospace Center
(DLR), DSS has also developed the re-usable scientific satellite
Astro-Spas, which has already completed four missions successfully.
Management competence and extensive know-how in large-scale satellite
projects for science and observation of the Earth led to DSS being
commissioned in 1996 to build the XMM European X-ray satellites and to
carry out the Envisat-1 environmental mission.
Germany's Ballistic and Aerodynamic Missile Capabilities
Germany derives a significant amount of its civilian power production from
nuclear reactors. Despite its reliance on nuclear power, Germany does not
possess nuclear weapons. There is no evidence in the unclassified
literature suggesting that Germany will renege its NPT commitments,
however, and pursue a nuclear option even in the face of a changing
European security environment.
The unclassified literature also suggests that Germany has never possessed,
nor has ever attempted to develop, long range and short range ballistic
missiles that can strike the United States. Although it appears that
Daimler-Benz aerospace possesses the technical know-how to develop such
missiles, German defense planners have never pursued this option.
Germany possesses, however, the AS 34 Kormoran aerodynamic missile. This
missile could threaten the United States if launched from either sea-borne
or air-borne platforms by countries or non-state actors with hostile
intentions towards the United States. Reports have also recently surfaced
that Germany has conducted wind tunnel tests on a supersonic aerodynamic
missile, the ASS 500, that may be able to carry a 500 kg payload to a range
of 500 km.
AS 34 Kormoran 1 and 2
The AS 34 Kormoran anti-ship, air to surface program was begun in 1962. The
AS 34 Kormoran 1 is a short-range, radar guided, ASM powered by a solid
propellant motor and armed with a HE warhead. This missile is 4.4 meters
long, has a launch weight of 600 kg, and is fitted with a 160 kg
semi-armor-piercing warhead. The missile has cruise speed of about MO.9 and
has a maximum effective range of 30 km. The missile must be launched at
speeds greater than MO.6. The missile entered service in 1977, and about
350 missiles were delivered to the German Navy for use with their Tornados.
3
In 1982, Germany began development of the Kormoran 2. The missile has the
same basic air-frame and propulsion system as its predecessor, but can
carry a warhead of 225 kg, and can be used to ranges of up to 35 km. The
missile entered service in 1991, and approximately 140 have been delivered
to the German Navy. There are no known exports of either version of the
missile.
ASS 500
LFK, a subsidiary of Daimler-Benz aerospace, has reportedly conducted
wind-tunnel tests on a supersonic missile called the ASS 500, which could
be fielded by 2015. According to assessments in the July 1997 issue of
Flight Magazine, the missile could carry a 500 kg kinetic energy penetrator
warhead up to a range of 500 km. The missile will be delivered by the
Panvia Tornado, and will reach a flight speed between Mach 2.5 - 4.0. Like
the Kormoran 34, this missile may present a future threat to the United
States if launched by airborne platform.
Unclassified assessments suggest that the missile's guidance system will
comprise a number of navigation systems including, intertial/satellite,
infra-red sensor, and phased-array radar. LFK has designed this guidance
system in order to achieve high kill probabilities against masked targets
or targets with few surface features.
Although there is limited information on this missile, the preliminary
estimates on its range/payload specifications suggest that it could be used
to carry a WMD warhead to a range of 500 km. If these preliminary
range/payload specifications prove accurate, the transfer of the ASS 500
and its associated technology will violate the parameters of the MTCR.
Germany and Nonproliferation
Although Germany does not present a direct ballistic or aerodynamic missile
threat to the United States, its past export policies have been extremely
problematic. German equipment, technology and know-how were used by Iraq to
develop WMD and ballistic missile delivery systems prior to the Gulf War.
Since the end of the Gulf War, however, Germany has attempted to strengthen
its export control system to ensure that German equipment and technology is
not used to produce WMD or ballistic missile delivery systems. The
following sections outline Germany's past assistance to Iraqi WMD programs,
examines Germany's current export control system, and reports how Germany
may continue to assist ballistic missile programs in Syria, Iraq and Iran.
