NOTIFICATION OF SANCTIONS: A.Q. KHAN AND

S E C R E T STATE 002556

SIPDIS

E.O. 12958: DECL: 01/09/2018
TAGS: ETTC EFIN KNNP MNUC PARM PINS PREL UNVIE
SUBJECT: NOTIFICATION OF SANCTIONS: A.Q. KHAN AND
ASSOCIATES

Classified By: IO PDAS James B. Warlick for reasons 1.4 (b)(c)(d)


1. (U) This is an action request. Please see paragraph three.

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SUMMARY
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2. (S) Sanctions have been imposed under the Nuclear
Proliferation Prevention Act (NPPA),the Export Import Bank
Act (EXIM),and Executive Orders (E.O.) 12938 and 13382 on 13
individuals and three companies for involvement in the A.Q.
Khan nuclear proliferation network.

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OBJECTIVES/ACTION REQUEST
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3. (S) Post is requested to achieve the following objectives:

-- Notify IAEA officials sometime after 9am EST January 12
that on January 12 the U.S. imposed sanctions on 13 people
and three companies for engaging in activities related to the
A.Q. Khan nuclear proliferation network.

-- Emphasize that no sanctions were imposed on governments
and that the overall sanctions decision reflects the diverse
and global nature of the network.

-- Post can draw from information from the legal paper in
para 5, points in the media note in para six, and press
guidance in para seven.

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SUGGESTED TALKING POINTS
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4. (SECRET/rel IAEA)

-- I wanted to inform you of a legal process that has
concluded in the U.S.

-- U.S. nonproliferation law requires that sanctions be
imposed in certain circumstances; the activities of Dr. Khan
and some of his associates fall under the requirements of
this law.

-- The U.S. has decided to impose sanctions on individuals
and companies listed in a media note that was released on
January 12.

-- This is a very complex case that involved a large volume
of information and many people and companies across the
globe.

-- The U.S. sanctions laws and executive orders involved
include the Nuclear Proliferation Prevention Act (NPPA),the
Export Import Bank Act (EXIM),and Executive Orders (E.O.)
12938 and 13382.

-- This legal non-paper describes in more detail the specific
sanctions and penalties involved.

-- The U.S. decision was announced on January 12 and will
soon be printed in the Federal Register.

-- This U.S. decision is not directed at any country. In
fact, as we highlight in our public statement, many countries
contributed to international efforts to shut down and
investigate the network.

-- The sanctions decision reflects the diverse and global
nature of the network.

-- No sanctions were imposed on governments.

-- As IAEA knows, the actions of the A.Q. Khan network have
irrevocably changed the proliferation landscape and will have
lasting implications for international security.

-- These sanctions will help prevent and deter future
proliferation-related activities and provide a warning to
other would-be proliferators.

-- It is imperative that all countries remain vigilant in
order to ensure that Khan network associates or others
seeking to pursue similar proliferation activities will not
become a future source for sensitive nuclear information or
equipment.

-- If Asked: Will there be any additional sanctions on these
individuals?

We don,t foresee, at this time, the imposition of additional
sanctions related to these activities.

-- If Asked: Will you share your findings with us?

We can not share details of the sanction decision but don,t
believe the information we have would contribute to a
different understanding of the activities than you already
have.

End suggested talking points.

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LEGAL NONPAPER
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5. (U) Begin non-paper:

Nuclear Proliferation Prevention Act (NPPA)

The NPPA provides for the mandatory imposition of a ban on
U.S. procurement from any person who, on or after June 30,
1994, knowingly and materially contributes, through the
export of nuclear-related goods or technology, to the efforts
of any individual, group, or non-nuclear weapon state to
acquire a nuclear explosive device or unsafeguarded special
nuclear material.

Once imposed, the sanction shall apply for a period of at
least 12 months, but can thereafter be terminated if reliable
information indicates that (1) the sanctioned person has
ceased to aid or abet any individual, group, or
non-nuclear-weapon state in its efforts to acquire
unsafeguarded special nuclear material or any nuclear
explosive device, and (2) the United States has received
reliable assurances from the sanctioned person that such
person will not, in the future, aid or abet any individual,
group, or non-nuclear-weapon state in its efforts to acquire
unsafeguarded special nuclear material or any nuclear
explosive device.

Export Import Bank Act (EXIM)

The EXIM provides for the mandatory imposition of a ban on
the Export-Import Bank,s guaranteeing, insuring, or
extending credit, or participating in the extension of credit
in support of United States exports to any person who, after

September 23, 1996, knowingly aids or abets a non-nuclear
weapon state to acquire a nuclear explosive device or
unsafeguarded material.

