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Guns From Londonistan

Arming the Iranian military.

11:00 PM, Jan 15, 2009 • By REUBEN F. JOHNSON
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The UK had been selected by Iran as the ideal nerve centre for these illegal arms sales for the same reason that Lloyds and other London banks later became such a convenient financial transfer mechanism. Not only is there an extensive network of Iranian business contacts in the UK, but London is also awash in banking, shipping, and insurance facilities. These institutions offer unlimited mechanisms for playing shell games with business interests.

Other than the "commissions" that UK financial, legal, and business fronts would make for handling millions in Iranian oil money, in the early 1980s Islamic Republic was also dangling the carrot of major sales for the British defense industry. The Iranians were looking to purchase -- direct from the factories in the UK -- hundreds of millions of dollars worth of engines, spare parts and munitions for the 890 British-built Chieftain tanks and 250 Scorpion armored cars that were in the Iranian military's inventory when the war with Iraq began.

But, the clinching factor in the Iranian decision to use London as the base for evading international sanctions was the porous nature of the UK's legal apparatus. In the UK at that time there existed no broad and vaguely worded conspiracy laws as there are in the United States. This made indictment of any arms smugglers almost impossible because the legal standard of proof was too difficult for any agency to prove definitively. The UK had not specifically outlawed the negotiation, sale, or shipment of spare parts to Iran, even if the sale and export of offensive military equipment was against the law.

This loophole was partially closed in September 1987, when the British government announced its intention to close the Iranian buying offices on Victoria Street, but this decision was not accompanied by a crackdown on British traders and companies selling weapons to Iran. And although to date the UK has been a reliable ally of the United States in Iraq and with NATO forces in Afghanistan, the door has never quite been closed completely shut on London being used as a base for Iran's skirting of the international sanctions that are supposed to keep it from equipping and arming its military.

* In May 2003 a "favors for friends" scandal broke inside the UK Government when it was revealed that David Mills, the husband of Culture Secretary Tessa Jowell, used his wife's contacts to discuss a contract for Iran with Baroness Symons of the Foreign Office. The contract was for a fleet of RJ146 short haul passenger aircraft, which are made by BAE Systems but use a US-made Honeywell AS900-series jet engine. Under U.S. law the sale would be illegal because the propulsion technology in these engines is forbidden for sale to Iran due to its military applications. Mills asked Symons to go through the British Embassy in Washington and ask the U.S. Commerce Department if an exception could be made on this sale.

The United States turned down the request, but the incident raised a number of questions as to why the husband of one of PM Tony Blair's inner circle decided to use his prestigious position and posh office space in Mayfair at one of London's most well-known law firms to become the head of ILTC, a secretive Iranian trading company. It is suspected that the Iranians sought out Mills because of his well-known ability to set up networks of difficult to comprehend off-shore companies. (Mills had created such a network at one time for the current Italian PM, Silvio Berlusconi, which later became the center of a major investigation into corruption under Berlusconi's administration.) These UK corporate labyrinths that obscure the true end destination of a product shipment are precisely what the Iranians have used time and time again to acquire technologies and implements of war that would otherwise be denied to them.

* July 2003 saw U.S. Customs and Defense Criminal Investigation Service raids on the offices of 18 U.S. companies under suspicion that they had violated the laws preventing the sale of arms equipment to Iran. These 18 firms had been acquiring parts for U.S.-made F-4, F-5, F-14 aircraft, Hawk air defence missiles, several U.S. model radars and other spare parts before shipping them to a London-based company called Multicore Ltd, which also operated under the name AKS Industries. The company had been under investigation since 1999 by U.S. and U.K. authorities, who determined that the parts the firm was purchasing were being transshipped to Iran. It is estimated that in total over 50 U.S. firms shipped spares to Multicore that ended up in Iranian hands.