Germany and Iraq: Prior to the Gulf War
For thirty years prior to the Gulf War, Germany refused to authorize the
export of arms to Iraq. Following the Gulf War, however, it was revealed
that Germany had offered extensive assistance to Iraq's WMD and ballistic
missile programs. Some scholars, like Michael Ledeen, have asserted that
hundreds, and perhaps thousands, of German scientists, businessmen and
middlemen played an integral role in Iraq's $50 billion effort to develop
nuclear, chemical and biological weapons, as well as ballistic missile
delivery systems. 4 As many as 80 German companies, including companies
like MBB and Karl Zeiss were implicated as suppliers for Iraq's WMD
programs after the Gulf War.
Ballistic Missile Program
Beginning in the early 1980's, Germany provided fundamental assistance to
Iraq's ballistic missile programs. In 1984, Iraq's Saad General
Establishment signed a contract with Gildemeister Projecta of Bielefld,
West Germany, a wholly owned subsidiary of the German machine tool
manufacturer Gildemeister AG or GIPRO. Under the terms of the contract,
Germany agreed to design, construct and fit a complete missile research,
development and test center near the Iraqi city of Mosul that included,
advanced wind tunnels, electronics workshops, manufacturing facilities for
missile parts, and missile assembly plants. German companies such as MBB,
BP, Carl Zeiss, Degussa, Rhinemetall and Tesa also won contracts to supply
the Iraqi facility which later became known as Saad 16.
In order to hide the true nature of the facility from the international
community, GIPRO disguised the complex as a university research facility,
insisting in German export licensing documents that the facility would
comprise laboratories and workshops similar to those German universities.
In all, more than 38 West German companies supplied equipment to this
facility, including, MBB, Siemens, and Thyssen. In his book, The Death
Lobby: How the West Armed Iraq, Kenneth Timmerman asserts that the German
government asked no questions about the proposed contract. It was worth far
too much money for German industry. 5 In fact, Gildemeister applied for and
received a blanket permit to export whatever it desired to Saad 16, and did
not require any further licensing requirements. According to Germany's
Federal Economic Agency which supplied the permit to Gildemeister,
constructing a ballistic missile design and testing center was considered
legitimate business for German companies.
After Saad 16 had become operational, German scientists, technicians and
researchers continued work conducted in Argentina and Egypt on the Condor I
and II projects. 6 Some assessments of Germany's involvement in Saad 16
assert that German technical assistance was integral in enabling Iraq to
increase the range of the Tamuz-1, an Iraqi missile that resembles the
Condor-2, to 1000 km. 7 Others suggest that without German assistance,
Iraq's Al-Huseyn missiles would never have been able to reach Israel during
the Gulf War. German laxity in enforcing its export controls allowed German
industry to transfer compressors to Iraq that were used to improve the
range of Scud missiles. 8
Chemical Weapons Program
German involvement in Iraq's chemical weapons program began in 1977. In
1980, Germany began construction on what the Iraqis labeled a "pesticide
plant" at Samarra, despite its extreme security measures, barbed wire
fences and armed guards. Four years later, the facility became operational.
The key technologies for Samarra came from four German companies for a
number of years: Kolb and its subsidiary, Pilot Plant; Walter Engineering
Trading (WET); and Preussag AG.
In the early 1990's, a Swiss Chemical Weapons expert, Werner Richarz, was
hired by the German government to determine whether Samarra had been built
to construct chemical weapons. Richarz bluntly concluded that German
technology and assistance greatly enhanced Iraq's ability to manufacture
poison gas and prussic acid. 9 He also noted that Samarra was probably one
of the largest chemical weapons facilities in the world.
