Globalaffairs

Issue 14/April-May 2009
By Alexandre Calvo Cristina

The purpose of this article is to examine to what extent Japanese companies might have played a role in Dr. Khan’s international nuclear proliferation network, and from here examine some wider issues related to Japan’s defense and nuclear policies.

Did Japanese companies provide Khan with parts, technology, and machinery?

Although not a nuclear weapons state, Japan is scientifically advanced country with a large number of nuclear electricity generating plants as well as a member of the Nuclear Suppliers Group, a club of nuclear technology exporting countries that cooperate on nonproliferation efforts.

A report by Kyodo News on February 17th carried by the Japan Times (1), has shed some light on the participation of a number of Japanese companies in the worldwide network of Dr. Khan, from which KRL obtained some key pieces of equipment.

According to Kyodo News, Dr. Khan and some (undisclosed) former employees of certain Japanese corporations have revealed the key role played by Japan-based companies in the operation of the network.

Dr. Khan is said to have visited Japan in 1977 and 1984 (2). In a written interview he stated that Japan was a source of machinery, laboratory equipment, and metal products. It was “a very, very important country for our imports,” from which, among other things, ring magnets were purchased. These are crucial for the manufacture of centrifuges, which are employed to enrich uranium.

A no-longer existing company, Tokyo-based Western Trading, served as a go-between, with the late Pakistani businessman Mian Mohammad Farooq acting as a broker in a number of high-profile agreements with Japanese and other companies.

The number of ring magnets bought by Pakistan through Western Trading is said to be not less than 6,000, according to a former employee who spoke to Kyodo News on condition of anonymity. He added that “As a businessman of a trading company, the priority is to sell goods… Of course, I always obeyed the export laws.” The identity of the company producing the magnets has not yet been revealed publicly.

The manufacturer of another crucial import from Japan, an electron microscope, has been named as Japan Electron Optics Laboratory (JEOL). A former employee of JEOL, also speaking on condition of anonymity, has revealed that the number of microscopes purchased was two, which were allegedly employed to check alloys used to build centrifuges. According to the same source, JEOL also sold an X-ray diffractometer, the total price tag surpassing US$650,000. JEOL has confirmed that an electron microscope was sold to Khan Research Laboratories in the 1980s claiming, however, that it was unaware of the true purposes of the purchase.

A third Japanese company named by Kyodo News is Hitachi Seiki, which underwent bankruptcy seven years ago, having previously supplied Khan with automatic lathes and other equipment. According to Khan, other supplies obtained from Japan included “maraging steel, beryllium thin sheets, beryllium-copper rods and other metal alloys with nuclear applications.”

Although the tone of these reports might be a bit sensational, and even mislead the reader into seeing Japan as the key to Pakistan’s development of nuclear weapons, it is true that some Japanese corporations were important suppliers to Dr. Khan’s organization, it was in his own words “a very, very important country for our imports“(3), and that we still know very little about their exact role.

Another Japanese company which cooperated with Khan’s network was Mitutoyo Corporation, a precision instrument specialist, which provided three-dimensional measuring machines, employed to build centrifuges with the required precision, whose ultimate recipient was Libya (4).

Mitutoyo´s facilities were raided on February 13 2006 as part of an investigation launched after IAEA (International Atomic Energy Agency) found two such machines in Libyan facilities in 2003 and 2004. The case of Mitutoyo is specially worrisome given both the large number of highly accurate measuring devices it may have illegally exported, up to 10,000, and the management’s involvement in efforts to bypass export-control legislation (5). These high precision products are critical for the development of an uranium enrichment capability (6) due to their “highly accurate, three-dimensional measuring capabilities, which can determine precise cylindrical dimensions and minimize surface distortions” which are “essential in the manufacturing of gas centrifuges for uranium enrichment, which require precise measurements to achieve continuous high rotational speeds.” (7).

When faced with higher controls on dual-use technologies, this corporation developed a computer program code-named “Cocom” (after the multilateral export-control regime, now succeeded by the 1996 Wassenaar Arrangement) that made its equipment appear to be less accurate than it really was, below the threshold above which an export license was required. Should Japanese customs authorities check the machinery being exported, the program disguised its true accuracy.

Mitutoyo’s efforts did not stop there; it also relied on foreign subsidiaries to indirectly export dual-use machinery, Singapore and Malaysia playing important roles. From 1992 to 1995 exports to the former jumped from 20-30 a year to around 200. The two devices discovered by IAEA inspectors in Libya were exported from Japan to Mitutoyo’s Singapore branch, which sold them to Malaysia-based SCOPE (Scomi Precision Engineering), which used an intermediary in Dubai to complete the transfer to Libya, reaching the country sometime between December 2001 and 2002. SCOPE was set up by B. S. A. Tahir, an associate of Dr. Khan, and played a key role in the network’s assistance to Libya’s nuclear program (8).

