The U.S. Justice Department announced this week that five Pakistani nationals have been indicted for their alleged role in a five-year clandestine operation to illegally procure and smuggle U.S.-made technologies for use in Pakistan’s nuclear weapons development program.
Between September 2014 and October 2019, the men used a system of front companies located in Pakistan, Hong Kong, the United Kingdom and Canada operating mostly under the names Business World and Industria.
According to the Justice Department, during that five-year period Muhammad Karman Wali of Pakistan, Muhammad Ahsan Wali and Haji Wali Muhammad Sheikh of Canada, Ashrah Khan Muhammad of Hong Kong and Ahmed Waheed of the United Kingdom procured components from 29 U.S. companies for 38 illicit shipments to Pakistan.
The parts were ordered primarily for the Pakistan Atomic Energy Commission (PAEC) and Pakistan’s Advanced Engineering Research Organization (AERO), both of which have been on the U.S. Commerce Department’s Entity List since 1998 and 2014, respectively.
U.S. companies are required by law to apply for an export license to ship to individuals and entities on the Entity List, with the presumption that the license will be denied.
Most of the Pakistani businessmen’s purchases were under $10,000 in value and included electronic connectors and components, engine and equipment parts and civilian aircraft parts.
So far, none of the five defendants are in U.S. custody. However, they are each charged with two felony counts of conspiracy to violate the International Emergency Economic Powers Act, which carries a maximum 20-year jail sentence.
The U.S. companies involved in the case were identified by name in the indictment against the five Pakistani men which was unsealed by U.S. Attorney Scott Murray for the District of New Hampshire on Jan. 15. The Justice Department added that “none of the U.S. companies is alleged to have been complicit in the illegal exports.”
However, Assistant Attorney General for National Security John Demers warned, “This indictment puts the world on notice not to do business with these defendants and demonstrates our commitment of holding them accountable.”
Demers also said the indictment “stands as an example of the kind of deceptive behavior U.S. businesses need to watch out for in designing appropriate export control and sanctions compliance programs.”
Export compliance consultant Paul DiVecchio, who has worked with many high-tech exporters throughout New England over the past 40 years, agrees that American companies must be on high alert for illicit export schemes.
He also advises his corporate clients to partner with federal agencies that have responsibility for export control enforcement, such as the Commerce Department’s Bureau of Industry and Security and FBI, to report potential illicit export transactions.
“The exporting industry is the eyes and ears for these enforcement agencies,” he said. “Partnering is every U.S. company and citizen’s responsibility.”