In addition to aiding the development of Iraq's Samarra chemical weapons
facility, German assistance was integral to the creation of Iraq's other
main chemical weapons facility at Salman Pak. The German firm Thyssen
Rheinstahl Technology (TRT) headed the development of this facility. In
addition to supplying technologies for the development of chemical weapons,
Thyssen helped Iraq construct an array of biological weapons such as
anthrax, cholera, and typhoid agents in large quantities in TRT built
laboratories. 10
Although not related directly to the Samarra or Salman Pak facilities,
German companies also helped Libya construct chemical weapons facilities at
Rabta and the Sabba military base, further illustrating the willingness of
German companies to assist foreign WMD programs during the 1980's. 11
Nuclear Weapons Program
On January 13, 1992, experts from the Iraqi centrifuge program at the
Tuwaitha Nuclear Research Center gave IAEA inspectors their most
comprehensive description of Iraq's centrifuge program to date. The Iraqis
announced that they had imported German technology and material needed to
manufacture centrifuge components.
It appears however, that neither the German government nor German industry
intentionally supported Iraq's nuclear weapons program. While Iraq had
little success in obtaining controlled items from German companies, it was
highly successful in acquiring technology and material with dual-use
applications; equipment which has numerous civilian uses and thus is
subject to less regulations. Iraq's import permit applications always
stated that the equipment would be used for civilian industrial use. In
order to disguise Iraq's intentions as thoroughly as possible, Iraqi
officials broke down their German orders into inconspicuous subcategories.
Iraq used an intricate web of middlemen to obtain German equipment for its
gas centrifuge program. These individuals disguised the destination of
dual-use imports to assure German suppliers that the equipment would be
used for peaceful purposes. Scholars have concluded that German companies
such as Interatom (a subsidiary of Siemens AG) and H&H Metalform were
therefore unaware that their exports were being used in Iraq's gas
centrifuge enrichment program. 12
According to Michael Ledeen's article "Iraq's German connection," some
German firms continued to supply materials for Iraq's nuclear program even
after Iraq's annexation of Kuwait in August 1990. He also concludes that
German companies may have continued to ship nuclear technology to Iraqi
contacts in Pakistan three weeks into the Gulf War. 13
Germany's International Arms Control Commitments
Germany is party to virtually every international arms control agreement.
It is a signatory of the Nonproliferation Treaty (NPT), is a member of the
Zangger Committee, Nuclear Suppliers Group (NSG) and Australia Group (AG).
Furthermore, Germany adheres to the principals of the Missile Technology
Control Regime (MTCR).
After it was learned in 1991 that German material and technology were used
in Iraq's WMD programs, Germany attempted to strengthen its export control
system by introducing new legislation and enforcement mechanisms in order
to prevent any further damage to its international reputation. Despite
these measures, questions still remain about the effectiveness of Germany's
export control system and its ability to halt the spread of dual-use goods
and technologies that are used in WMD applications.
Germany's Export Controls: Statutory Requirements
Germany's export control system is based on two statutes, government
principles, international agreements and implementing regulations. The
Weapons of War Control Act and Foreign Trade and Payments Act, both enacted
in 1961, set the statutory groundwork for Germany's export control system,
and set the guidelines which regulate the control of weapons and military
and civilian equipment and technologies.
Weapons of War Control Act
The Weapons of War Act (KWKG) regulates the export, sale and transport of
weapons and munitions. Although the KWKG does not have any implementing
regulations, it includes a War Weapons List. The first part of this list
asserts that the manufacture, acquisition, transport and possession of
nuclear, chemical and biological weapons is prohibited, while the second
part specifies
the other weapons and munitions that are subject to KWKG regulations. A
government license is required to produce, possess or transport any weapon
on the second part of this list. This statute prohibits the trade of war
weapons, allowing their export only under limited circumstances. In
general, the law asserts that the government has the right to withhold an
export license if the weapons and munitions could disrupt international
peace and stability.
Foreign Trade and Payments Act
The Foreign Trade and Payments Act (AWG) regulates the export of dual-use
goods and technologies, and the export of military-related technology that
is not covered by the KWKG. This law also contains nonproliferation export
controls.
The principle of "freedom of economic activity" is the first priority of
the AWG, and thus, restrictions on exports are allowed only under limited
circumstances. Under this law, the government may deny licenses only: to
ensure the security of Germany, to prevent international disturbances, to
prevent disturbances in German foreign relations, or to fulfill
international agreements. In 1992, however, the AWG was amended to empower
the Minister of Economics to issue orders barring the export of goods and
technologies under certain circumstances, even if the goods are not on a
specific control list.