The case resulted in Mitutoyo being fined USD 350,000 and subjected to an export ban, and four of its former executives being convicted. However the ban is only for three years (the maximum allowed by Japanese legislation), applies only to specific items after an initial 6-month phase, and does not affect exports to countries considered “safe” such as the United States, leading observers to conclude it will not harm the company in the long run. The sentences were suspended, none of the convicted actually serving any time (9).

This led some observers to doubt whether the case, and the surrounding publicity, would serve as a deterrent to other high-tech companies tempted to bend or even simply ignore the law in their search for exports and profits (10). It is necessary, however, to take into account the very different nature of Japanese and Western legal systems, the former often having resource to informal sanctions and regulations to a greater extent than would be admissible in Europe or the United States. A sentence which seems lenient to Western eyes might be accompanied in Japan by governmental “advice” to the company involved actually tantamount to effective orders.

Japan and nonproliferation. Some other cases of Japanese corporations violating exports laws.

The role of Japanese enterprises in the subversion of nonproliferation efforts does not stop at the participation of some in Dr. Khan’s network.

Libya also acquired a uranium conversion plant from an unnamed Japanese company in 1984, according to diplomatic sources, which revealed that “the components were so large that they could not have been shipped from Japan without the government knowing about it” (11).

Horkos Corp, a machinery maker with 665 employees and annual sales of $192 million, has been accused by Japan’s trade ministry of illegally exporting to China and South Korea devices which can be used in nuclear fuel enrichment plants. Four employees were arrested in early March this year, as a result of an investigation launched in July last year (12).

The more than 200 machine tools illegally exported by the company between 2004 and 2006, called “machining centers”, are dual-use items which can be employed to manufacture civilian devices such as automotive components as well as components for uranium enrichment centrifuges. Because of this they are subject to a license from Japan’s METI (Ministry of Economy, Trade, and Industry), which the company avoided by pretending its products were of a lower caliber than they actually were.

Horkos’ machine tools were exported to a number of countries, but it is transactions with South Korea which particularly worry Japanese authorities, since it is suspected they might have resulted in re-exports to North Korea and the Middle East (13).

Tokyo Vacuum (based in Sagamihara) and Nakano Corporation (a Tokyo-based trading firm) are two more companies whose facilities were raided last year, being suspect of, respectively, manufacturing and exporting vacuum pumps for use in uranium enrichment without a proper license.

Investigations were also launched as a result of an IAEA inspection, in this case on North Korea’s Yongbyon nuclear complex and related facilities in July 2007, where some components, including an oil-diffusion pump and an oil-rotary pump were identified, confirming for the first time speculation that Pyongyang had relied on Japanese technology to advance its nuclear program (14).

The pumps, used to remove impurities from plutonium, were manufactured by Tokyo Vacuum and exported by Nakano Corporation to an unidentified Taiwanese company (Taipei-based Transmerits according to some sources) which resold them to Namchongang, a Pyongyang-based trading company headed by North Korea’s representative during the 2007 Yongbyon IAEA inspection (15).

Some authors have argued that in contrast with the Mitutoyo and Horkos cases, this incident seems to have been the result of a lack of proper oversight by the companies involved, rather than part of a deliberate export control avoidance policy., which might be the reason why Japan’s METI issued a strong warning to Nakano Corporation on 8 August last year but prosecutors have not pressed charges against the company or its managers. Additional reasons why the transaction might not have attracted the attention of Japanese authorities are the long-standing relations of both companies with Taiwanese firms and the fact that the Island’s end-user was not under strict export-control requirements (16).

A retrospective look at Japanese nonproliferation efforts, their impact and shortcomings

We have seen that some Japanese companies played a minor, albeit qualitatively important, role in Dr Khan’s worldwide procurement network, while others have been investigated for export-control violations.

Whatever the explanation, all these cases, which some suspect are not the whole story, have raised concerns, both in Japan and abroad, that enforcement of dual-technology export controls by Japanese authorities might not be as strict as they should be, although Japan is generally considered to be a country with one of the strongest export control systems in the world (17). These concerns are magnified by three important facts:

• Japan’s advanced technology. In spite of the economic stagnation suffered by the country for the last two decades, it is still a major technological power, with hundreds of enterprises on the leading edge of their fields, many producing dual-use items, and a strong tradition of export-oriented development. Furthermore, Japan is one of the biggest producers of nuclear-generated electricity, a leading member of the Nuclear Suppliers Group, and is described by many as a “latent nuclear power”, meaning a country without a nuclear arsenal but having the know-how, engineering capacity, and fissile materials, to quickly develop one if perceived as necessary.

