Statement by South Africa (Abdul Minty) at the IAEA Board, Vienna, 11 September 2007.

 Update on the Illicit Network

 Chairperson,

Thank you for the opportunity to address the Board on this important matter.

As Board Members are aware, the declaration on 19 December 2003 by Libya that it had been involved in nuclear weapons activities, led to the exposure of an illicit international nuclear weapons proliferation network (the so-called AQ Khan Network). This Illicit Network apparently operated in more than 30 countries and comprised of several entities and individuals of different nationalities.

In this context, Board Members may recall, that we reported during September 2004 that an investigation had been undertaken with regard to the contravention of South Africa’s Non-Proliferation of Weapons of Mass Destruction Act, 1993 (Act No. 87 of 1993) and Nuclear Energy Act, 1999 (Act No. 46 of 1999). At that time I informed the Board that these investigations were taking place in the context of the so-called AQ Khan Network, as well as information obtained following Libya's announcement of the abandonment of its nuclear weapons programme.

We share the view of the Director General, Dr ElBaradei, and others that the Illicit Network presents a serious challenge to the NPT.  It is for this reason, Chairperson, that the South African government in co-operation with a few other countries, as well as the IAEA, undertook a thorough and urgent investigation into the contravention of relevant South African non-proliferation legislation with the aim of prosecuting those involved in these illicit activities. This is yet another demonstration of South Africa’s commitment to the Treaty’s non-proliferation provisions.

Chairperson,

The allegations that were investigated initially related specifically to the import and export of a controlled flow-forming machine, as well as the production and attempted export of certain components associated with a centrifuge enrichment plant without the necessary permits and authorisation. 

The South African authorities instituted an intensive investigation into the possible involvement of two South African registered corporate entities, namely Krisch Engineering Co (Pty) Ltd and Tradefin Engineering CC, with the network’s procurement activities for Libya. 

This led to a search being carried out at the premises of Tradefin Engineering on 1 September 2004.  Feed systems/product and tails withdrawal systems and machine header piping systems, as identified in Part 1, Annex B, 5.2.1 and 5.2.2 respectively, of the Nuclear Suppliers Group Guidelines (published in IAEA document INFCIRC/254/Rev. 8/Part 1) were found, as well as documentation relating to the import and export of a flow-forming machine, classified as “nuclear related dual-use equipment” as described in INFCIRC/254/Rev.7/Part 2.  Both the flow-forming machine and the systems formed part of Libya’s undeclared nuclear activities. One of the Directors of Tradefin, who had been responsible for the manufacture of the systems, Mr JAM Meyer, was arrested.

The charges against him were withdrawn after he revealed that he had been acting on behalf of Krisch Engineering when he took part in the above activities.  He was given the status as a cooperating, complicit witness and on the strength of his evidence, the Managing and Design Directors of Krisch Engineering, namely German citizen, Gerhard Wisser and Swiss citizen, Daniel Geiges, were arrested and charged with contravening South Africa’s non-proliferation legislation.

Mr Wisser is a mechanical engineer and has a diploma in engineering.  In 1971 he established a company which is now known as Krisch Engineering Co (Pty) Ltd in Randburg.  On 12 March 1971, he became a Director of the company and at the time of the commission of these offences, he was its Managing Director.  For many years, Krisch Engineering had been the local agent for Leybold Heraeus.

Mr Geiges is also a mechanical engineer. In the 1970’s, he joined Krisch Engineering and became a Director on 10 July 1981.  At the time of the commission of these offences, he was a project manager in the company, working on the instructions of Mr Wisser in his capacity as Managing Director.

At a preliminary hearing after their arrest, both Messrs Wisser and Geiges declared their intention to plead not guilty to all the charges and indicated that the systems in question related to a water purification plant.  In order to counter this argument, the South African authorities embarked on an extremely thorough and expensive investigation.  During the course of the investigation, the South African authorities received assistance from a few countries. Co-operation by the authorities of affected countries was, unfortunately, uneven.  Whilst some authorities co-operated fully, others that were ideally placed to provide evidence, either provided limited assistance or declined to provide any assistance whatsoever.

Chairperson,

Upon the seizure of the systems and documentation, the South African Government immediately reported the investigation to the IAEA and the Agency provided continuous and valuable assistance during the course of the investigation.

The investigation revealed that during the period 1986 to 1995 the accused supplied controlled nuclear equipment to Pakistan. These activities by the Illicit Network later led to the attempted supply to Libya of controlled items in contravention of South Africa’s non-proliferation controls.  It is important to note in this context that the former South African apartheid regime only joined the NPT in 1991, during the period of transition, and the relevant legislation and regulations were only promulgated in 1994, in the year when the first democratic Government came to power in South Africa.

As a result of the investigation, the National Prosecuting Authority indicted the accused on 10 charges, six of which were related to the Libyan activities and the remaining four to Pakistan. The indictment alleged that the accused had acted in concert with other members of the network outside the country.

When the National Prosecuting Authority was ready to proceed with the prosecution in early 2006, the two accused sought postponements for various reasons.  In late 2006, one of the accused, Daniel Geiges, was diagnosed as being terminally ill with cancer, which resulted in him not being able to attend certain trial hearings.

Chairperson,

I am glad to report to the Board that on 4 September 2007, the other accused, Gerhard Wisser, entered into a Plea & Sentence Agreement with the National Prosecuting Authority in terms of which he was convicted of seven counts relating to his activities with both Libya and Pakistan and sentenced to three years’ correctional supervision, as well as a total of 18 years’ imprisonment, suspended for five years on conditions which, inter alia, require him to cooperate fully with the authorities as far as further investigations into the network’s activities are concerned.  A Confiscatory Order was made in respect of his proceeds of crime to the amount of EUR2.8 million and R6 million. 

The case against Daniel Geiges was separated and postponed until 21 September 2007, pending medical reports concerning his health status and ability to stand trial.

Gerhard Wisser, in his plea of guilty, confirmed that his crimes had in one way or another contributed to the Illicit Network’s activities and admitted that he had acted in concert with other members of the network outside the country.  His plea of guilty was only tendered after he was supplied with conclusive evidence which destroyed his initial defence argument that he had only been involved in water purification activities.

In conclusion, Chairperson,

South Africa is highly appreciative of the major contribution of the IAEA and for its assistance in bringing the case against Mr Wisser to a close.  We also wish to recognise the co-operation received from all Governments involved in the investigation.

What is now required from all countries affected by the Illicit Network, is enhanced efforts by the respective authorities, in close co-operation with the IAEA.  It is only through resilient action that we will be able to achieve the successful prosecution of all the major actors involved in these global illicit networks that will lead to the complete elimination of the Network.

As one of the first successful cases against those involved in the so-called AQ Khan Network, South Africa’s experience has illustrated the value of the IAEA and of effective information-sharing.  We believe that this type of co-operation will contribute to the prevention, combating and eradication of such illicit activities.

Extracts from the Terms of Agreement related to the Plea and Sentence Agreement of Mr Gerhard Wisser will be circulated as an annex together with this statement.

We request that this update and the annex be circulated as an official document of the Agency.

I thank you.

Abdul Minty
Chairperson-SA Council on Non-Proliferation

Issued: C/o Department of Foreign Affairs
P/Bag X152
Pretoria
0001

11 September 2007.