Trading With the Enemy.

This article focuses on the smuggling of United States-made products through ports with little or no export controls to avoid United States trade embargoes. On paper the shipment was harmless enough. Sixty-six American-made spark gaps--high-speed electrical switches used in medical devices to break up kidney stones--traveled from the manufacturer in Salem, Mass. late last summer to a buyer in Secaucus, N.J. From there, according to the export declaration, they were to be shipped to their ultimate destination in Cape Town, South Africa. But these spark gaps can also be used to detonate nuclear bombs--and it turned out that the goods were aimed at an end user in Pakistan, with a stopover in Dubai. The commercial capital of the United Arab Emirates, where trading activity accounts for the biggest single chunk (16.5%) of a $20 billion economy, has become a favorite diversion point on the Persian Gulf for shady cargo. With no export controls and hardly any bureaucracy at ports, airports and free zones, this entrepôt provides stellar cover for smugglers hoping to bypass U.S. embargoes. Smuggling isn't exactly new to the Persian Gulf. But the system really took off around 1987, when the U.S. imposed its first trade embargo on Iranian goods and services in response to Tehran's sponsoring of terrorism in the Middle East. Today American companies are downright brazen about dodging the sanctions.