A recent report by the Financial Action Task Force (FATF) has brought renewed attention to a 2020 incident where Indian customs authorities seized dual-use equipment from a merchant vessel en route to Pakistan. The FATF report reveals a direct link between the seized items and Pakistan's National Development Complex (NDC), a defense and aerospace agency instrumental in the nation's missile development program.
The incident, which occurred in February 2020, involved an Asian-flagged vessel, Da Cui Yun, that was intercepted at Kandla Port in Gujarat, India. The ship had originated from Jiangyin port in China and was destined for Karachi’s Port Qasim. Acting on intelligence inputs, Indian authorities discovered that the ship's documents had mis-declared the cargo, which was identified as an "autoclave." Autoclaves are pressure chambers used in various industrial and scientific processes, including the manufacturing of sensitive high-energy materials, insulation, and chemical coating of missile motors. These items are included in dual-use export control lists under the Missile Technology Control Regime (MTCR), to which India and other countries adhere.
Experts from India's Defence Research and Development Organisation (DRDO), including nuclear scientists, examined the seized autoclave. They confirmed that the 18x4-metre equipment could be used for both civilian and military purposes, thus classifying it as a dual-use item. The FATF report highlights that the bill of lading for the cargo provided evidence linking the importer to Pakistan's National Development Complex. The NDC is a crucial entity under Pakistan's Ministry of Defence and has been central to the development of Pakistan's long-range ballistic missiles. The export of such equipment without proper authorization violates existing laws and raises serious concerns about proliferation financing.
The FATF report listed this incident as a case of "non-declaration of dual-use goods under the prescribed export laws of the exporting country." While the report did not explicitly name the exporting country, it noted that the ship had sailed from China. This detail is particularly sensitive given China's close relationship with Pakistan and previous instances of similar seizures. The report underscores the vulnerabilities in the global financial system that can be exploited to finance the proliferation of weapons of mass destruction (WMDs). It emphasizes the misuse of the maritime and shipping sectors, including vast networks of vessels, ports, and logistics, by illicit actors seeking to evade sanctions and transport prohibited items.
This revelation by the FATF comes amid increasing scrutiny of state-sponsored terrorism and proliferation financing. The task force has been actively working to identify and address loopholes in international regulations to prevent the flow of funds and equipment to entities involved in developing WMDs.