Regulations
The Foreign Trade and Payments Regulation (AWV) implements the AWG and
identifies the goods and technologies subject to control under that
statute. Under the nonproliferation rules that were adopted in March 1991,
the AWV includes two "catch-all" provisions that impose licensing
requirements on exports of goods and technologies to projects in nations of
proliferation concern.
In addition, in August 1993, the regulation was modified to cover the
transfers of tangible and intangible technologies such as computers and
telefaxes. In this regard, computer software, patent licenses, construction
drawings, models and any instructional advice that can be used for the
development of WMD can be subject to licensing requirements.
Executive Pronouncements
The German government has issued policy statements and guidelines for
private industry on export control initiatives. Such guidelines have
included the Arms Control Export Act of 1982 and its related principals, as
well as Foreign Trade Circular Directives from the Ministry of Economics.
Administrative Agencies
The 1992 modifications of the KWKG, the AWG and the AWV altered the
administrative structure of Germany's export control system. Most notably,
the government established an independent Federal Export Office (BAFA) and
granted this office responsibility under the AWG for the legal and
technical examination of export license applications for dual-use goods and
technologies and the granting of export licenses. The Federal Security
Council (BSR) must approve all controversial or highly sensitive items. The
BSR is an inter-agency committee, comprised of the ministers of Defense,
Economics, Foreign Affairs, Justice and the Interior, and is not an
autonomous or independent agency.
The Finance Ministry's Customs Control Institute (ZKI or FRG Customs) is
Germany's central export control investigating authority. In the early
1990's, this office was raised to federal authority level, and grew from 94
employees in 1988 to nearly
370 by 1994. This office coordinates the activities of over 2,600 customs
officials responsible for German trade.
Increased Cooperation Among Government Agencies
Prior to the early 1990's, the Federal Data Protection Act imposed limits
on the sharing of sensitive information among government agencies.
Following the Gulf War, however, these secrecy restrictions have been eased
in order to allow German ministries to exchange information on export
control related issues. In recent years, the AWG has adopted a provision
authorizing the establishment of an automated data processing system
between the Federal Export Office and German Customs. In addition, the
government has dedicated funds to improve the computer processing system
for licensing applications and develop an information exchange database.
Furthermore, German customs has developed a KOBRA computer program to
supervise all elements of export licensing through the accumulation of
pertinent information. All federal government agencies are required to
submit relevant information to the Customs Office for submission into
KOBRA. Since the Gulf War, the Customs Office has also cooperated more
closely with German intelligence and other government agencies that collect
information on illegal export behavior by German companies.
Export Control Lists
Since the Gulf War, Germany has modified its export control lists in order
to strengthen its control over the export of sensitive goods and
technologies.
Commodity-Based Controls
Commodity-based controls are imposed under two lists, the War Weapons List
and the Export List. Section A of the War Weapons List outlines the
nuclear, chemical and biological weapons that may not be produced in
Germany under the agreement establishing the Western European Union.
Section B of this list controls the export of conventional weapons and
munitions.
The Export List of the AWV controls the export of five categories of goods
and technologies. Part A lists the weapons and armaments that are not
covered by the KWKG; Part B lists the materials and technologies controlled
for nuclear purposes; Part C outlines dual-use goods and technologies that
are of strategic significance; Part D lists chemical plants and chemicals
that are subject to control; and Part E lists the biological plants and
agents that are subject to control. In general, sections A-C correspond to
the former CoCom lists, while sections D-E are based on the lists adopted
by the AG.
Destination-Based Controls
Both the AWG and the AWV include "Country Lists" designed to impose
destination-based controls. Lists A and B comprise all of the nations of
the former Soviet Bloc, while List C includes former Soviet States, China,
and other nations formerly proscribed by CoCom. In December 1990, Germany
created List H that identified 54 nations that were "sensitive" because of
WMD proliferation concerns. This list was reduced to 33 nations in 1993. In
addition to these lists, Country List I controls the export of goods and
technologies to the nations that have not signed the Nonproliferation
Treaty.
