Return to an Address of the Honourable the House of Commons
dated 18 July 1996 for the Appendices to the Report of the Inquiry into the Export of Defence Equipment and Dual-Use Goods to Iraq and Related Prosecutions laid before The House on 15 February 1996*

Volume Two
Section D Arms and Defence-Related Exports to Iraq
Chapter 7 Other Allegations of Illegal Arms Exports to Iraq

Excerpt:
(III) TEREX EQUIPMENT LTD

D7.45 Terex Equipment Ltd (Terex) is a UK subsidiary company of Terex Corporation, a US company. Terex’s place of business is in Motherwell, Lanarkshire in Scotland. Its business is the manufacture of earth moving equipment. Its market is worldwide. *56

D7.46 On 19 January 1993 the Inquiry received a letter from Richard Fuisz of Virginia US. Mr Fuisz enclosed a copy of a statement which he had made on 1 July 1992 to the US House of Representatives Committee on Agriculture in the course of the Committee’s investigation into Iraq’s participation in Agricultural Guaranteed Loans Programs. *57

D7.47 In his statement Mr Fuisz had said that on 28 September 1987 he had gone to Terex’s plant in Motherwell, Scotland, together with Mr R Lenz, the company chairman. They toured the plant with a guide. Mr Lenz left the tour and Mr Fuisz continued on his own with the guide to the paint area of the plant where, he said, he saw “two huge vehicles with tires more than ten feet in diameter. They had flat sheet steel backs with holes drilled into it ‘from a template’.” The vehicles were, according to Mr Fuisz, painted light desert camouflage. Mr Fuisz added that he was told by the plant manager that the vehicles were “missile launchers for the Iraqi military”. In the circumstances Mr Fuisz suggested that Terex was involved in a “breach of the existing rules covering trade with Iraq.”

D7.48 The allegation made by Mr Fuisz suggested a possible contravention of the regulations controlling the export of defence-related equipment from the UK to Iraq. So the Inquiry followed up the information in the statement.

D7.49 It transpired that, in March 1991, Terex had been the subject of an investigation by the US Customs Service into the company’s known sales to Iraq and into allegations that the company had modified commercial trucks to military units capable of use in launching missiles. It also transpired that UK Customs had been asked by the US authorities to assist them in their investigation. *58

D7.50 Customs visited Terex’s premises on 28 February *59 and on 1 March 1991. *60 They were shown the company’s records and interviewed the company’s Sales Director and its Technical Sales Manager. They found that, between 1979 and 1987, Terex had sold to Iraq hundreds of scrapers, suitable for runway and road construction. They also found that, by 1989, Terex had sold to Iraq 50 dumper trucks. But they found no evidence that any of the scrapers or the dumper trucks had been modified for military use.

D7.51 The investigators were also told by the company’s officials, that in 1987 Terex had built 4 loaders for rapid runway repair. The loaders had been made with bullet-proof glass, armour plated and camouflaged. The loaders “were consigned to the Royal Jordanian Air Force, and shipped to Amman, Jordan via Aqaba.” An invoice for the sale was produced, which showed that the sale by Terex had been made to International Military Services Ltd (IMS). *61 The company officials said that it was possible that these loaders had been the vehicles which had been noticed by Mr Fuisz during his visit.

D7.52 On 30 May 1991 Customs visited IMS, where the company’s General Manager, Major- General Hellier, produced the documentation relating to the supply of rapid runway repair equipment (which included the four loaders) to the Jordanian Air Force in 1987. Customs found no irregularities in connection with the export. *62

D7.53 The Inquiry has examined an ELA dated 27 March 1987 for rapid runway repair equipment. *63 In the ELA the consignor was named as IMS. The consignee’s name was stated to be “Royal Jordanian Air Force”. The ELA was attached to a letter from IMS to the DTI which stated that the ELA covered “the supply of Rapid Runway Repair Equipment to the Jordanian Armed Forces under the Memorandum of Understanding [MOU] between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Hashemite Kingdom of Jordan signed 19 September 1985.” *64 Section 9 of the MOU states that “The Government of Jordan will not sell or otherwise dispose of the equipment to any third party or allow the equipment to pass out of the Government’s absolute control at any time without the prior written approval of the United Kingdom Government”. A list of equipment attached to the MOU included 4 sets of rapid runway repair equipment. The ELA was circulated to FCO and MOD/DESS and was approved. In the Bill of Lading dated 19 June 1987 the consignee’s name was given as “H.Q. Royal Jordanian Air Force”. *65

D7.54 Lieut-Colonel Glazebrook has been asked to consider whether the quantities of equipment to be supplied to Jordan under the MOU were reasonable given the size and structure of the Jordanian armed forces. *66 In respect of the rapid runway repair equipment he described the equipment as intended to enable bomb craters on aircraft runways to be speedily repaired. He added that he was advised that “Jordan has four main military airfields and therefore the quantity is reasonable.” *67

D7.55 There is no indication in the evidence which has been submitted to and examined by the Inquiry that Terex exported any licensable plant or machinery to Iraq. It is relevant to add that the Inquiry has been informed that the US company has been publicly exonerated from any wrongdoing under American law in respect of its exports to Iraq. *68

Endnotes:

*56 - Key Business Enterprises, Dun & Bradstreet International, Vol 3, p.730

*57 - USI/5

*58 - CE/83.1

*59 - CE/420

*60 - CE/83.2 at 3

*61 - CE/83.2 at 4

*62 - CE/83.46

*63 - DTI/231.2.18182

*64 - The MOU is referred to in more detail in paragraph E2.13 infra

*65 - CE/83.43

*66 - see the letter of 29 July 1993 from the Inquiry to Lieut-Colonel Glazebrook.

*67 - see Lieut-Colonel Glazebrook’s written statement dated 5 August 1993, p.7, paragraph 18

*68 - CE/605: Note of telephone call on 3 April 1995 from Terex to the Inquiry

* The Full report is available from The Stationery Office Ltd., PO Box 276, London, SW8 5DT.