Leading British firms flouted Iran arms ban

SOME OF Britain's best-known companies, including ICI, Royal Ordnance and British Steel, supplied weapon components to a secret international network which exported arms to Iran in breach of government embargoes.

Senior officials at the Ministry of Defence knew of the operation. Officials at the Department of Trade and Industry and the Health and Safety Executive, which issues licences for the import of explosives, provided the necessary paperwork.

Lord Younger of Prestwick, Secretary of State for Defence between 1986 and 1989, said last week that he had no personal knowledge of the project. 'If it happened, it would have been totally contrary to our policy. Geoffrey Howe (then Foreign Secretary) and I would have sat on it instantly,' he said.

Sources close to the arms trade have told the Independent on Sunday that MoD officials were regularly briefed in Whitehall on the progress of the project by senior executives of Allivane, the British company at the heart of the network.

Until August 1988, Iran was fighting a bitter war with Iraq. After 1983, Britain imposed an embargo on the sale of arms to the country. There was also a ban on the export of arms to Iraq from 1985. Between 1986 and 1988, the years in which the most frequent MoD briefings took place, the Minister for Defence Procurement was Lord Trefgarne.

Lord Younger, while denying any ministerial knowledge of the Iranian trade, added that he might have come across Allivane in 1988, when it won a contract to supply ammunition to Saudi Arabia. Concerns over the company's financial position led him to authorise the MoD to intervene and ensure that the arms were shipped on time. 'I may well have done that. I can't personally recall doing it . . . but I'm not saying it's not true. It probably is.'

Nobel's, the explosives division of ICI, confirmed that it supplied components to Allivane between 1985 and 1988. It denies knowing that they were destined for Iran. British Steel has also confirmed supplying the company, but refused to say whether it knew its goods were destined for Iran. Royal Ordnance admitted to knowing the company but denied making any arms sales to it.

The operation, in its size and complexity, dwarfs the Iraqi supergun controversy which the Department of Trade and Industry select committee examined earlier this year. Our evidence has been drawn from hundreds of documents and from interviews with people close to the project.

Between 1983 and 1988, at least 1.5 million artillery shells and huge numbers of mortar bombs were sent to Iran through a complex web of companies in more than 10 countries. The shells were designed by the Canadian Gerald Bull, who created the supergun. In appropriate guns, they could outrange any Nato shell.

In total, the Iranian contract, which was negotiated by a French arms company in 1981 and 1982, was worth dollars 2bn ( pounds 1.06bn). British producers feature among the most important suppliers in the operation, which could have earned them as much as dollars 400m.

At least 27 British defence and electronics sub-contractors were involved. The DTI issued export licences to Allivane for weapons that were to end up in Iran on the basis of fictitious end-user certificates. Licences were issued for products not made by the applicant, to countries that could have no reasonable need of them.

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