"Catch-All Controls"
In 1991, several "catch-all" provisions were added to the AWV. These
controls authorize the Minister of Economics to restrict the export of
goods and technologies, "where the peaceful coexistence of peoples and the
foreign relations of Germany are endangered." Under section 5c of the AWV,
any good or production document is subject to licensing requirements if the
exporter has knowledge that it will be used by any nation on List H for
either weapons manufacture or the construction or operation of a weapons
armament plant. Goods are covered if they are considered "functional
elements of the production process."
Section 5d of the AWV focuses on the nuclear end-use of exported items.
Under this section, any dual-use good or production document is subject to
licensing requirements if the exporter has positive knowledge of its
intended end-use in a facility in any of the countries listed in Section B
of the export list.
Extra-Territorial Controls
In 1991, the German Government initiated legislation requiring government
approval for the participation of German citizens in chemical, biological
and missile programs abroad. Although the legislation is not binding for
non-German citizens, it covers a variety of international activities by
German citizens which may relate to the proliferation of WMD and their
delivery systems by broadly defining "proliferation activities."
German Export Controls and Private Industry
Licensing Requirements
The KWKG requires that any company which seeks to export weapons and
armaments must apply for an export permit from Germany's Export Office.
Under this law, the export of such equipment to NATO members and certain
other countries is permitted preferential licensing treatment. Exports of
such equipment to non-NATO nations is permitted only if the importing
nations' "internal situation" is stable; the delivery does not "increase
existing tensions," and the arms are intended exclusively for defensive
purposes.
The Export Office issues several different types of licenses to German
companies: General, single export, simplified and collective. If a license
application is required, the Export office makes licensing decisions on a
case by case basis. Although the German government typically issues
licenses for exports that have been licensed in the past, applications for
unusual exports are transferred to the FRG Security Council for its
decision.
Export Declarations
If an exporter seeks a license under the KWKG or the AWG, the company's
Designated Export Officer must submit an license application to Germany's
export office as well as an end-use declaration signed by the designated
recipient of the export and a certificate of reliability signed by the
company itself. The Export Office often accepts an international end-use
certificate (IEC) issued by importing entities' government. This
certificate guarantees that the exported goods and technologies will not be
used for military applications. The Export Office examines the IEC and its
issuer and then determines whether to approve the license application. In
addition, any nation that receives a German export under an IEC is
prohibited from re-exporting any of the transferred goods and technologies
without the specific consent of the German government.
FRG Involvement in Private Industry
Since the Gulf War, the German government has attempted to strengthen its
export control system by increasing cooperation between government agencies
and between government and industry. After learning of Germany's
involvement in Iraq's nuclear, chemical and ballistic missile programs, the
FRG adopted strict corporate compliance procedures. In November 1990,
Germany issued "Political Principles Governing the Reliability of Exporters
of War Weapons and Armament-Related Goods." Exporters of any item on the
KWKG control lists or any item covered by Section A, B, C, D, and E of the
AWG are subject to these principles. These principles outline the necessary
actions to be taken where corporate compliance procedures have not been
implemented and where existing compliance procedures have been violated.
The principles require that each company assign a high level manager to the
position of "Designated Export Officer". This individual is responsible for
ensuring that the exporter adopt, implement, and enforce internal
procedures which comply with federal export control standards. In creating
more rigid internal compliance requirements, the FRG government has shifted
a significant amount of responsibility onto German exporters for monitoring
compliance with federal export control standards.
These enforcement practices reflect Germany's desire to strengthen its
export control system to ensure the responsible use of German products in
the international arena. It does not appear that German industry has been a
cooperative partner in this endeavor, however. On numerous occasions,
German firms have lobbied the FRG to relax the measures that were
implemented during the early 1990's. But more problematic, reports have
surfaced that German companies have continued to supply dual-use goods and
technologies to WMD and ballistic missile programs in Syria, Iraq and Iran,
thus suggesting that the government's nonproliferation initiatives have
been imperfect since the end of the Gulf War.
