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China-Japan-Koreas

China Aids Iran with Nuclear Program

2012-08-12

The Chinese toymaker said he was seeking parts for a "magic horse," a metal-framed playground pony. But the exotic, wildly expensive raw material he wanted seemed better suited for space travel than backyard play. His shopping list, sent by e-mail to a Seattle factory, started with 20 tons of maraging steel, an ultra-strong alloy often used in rockets. The buyer didn't flinch at the price tag -- $2 million -- but he repeatedly insisted on secrecy. This time it didn't raise any eyebrows, but when he came back for more... Last month, the Justice Department announced indictments against two people, one Chinese and the other Iranian, for conspiring to acquire maraging steel and other restricted American technology. U.S. officials say the case is part of a broader effort by Iran to dramatically expand its capacity to enrich uranium -- with Chinese firms serving as willing accomplices. Maraging steel is a critical material in a new, highly efficient centrifuge that Iran has struggled for years to build. Barred by sanctions from buying the alloy legally, Iranian nuclear officials have sought to secretly acquire it from Western companies. In recent years, U.S. officials say, an increasing number of Chinese merchants have volunteered to help, serving as middlemen in elaborate schemes to obtain the steel and other forbidden material for Iran's uranium enrichment plants as well as its missiles factories. My enemy's enemy can be my friend. "They are not just stumbling on opportunities," said Steve Pelak, the Justice Department's counterespionage chief. "They are professional, studied procurement agents and shippers. They know precisely what business they're in and how to go after it." Although the Obama administration has praised China for reducing its imports of Iranian oil in recent months, bilateral trade between Tehran and Beijing surged in the previous decade, from $2.5 billion in 2000 to $29.3 billion in 2010. The increase has softened the impact of international sanctions, U.S. officials and independent analysts say. Looking tough on Iran while boosting the Chinese - what's wrong with that, Champ? Over the following months the shopping list grew, as the Iranian, with increasing boldness, piled on requests -- other specialty metals used in uranium enrichment, an array of machines and instruments with known nuclear applications, even a mass spectrometer specifically calibrated to measure uranium fluorine gas, a key part of the enrichment process. Investigators determined Martin's real identity -- Parviz Khaki. As part of the subterfuge, they confronted him about the possibility that the materials would be shipped illegally to Iran. Khaki did not appear to care, Justice Department officials said in an indictment handed down last month around the time of the man's arrest. "Khaki discussed his motivation to make money from this transaction," the indictment stated. On July 13, authorities in the Philippines arrested Khaki as he was boarding a plane in Manila. He had been indicted by a U.S. grand jury on charges of running a $30 million scheme to acquire banned U.S. technology for Iran. His alleged Chinese associate, Zongcheng Yi, was also indicted. Khaki remains in custody in Manila. Yi's whereabouts are unknown.

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Home Front: WoT

US Charges Two With Trying To Export Nuclear-Related Material

2012-07-15

Iranian Khaki to stand trial for allegedly trying to buy 20 tons of special steel for nuclear centrifuges; Chinaman Zongcheng Yi still on the run More details at link. The two men have been charged with trying to illegally export nuclear-related material to Iran that could be used in gas centrifuges to enrich uranium, the US Justice Department announced Friday. A grand jury indictment in the case also charged one of the men with conspiring to procure radioactive material from the United States for customers in Iran. Parviz Khaki, a citizen of Iran, was tossed in the calaboose Keep yer hands where we can see 'em, if yez please! in May by authorities in the Philippines on a US provisional arrest request. The other man, Zongcheng Yi, a resident of China, is a runaway The indictment alleges that the efforts of the defendants actually did result in the illegal export of lathes and nickel alloy 120 wire from the US through China to Iran. In February 2009, Khaki asked Yi to contact a US company about procuring two Twister Speed Lathes. Yi allegedly purchased these items and arranged for them to be shipped from the US to Hong Kong and ultimately to Iran in June 2009. At Khaki's request, an unnamed conspirator sent a US company an order for nickel alloy, falsely stating that a company in China was the buyer. The US company shipped the nickel alloy to Yi in Hong Kong, who shipped it on to Iran. Khaki and Yi are each charged with one count of conspiracy to violate the International Emergency Economic Powers Act by conspiring with others to export US goods to Iran without a required US Treasury Department license. Both are also charged with one count of conspiring to defraud the US, two counts of smuggling, two counts of illegally exporting US goods to Iran in violation of IEEPA and one count of conspiracy to engage in money laundering. Both defendants face a maximum sentence of 20 years in prison for conspiring to violate IEEPA; five years for conspiring to defraud the US, 10 years for each smuggling count, 20 years in prison for each IEEPA count and 20 years in prison for conspiracy to commit money laundering.

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