• The country’s proximity to North Korea. Mutual perceptions contribute to tensions between Tokyo and Pyongyang. While Japanese concerns are based on repeated threats from the regime and a number of incidents, including the unresolved hijacking of civilians and the violation of territorial waters by submarines and spy ships., North Korea sees Japan as a US pawn, protected by the American nuclear umbrella, and furthermore, a country unrepentant about its colonial past in the peninsula (a concern shared by South Korea, which has been involved in a number of diplomatic rows with Tokyo on the issue of textbooks). The impact of revelations that some Japanese companies aided Pyongyang in their quest for the A-bomb has been multiplied by the view in Japan that such corporations were not only violating internal legislation and the international exports-control regime but directly threatening Japanese national security. In spite of being the second World economic power and, constitutional limitations not-withstanding, having one of the most powerful armed forces in East-Asia, Japan feels insecure when faced from the missile and non-conventional capabilities displayed by Pyongyang, whereas the communist regime, suffering from its self-imposed isolation, is afraid of its giant neighbor and its latent military capabilities. In recent years North Korea has captured the Japanese public’s imagination, and the media has stressed the threat from the regime, with particular attention being paid to the issue of abductees, forcing the government and political leaders to take a hard stance on the issue, which overshadows all other matters of concern and leaves Tokyo very little room for maneuver and risks turning Japan into an irrelevant actor in the region (18).

• Japan’s long standing policy of not selling weapons abroad. One of Japan’s post-war foreign policy distinguishing features has been its ban on weapons exports. Although qualified by the participation of some Japanese corporations in joint programs and the donation of naval equipment to certain countries to fight piracy, it is nevertheless an exception in a world used to see all major powers employ arms sales (or their possibility) as a major diplomatic and security tool. Reports of nonproliferation violations by Japanese companies can therefore tarnish the image of Japan as a country not feeding arms races abroad.

Of course it is not only Japan which is struggling to keep abreast of rapid technological change and growth in international trade, but for the reasons stated the country’s effective enforcement of dual-use regulations can have a major impact on nonproliferation efforts.

Some voices have expressed concern at the lack of awareness of international security issues by the managers of many Japanese firms engaged in illegal exports, who knew they were breaking the law but do not seem to have realized the extent to which their activities might have an impact on the military arena. This point of view was first voiced during the Cold War and has continued to be held by some observers (19).

Concerning North Korea, it was precisely its 2006 missile and nuclear tests that led to a significant tightening of Japanese export-control regulations, in an effort to close loopholes which might be used by Pyongyang to get hold of the country’s materials and technology. This increased emphasis by Tokyo manifests itself in a twin-track policy of harsher fines and other penalties for companies and managers, and a heavier emphasis on outreach programs aimed at medium and small enterprises, many of which are not aware of export-control regulations and lack in-house compliance mechanisms (20).

Finally, we should mention that all the reports on the participation of some Japanese corporations in Dr. Khan’s worldwide network remind us once more that in spite of the country’s decision not to develop nuclear weapons, based partly on its historical experience, Japan has the necessary technological and economic base to go down this path should the decision be ever taken. China’s ascent means this is by no means a closed matter.

Alexandre Calvo Cristina
Second Lieutenant, Spanish Army Reserve
International Relations Professor, European University.
Teaching and Research Fellow, OSCE Academy (Kyrgyzstan)

References:

(1) “Japan firms played into Khan´s nuclear hands”, Japan Times, 17 February 2009, available at http://search.japantimes.co.jp/cgi-bin/nn20090217a2.html .

(2) PENN Michael,”A. Q. Khan Claims That He Obtained Key Nuclear Components in Japan”, Shingetsu Institute Newsletter, Shingetsu Institute for the study of Japanese-Islamic Relations, No 1218, 11 December 2008, available at http://www.shingetsuinstitute.com/newsletter/december2008/december2008.htm .

(3) “Pakistani nuke program used Japanese parts”, United Press International, 17 February 2009, available at http://www.upi.com/Top_News/2009/02/17/Pakistani_nuke_program_used_Japanese_parts/UPI-42961234918509/ .

