In June 1989, the security intelligence service MI6 pinpointed the Nassr State Enterprise, a heavily guarded plant north of Baghdad, as the centre for Project 395, a development programme for ballistic missile production. The information was brought to the attention of two Department of Trade and Industry officials, but both 'forgot' to mention it to Lord Trefgarne, the former trade minister, when he considered applications to export machine tools to Nassr in September.
Eric Beston, former head of the DTI's export controls and licensing branch, told Lord Justice Scott he had no system other than his memory to remind him of the vital information. He said he and his deputy, Tony Steadman, who wrote a briefing paper for Lord Trefgarne, were told about the project via a secret Whitehall committee investigating Iraqi arms procurement. But they had forgotten about it over the summer holidays.
Lord Trefgarne later recommended machine tool exports worth pounds 6m by the Matrix Churchill company be allowed, despite Foreign Office fears.
Mr Beston was critical of the Foreign Office and MI6 for not providing firmer intelligence on Iraq's procurement activities. 'I don't understand how there could have been any doubt if the agency had an agent in place and he was reporting in a timely and thorough fashion,' he said, referring to the fact that MI6 received information from Paul Henderson, managing director of Matrix Churchill.
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