Going Nuclear

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Going Nuclear

• The Illicit Trafficking of Nuclear Materials

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Energy Law Presentation Fall 2010, Professor
Bosselman Prepared By Lauren Bean Time 22
minutes E LaurenBean2005_at_gmail.com
Images, clockwise from the left A.Q. Khan A
member of the Italian Mafia Ndrangheta Kim Jung
Il Iranian President Mahmoud Ahmadinejad Viktor
Bout, a.k.a, the Merchant of Death
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Presentation Structure

1. Actors
2. Procurement Methods
3. Points of Impact
4. Security Challenges
5. Response

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Overview

• What is the nuclear black market?
• Illicit nuclear trafficking is an enduring and
  pervasive threat to global security.
• A Turning Point The Fall of the Soviet Union and
  the Demise of the Russian Nuclear Complex
• Smugglers use traditional networks
  (transportation, communication, and financial) to
  obtain and move nuclear materials.
• The crossover of different violent actors and
  organizations represents a particularly complex
  challenge for thwarting smugglers, who seek to
  acquire a range of nuclear materials.

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State Actors
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Russia

• Russian stockpiles are a primary source of
  nuclear materials purchased on the nuclear black
  market.
• Russia owns at least 950 metric tons of highly
  enriched uranium and approximately 145 tons of
  weapons grade plutonium.
• State efforts to protect nuclear stockpiles and
  thwart illicit procurement efforts have been
  ineffective.
• Stronger regulations and export controls are
  required, in addition to a consolidation of
  stockpiles and data.

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Iran

• Irans nuclear weapons program has been in
  existence for more than three decades.
• Irans procurement regime is thought to be
  controlled by its top tiers of government,
  including its Ministry of Defense and Armed
  Forces Logistics, Ministry of Energy, and the
  Ministry of Education.
• Iran, like Pakistan, has invested in foreign
  companies from Namibia to Germany for the
  development of its nuclear weapons program.
• In the last year, more than three arrests have
  been made for successful or thwarted attempts to
  smuggle nuclear materials, technology and
  equipment to Iran.

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North Korea

• North Korea is both a host country and supplier
  of nuclear weapons material.
• International efforts to dismantle North Koreas
  nuclear aspirations have been wholly in
  effective.
• North Korea directly enabled the development of
  Syrias covert nuclear reactor program for the
  last two decades, which was subsequently
  destroyed by Israel.
• Most recently, North Korea has tested two (2)
  nuclear devices and may be preparing to test a
  third device.

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Pakistan

• The history of Pakistans nuclear weapons and
  procurement program is perhaps the most infamous.
• Pakistan and North Korea (and India) have refused
  to participate in the Nuclear Non-Proliferation
  Treaty (NPT), an international treaty to limit
  the proliferation of nuclear weapons there are
  189 countries that are party to the NPT.
• Pakistan has allegedly provided illicit nuclear
  materials to al Qaeda in Afghanistan.
• Dr. Abdul Qadeer Khan, or A.Q. Khan, a Pakistani
  nuclear scientist, operated the most extensive
  illicit nuclear network to this day.
• Pakistan is estimated to have 55-90 nuclear
  weapons and increasing stockpiles of HEU and
  plutonium.

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India

• India is also a non-party to the NPT.
• Although the U.S. has facilitated the develop of
  Indias civilian nuclear energy program as agreed
  to within the civilian nuclear trade agreement,
  India continues to illicitly secure items for its
  nuclear weapons program.

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China

• It is alleged that China continues to engage in
  illicit trade activities after agreeing to halt
  illicit efforts in the 1990s following pressure
  from the United States.
• It is further alleged that China is using stolen
  U.S. plans and technology in 1999, Congressional
  researchers declared Chinas next generation of
  nuclear weapons would likely integrate stolen US
  design information.

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Non-State Actors
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Terrorist Organizations

• While terrorists may not have the readily
  accessible capacity to build a nuclear explosive
  or nuclear weapon, ease of communication via the
  Internet, the lack of strong international export
  controls, and the amount of available nuclear
  materials suggests that the opportunity may be
  more ripe today then it was just a few years ago.
• Terrorist have already developed simple yet
  sophisticated systems for transferring cash funds
  that could be used to purchase nuclear materials
  on the black market. Hawala is an international
  covert banking system that allows funds to be
  transferred into bank account without a paper
  trail.
• Additionally, a growing willingness to cooperate
  with violent global counterparts may provide a
  new avenue for terrorists and new source of
  revenue for rogue state actors seeking
  purchasers.