The Diversion of German Dual-Use Material and Technology: Syrian, Iraqi and
Iranian "Spin-On" Efforts
A report released by the Central Intelligence Agency in September 1997
entitled "The Acquisition of Technology Relating to Weapons of Mass
Destruction and Advanced Conventional Munitions" stated that Germany was
the principal target of nations who want to advance their WMD capabilities.
The CIA concluded that German companies have maintained close commercial
ties with Syria, Iraq and Iran, despite the vocal disapproval of the German
Government. The following sections outlines specific examples of Syrian,
Iraqi, and Iranian cooperation with German firms, and assesses their
importance for the Rumsfeld Commission. 14
Syrian-German Cooperation
German firms must receive permission to export dual-use goods to Syria.
Germany's export control watch lists include Syria's Centre d'Etudes de
Recherches Scientifiques (CERS), and its Higher Institute of Applied
Science and Technology (HIAST). CERS is classified as a government agency,
but has since become the center of Syria's state R&D network. CERS is
identified as an organization of concern in Germany's national trade law.
All German products exported to the Center Require a license.
In recent years, it appears that CERS has purchased dual-use technology
from Germany. In November 1992, CERS sent a delegation to Germany to
purchase electronics goods and "connectors" that can be used in ballistic
missile separation. 15 Six months earlier, CERS representatives signed
contracts with German companies to obtained advanced technology equipment.
16
In the early 1990's, it was reported that CERS attempted to establish
ballistic missile manufacturing facilities by soliciting German companies.
In August 1992, Mednews reported that fifteen German companies had supplied
CERS with dual-use materials to produce solid rocket fuel, including, hot
isostatic presses and high temperature ovens. 17
Several months later in January 1993, Italian authorities stopped a German
ship en route to Syria that was loaded with dual-use equipment that could
be used to extent the range of Syrian Scud's from 300 to 700 km. 18
Furthermore, in August 1993, the Simon Wiesenthal Center issued a study
revealing that as many as 100 German companies were both intentionally and
unintentionally aiding Syria construct two underground ballistic missile
factories. The report also revealed that German rocket engineers were
helping Libya develop its ballistic missile program. 19
In addition, there is considerable speculation that German firms have
helped Syria develop cruise missiles since the Gulf War. Jane's Defence
Weekly reported in December 1993 that Syria and Iran were using German
dual-use technology to jointly develop a new cruise missile. 20
Iraqi-German Cooperation
In an October 11,1995 report to the U.N. Security Council, UNSCOM chief
Rolf Ekeus noted that, "new revelations (about Iraq's secret procurement
network) cast into doubt the veracity of Iraq's previous declaration in the
missile area, including the material balance for proscribed weapons and
items." In the fall of 1995, United Nations and U.S. officials accused Iraq
of covertly purchasing missile components from Russian and German firms.
Ekeus accused Iraq of obtaining accelerometers and gyroscopes, special
metals and machine tools in order to manufacture missile engine parts and
guidance equipment. Ekeus also claimed that Iraq had placed orders for
other related missile technology and material with German and Russian
industrial firms. While Ekeus and other U.N. officials conceded that Iraq
has probably not assembled any new ballistic missiles since the Gulf War,
they asserted that Iraq has stockpiled and concealed German materials and
technologies in order to resume the manufacture of ballistic missiles
sometime in the future. These officials asserted that Iraq could ultimately
increase the range of its Scud missile in the future with these components
through reverse engineering 21
Nearly a year after the UN's report, in September 1996, the International
Atomic Energy Agency (IAEA) confiscated an Iraqi carbon-fiber-filament
winding machine in Jordan. This machine can be used in production of both
rocket motor cases and high speed gas centrifuges for uranium enrichment.