This sanction can be terminated if the U.S. determines and
certifies in writing to the Congress that reliable
information indicates that the sanctioned person has ceased
to aid or abet any non-nuclear weapon state to acquire any
nuclear explosive device or acquire un-safeguarded special
nuclear material; and steps have been taken to ensure that
the sanctionable activities will not resume. The sanction may
also be terminated if the appropriate government has taken
certain corrective actions.

Executive Orders 12938 and 13382

These Executive Orders (E.O.) provide the authority to impose
measures against a foreign person that has engaged or
attempted to engage in activities or transactions that have
materially contributed to, or pose a risk of materially
contributing to, the proliferation of weapons of mass
destruction (WMD) or their means of delivery.

The sanctions under E.O. 12938 include: a ban on USG
departments, and agencies, procurement from, or entering
into contracts for procurement with, the sanctioned person or
entity; a ban on providing any USG assistance to, and any
participation in USG assistance programs by, the sanctioned
person or entity; and a ban on the importation into the U.S.
of goods, technology or services procured or provided by the
sanctioned person or entity.

The E.O. 12938 sanctions may be terminated if there is
reliable evidence that the foreign person has ceased the
activities that led to the imposition of sanctions.

The sanction under E.O. 13382 is that all property and
interests in property of the designated entity, that are in
the U.S. or subject to the jurisdiction of the U.S. (i.e.,
U.S. persons anywhere) are blocked and may not be
transferred, paid, exported, withdrawn, or otherwise dealt
in.

Sanctions under E.O. 13382 may be lifted when circumstances
no longer warrant their imposition.

End non-paper.

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MEDIA NOTE
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6. (U) Post can draw from the following Media Note after
0900 EST January 12.

Begin Media Note:

For Immediate Release
January 12, 2009

Designation of A.Q. Khan and Associates for Nuclear
Proliferation Activities

Today, the Department of State announced that sanctions will
be imposed on 13 individuals and three private companies for
their involvement in the A.Q. Khan nuclear proliferation
network. This announcement comes after a multi-year U.S.
government review of the available information pertaining to
the activities of this network.

We believe these sanctions will help prevent future
proliferation-related activities by these private entities,
provide a warning to other would-be proliferators, and
demonstrate our ongoing commitment to using all available
tools to address proliferation-related activities.

Dr. A.Q. Khan led an extensive international network for the
proliferation of nuclear equipment and know-how that provided
&one stop shopping8 for countries seeking to develop
nuclear weapons. He and his associates provided Iran and
Libya with centrifuge components, designs, and, in some
cases, complete centrifuges. The United States also believes
that Khan and his associates provided centrifuge designs,
equipment, and technology to North Korea. Dr. Khan also
provided Libya with nuclear weapon designs. With the
assistance of Khan,s network, countries could leapfrog the
slow, incremental stages of other nuclear weapons development
programs. In 2004, following Libya,s welcome decision to
renounce its nuclear program, the United States removed from
Libya items it had received from the network.

The network,s actions have irrevocably changed the
proliferation landscape and have had lasting implications for
international security. Governments around the world,
including Pakistan, South Africa, Turkey, the United Kingdom,
Germany, the United Arab Emirates, Switzerland, and Malaysia,
worked closely with the United States to investigate and shut
down the network. Governments have also joined together to
put in place United Nations Security Council Resolution 1540
to criminalize proliferation and have worked cooperatively to
establish the Proliferation Security Initiative (PSI) to
enhance international tools to interdict and prevent trade in
sensitive technologies.

Many of Dr. Khan,s associates are either in custody, being
prosecuted, or have been convicted of crimes. Dr. Khan
publicly acknowledged his involvement in the network in 2004,
although he later retracted those statements. While we
believe the A.Q. Khan network is no longer operating,
countries should remain vigilant to ensure that Khan network
associates, or others seeking to pursue similar proliferation
activities, will not become a future source for sensitive
nuclear information or equipment.

Sanctions have been imposed under the following statutes as
follows:

Nuclear Proliferation Prevention Act (NPPA): Selim Alguadis,
Kursad Zafer Cire, Muhammad Nasim ud Din, EKA Elektronik
Kontrol Aletleri Sanayi ve Ticaret A.S., ETI Elektroteknik
Sanayi ve Ticaret A.S., Muhammad Farooq, Paul Griffin, Peter
Griffin, Abdul Qadeer Khan, Shamsul Bahrin bin Rukiban,
Buhary Seyed Abu Tahir, and Shah Hakim Shahnazim Zain

Export-Import Bank Act (EXIM): Selim Alguadis, Kursad Zafer
Cire, Muhammad Nasim ud Din, EKA Elektronik Kontrol Aletleri
Sanayi ve Ticaret A.S., ETI Elektroteknik Sanayi ve Ticaret
A.S., Muhammad Farooq, Daniel Geiges, Paul Griffin, Peter
Griffin, Abdul Qadeer Khan, Gotthard Lerch, Shamsul Bahrin
bin Rukiban, Buhary Seyed Abu Tahir, Gerhard Wisser, and Shah
Hakim Shahnazim Zain

Executive Order 12938: Selim Alguadis, Kursad Zafer Cire,
Muhammad Nasim ud Din, EKA Elektronik Kontrol Aletleri Sanayi
ve Ticaret A.S., ETI Elektroteknik Sanayi ve Ticaret A.S.,
Muhammad Farooq, Daniel Geiges, Paul Griffin, Peter Griffin,
Abdul Qadeer Khan, Gotthard Lerch, Shamsul Bahrin bin
Rukiban, Buhary Seyed Abu Tahir, Tradefin Engineering,
Gerhard Wisser, and Shah Hakim Shahnazim Zain

Executive Order 13382: Selim Alguadis, Kursad Zafer Cire,
Muhammad Farooq, Daniel Geiges, Paul Griffin, Peter Griffin,
Abdul Qadeer Khan, Gotthard Lerch, Buhary Seyed Abu Tahir,
and Gerhard Wisser

End media note.

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Press Guidance
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7. (U) Post can draw from the ISN Press Guidance after 0900
EST January 12.

Begin Press Guidance:

ISN Contingency Press Guidance
January 12, 2009

A.Q. Khan Network: Sanctions

General Questions

Q: What specifically did A.Q. Khan and his network transfer?
What did these people do to trigger sanctions?

These entities were sanctioned for engaging in
nuclear-related proliferation activities as part of the
international A.Q. Khan network.

In particular, Dr. Khan and his associates in a number of
countries provided Iran and Libya with centrifuge components,
designs, and, in some cases, complete centrifuges. The
United States also believes that Khan and his associates
provided centrifuge designs, equipment, and technology to
North Korea. Dr. Khan also provided Libya with nuclear
weapon designs.

These illicit transfers by the Khan network have been
reported in the press for a number of years. I cannot comment
on additional specific intelligence-related information.

Today,s imposition of sanctions on private companies and
individuals does not reflect recent proliferation activity by
the network.

Q: Why haven,t you sanctioned any countries?

The authorities under which sanctions are being imposed do
not target countries. Governments around the world,
including Pakistan, South Africa, Turkey, the UK, Germany,
Switzerland, the UAE, and Malaysia worked closely with the
U.S. to investigate and shut down this international network.

Q: Why has it taken four years to impose sanctions?

This is a very complex case that involved a large volume of
information and many people and companies across the globe.

We have been working diligently for the past four years to
assemble and properly evaluate the available information.
Given the consequences of a sanctions decision, it is
important that the information be thoroughly vetted and
evaluated before a sanctions determination is made.

Q: Why couldn,t you have sanctioned some entities earlier
instead of waiting four years?

Information continued to become available as other countries
concluded their investigations or prosecutions and we
believed in this case that it was important to sanction the
group at one time.

Q: Did you tell the affected governments prior to public
announcement?

Yes, governments were notified in advance that the United
States intends to impose proliferation sanctions on these
private companies and individuals. We applaud the actions
that each of these countries took to shut down and
investigate the network, and work cooperatively to implement
new measures to prevent proliferation.

Q: What sanctions authorities were used to impose penalties?

There are two sanctions laws and two Executive Orders that
provide the basis for the imposition of sanctions in this
case. The sanctions laws are the Nuclear Proliferation
Prevention Act (the &NPPA8) and the Export Import Bank Act
(&EXIM8). The two Executive Orders are 12938 and 13382.

Q: What do these authorities require?

The NPPA provides for the mandatory imposition of a ban on
U.S. procurement from any person who, on or after June 30,
1994, knowingly and materially contributes, through the
export of nuclear-related goods or technology, to the efforts
of any individual, group, or non-nuclear weapon state to
acquire a nuclear explosive device or unsafeguarded special
nuclear material.

The EXIM provides for the mandatory imposition of a ban on
the Export-Import Bank,s guaranteeing, insuring, or
extending credit, or participating in the extension of credit
in support of United States exports to any person who, after
September 23, 1996, knowingly aids or abets a non-nuclear
weapon state to acquire a nuclear explosive device or
unsafeguarded material.

