China The Embargo Buster
April 24, 2012: As economic sanctions on Iran grow stronger and more extensive, one source of forbidden goods becomes more important. That source is China, which opposes the sanctions, but goes through the motions of observing them. But China has always been the ultimate source of forbidden military and nuclear research items for Iran. This includes Western gear, including stuff from the United States. These American items are usually obtained by Chinese trading companies, who serve as a one-stop-shopping source for many countries. The trading companies break American laws when they ship some types of restricted (by American regulations) gear to embargoed nations. This is done using forged documents and bribes. These Chinese exporters have little fear of punishment, because the Chinese government refuses to discipline its wayward firms. Trading companies can be hurt in other ways, as U.S. regulators can reach just about every other country (except China) using the enormous U.S. presence in the international banking system. But the Chinese traders consider these fines a cost-of-doing-business and charge extra for dirty deals. Thus as the sanctions on Iran grow more formidable, prices Iran must pay go up and the Chinese profits increase even more.
This kind of smuggling employs techniques that Iran has used successfully for a long time. Many Western suppliers would simply charge a much higher price to cover the risk of being found out and prosecuted. There are, as the Iranians know well, a lot of Western suppliers who are willing to take the risk. But as the risk of getting caught, and the penalties, increase more and more Westerners abandon this lucrative business to the Chinese.
The war on Iranian arms smuggling has been intensifying in the last decade. Most countries cooperate, but not all. While Turkey has been getting cozy with Iran, the Turks still enforce international trade sanctions against Iran. But as Turkey encourages its companies to do more business with Iran, there are more opportunities to smuggle forbidden goods to assist Iranian nuclear weapons and ballistic missile projects. Iran takes advantage of this whenever possible.
Germany was once a favorite place for Iran to buy equipment for their ballistic missile and nuclear weapons programs. No longer. For example, four years ago, a German citizen was prosecuted for running a weapons related smuggling operation. The defendant shipped 16 tons of high-grade graphite, used for making rocket nozzles, to Iran in 2005-7. The defendant mislabeled the graphite as low-grade, which was legal to sell to Iran. Another ten tons of the high-grade graphite was caught by Turkish customs officials. Germany adopted stricter export rules for Iran four years ago and promptly began seeking out and prosecuting those who ignored the ban. More recently, Germans have been prosecuted for exporting special metals and manufacturing equipment needed for ballistic missile warheads.
Ever since the U.S. embargo was imposed in 1979 (after Iran broke diplomatic protocol by seizing the American embassy), Iran has sought, with some success, to offer big money to smugglers who can beat the embargo and get needed industrial and military equipment. This is a risky business, and American and European prisons are full of Iranians, and other nationals, who tried, and often failed, to procure forbidden goods. The smuggling operations are currently under more scrutiny, and attack, because of Iran's growing nuclear weapons program. But the Iranians simply offer more money and more smugglers step up to keep the goodies coming.
|"The chief aim of all government is to preserve the freedom of the citizen. His control over his person, his property, his movements, his business, his desires should be restrained only so far as the public welfare imperatively demands. The world is in more danger of being governed too much than too little.
It is the teaching of all history that liberty can only be preserved in small areas. Local self-government is, therefore, indispensable to liberty. A centralized and distant bureaucracy is the worst of all tyranny.
Taxation can justly be levied for no purpose other than to provide revenue for the support of the government. To tax one person, class or section to provide revenue for the benefit of another is none the less robbery because done under the form of law and called taxation."
John W. Davis, Democratic Presidential Candidate, 1924. Davis was one of the greatest trial and appellate lawyers in US history. He also served as the US Ambassador to the UK.