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Israel’s Nuclear Shopping List

Despite Israel’s impressive achievements in nuclear weaponry, it still need imports to maintain and develop its existing arsenal. According to a 1992 Pentagon study, “The Militarily Critical Technologies List,” Israel’s strongest capabilities lie in processing nuclear materials and in developing high explosives for nuclear weapon detonation. Israel is less capable in enriching fissile material, building power reactors and mastering thermonuclear fusion.

One of Israel’s most important recent imports has been people. Following the breakup of the Soviet Union, Israel began recruiting Soviet nuclear scientists. In 1991 alone, nearly 20 top Soviet scientists reportedly emigrated to Israel, some of whom were involved in operating nuclear power plants and planning for the next generation of Russian reactors. In September 1992, German intelligence was quoted in the press as estimating that 40 Soviet nuclear scientists had emigrated to Israel since 1989.

The biggest challenge for Israel’s nuclear weapon program has been its inability to openly conduct explosive tests. To compensate for this limitation, Israel must rely on imported high-speed computers. Supercomputers can simulate what goes on inside both fission and fusion weapons. Israel will also have a continuing need for other diagnostic and development tools such as vibrational test equipment, flash X-ray machines and multistage light gas guns.

To continue enriching uranium with gas centrifuges, Israel will need to replace worn-out centrifuges and their parts. This, in turn, will require continued access to high-speed balancing equipment, high-strength rotor materials such as fibrous and filamentary materials, to filament winding machines, and to frequency changers and inverters. Israel also needs a steady supply of tritium to boost the yield of its existing nuclear bombs. Tritium decays at the rate of approximately 5 percent per year, so existing supplies must be constantly replenished. This means that Israel must continue to run the Dimona reactor to irradiate lithium, Israel’s only means of producing tritium. In addition, Israel will continue to need tritium storage containers, oil and rubber-free mechanical vacuum pumps, and palladium and palladium alloy diffusers for separating tritium from helium-3 and other gases. Cryogenic distillation equipment will also be needed to handle tritium.

Israel: A Green Light on Imports from Western Suppliers

Although Israel has the biggest nuclear weapon and ballistic program in the Middle East, and is included on virtually every export control warning list, it is now being allowed to import almost everything it needs to keep its weapon programs going.

The reason, Western officials tell the Risk Report, is that Israel’s close relation to the United States has created a virtual taboo against mentioning Israel at meetings of the international export control regimes (the Nuclear Suppliers Group-NSG, the Australia Group-AG-and the Missile Technology Control Regime-MTCR) in which countries have agreed to restrict their sales of nuclear, missile and chemical/biological weapon technology. The only obstacle Israel now faces in nuclear imports is obtaining large items such as a nuclear power reactor. The Nuclear Suppliers Group insists on full-scope safeguards as a condition of export, which Israel does not meet.

“When it comes to Israel, there is little information-sharing…in fact, there is absolute silence…no one talks about ‘sensitive’ Israeli buyers,” says an Austrian official. A German official agrees. After listing the countries he tracks for proliferation, which include Iran, Iraq, Pakistan, North Korea, India and Syria, he adds with a wink: “And of course, Israel, I almost forgot–we also track Israel.” The official could not think of a recent case, however, where an export license had been denied to Israel.

A Swiss official argues that the current system amounts to “paper export controls,” in which Israel is allowed to get what it needs in practice despite the official control system. When it comes to Israel, he says, the Swiss are actually tougher than the Americans. “We don’t just give things to Israel like the United States does; we ask for test protocols for machine tools and we deny things to Israel based on end-users that the United States does not.”

A U.S. official responsible for tracking countries of proliferation concern recently confirmed that United States is not especially worried about Israeli proliferation. He told the Risk Report: “I don’t know of anybody in the [U.S.] government who really tracks Israel’s program closely. Very few people look at the Israeli nuclear weapon program in detail. It’s a big fact, and it will be changed only in the context of political developments on the ground.”

In 1994, the recent history of American nuclear-related exports to Israel was reviewed in a report by the General Accounting Office (GAO). It found that the United States routinely approves controlled equipment to Israel. The report quoted a State Department official who said that “while the United States does not endorse the Israeli nuclear program,” it has approved high-powered computers for Israeli organizations linked to the unsafeguarded Israeli nuclear weapon effort “because of the overall U.S.-Israeli relationship and the U.S. policy of maintaining Israel’s qualitative military superiority over its neighbors.”

This taboo against asking questions is even stronger in Israel, where discussion of the nuclear program is strictly off limits. The resulting silence makes it difficult even for Israeli companies to know how their products will be used. An employee of Ortal, an Israeli firm specializing in the diecasting of zinc and magnesium, tells the Risk Report that Ortal makes small parts for use in missiles, but that he is not supposed to know which missiles are involved. Ortal simply fills the orders for Taas (Israel Military Industries), the aerospace giant that builds Israeli rockets. Taas does not divulge even to Ortal how the parts are used.

Abraham Alexandrovitz (A. Alexandrovitz Inc.), a company that buys and sells specialized materials, plastics and rubbers from Europe, distributes these materials to manufacturers and factories throughout Israel, including the Atomic Energy Commission. A company employee admits that Alexandrovitz sells materials to Dimona, but he adds, “I am not even allowed to ask what the application is. If I did, we wouldn’t be allowed to sell there.”

This policy of secrecy means that exporters to Israel will have a hard time verifying that their products are not misused. An experienced Israeli trade consultant, who insisted on anonymity, told the Risk Report that discovering which small companies contribute to Israel’s nuclear and missile programs is next to impossible. “There is a great fear of business espionage in Israel. Companies hold information very closely. It is not like in the United States. Especially if you are inquiring about security-related activities, you will meet silence. People feel they could get in trouble for talking and they are very protective of Israel’s reputation and security.”

