The U.S. Commerce Department is set to deny export privileges to a network charged last week with procuring U.S.-origin goods for companies linked to Pakistan’s nuclear program — without the required licenses.
Prosecutors said on Jan. 15 that five men operated a procurement network of front companies used to acquire U.S. goods for the Advanced Engineering Research Organization (AERO) and the Pakistan Atomic Energy Commission (PAEC), both of which are on the Commerce Department’s Entity List, which imposes license requirements for any U.S. exports. The indictment cited 38 separate exports sent from the U.S. using 29 different companies; prosecutors noted that none of the U.S. firms were complicit in the scheme.
The Entity List is managed by the Commerce Department’s Bureau of Industry and Security (BIS). PAEC was listed by BIS in 1998; AERO was added in 2014 after the U.S. found it used intermediaries and front companies to procure items for use in Pakistan’s missile and unmanned aerial vehicle (UAV) programs, prosecutors said.
The Commerce Department’s order, scheduled to be published Friday in the Federal Register, denies export privileges for 180 days for the five men — Muhammad Kamran Wali, Muhammad Ahsan Wali, Haji Wali Muhammad Sheikh, Ahmed Waheed and Ashraf Khan Muhammad — as well as Kamran’s Pakistan-based front company Business World, and other related firms.
Kamran and Business World received purchase orders or tender inquiries from the PAEC and AERO, and the network sought to obtain items directly from U.S. suppliers or through intermediaries, using a series of aliases and alternative shipping addresses to avoid detection, according to the order. An investigation uncovered a number of shipments using a similar pattern, using slightly different entities and routes to escape suspicion, the Commerce Department said in the order.
The denial order is necessary to stop transactions in progress and to prevent U.S.-origin items from reaching prohibited end users, according to the order. “Despite the indictment, [they] will continue to operate this well-established and durable international procurement network for the PAEC and AERO absent action by this order,” the order said.
The order also cites multiple examples of transactions for items sought by the PAEC, including a recent one for industrial safety equipment that BIS said it had reasonable cause to believe was intended for a nuclear power project, and another for PAEC’s “in house design, manufacturing, inspection, testing facilities.” Historical transactions cited by the order involved “a flexible procurement scheme” in which the network obscured the originators of transactions by incorporating middle parties and alternative entities and destinations.
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