(4) A Q Khan and Onward Proliferation from Pakistan, International Institute of Strategic Studies, London, 2006, p. 81-82, available at http://www.iiss.org/publications/strategic-dossiers/nbm/nuclear-black-market-dossier-a-net-assesment/aq-khan-and-onward-prolifertion-from-pakistan/ .

(5) TOKI Masako and LIEGGI Stephanie, “Japan’s struggle to limit illegal dual-use export”, Bulletin of the Atomic Scientists, 5 September 2008, available at http://www.thebulletin.org/web-edition/features/japans-struggle-to-limit-illegal-dual-use-exports.

(6) TOKI Masako and LIEGGI Stephanie, “The Mitutoyo Case: Will Japan Learn from its Mistakes or Repeat Them?”, The Nuclear Threat Initiative, 31 July 2007, available at http://www.nti.org/e_research/e3_90.html .

(7) “Evading Export Controls: Mitutoyo Corporation as a Case Study in Determined Proliferation”, WMD Insights, October 2006, available at http://www.wmdinsights.org/I9/I9_EA1_EvadingExport.htm .

(8) TOKI Masako and LIEGGI Stephanie, “Japan’s struggle to limit illegal dual-use export”, Bulletin of the Atomic Scientists, 5 September 2008, available at http://www.thebulletin.org/web-edition/features/japans-struggle-to-limit-illegal-dual-use-exports.

(9) TOKI Masako and LIEGGI Stephanie, “Japan’s struggle to limit illegal dual-use export”, Bulletin of the Atomic Scientists, 5 September 2008, available at http://www.thebulletin.org/web-edition/features/japans-struggle-to-limit-illegal-dual-use-exports.

(10) TOKI Masako and LIEGGI Stephanie, “The Mitutoyo Case: Will Japan Learn from its Mistakes or Repeat Them?”, The Nuclear Threat Initiative, 31 July 2007, available at http://www.nti.org/e_research/e3_90.html .

(11) “Country Profile: Libya. Nuclear Chronology 2004″, Nuclear Threat Initiative, September 2005, available at http://www.nti.org/e_research/profiles/libya/4132_5206.html .

(12) SATO Shigeru and OKADA Yuji, “Japanese Company Accused of Exporting Nuclear Enrichment Parts”, Bloomberg, 3 March 2009, available at http://www.bloomberg.com/apps/news?pid=20601101&sid=aIUX.58KHWVE .

(13) TOKI Masako and LIEGGI Stephanie, “Japan’s struggle to limit illegal dual-use export”, Bulletin of the Atomic Scientists, 5 September 2008, available at http://www.thebulletin.org/web-edition/features/japans-struggle-to-limit-illegal-dual-use-exports.

(14) TOKI Masako and LIEGGI Stephanie, “Japan’s struggle to limit illegal dual-use export”, Bulletin of the Atomic Scientists, 5 September 2008, available at http://www.thebulletin.org/web-edition/features/japans-struggle-to-limit-illegal-dual-use-exports.

(15) TOKI Masako and LIEGGI Stephanie, “Japan’s struggle to limit illegal dual-use export”, Bulletin of the Atomic Scientists, 5 September 2008, available at http://www.thebulletin.org/web-edition/features/japans-struggle-to-limit-illegal-dual-use-exports.

(16) TOKI Masako and LIEGGI Stephanie, “Japan’s struggle to limit illegal dual-use export”, Bulletin of the Atomic Scientists, 5 September 2008, available at http://www.thebulletin.org/web-edition/features/japans-struggle-to-limit-illegal-dual-use-exports.

(17) TOKI Masako and LIEGGI Stephanie, “The Mitutoyo Case: Will Japan Learn from its Mistakes or Repeat Them?”, The Nuclear Threat Initiative, 31 July 2007, available at http://www.nti.org/e_research/e3_90.html .

(18) ABE Amii, “Taboo in Japan: Can Japan Think Strategically about North Korea? “, Policy Forum Online, Nautilus Institute, 9th April 2009, available at http://www.nautilus.org/fora/security/09029Abe.html .

(19) GILL Bates, EBATA Kensuke, and STEPHENSON Matthew, “Japan’s Export Control Initiatives: Meeting New Nonproliferation Challenges”, The Nonproliferation Review, Fall 1996, available at http://cns.miis.edu/npr/pdfs/gill41.pdf .

(20) TOKI Masako and LIEGGI Stephanie, “Japan’s struggle to limit illegal dual-use export”, Bulletin of the Atomic Scientists, 5 September 2008, available at http://www.thebulletin.org/web-edition/features/japans-struggle-to-limit-illegal-dual-use-exports.

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