Israel’s Nuclear Weapon Capability: An Overview

Today, Israel is the world’s sixth most powerful nuclear state, with a stockpile of more than 100 nuclear weapons and with the components and ability to build atomic, neutron and hydrogen bombs. Israel’s nuclear program began and still operates under tight secrecy, but in the 1980s a series of revelations showed the crucial role played by foreign suppliers.

France launched Israel on the nuclear path in the late 1950s by building the Dimona reactor, which is still the source of Israel’s plutonium–its main nuclear weapon fuel. The reactor’s heavy water, essential to achieve a chain reaction, was supplied by Norway in 1959. In 1963, when the reactor started operation, the United States supplied four more tons of heavy water.

Israel got other nuclear help from the United States, which also supplied a small 5-megawatt (thermal) research reactor at Nahal Soreq. The reactor started in 1960, but cannot produce significant quantities of plutonium. Instead, the reactor offered an early training ground for Israeli nuclear technicians. Later in the 1960s, Israel was widely thought to have smuggled more than 100 kilograms of highly enriched uranium out of a nuclear materials plant in Pennsylvania.

France’s contribution

Franco-Israeli nuclear cooperation is described in detail in the book “Les Deux Bombes” (1982) by French journalist Pierre Pean, who gained access to the official French files on Dimona. The book revealed that the Dimona’s cooling circuits were built two to three times larger than necessary for the 26-megawatt reactor Dimona was supposed to be–proof that it had always been intended to make bomb quantities of plutonium. The book also revealed that French technicians had built a plutonium extraction plant at the same site. According to Pean, French nuclear assistance enabled Israel to produce enough plutonium for one bomb even before the 1967 Six Day War. France also gave Israel nuclear weapon design information.

In 1986, Francis Perrin, high commissioner of the French atomic energy agency from 1951 to 1970, was quoted in the press as saying that France and Israel had worked closely together for two years in the late 1950s to design an atom bomb. Perrin said that the United States had agreed that the French scientists who worked on the Manhattan Project could apply their knowledge at home provided they kept it secret. But then, Perrin said, “We considered we could give the secrets to Israel provided they kept it a secret themselves.” He added: “We thought the Israeli bomb was aimed against the Americans, not to launch it against America but to say ‘if you don’t want to help us in a critical situation we will require you to help us, otherwise we will use our nuclear bombs.'”

U.S. intelligence reports

After the United States discovered the Dimona reactor in 1960, U.S. nuclear specialists inspected Dimona every year from 1965 through 1969, looking for signs of nuclear weapon production. It is not clear what they found, but in 1968 the Central Intelligence Agency (CIA) reported to President Lyndon Johnson its conclusion that Israel had already made an atomic bomb. In 1969, Israel limited inspection visits by U.S. scientists to such an extent that the Americans complained in writing. Without explanation, the Nixon administration ended the visits the following year.

The CIA continued to report on Israel’s nuclear weapon progress during the 1970s. In a September 1974 memorandum, “Prospects for Further Proliferation of Nuclear Weapons,” the CIA cited “Israeli acquisition of large quantities of uranium, partly by clandestine means” as further evidence that “Israel already has produced nuclear weapons.” The CIA also cited Israeli missile development as evidence that Israel had made nuclear weapons–the CIA said the Jericho made little sense as a conventional missile and was “designed to accommodate nuclear warheads.” In a February 1976 report to the Nuclear Regulatory Commission, CIA Deputy Director for Science and Technology Carl Duckett reported that Israel was already making bombs with plutonium produced in its Dimona reactor.

Israeli deployment and possible test

According to a detailed account contained in Time magazine, Israel assembled about a dozen bombs and readied them for use during the October 1973 Arab-Israeli war. The bombs could have been delivered by aircraft or missiles. In 1974, Israeli President Ephraim Katzir said that “it has always been our intention to develop a nuclear potential … We now have that potential.” This remark was followed five years later by a spectacular and still controversial event.

On September 22, 1979, an American “Vela” satellite detected a distinctive double flash off the southern coast of Africa. The satellite data, together with other information from U.S. intelligence sources, offered strong evidence that the flash had been caused by a low-yield nuclear explosion. Defense Department and State Department officials pointed out that this was only the 42nd time that a satellite of this type had registered such a signal; and in the first 41 cases, according to these officials, the Vela had correctly detected atmospheric nuclear tests. A State Department official later told the Washington Post: “Look, the Vela satellite picked up a signature like this 41 times before. In every one of those 41 instances, there was never any question about the fact that a nuclear test had taken place. Each of those 41 was undeniably a nuclear explosion. This was, too.”

A 1979 CIA memorandum stated that “of all the countries which might have been responsible for the 22 September event, Israel would probably have been the only one for which a clandestine approach would have been virtually its only option.” The CIA also observed that Israelis had participated in South African nuclear research during the preceding several years.

In June 1980, the CIA reported to the National Security Council that a 2-3 kiloton nuclear test had taken place at the time and place of the Vela reading, and that it had probably involved Israel and South Africa. However, a panel of scientific experts assembled by the Carter White House analyzed the technical data and concluded that the information was too ambiguous to prove that the event was a nuclear test.

In 1981, after Israeli planes destroyed Iraq’s Osirak reactor (also built by France), former Defense and Foreign Minister Moshe Dayan told the New York Times: “We do have the capacity to produce nuclear weapons, and if the Arabs are willing to introduce nuclear weapons into the Middle East, then Israel should not be too late in having nuclear weapons, too.”

