Shadowy world where the prizes are high

A UN embargo inspired arms dealers to new levels of subterfuge, report Chris Blackhurst and Tim Laxton

Arms dealing has always been secretive, involving shadowy middlemen and commission agents, but the Iran-Iraq war from 1980 to 1988 gave the business new depths of intrigue.

A UN arms embargo meant that in theory, manufacturers could not supply arms to the two protagonists. Instead of stopping them, it encouraged them to find devious ways of getting their weapons to the two states.

One of the most favoured conduits was Singapore. It was a standing joke in the industry that if the tiny island off the tip of the Malaysian peninsular kept all the arms its officials had signed for, it would sink.

In one notorious, well-documented case, a British firm, Casalee, arranged the shipment of 9 million anti-personnel mines to Charter Industries of Singapore, a company owned by the Singapore government. According to their end-user certificates, the mines, made by Valsella in Italy, were to be used by the Singapore armed forces. All of them, however, went to Iraq, for use by Saddam Hussein against the Kurds, Marsh Arabs and allied forces in the Gulf War.

Coincidentally, the same company, Charter Industries, was the purported end-user for the 140 naval guns made by BMARC that went to Iran. The structure of the BMARC deal was classic arms tradecraft. The guns were sent to Singapore in bits while 37 key parts were made by Charter using tooling supplied by BMARC. As the guns were not sent complete from Britain they did not require an end-user certificate specifying if they were being sold on by Charter to a third country.

Just as nobody ever questioned why Singapore needed 9 million mines, nobody, apparently, ever asked why the small Singapore navy needed 140 naval guns - one or two per ship.Companies willing to trade with embargoed countries always ran the risk of prosecution from Customs and Excise, and ultimately, ruin. Since the Second World War, there have been at least 20 successful prosecutions in Britain alone of arms makers breaking export laws.

Not surprisingly, sanctions-busting deals were never discussed in those terms at board meetings or spelt out in company papers. Security was always ferociously tight - with nobody prepared to admit to anything. The rewards were huge: the Casalee-Charter mines deal was worth over $200m (£124m).

Deals were put together overseas, using front companies, offshore bank accounts and bogus paperwork. Every step along the trail involved payment of an arrangement fee or bribe. Following the money was fruitless: the money was routed through secretive offshore centres, ending up in numbered accounts in Switzerland and the Cayman Islands.

Nobody has come close to unravelling the biggest deal of all: the sale of arms from Britain to Saudi Arabia, the £20bn Al Yammamah contract. An attempt by the National Audit Office, the public finance watchdog, to get to the bottom of who paid what to whom, failed. MPs on the Public Accounts Committee, which receives reports from the NAO, has never been given the results of the investigation.

The Scott inquiry into arms to Iraq has also passed this shadowy world by, concentrating on the level of knowledge in Whitehall. Businessmen, City bankers and middlemen have not been interviewed.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Sport
Kim Sears is reported to have directed abuse at Berdych
tennis
Arts and Entertainment
Cold case: Aaron McCusker and Christopher Eccleston in ‘Fortitude’
tvReview: Sky Atlantic's ambitious new series Fortitude has begun with a feature-length special
Voices
Three people wearing masks depicting Ed Miliband, David Cameron and Nick Clegg
voicesPolitics is in the gutter – but there is an alternative, says Nigel Farage
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
News
i100
News
people
Sport
Chelsea manager Jose Mourinho
footballThe more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Life and Style
Vote green: Benoit Berenger at The Duke of Cambridge in London's Islington
food + drinkBanishes thoughts of soggy school dinners and turn over a new leaf
News
Joel Grey (left) poses next to a poster featuring his character in the film
peopleActor Joel Grey comes out at 82
News
i100
News
business
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Marketing & Sales Manager

£40000 per annum: Ashdown Group: A reputable organisation within the leisure i...

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Recruitment Genius: Doctors - Dubai - High "Tax Free" Earnings

£96000 - £200000 per annum: Recruitment Genius: Looking for a better earning p...

Recruitment Genius: PHP Developer

£32000 - £36000 per annum: Recruitment Genius: A rapidly expanding company in ...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee