Arms smugglers blow their cover

WHEN THE CUSTOMS Department discovered five armoured personnel carriers being illegally shipped through Hong Kong five weeks ago, it put on a big show to display its catch. As the vehicles were mounted on trailers, officers stood on guard every few metres and tarpaulins were dramatically pulled off at a packed press conference. The message to the world was clear: the SAR would not be used as a hub for the illegal trade in arms or military equipment. But the circumstances in which the authorities detected the Soviet Union-built BTR-70 carriers were far from reassuring. Officers patrolling the Kwai Chung container terminal simply stumbled across the vehicles in the early hours of March 30, just as one had been parked on a dock and the others were lined up on the cargo ship's deck. It was a chance discovery. So much for the highly sophisticated system of trade controls and checks that the Government - and its backers in Washington and other Western capitals - likes to trumpet. The US State Department said in a recent report that the SAR's system was 'widely considered one of the world's finest export control regimes'. 'Hong Kong's export control system is unusually transparent, and locally authorities co-operate closely with US counterparts to ensure compliance,' said the report released on April 25, which is required by Congress to be produced annually. It noted that a 'watch list' of suspicious individuals and nations was kept on computer in Hong Kong. Another source of comfort was that the Government allowed a liaison official from nations with an interest in curbing arms proliferation to be posted in the Trade Department to provide technical expertise. The position is currently held by an official from Japan's Ministry for International Trade and Industry. Officials from the Australian Ministry of Defence and US Department of Commerce have also held the post. Despite the American officials' confidence, the armour-plated carrier found on the Hong Kong dock begs the question of how many other illegal shipments remain undetected. Officials say they cannot possibly know. The Cox report, a US Congressional committee's investigation into China's efforts to obtain data to upgrade its military which wasmade public a year ago, raised doubts about whether PLA trucks could be carrying hi-tech equipment across the border. Intensive lobbying by SAR officials in Washington killed off efforts to introduce legislation which would have removed Hong Kong's privileged export status. This allows it to import advanced technology on the basis that the equipment cannot then be shipped across the border. What those lobbying efforts managed to obscure was that although Customs officials can inspect the PLA trucks' documents, they need advance permission to inspect the cargo. The only significant seizures made since Hong Kong's return to Chinese rule have been the armoured personnel carriers as well as another armoured personnel carrier in August, 1997 - a Chinese-made vehicle being returned to Guangdong from a military exhibition in Thailand. There was an unsubstantiated report in January that a Hong Kong company was being used by Beijing to supply North Korea with equipment for its long-range missile programme. The allegation was made in the Washington Times, which is said to have been tipped off by the National Security Agency. North Korea has emerged as a frequent arms smuggler using Hong Kong. Indeed, some diplomats who closely monitor the illegal trade believe the five APCs were destined for Pyongyang rather than the China Aviation Industry Supply Marketing Corporation in Tianjin, which was marked on the ship's manifest. But a source said that, though it was difficult to prove the final destination of the vehicles, suspicions lingered. These discoveries, punctuated by a 32-month gap, contrast with the flurry of activity by arms dealers uncovered in the run up to the 1997 handover. A batch of rocket fuel - ammonium perchlorate - was found being shipped from North Korea to Pakistan in April 1996. Two inert bombs and a Sidewinder air-to-air missile launcher were discovered aboard a Dragonair flight from Beijing destined for Israel the following month, and 18 containers with parts for 10 millimetre field guns being sold by Pyongyang to Syria were also detected in September 1996. Some intriguing developments occurred at that time within Hong Kong's small arms-dealing industry. High-grade steel pipes, suitable for use in manufacturing chemicals or explosives, were detected being shipped to an industrial complex in Iran which had been identified as a military facility making chemical weapons. Following a big rise in the detection of illegal arms shipments since 1993, the British-run administration resolved to close down the Rex International Development Company, which Western intelligence agencies had linked to the pipe shipment. The company was a subsidiary of China North Industry Corporation, a mainland arms manufacturer. Authorities sought to have the courts strike Rex off the Companies Registry but decided to opt for an out of court settlement in 1997. This involved the corporation being wound up voluntarily. Glenn Schloss (schloss@scmp.com) is a Post staff writer First seen in public: November 1980, Moscow parade Manufacturer: Arzamas Machinery Construction Plant Crew: Commander, driver, nine soldiers Length: 7.5m Width: 2.8m Height (to top of turret): 2.235m Ground clearance: 0.475m Amphibious using single water jet at rear of hull Max speed: on road 80km/h, on water 10km/h Fuel capacity: 350 l (estimated) Engines: Two eight-cylinder petrol, 120hp each. Each powers two axles. Manual transmission, one reverse, four forward gears. Fitted with fire extinguishing system Arms capacity: One 14.5mm, one 7.6mm machine gun. Space for one anti-tank, two automatic grenade launchers