Israel’s continuing need for imports was revealed in 1985, when Los Angeles businessman Richard Smyth was indicted for smuggling to Israel 810 krytrons, high-speed electronic switches used as nuclear weapon detonators. The krytrons were shipped between 1979 and 1983 to an Israeli firm under contract to the government for defense work. The Israeli Ministry of Defense returned only 469 of the krytrons, and Smyth vanished a week before he was to appear for trial. Records obtained by NBC News from Smyth’s firm, Milco International, also showed that two related firms, Heli Trading and Milchan Brothers, both owned by Hollywood producer Arnon Milchan, ordered large quantities of missile-related equipment and materials between 1977 and 1982. Among the nuclear items listed were the 810 krytrons, plus neutron generators, high-speed oscilloscopes and high-voltage condensers.

Vanunu’s disclosures

In September 1986, Mordecai Vanunu, an Israeli arms technician who had worked at the secret Dimona site for eight years, provided the world with the first detailed account of Israel’s nuclear weapon progress. He provided almost 60 color photographs to the London Sunday Times of what he said was Israel’s underground bomb factory. He also described Israel’s nuclear weapon production techniques in an account accepted by weapons experts on both sides of the Atlantic. According to Vanunu’s data, the solid plutonium spheres for Israel’s nuclear weapons weighed 4.4 kilograms. He also said that Israel had produced 100 to 200 advanced fission bombs by 1986, had mastered a thermonuclear design, and appeared to have a number of thermonuclear bombs ready for use.

Vanunu’s photographs also showed the processing of what appeared to be large hollow hemispheres of lithium deuteride–parts for a thermonuclear bomb with a destructive power of about 200 kilotons. According to Vanunu, other Dimona products included copper hemispheres, into which the plutonium was sealed, and beryllium neutron reflectors, which reduced the amount of plutonium required to achieve a nuclear explosion. Dimona was also making the thermonuclear bomb ingredients tritium and deuterium. Vanunu reported that the plutonium spheres and bomb components from Dimona were taken at regular intervals by convoy with armed escorts to an airfield near Haifa for assembly.

Experts’ conclusions

Theodore Taylor, a highly respected former U.S. weapon designer, reviewed Vanunu’s claims in detail. Taylor concluded that Israel’s thermonuclear weapon designs appeared to be “less complex than those of other nations,” and “not capable of producing yields in the megaton or higher range.” Nevertheless, “they may produce at least several times the yield of fission weapons with the same quantity of plutonium or highly enriched uranium.” In other words, Israel could “boost” the yield of its nuclear fission weapons. According to Taylor, the uncertainties involved in the process of boosting required more than theoretical analysis for full confidence in the weapons’ performance. Taylor therefore concluded that Israel had “unequivocally” tested a miniaturized nuclear device.

In 1987, the Institute for Defense Analyses (IDA), which does Pentagon-funded research, released a Pentagon-sponsored report confirming that Israel was still conducting extensive research in the technology required for the design and fabrication of nuclear weapons. According to the report, Israel’s facilities at Soreq and Dimona have the same mission as the Los Alamos, Lawrence Livermore and Oak Ridge National Laboratories in the United States. IDA reported that Israel was developing the computer “codes which will enable them to make hydrogen bombs…. However, it is doubtful they have the codes to completely design such devices.” The report concluded that as of 1987, “the Israelis are roughly where the U.S. was in the fission weapon field in about 1955 to 1960.”

Since 1988, Israel has been trying to buy supercomputers that would allow it to speed up its nuclear weapon calculations by a factor of one hundred. Supercomputers can simulate the implosive shock waves that detonate nuclear warheads, calculate the multiplication of neutrons in an explosive chain reaction, and solve the equations of state that describe the behavior of nuclear explosives (plutonium and high-enriched uranium) under high temperature and pressure–all essential problems for nuclear weapon design. Although it is possible to develop unsophisticated nuclear weapons with less powerful computers, supercomputers are particularly valuable to countries such as Israel that seek to avoid conducting nuclear tests. They also can be used for missile design by modeling the forces acting on a flying body, such as the heat and shock waves encountered by a long-range missile reentering the atmosphere.

In January 1992, Israel’s Technion University procured two “parallel” computers capable of reaching supercomputer speeds from the U.K. company Meiko Scientific Ltd.. The sale effectively circumvented U.S.- and Japanese-imposed restrictions for countries that had not signed the Nuclear Nonproliferation Treaty (NPT). But in November 1994, the United States approved the sale of nine supercomputers to Israel: two from Cray Research, five from IBM and two from Silicon Graphics. (The speeds of the nine computers ranged from 1,071 to 6,796 MTOPS.) The end-users–Technion University, Hebrew University and the Weizmann Institute–all have links to Israel’s nuclear and missile programs. U.S. officials opposed to the sales were concerned that Israel would get a boost in computing power to work on a major engineering problem: shrinking thermonuclear warheads to fit on long-range missiles.

Dubai is a Growing Diversion Risk, German Officials Say

German officials tell the Risk Report that Iran is increasingly using Dubai in the United Arab Emirates to obtain high technology, particularly electronic `equipment. They say that Iranians operating in Dubai have created a number of front companies, which exist only in the form of mailing addresses.

In a confidential letter to German industry, the Economics Ministry identifies the following Tehran-based organizations as active in Dubai:

  • STATE PURCHASING ORGANIZATION (SPO): SPO buys equipment and technology for the Iranian military.
  • BONYAD MOSTAZAFAN AND JANBAZAN FOUNDATION: This foundation makes purchases for several hundred companies in Iran and buys equipment for the Iranian nuclear weapon, chemical/biological weapon and missile programs.

The German letter says that front companies for SPO and the Bonyad Mostazafan and Janbazan Foundation act as “go-betweens.” They arrange and finance the technology transfers from Dubai, but the actual goods are not transported via Dubai. These Iranian business partners in Dubai are aware of the military potential of their purchases, German officials say.