The Executive Orders provide the authority to impose measures
against a foreign person that has engaged or attempted to
engage in activities or transactions that have materially
contributed to, or pose a risk of materially contributing to,
the proliferation of weapons of mass destruction (WMD) or
their means of delivery, including any efforts to
manufacture, acquire, possess, develop, transport, transfer,
or use such items, by any person or foreign country of
proliferation concern.

Q: What penalties can be imposed pursuant to these sanctions
authorities?

These sanctions are not being applied to any governments, but
to private companies and individuals. In brief, the NPPA
provides for a ban on USG procurement from the sanctioned
person. EXIM provides for a ban on Export Import Bank
credit, guarantees, or insurance in support of U.S. exports
to the sanctioned person. Executive Order 12938 provides for
a ban on USG procurement or imports from the sanctioned
entity as well as a ban on U.S. assistance to the sanctioned
entity. Executive Order 13382 freezes the assets of a
sanctioned entity that are under U.S. jurisdiction.

Q: What impact, if any, will these sanctions have?

These sanctions will help prevent and deter future
proliferation-related activities and provide a warning to
other would-be proliferators.

Q: What can companies and individuals do to have sanctions
rescinded?

Each law treats this issue differently. I refer you to the
statutes.

Q: Is the A.Q. Khan network still active? If so, what are we
doing about it?

We do not believe that the network run by A.Q. Khan is still
functioning.

Most of the key people involved with the network have been
put out of business, are in jail and/or facing prosecution.

We remain concerned that individuals associated with the
network, once they are released from jail or are no longer
being closely monitored, could re-engage in proliferation on
their own in the future. It is important that countries
continue to monitor their behavior closely and put in place
laws and enforcement mechanisms to prevent proliferation
activities.

Q: Do remnants of the network still exist? What are we doing
about them?

Saying the Khan network is no longer functioning does not
mean that other proliferation-related networks and activity
around the world has stopped.

We know, for example, that Iran has utilized several
different front and Iranian companies to purchase particular
items of proliferation concern.

Several of these entities and companies were identified in UN
Security Council Resolutions 1737, 1747, and 1803 in
connection with their involvement in the Iranian nuclear or
missile programs.

The U.S. has taken action against many of these entities,
including designations under E.O. 13382. More information
on E.O. 13382 designations can be found on the State
Department,s website under nonproliferation sanctions as
well as the Treasury,s Office of Foreign Asset Control,s
website.

Country Specific Questions

Pakistan

Q: Wasn,t the Government of Pakistan involved or at least
knew what was going on?

The government of Pakistan assured us it had nothing to do
with the network and we have no information to refute this.

We applaud the actions Pakistan took to shut down and
investigate the network.

In the years since the public revelation of the Khan network,
the government of Pakistan also has taken a number of
positive steps to improve its export controls and promote
international nonproliferation.

Q: Why haven,t we had direct access to Khan?

We appreciate the cooperation the government of Pakistan has
provided the IAEA and the United States. We believe that
Pakistan took seriously its commitment to dismantle the
network.

Pakistan has assured us that it will not be a source of
proliferation in the future.

The United States does not need direct access to A.Q. Khan in
order to obtain information about his dealings.

Q: Reports indicate that Pakistan is easing restrictions on
Khan ) What is your reaction to this?

We appreciate Pakistan,s efforts in shutting down the
proliferation network led by A.Q. Khan as well as the
cooperation Pakistan has provided the United States and the
IAEA to investigate the Khan network.

We believe Dr. Khan is still a proliferation threat to the
world and the proliferation support that he and his
associates provided to several states of proliferation
concern has had a harmful impact on international security
and will for years to come.

Q: Khan recently said he was forced to confess. If we
haven,t had access to Khan then how do we know he was
complicit?

We have information from other sources indicating that Khan
was complicit in nuclear-related transfers to several
countries.

Q: Any response to statements by Pakistan that it wants to
put the A.Q. Khan issue to rest or that the U.S. has not
passed questions on Khan,s activities for some time.

The U.S. appreciates the cooperation Pakistan has provided
the U.S. and IAEA.

Such cooperation will continue to be important as we work
toward a greater understanding of what the network provided
to various countries.

Q: Will there be any additional sanctions on these
individuals?

We don,t foresee, at this time, the imposition of additional
sanctions related to these activities.

Q: Why didn,t you sanction Khan Research Labs?

I can,t comment on individual decisions.

Q: What effect will these sanctions have on our relationship
with Pakistan ) specifically, our counter-terrorism
relationship?

These sanctions are based on activities by individuals that
occurred well in the past and have been public for many years.