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Guerilla Organizations

• Guerilla organizations such as the FARC, the
  Revolutionary Armed Forces of Colombia, has also
  sought nuclear materials on the black market.
• In an effort to combat nuclear procurement
  operations, the Colombian government implemented
  the first counter-nuclear arms unit to prevent
  illicit activity.
• To date, Colombian officials have uncovered email
  communications indicating FARCs illicit
  operations. However, for reasons discussed in
  subsequent slides, thwarting these operative
  before they secure goods is extremely difficult.

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Organized Crime

• The Italian mafia, which includes both Cosa
  Nostra (Sicilian safia) and Ndragheta (Calabrian
  mafia), represent a unique case study.
• The Italian Mafia is known by some as the
  Ecomafia due to their environmentally-unfriendly
  modus operandi. For example, the Ndragheta will
  load derelict cargo ships with high-level nuclear
  wastes and used reactor cores and sink them off
  the Mediterranean and African coasts, charging a
  revenue for their services.
• Italian officials estimate that more than 600,000
  tons of radioactive waste have been deposited on
  the floor of the Atlantic Ocean and along the
  coast of the Western Sahara.
• Mafia target the nearby seas of countries with
  weak or nonexistent governmental structures such
  as Somalia. A group of Somali pirates, however,
  capitalized on the mafias waste-dumping
  activities and brokered a joint piracy business
  at the port of Eyl.

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Rogue Individual Actors
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A.Q. Khan

• Pakistani nuclear scientist, Abdul Qadeer Khan
  (a.k.a. A.Q. Khan), built and operated the
  largest nuclear black market for nearly three
  decades before his dramatic arrest by an
  international coalition of officials in 2004.
• His network spanned three continents and sales of
  sensitive nuclear technology components,
  materials, and design data were sold to the most
  dangerous regimes, including Iran, North Korea,
  and Libya Iran, excluding Pakistan, was Khans
  first major client.
• It has been documents that Khan traveled to
  Afghanistan in the late 1990s and early 2000s and
  there are concerns that he has sold nuclear
  designs to terrorists, including Al Qaeda.
• Khan remains a national hero to his country of
  Pakistan.

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The Merchant of Death

• Viktor Bout, a Russian arms dealer, has become
  notoriously known as The Merchant of Death.
• Bout is accused of selling arms to countries from
  Afghanistan to Libya. He is also accused of
  arming the Democratic Republic of Congo, Sudan,
  Sierra Leone, and Rwanda. The estimated value of
  his arms empire is US 6 billion.
• Furthermore, he is accused of conspiring to kill
  American citizens.
• He was arrested in 2008 in a joint Thai-U.S.
  sting operation called Operation Relentless and
  awaits trial. The U.S. Drug Enforcement Agency
  has stated that Bout could not have acquired the
  weapons system he did without the complicity of
  the Russian government and military.

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II. Procurement Methods
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Procurement Methods

• Most procurement operations are intended to arm
  already proliferant states.
• Iran, North Korea, and Pakistan are currently at
  the center of the illicit procurement market.
• A combination of operatives willing to sell
  nuclear materials and buyers willing to pay cash
  drives the nuclear black market.
• Export controls only curtail a small percentage
  of the types of goods that might be acquired by
  nuclear actors (e.g., entire reprocessing or
  enrichment plants). Actors can still acquire
  valuable subcomponents or dual use goods that
  are not subject to export controls.
• Countries with weak governmental infrastructures
  and export controls become major transshipment
  conduits for nuclear actors.

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The Simple Scheme

• Direct Order to Supplier by Nuclear Program or
  Operative Direct Inquiry to Proliferant Country
  by Supplier
• The Supplier believes that the purposes of the
  order are legitimate and the transaction is
  conducted with ease.
• This letter is A.Q. Khans nuclear bomb offer to
  Iraqs Saddam Hussein, translated by the
  Institute for Science and International Security
  (ISIS).

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A Complex Scheme

• Multi-Company Supply Chain
• Some trading companies are unaware of the nature
  of these activities others are aware.

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A Deceitful Scheme

• Nuclear actors convince manufacturing companies
  to purchase goods for them.
• Or, in an effort to circumvent export controls,
  actors will engage off-shore companies to
  purchase equipment, materials, and technology
  under a civil nuclear arrangement guise. These
  companies will then ship the items to their
  country, sometimes via a circuitous route.
  Off-shore companies may be a post office box, a
  trading company, or a major institution involved
  in producing legitimate goods for legitimate
  usages.
• A.Q. Khan has said that his gas centrifuge
  program depended largely on a number of off-shore
  front companies, including companies in Japan
  and Singapore.