The letter from the German Economics Ministry serves as a “warning” to German exporters to be careful. It says that the most important front companies in Dubai to watch out for are subsidiaries of BONYAD MOSTAZAFAN FOUNDATION, including the following:

  • MOSTAZAFAN AND JANBAZAN FOUNDATION EST.
  • AL YUSUF UNIVERSAL IMPORT-EXPORT EST.
  • AL YOUSUF UNIVERSAL IMPORT-EXPORT EST.
  • AUIE (AL YOUSUF UNIVERSAL IMPORT-EXPORT EST.)
  • COMMERCIAL COMPANY 209
  • COMPANY OF M&J.

Israel’s Uranium Processing and Enrichment

Israel has relied on plutonium, rather than high-enriched uranium, as the primary fuel for its nuclear weapons. Nonetheless, Israel has developed the ability to process and enrich uranium at the Dimona nuclear complex. Israeli nuclear technician Mordechai Vanunu told the Sunday Times of London in 1986 that Israel had been operating a secret uranium enrichment facility “on a production scale” since 1979-80. Vanunu also told former U.S. nuclear weapon designer Theodore Taylor that uranium was enriched by gas centrifuges. Based on Vanunu’s information, Taylor concluded that Israel was enriching uranium to weapon grade. Vanunu also confirmed earlier reports that Israel was conducting research on laser enrichment at Dimona.

Israel has obtained natural uranium supplies on the world market from a number of sources. Starting in the mid-1970s, Israel clandestinely imported 600 metric tons of yellowcake from South Africa. Israel has also devised a method of extracting uranium from the phosphate deposits in the Negev desert, where there is an estimated thirty to sixty thousand tons of uranium contained in low-level phosphate ores. Active mining of phosphate deposits takes place in the Negev near Beersheba. The Nuclear Engineering International industry handbook lists the Negev Phosphates Chemicals Company, at Mishor Rotem, as Israel’s only fuel cycle facility.

The French companies that built the Dimona reactor also supplied a uranium fuel fabrication plant. At the plant, uranium metal is encased in aluminum cladding to make reactor fuel rods. The plant’s capacity is unknown but is apparently sufficient to fuel the Dimona reactor.

Israel’s Plutonium Production

Israel makes plutonium for atomic bombs at Dimona, a secret nuclear complex in the Negev Desert. The French-supplied reactor there has produced plutonium free from international controls since 1963. The quality of the plutonium created by the Dimona reactor is ideal for making atomic bombs.

The size of the reactor at Dimona is listed by the International Atomic Energy Agency [IAEA] as 26 megawatts (thermal). However, experts believe it is much more powerful than that. Mordechai Vanunu, an Israeli technician who worked at Dimona for eight years, reported that the reactor had been scaled up twice before he arrived at the site in 1977. The first scale-up was from 26MWt to 70MWt; the second was to some higher level.

The first scale-up was planned when Dimona was built. Israel convinced France to make the reactor’s critical components–including its cooling circuit–three times larger than needed for a facility of its nominal size, and three times larger than originally agreed upon. This modification permitted a scale-up to 70MWt without the addition of extra cooling circuits, which would have attracted outside attention. Further evidence of a scale-up came in late 1968, when Israel diverted 200 metric tons of Belgian uranium on the high seas–a quantity considerably greater than a 26-megawatt reactor would have required. Israel probably needed the additional uranium for the first scale-up, which appears to have occurred in 1970.

Vanunu also said that Dimona had been producing 40 kilograms of plutonium per year for some time before he arrived in 1977. If the reactor at Dimona was unusually efficient (i.e., producing more than 1 gram of plutonium per megawatt day) and ran for as many as 300 days per year, the 40 kilograms could have been produced with a peak power of sightly more than 100MWt. If the reactor were less efficient, and operated for fewer days per year, the peak power would have to approach 150MWt.

Plutonium extraction

To be used in weapons, plutonium must be extracted chemically from irradiated nuclear reactor fuel. A French firm, St. Gobain Techniques, supplied Israel with a chemical extraction plant at Dimona. The plant’s first trial runs were in late 1965. By 1968, Israel had extracted enough plutonium for an atomic bomb.

The Dimona reactor, if operated continuously, could have created as much as 870 kilograms of plutonium through 1994. This figure assumes that the reactor started operating at 26MWt in 1963, was scaled up to 70MWt in 1970, and was scaled up again in 1977 to a level at which it could produce about 40kg of plutonium per year. Vanunu reported that the extraction plant where he worked produced 1.17 kilograms of plutonium per week for 34 weeks per year, a total of 40 kilograms annually. At this rate, 320 kilograms of plutonium would have been produced during the eight years Vanunu worked at Dimona. If the reactor experienced shutdowns, or was operated at a lower power, this figure could be significantly smaller.

Future plutonium production at Dimona is uncertain, primarily because of the reactor’s age. The United States has urged Israel to cap its nuclear program and cease plutonium production at Dimona, but Israel has not agreed to do so.

Size of Israel’s arsenal

The above figures for plutonium production indicate that Israel could have up to 175 bombs’ worth of plutonium in its nuclear arsenal today. This figure assumes roughly 5 kilograms of plutonium are needed per bomb, including processing losses. (Vanunu reported in 1986 that Israel was using about 4.4kg of plutonium per bomb, an amount slightly greater than the reflected fast critical mass of plutonium-239.)

It is impossible to estimate the exact size of Israel’s arsenal without knowing Dimona’s true operating history and the characteristics of Israeli nuclear weapon designs. For example, Israel has produced enriched uranium, which could be used to make additional weapons. Israel has also made a number of “boosted” weapons using tritium, also produced at Dimona. Tritium can be produced by irradiating lithium-6 targets in the Dimona reactor.