We appreciate Pakistan,s efforts in shutting down the Khan
proliferation network as well as the cooperation Pakistan has
provided the United States and the IAEA to investigate the
activities of the Khan network.

The United States has a close partnership with Pakistan on
counter-terrorism, nonproliferation, and other issues.

Q: Do you think these sanctions will have an effect on the
India-Pakistan relationship?

These sanctions are based on activities by individuals that
occurred well in the past and have been public for many years.

Questions about India and Pakistan,s relationship are best
answered by those countries.

Switzerland

Q: Is it true that the U.S. asked Switzerland to destroy
nuclear documents?

We have no comment.

Q: Why aren,t you sanctioning any of the Tinners? Is it
because they were spies for the U.S.?

We have no comment.

Sanctions Decisions:

Q: Didn,t the Khan network include many more people and
companies than you sanctioned, including the Tinner family,
Henk Slebos, and companies in the UAE. Why aren,t you
sanctioning them?

The decision to impose sanctions is based on a thorough
review of all available information.

While I cannot comment on individual decisions, I can note
that we did not impose sanctions on companies that are no
longer operating.

Q: Why did you designate some people under E.O. 13382 but not
others?

The decision to impose sanctions is based on a thorough
review of all available information.

I can,t comment on individual sanction decisions.

Q: Why did you sanction Lerch, Geiges, and Wisser under EXIM,
but not under the NPPA?

The decision to impose sanctions is based on a thorough
review of all available information.

I can,t comment on individual sanction decisions.

Q: What about Libya, Iran and North Korea? They bought these
items ) why haven,t we sanctioned them?

These sanctions focus on individuals and companies associated
with the Khan network. As such, the governments that
acquired these items are not subject to sanction under the
NPPA or the EXIM Bank Act.

Iran and the DPRK are subject to a wide array of sanctions,
including UNSCRs 1737, 1747, 1803, and 1718 respectively. In
addition, sanctions were imposed on the DPRK under the Glenn
Amendment of the Atomic Energy Act following its October 2006
nuclear test.

In the case of Libya, once it made the strategic 2003
decision to dismantle its WMD program, it then cooperated
with the USG to facilitate that process. Libya also provided
information about the A.Q. Khan network's activities in Libya.

Q: Aren,t these kinds of sanctions really toothless with
little impact?

Sanctions help signal strong U.S. opposition to the
activities of the A.Q. Khan network, expose publicly those
involved, and serve as a deterrent to others that might
consider pursuing similar activities.

Sanctions imposed under Executive Order 13382 will allow the
U.S. to seize assets held under U.S. jurisdiction and thereby
help prevent future proliferation.

Q: What about North Korea ) are sanctions in the works for
their nuclear transfers to Syria?

The DPRK is subject to a wide array of sanctions, including
UNSCR 1718 and a number of other U.S. sanctions related to
its transfers of items proliferation concern. Furthermore,
in the Six-Party Talks, the DPRK has reaffirmed its
commitment not to transfer nuclear materials, technology or
know-how.

Q: What have we learned about Khan,s efforts to assist
Iran,s nuclear program?

The IAEA has detailed in various reports that Iran has
admitted to a relationship with the Khan network ) the same
network that provided nuclear weapons designs to Libya )
from 1987 to 1999. This network provided Iran with P1
centrifuge designs, centrifuges, and components; P2
centrifuge designs; other very sensitive information; and
technical advice including a &hemispheres document8.

The &hemispheres document8 contains instructions for
casting enriched uranium metal into hemispheres, which the
IAEA,s January 2006 report noted are &related to the
fabrication of nuclear weapons.8

Beginning with the November 2003 report, the IAEA Director
General confirmed that for almost 20 years, Iran had been
pursuing undeclared work in some of the most sensitive
aspects of the nuclear fuel cycle, and had systematically
hidden that work from the IAEA. Iran,s failure to cooperate
sharply limits the IAEA,s ability to know more about the
possible military dimensions of its nuclear program, and
increases the international community,s concerns about
Iran,s true intentions.

Q: What have we learned about Khan,s efforts to assist North
Korea,s nuclear program?

Former Pakistani President Musharraf has previously
acknowledged that Dr. A.Q. Khan and his international network
provided sensitive centrifuge technology, including about two
dozen centrifuges, to North Korea.

Q: Were there other customer of Khan,s network?

Questions remain as to whether there were other customers.

End Press Guidance.

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REPORTING DEADLINE
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8. (U) Please report within ten working days of receipt of
this cable. Please use SIPDIS caption on all responses.

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POINT OF CONTACT
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9. (U) Washington point of contact for follow-up information
is Caroline Russell and Chris Herrington, ISN/CPI, 647-5035.
RICE