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III. Points of Impact
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Russian Stockpiles

• The largest inventory of highly-enriched uranium
  (HEU) and plutonium are located in Russia.
• Smaller stocks are located in Kazakhstan,
  Belarus, Ukraine, and Uzbekistan.
• Much of Russias materials are contained in the
  form of nuclear weapons, but some of it (an
  estimated 600 tons) is stored in non-weapon form
  at an estimated 50 different storage sites.
• Since the collapse of the Soviet Union and the
  demise of the former Soviet Nuclear Complex,
  numerous successful or thwarted theft attempts
  have been reported by the International Atomic
  Energy Agency (IAEA), and other watchdog
  organizations such as the Nuclear Threat
  Initiative (the chart on the next slide shows
  incidents from 2009).

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Illicit Procurement and Trafficking Incidents
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IV. Security Challenges
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Security Challenges

• The primary challenge to state governments,
  intelligence agencies, or cooperative global law
  enforcement and intelligence efforts is
  detection.
• The amount of materials available and the
  willingness of operatives, compounded by the
  number of trading and manufacturing companies
  (some or most of whom are not equipped with
  internal intelligence detection programs), makes
  tracking such operations nearly impossible.
• New suppliers and emerging technologies are
  simplifying both the procurement methods and
  nuclear develop and design methods.
• The crossover of different violent actors, all of
  whom have developed particular methods by which
  they avert officials, presents a more daunting
  challenge. Following the green has become
  increasingly difficult.

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V. Response
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Export Controls

• Experts have called for a universal export
  control system (David Albright, Author of
  Peddling Peril).
• Export controls, however, are generally
  disfavored by industry.
• Additionally, some countries do not have any
  existing export control system, despite the
  United Nations Resolution 1540 which mandates all
  countries to develop controls.
• Moreover, coordinating a universal export control
  system among countries with different goals,
  companies with competing interests, and
  individuals may not be a feasible option.

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A Legal Framework

• In order to deter potential operatives,
  governments must prosecute major export
  violations.
• However, a comparative law analysis indicates
  that export control, evidence-sharing, and access
  to foreign witness testimony laws vary among
  countries.
• Furthermore, the crime of illicit trade activity
  receives a mild penalty in some countries.
• An effective international legal regime must
  begin with some consensus regarding the nature
  and penalty for export crimes.

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Diplomacy

• Diplomacy as a stand alone tool will not be
  effective with countries such as Iran and North
  Korea, as has been shown by recent events.
• However, with those countries that share similar
  interests (e.g. India and the U.S.) diplomacy can
  have an impact.
• For example, Israel, which rivaled Pakistan with
  its procurement program, halted its illicit
  activities under pressure from the U.S. (although
  allegations still surface regarding illicit
  activities).

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Industry Cooperation

• Enhanced corporate awareness is critical to
  ending illicit procurement efforts.
• Companies are often resistant to
  information-sharing efforts with intelligence
  agencies or other officials because of potential
  prosecution concerns and concerns regarding
  export penalties.
• Companies are often unable to detect suspicious
  or illicit efforts to purchase goods because
  staff are not trained intelligence analyst with
  access to a breadth of important data.
• Attempts by agency officials to provide companies
  with key data are often out-of-date before they
  reach the desks of company staff.

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Early Detection

• U.S. intelligence efforts have been relatively
  effective at detecting illicit activity however
  it took U.S. officials and other nations decades
  to topple A.Q. Khans network and analysts are
  still unraveling his intricate web of suppliers
  and purchasers.
• Participant states of the Proliferation Security
  Initiative (PSI) can be consistently engaged to
  prohibit transnational trafficking. Again, this
  would require greater consensus on the crime of
  illicit trade and a developed system of export
  controls.
• Suppliers, manufacturers, and trading companies
  must be trained to detect suspicious activity
  when it arises, and intelligence agencies must
  work with companies to develop a realistic system
  to facilitate information-sharing across industry
  lines transnationally.

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Conclusion

• The illicit trafficking of nuclear materials is a
  complex scheme composed of several states, many
  actors, and a complex system by which materials
  are traded.
• Global counter-arms efforts alone will not be
  sufficient to topple the nuclear black market
  industry buy-in is required.
• Stronger export controls coupled with the backing
  of participant countries is required, in addition
  to a more consistent application of the laws
  against these crimes.
• Still, countries who seek to acquire nuclear
  weapons programs and actors who seek to disrupt
  global security with nuclear materials will
  continue to challenge international officials and
  agencies.