Dimona reactor:

Reactor: IRR-II
Type: Heavy water
Power: 26-megawatt (thermal) scaled up to 70MWt or more
Start-up: 1963
Safeguards: None
Plutonium created through 1994: Up to 870 kilograms

China National Nuclear Corporation (CNNC) to Work with Westinghouse on Advanced Reactor

The Clinton administration has approved six one-year visas that will allow nuclear engineers from the China National Nuclear Corporation to work on the development of Westinghouse’s most advanced nuclear reactor, the AP-600.

Because the AP-600 project is part of the Department of Energy’s “Advanced Light Water Reactor Program” the U.S. government reserved the right to prohibit certain countries from participating in the project. Only with the consent of the State, Commerce and Defense Departments, in addition to the Nuclear Regulatory Commission and the Arms Control and Disarmament Agency (ACDA), could DOE grant permission to the Chinese. The National Security Council also gave its approval. Officials at DOE cited the action as a reward for China resuming nonproliferation talks, which China had suspended in protest of President Lee Teng-hui’s visit to the United States last year. Westinghouse reports that it has spent a total of about $400 million, of which $63.9 million are federal funds, on the AP-600 program since 1985.

The approval of the visas comes at a sensitive time in U.S.-China relations. China’s repeated exports of proliferation-sensitive technology, in addition to its missile tests around Taiwan, have put U.S. cooperation with China under the microscope. In May 1995, the Risk Report revealed that clandestine shipments of poison gas ingredients were going from China to Iran, and in February of this year major newspapers reported the transfer to Pakistan of Chinese ring magnets, equipment needed to enrich uranium for use in atomic bombs. The 1994 Nuclear Proliferation Prevention Act authorizes the President to halt Export-Import Bank financing if a country like China assists other countries in developing nuclear weapons. There are about $10 billion in loans for Chinese projects now in the Ex-Im Bank pipeline.

China acknowledged that it exported the magnets to Pakistan but maintained that it had done nothing that violated the Nuclear Nonproliferation Treaty (NPT). China also refused to rule out future sales of sensitive technology. If the Clinton administration were to impose sanctions against the China National Nuclear Corporation, the action could jeopardize contracts held by Westinghouse and Bechtel totaling about $800 million. As the Risk Report went to press, the administration had made no decision on sanctions but had persuaded the Ex-Im Bank to suspend action on loans concerning China pending negotiations.

Western business interests perceive China as one of the biggest emerging markets in the world. U.S. Energy Secretary Hazel O’Leary and late U.S. Commerce Secretary Ron Brown both traveled to China in 1995 with American business leaders to witness the signing of agreements worth billions of dollars.

Israel: U.S. Turns Down Shavit Rocket

In early May, the Clinton administration denied a request from Israel to sell its “Shavit” space launcher to the U.S. Air Force, which wanted to use the Shavit to launch small military satellites from U.S. soil. If the approval had been granted, it would have marked the first import into the United States of a foreign-made space rocket developed as a ballistic missile. The request went all the way up to President Bill Clinton because U.S. space policy requires a presidential waiver before a foreign rocket can launch U.S. government satellites.

The proposal sparked controversy among federal agencies, with the opponents of the deal arguing that it would undermine U.S. efforts to halt missile proliferation and subsidize Israel’s effort to build rocket motors capable of delivering nuclear warheads.

The Shavit, which is built by Israel’s leading aerospace company, Israel Aircraft Industries, launched Israel’s first spy satellite, the Ofek-3, in April of 1995. The Shavit’s two large rocket motors were developed in the 1980s to power Israel’s “Jericho-II” ballistic missile. “The Jericho-II is a Shavit minus the upper stage, which is replaced by a warhead,” a U.S. official told the Risk Report last year (Vol. 1, No. 5, June 1995). In 1987, the Jericho-II was tested over the Mediterranean to a range of more than 800 kilometers, and tested again in 1988 and in 1989, when it flew nearly 1,300 kilometers. The Jericho-II is mounted on a mobile launcher to enhance its military effectiveness; the Shavit launcher operates the same way.

A U.S. government analyst has estimated that as a missile, the Shavit could fly up to 4,500 kilometers carrying a nuclear-sized payload. In the 1970s, the CIA (Central Intelligence Agency) cited Israel’s Jericho missile program as evidence that Israel had made nuclear weapons. The CIA said the Jericho made little sense as a conventional missile and was “designed to accommodate nuclear warheads.”

Chinese Firms Diverted U.S. Machine Tools, Commerce Department Finds

Three Chinese companies “knowingly violated” U.S. export regulations by diverting sensitive American machine tools to a missile factory in Nanchang, according to a Commerce Department investigation completed in late 1995.

The companies, CATIC (China National Aero-Technology Import-Export Corporation), China National Aero-Technology and China National Supply and Marketing Corporation imported the machines under export licenses issued by the U.S. Commerce Department with the stated purpose of making civilian aircraft. The machines had been used previously to make parts for the B-1 strategic bomber. The machines were shipped to China between September 1994 and March 1995 by the McDonnell-Douglas Corporation and were destined for CATIC’s Beijing Machining Center. The Machining Center, however, did not exist at the time the licenses were granted and was never created. Instead, the tools were illegally sent to other locations, including the China Nanchang Aircraft Manufacturing Company which makes military attack aircraft and Silkworm anti-ship missiles.

Commerce Department investigators found that the three companies had committed “intentional and willful violations of U.S. export regulations” and that the diversion posed “an imminent threat to the security of the United States.” The investigators recommended that the three companies and their subsidiaries and affiliates be denied U.S. export privileges until they complied with the 1994 export licenses under which the machines were shipped.

