Government firm `broke Iran embargo'

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The Independent Online

Westminster Correspondent

The British Government was accused yesterday of knowingly breaking a United Nations arms embargo and its own guidelines preventing the supply of arms to Iran during the Iran-Iraq war.

The potentially explosive allegation was made by Stephen Byers, MP for Wallsend and a Labour whip, in a letter to Valerie Strachan, head of Customs and Excise. Mr Byers claimed he had evidence detailing five shipments made by Royal Ordnance, then a state-owned ammunition manufacturer, to Iran in 1985 and 1986.

If proven, Mr Byers's claims would cause maximum damage to the Government as it awaits publication of the Scott inquiry report into arms exports to Iraq. The Royal Ordnance allegations could bring into question the role of Michael Heseltine, the Deputy Prime Minister, who was, for part of the period, Secretary of State for Defence, in ultimate control of Royal Ordnance. This could be the first time Mr Heseltine's name has been dragged into the embargo-breaking scandals culminating in the Scott inquiry. Unlike several of his Cabinet colleagues, Mr Heseltine is expected to emerge with clean hands from the Scott report.

Mr Byers requested that Customs extend its current investigation into possible breaches of arms controls by BMARC, the defence supplier which once counted Jonathan Aitken, former defence minister, among its directors, to cover Royal Ordnance. It was Mr Heseltine who instigated that inquiry. BMARC sent naval guns to Iran via Singapore, in contravention of the UN blockade and government export guidelines. Mr Byers, however, claims to have obtained evidence of direct shipments to Iran, and, most embarrassingly of all, says they were made by a government-owned company.

A "Memorandum of Understanding" between Royal Ordnance and the Government makes it clear who was in charge: the company had to submit an annual business plan to the Secretary of State for Defence and could not enter into exclusive trading agreements without his approval.

Thirty-five pages of documents, including ships' manifests, sent to Customs, apparently map out five shipments from Royal Ordnance:

t From a Kent port in September 1985. On board were 11 containers of propellant powder and one of tetryl. The ship went to Zeebrugge, then to Rijeka in Yugoslavia and on to Bandar Abbas in Iran where the cargo was unloaded on 26 October 1985.

t From a Kent port to Iran with three containers of tetryl, in November 1985.

t 54 cases of tetryl to Iran in April 1986.

t 104 cases of Royal Ordnance-manufactured tetryl to Bandar Abbas in June 1986.

t 2,600 boxes of explosive powder to Bandar Abbas in July 1986.

Mr Byers obtained his papers from sources in the United States and Scandinavia. They refer to Royal Ordnance's participation in a tight-knit group of European explosives manufacturers. Another British ammunition-maker is ICI. It is understood ICI management ordered the company to take no part in the trade with Iran.

The consignments were organised by Scandinavian Commodity, according to Mr Byers's documents, with the shipping arranged by Transammo of Antwerp in Belgium. In some cases, claims Mr Byers, the Royal Bank of Scotland is shown as acting as banker.

A Customs spokeswoman said they had yet to receive Mr Byers's letter and it was too early to comment.