This machine was allegedly built for Iraq by Karl-Heinz Schaab, a former
employee of Germany's MAN Technology AG. Schaab planned to send the
equipment to Iraq through a Swiss company and a middleman in Singapore.
Schaab allegedly built another filament winding machine at his German
company, Rosch GmbH, that was designed to wind about 50 carbon-fiber rotor
tubes. The tubes were sold to Iraq around 1989. 22
These reports suggest that Iraq has continued to attempt to obtain German
dual-use equipment and technology, as well as technical know-how, for its
ballistic missile programs from German companies behind the back of UNSCOM
inspection efforts. Whether intentionally or indirectly, German companies
have continued to supply Iraq with dual-use materials that can be used in
its ballistic missile programs despite a revamped domestic export control
system. So long as German companies continue to do business with Iraqi
entities, the possibility exists that dual-use equipment may be diverted to
Iraq's ballistic missile program. In addition, the unclassified literature
suggests that Iraq has attempted to set up a supplier network through other
nations like Jordan. It appears that Iraq has placed fronts in other
nations between Germany and Iraq so that German companies do not know that
they are actually delivering material and technology to Iraq.
Iranian-German Cooperation
In June 1995, German Chancellor Helmut Kohl said in Jerusalem that Germany
could not break its commercial ties with Iran in order to ensure debt
repayment. Since this announcement, the United States has been troubled by
Germany's insistence to maintain commercial ties with Iran.
Although Germany has attempted to restructure its export control system
since the Gulf War in order to ensure that dual-use items are not used for
military purposes, there is considerable speculation that German companies
have supported Iran's ballistic missile development efforts. In addition to
reports that Germany supplied solid fuel technology to Iran's Shehab-3
program during the early and mid 1990's, 23 some believe that the Iranians
have set up an extensive procurement network within Germany in order to
obtain German material and technology for its ballistic missile program.
According to an April 1997 report in the German Newspaper Hamburg Stern,
German authorities believe that Iran has centered its procurement network
in Germany. Iranian companies have set up German "front" companies which in
turn send material and technologies to Iran via Austria or Switzerland.
These companies have allegedly obtained dual-use goods such as milling
cutters, sheet rolling machines and presses, which can be used to construct
missile casings. 24
German officials have attempted to unveil Iran's German procurement
structure, although the Cologne-based Customs Criminal Investigation Agency
(ZKA) has asserted that the investigations are very difficult to conduct
because Iran has used small firms, that are often directed by "low
profile," Iranians that have lived in Germany for a considerable length of
time. According to this report, the Iranian network is discreet and
effective. It is centered in the German states of Schleswig-Holstein,
Rhine-Main, and Cologne Dusseldorf, and often uses Austria as the transit
country.
In recent months, the ZKA has enlarged its investigation of German
companies suspected of illegally exporting arms to Iran's arms industry.
The ZKA has targeted companies such as Krupp, the Mannesmann Corporation,
Siemens and an unnamed Duisburg company in order to determine if they have
illegally supplied dual-use equipment to Iran's ballistic missile program.
25
It appears that these investigations were sparked in part by the signing of
a letter of intent by Iran's Minister for Mines and Metals in January 1997
to purchase the German firm Sket Magdeburg GmbH, a collapsing machine-tool
manufacturer. Reports indicate that the German government has been
extremely concerned about the potential applications of the company's
materials and technology, fearing that its materials and technologies could
be used in Iranian military applications. 26
------------------------------------------------------------------------
1. U.S. Arms Control and Disarmament Agency, World Military Expenditures
and Arms Transfers 1996, Washington D.C., p. 22.
2. Interavia, Space Directory 1992-93, ed. Andrew Wilson, pp. 56-57.
3. For a description of both the Kormoran 1 and 2, see Duncan Lennox, ed.
Jane's Strategic Weapons Systems, September 1997, JSWS-Issue 25.
4. Michael Ledeen, "Iraq's German Connection," Commentary, April 1991, p.
27.
5. For a detailed analysis of Germany's involvement in Iraq's Condor
program, see Kenneth Timmerman, The Death Lobby: How the West Armed Iraq
(Hughton Mifflin, 1991) pp. 157-160.