Of the seventeen machines exported, eleven were sent to Tianjin where they were stored, and six were sent to the Nanchang plant where one was uncrated, installed and operated. McDonnell-Douglas first discovered the diversion in March 1995 and in August, a McDonnell-Douglas employee saw one of the diverted machines in operation. The Commerce investigators concluded that the Chinese companies “demonstrated neither technical errors nor negligence” and were guilty of “deliberate violations.” The machines consisted of a Wheelon hydraulic stretch press, a White Sunstrand numerical machining center, a Sheffield (Bendix) coordinate measuring machine and three Cincinnati Milacron vertical bed mills.

After discussions among McDonnell-Douglas and the U.S. and Chinese governments, the Commerce Department agreed to amend the export licenses in February 1996 to designate Shanghai, where McDonnell-Douglas maintains a joint venture facility. On April 19, 1996, Commerce Department spokesperson Rosemary Warren, in response to questions from the Risk Report, stated that the machines “will remain in Shanghai for use on the previously approved joint-venture with the Chinese.” Warren also said that the “future of these machines is under review as part of the overall investigation.” On February 23, 1996, Rep. Floyd Spence, chairman of the House National Security Committee, asked the General Accounting Office (GAO) to investigate the transaction.

Portions of an undated Commerce Department document summarizing the Commerce investigation are included here. It appears to have been written in late 1995.


TEXT OF MEMO

UNITED STATES DEPARTMENT OF COMMERCE
Bureau of Export Administration (BXA)
Office of Export Enforcement
2601 Main Street, Suite 310
Irvine, CA 92714-8299

In reply refer to:
006153: MGR
MCDONNELL DOUGLAS

Date of first Violation: March 1995

MEMORANDUM TO: Pamela P. Breed
Deputy Chief Counsel for Enforcement and Litigation

FROM: Mark D. Menefee
Acting Director
Office of Export Enforcement

SUBJECT: Recommendation for the Issuance of a Temporary Denial Order Naming as Respondents:

RESPONDENTS:
– CATIC, and all related affiliates and/or subsidiaries thereof in the People’s Republic of China
67 Jiao Nan Street
P. O. Box 1671
Beijing, China (PRC)

– CHINA NATIONAL AERO-TECHNOLOGY
Beijing, China (PRC)

– CHINA NATIONAL SUPPLY AND MARKETING CORPORATION
North China Branch
10 Shifang Yuan Desheng Men
Beijing, China (PRC)

ALLEGED VIOLATIONS:

Title 15, C.F.R. 787.4
Acting with Knowledge of a Violation

Title 15, C.F.R. 787.5
Misrepresentation and Concealment of Facts

Title 15, C.F.R. 787.6
Export, Diversion, Reexport, Transhipment

COMMODITIES AND LICENSING REQUIREMENTS:

  • Wheelon Stretch Hydraulic Press – ECCN 2B44
  • White Sunstrand Numerical Machining Center – ECCN 2B01
  • Sheffield (Bendix) Coordinate Measuring Machine – ECCN 2B06
  • (3) Cincinnati Milacron Vertical Bed Mills – ECCN 2B01

The identified commodities are controlled for Nuclear Proliferation and National Security reasons and required an Individual Validated License (IVL) for export to the People’s Republic of China (PRC).

Synopsis:

The information delineated below will outline the immediate need for the issuance of a Temporary Denial Order against the listed respondents to prevent continuing and imminent violations of the Export Regulations from occurring.

In 1993, CATIC successfully bid for, and purchased, various equipment, including the listed commodities, that were located at the Rockwell Corporation B-1 Bomber facility in Columbus, Ohio, which at the time was being leased by the McDonnell Douglas Corporation (MDC) from the U.S. Government. The original intention was that CATIC wanted to utilize the B-1 Bomber manufacturing equipment as part of a joint venture with MDC to build MD-80 and MD-90 commercial aircraft. Following the purchase, approximately 50 CATIC personnel were dispatched from Beijing, and with coordination from CATIC in El Monte, CA, dismantled, packed and prepared the equipment for shipment, pending approval of the appropriate IVL’s.

CATIC additionally retained the services of Monitor Aerospace Corporation (MAC), Amityville, NY, which agreed to assist CATIC in setting up the CATIC Machining Company (Beijing Machining Center) at No. 16 Hongda North Daxin, Beijing, where the commodities were to be shipped. In September 1994, based upon end user assurances from the respondents, the U.S. Department of Commerce (USDOC) issued 16 IVL’ s for 19 aircraft machine tool commodities from this B-1 Bomber plant, including those listed.

Numerous terms and conditions were mandated by the USG in the approved IVL’s, specifically with regard to location, end use and end user of the equipment. These terms and conditions were conveyed verbally and in writing by MDC to CATIC.

Between September 1994 and March 1995, all commodities were shipped to the PRC by CATlC and MDC, with the exception of two, which were leased back to MAC and shipped to Amityville, NY. During that time frame, an impasse was reached between CATIC and MAC concerning setting up the Beijing Machining Center. Ultimately, the Beijing Machining Center was never established, and 11 of the commodities were delivered to two unapproved locations in Tianjin, a port city two hours from Beijing, in violation of the IVL terms and conditions and CATIC’s end use assurances for the IVL’s; 6 of the commodities were delivered to the Nanchang Aircraft Manufacturing Company (Nanchang) factory in Nanchang, approximately 900 miles from Beijing, also in violation of the terms and conditions and CATIC’s end use assurances for the IVL’s. On March 24 and August 23, 1995, MDC Long Beach, CA and MDC Beijing officials personally inventoried all items in Tianjin and Nanchang, respectively, confirming that none were present at the location originally specified and approved in the IVL’s. During discussions between OEE/LAFO and MDC Long Beach on November 21, 1995, MDC disclosed their concern about the Nanchang factory being involved in the production of attack aircraft and coastal defense missiles, and provided documentary evidence to that fact. Despite protests by MDC to CATIC that same violated the terms and conditions of the IVL’s, according to MDC, CATIC has made no attempts to return the commodities to Beijing, adding to this problem. In July, 1995, CATIC assured MDC that the equipment in Nanchang would not be unpacked.

CATIC in fact requested MDC to ask USDOC to approve the sale of the 6 commodities in Nanchang to Nanchang. Despite CATIC’s assurances to MDC, to the contrary, CATIC has already permanently installed and made operational the Hydraulic Stretch Press at the Nanchang factory. Recent CATIC/MDC discussions have suggested an alternate storage location in Shanghai; however, based upon MDC’s observation there appears to be an unsuitable risk of continued and imminent diversion of the B-1 Bomber facility aircraft manufacturing machine tools, both controlled and general license, to unapproved end uses and EPCI (Enhanced Proliferation Control Initiative)-related destinations.

Chronology of events:

As background, during the time frame 1985 to 1993, MDC and CATIC were involved in a joint venture involving the production of MD-80 and MD-90 commercial aircraft. In 1993, further agreement was made between MDC and CATIC for the production of 40 additional “trunkline” aircraft to be completed by 1998. The Rockwell Corporation, having been involved in production of the B-1 Bomber, maintained a facility in Columbus, OH. Upon termination of the B-1 program, MDC took possession of the Rockwell facility, to include, all equipment at same, until apprised by the U.S. Air Force that MDC would no longer be allowed to lease the facility. In disposing of all the equipment, MDC offered same to bid; the eventual successful purchaser was CATIC, and it was agreed by MDC and CATIC that the equipment could be utilized to enhance productivity on the “trunkline” project. CATIC agreed to do all dismantling, packing and shipping of the equipment to the PRC, and through coordination with its El Monte, CA office, sent 50 individuals to accomplish the task. In May, 1994, MDC subsequently made application with the USDOC for IVL’ s to export the equipment to the PRC.

During the same time frame, CATIC entered into an agreement with MAC whereby MAC would assist in setting up the CATIC Machining Company’s Beijing Machining Center, where the commodities would be shipped and eventually utilized.

On September 14, 1994, the USDOC issued 16 IVL’s relative to 19 commodities from the B-1 Bomber facility destined for export to the PRC, following extensive inter-agency review. Exhibit (1) is a list of the IVL’s issued for export to the PRC, identified by the September 14, 1994 date. Exhibit (2) is one of the IVL’ s granted relative to one of the commodities, and is attached for the purpose of identifying the numerous terms and conditions stipulated on all of the IVL’s.

Between September 1994 and March 1995, all commodities were shipped to the PRC, with the exception of two items, which were leased by CATIC back to MAC, and thus shipped to Amityville, NY. Apparently, the IVL’s relating to this equipment have been suspended by USDOC.

Following the shipments, an impasse was reached between CATIC and MAC concerning establishment of the Beijing Machining Center, resulting in same never being effected. As the Beijing Machining Center did not exist at the time the commodities were ready for delivery, CATIC illegally, knowingly and willfully diverted 11 of the commodities to two locations in Tianjin (CBW Head Office and CBW Storage Yard), and the remaining 6 to Nanchang in Nanchang.

In adhering to the various terms and conditions, specifically that MDC provide a quarterly report to USDOC concerning the status of the commodities, on March 24, 1995, MDC officials from the Beijing office attempted to inventory the commodities in Beijing. The officials discovered that 11 of the commodities had instead been stored in Tianjin, two hours from Beijing, and were still in the original crates; it was additionally revealed that 6 of the commodities had been taken to Nanchang. Exhibit (3) is MDC’s first quarterly report detailing its discovery that the commodities had been diverted from Beijing, and specifically identifying the locations of the commodities.

On July 5, 1995, Exhibit (4) a letter from CATIC to MDC indicated the reasons behind the commodities being diverted from Beijing, as well as confirmed CATIC’s intention of selling the 6 commodities already in Nanchang to Nanchang. The letter provides assurances that none of the commodities have unpacked, and will not be until USDOC approval has been granted for the sale to Nanchang. The letter identified the end use of the commodities to be that of producing parts for the K-8 trainer and other commercial products.

On August 23, 1995, MDC Long Beach, MDC Beijing and CATIC officials sighted and inventoried the 6 commodities sent to Nanchang. Exhibit (5) are photographs taken by MDC during the inventory, which depict crates bearing 5 of the commodities as being stored outside of the restricted Nanchang factory, but also one of the commodities (Hydraulic Stretch Press) permanently installed inside the factory, at substantial effort and cost to the Nanchang factory, to design and fabricate the permanent foundation and building. [Text deleted]

[Text deleted] Exhibit (8) describes Nanchang as a military-civil production combination system” and being involved in the production of attack aircraft (Q-5, Q-5III, Q-5M, L-8) coastal defense missiles (FL-1, FJ-2, FL-3A) and motorcycles. Exhibit (9) is a memorandum forwarded from the Defense Technology Security Administration (DTSA) to OEE Headquarters, confirming also that Nanchang is involved in the production of attack aircraft and missiles, and expressing Department of Defense concerns regarding CATIC’s intentional misuse of the export license.

On November 22, 1995, a review of ECASS disclosed extensive licensing history listing CATIC and its affiliates/subsidiaries, as well as China National Aero Technology, as previous/current consignees (15 total). Of the 15, application information was found for three, and of those, two have applications currently pending (D219031, D218462, D225413, D226271, D222230).