6. See Timmerman, also see International Defense Review, "UN Discovers More
Evidence Of Iraqi Links To Condor Missile Project," November 1993, p, 842.
In November 1993, Argentinian Defense Minister Oscar Camilion stated that
Argentina never transferred Condor "elements" to Iraq via Egypt prior to
the Gulf War, but admitted that German technicians had worked on the Condor
II project.
7. Somos (Buenos Aires), "Iraq's Involvement in Condor II Project Viewed
Nuclear Developments," January 28, 1991, pp. 1-4.
8. Marc Fisher, "Germany Pledges $5.5 Billion More Toward Gulf War," The
Washington Post, January 30, 1991, A 23.
9. Michael Ledeen, "Iraq's German Connection," Commentary, April 1991, p.
27.
10. Ibid., pp. 27-28.
11. See Louise Lief and Michael Wise, "Inside Bonn's Middle East Arms
Bazaar," U.S. News and World Report, May 28, 1990, p. 41.
12. See David Albright and Mark Hibbs, "Iraq's Shop-Till-You-Drop Nuclear
Program," Bulletin of the Atomic Scientists, Apil 1992, pp. 27-32.
According to Albright and Hibbs, there is speculation that H&H may have
intentionally aided Iraq's centrifuge program even after learning that the
material it supplied was being used for military applications.
13. Ledeen, p. 28.
14. There also appears to be some evidence of recent German-Libyan
ballistic missile cooperation. According to the publication Munich Focus,
Swiss and Australian authorities have banned the entry of German space
technology scientist Lutz Kayser into their nations out of concern that he
will attempt to gain access to materials and equipment for Libya's
ballistic missile program. A Swiss intelligence report stated that Kayser
promised in a written report to offer Libya help with its ballistic missile
program. Kayser's former firm OTRAG managed a missile test site in the
Libyan Sahara until Bonn forced it to abandon operations. Former German
scientists reportedly still work for the German government. See Munich
Focus, "Scientist Linked To Supplying Missile Know-How to Libya," September
2, 1997, in FBIS-TAC-97-245, September 2, 1997.
15. Mednews, "CERS Continues French Purchases," December 7, 1992, p. 5
16. Ibid., p. 5. The article does not specify what type of materials Syria
attempted to obtain.
17. Mednews, "Syria's High Tech Networks," August 17, 1992, pp. 5-6.
18. Yediot Aharonot, "Equipment For Improving Scuds On Its Way To Syria,"
January 10, 1993, p. 7.
19. Nonproliferation Network News, "Western Technology Diverted to Mideast
Weapons Use, Report Says," August 3, 1992.
20. Jane's Defense Weekly, "Flashpoints," December 11, 1993, p. 18.
21. R. Jeffrey Smith, "Iraq Buying Missile Parts Covertly," The Washington
Post, October 14, 1995, pp. A1 and A 20. Also see James Bruce, "Playing
hide and seek with Saddam," Jane's Defence Weekly, January 3, 1996, pp. 15,
18-19. Ekeus also said that Iran was attempting to obtain missile related
technology while claiming that it was for use in its missile programs with
ranges less than 150 km, missiles that are permitted by U.N. resolution.
22. See Mark Hibbs, "IAEA Recovers Gear In Jordan Sold To Iraq By German
Fugitive," Nucleonics Week, September 19, 1996 pp. 1, 11-12.
23. Iran Brief, "Special Report: The Zelzal Missile Program," September 9,
1996, pp. 1-2.
24. Rudolf Lambrecht, Leo Mueller and Tilman Mueller, "A Roaring Trade With
Tehran," The Hamburg Stern, April 17, 1997, FBIS-WEU-97-108, April 18,
1997.
25. Hamburg Stern, "Export of Dual-Use Goods To Iran Investigated,"
September 11, 1997, FBIS-TAC-97-254, September 11, 1997.
26. Iran Brief, "Tehran to Buy German M-Tool Maker," January 6, 1997, p. 8.