Additional information:

CATIC is a subsidiary of the Ministry of Aerospace Industry, according to “Jane’s Intelligence Review,” dated January 1992. The Federal Register, dated August 26, 1993, lists the Ministry of Aerospace Industry and all of its subsidiaries as Category 2 MTCR (Missile Technology Control Regime) sanctioned parties. Exhibit (10) also gleaned from the “Survey of Chinese Aviation Industry publication,” provides further identifying data for CATIC. No such facility as the Beijing Machining Center, identified in the IVL’s has ever existed; however, information provided by CATIC, and written into the terms and conditions of the IVL implied that the facility was in the final stages of preparation, thus constituting a misrepresentation of facts. Verbiage in the terms and conditions also specified that, until each facility was completed, all commodities were to be stored in one central location; instead, CATIC chose to ignore same, and knowingly violated the regulations by diverting the commodities to three separate locations in the PRC, one of which is an identified missile production site, and allowing one of the commodities to be installed and made operational at same without USG approval. Based upon the discovery of these diversions and violations of the Export Regulations, CATIC was advised by MDC that it should take immediate actions to rectify the violations of conditions originally agreed to. As such, MDC has submitted amendments for 11 IVL’s regarding the commodities identified herein, which would change the ultimate consignee to the Shanghai Aviation Industrial Corporation (SAIC). As of the date of this recommendation, the amendments are still pending approval, however, based upon CATIC’s prior performance in abiding with IVL terms and conditions, there are no guarantees that CATIC will comply, and the imminent risk of diversion remains.

CATIC has demonstrated a consistent pattern of deliberate actions which do not constitute either technical error or simple negligence, and are proactively contrary to the terms and conditions of the IVL; the likelihood of further movement and/or subsequent diversion of the commodities to unapproved or EPCI-related end uses poses an imminent threat to the national security of the U.S., especially considering that commodities have already ended up at a missile production facility. CATIC, by its actions, has manifested that it does not choose to abide by terms, conditions, regulations or contracts, and the likelihood that disposition of technology contrary to export control requirements will occur again, perhaps concerning pending licenses/exports, is substantial.

EPCI concerns are prevalent concerning these licensed commodities which have been diverted. Additionally, other commodities related to this transaction were exported under General License G-DEST, and concerns exist that same, as well as future G-DEST exports, might also be diverted/put to end uses in violation of EPCI regulations, and contrary to national security and foreign policy issues.

Recommendations:

The violations enumerated herein demonstrate intentional and willful violations of U.S. Export Regulations and licences by the respondents. The recommendation identifies the likelihood that such violations will continue to occur, and that those violations are imminent in nature. There is no guarantee that the respondents will conform to USG mandates regarding the subject commodities, and there has been no effort on the respondents’ part to comply with the terms and conditions specified in the respective IVL’s identified in this recommendation. There are unused controlled commodities located in both Nanchang and Tianjin, which can, and may, be diverted to proscribed end uses at any time, as has already occurred in Nanchang. The respondents have demonstrated neither technical errors nor negligence issues in this matter, but rather deliberate violations, as evidenced by the fabrication of specialized building and cement foundation followed by permanent installation of a diverted, controlled CNC machine tool at Nanchang.

Related concerns regarding imminency should also extend to those general license commodities exported from the B-1 Bomber plant by CATIC to the PRC, and any current EPCI uses which were not disclosed to the USG as with the non-existent Beijing ultimate consignee.

It is recommended that a Temporary Denial Order denying all export privileges, including all General License exports, be issued against the respondents and their related subsidiaries/affiliates. It is further recommended that this order remain in full force until such time that USG is satisfied (via physical inspection) that the respondents are in full compliance with the terms and conditions of the IVL’s identified herein, as well as abiding by the assurance given by the respondents to the USG in the form of end user certificates.

Israel Gets U.S. Supercomputer for Secret Military Site

U.S. officials have approved the sale of an American supercomputer to Israel’s Ministry of Defense for use at a secret military site, knowledgeable U.S. officials tell the Risk Report.

The machine, built by Cray Research, operates at 2,625 MTOPS (million theoretical operations per second) and is destined for the Israeli intelligence services, U.S. sources said. According to a Cray official, it will do “crypto-analytics,” meaning that it will be used for coding and decoding secret messages. Israel received funding to purchase the machine from the U.S. Department of Defense.

Cray’s application was voted down in October 1995 by a group of experts from five federal agencies because the computer was destined for a secret site where its use could not be verified. Officials were concerned that the machine could be used to design nuclear weapons or long-range missiles. “The policy was that if the export is going to a proliferant and you can’t safeguard it, and it is not part of a government-to-government program, you deny it,” said a U.S. official familiar with the case. According to Cray, the negative vote by the Subgroup on Nuclear Export Controls (SNEC) was due to the fact that the machine “was going into a black hole because the site was classified as off-limits.” The recipient was “known but not trusted,” the Cray official confided to the Risk Report.

The negative vote was reversed late last year by a change in U.S. export policy. After the change, computers operating at less than 7,000 MTOPS were no longer defined as supercomputers and therefore no longer had to be protected by a security plan. Thus, the machine for Israel could be approved even though it would be inaccessable to U.S. personnel.

As the May issue of the Risk Report went to press, at least two other applications were pending for American supercomputer exports to Israel. U.S. officials said that the Israeli Ministry of Defense had requested a second machine for the secret military site. The Ministry asked for permission to upgrade and use at the site an American computer previously exported to Israel by the Digital Equipment Corporation. The machine’s speed would increase from 1,335 to 2,596 MTOPS. The DEC computer had been approved for export in May 1995 by a high-level decision that overruled a rejection at the expert level.

The second application was to upgrade a Cray supercomputer in use at Israel’s Inter-University Computation Center at Tel Aviv University. The Cray had been approved for export in November 1994, also after an interagency conflict (Risk Report Vol. 1, No.1, Jan.-Feb, 1995). Israel asked for permission to increase the computer’s speed from 5,225 MTOPS to 10,425 MTOPS and to move the Computation Center from Tel Aviv to Ben Gurion University.