Project Lisi designed for `deniability'

If all had gone according to plan, this was just the first of a series of shipments. Chris Blackhurst and Tim Laxton report

The key to Project Lisi was deniability. According to a former technical adviser who worked for BMARC for more than three years, every stage of the supply of naval guns to Iran was organised in tight compartments.

The guns took a complicated and circuitous route which involved six countries. The code name for the project was originally going to be SILI - Singapore Licence - but someone had second thoughts.

It started in 1987 when Oerlikon, in Switzerland, a leader in precision heavy weaponry, was handed the £15m order for 140 GAM-BO1 naval guns. The guns were to be made by BMARC, the Swiss company's British subsidiary.

To make sure everything went smoothly, and there were no uncomfortable hitches like prying customs officers, an elaborate, but well-tried and tested operation swung into place.

Most of the parts for the guns were made by BMARC at its factory in Grantham, Lincolnshire. The gun mounts were made in kit form at Asco, a specialist manufacturer, in Belgium.

The barrels - just the bits that might attract a sharp-eyed British Customs officer on the dockside - were made by Oerlikon's factory in Sao Paulo, Brazil. Unlike their British counterparts, the Brazilians were not so fussy about what their country was making or where it was going.

Working from models and designs sent out from Grantham, Oerlikon (Brazil) sent the barrels by sea: the shipping was handled by a freight forwarder in Fort Lauderdale, Florida, to Singapore. There, at the workshops of the state-owned arms dealer Charter Industries in Singapore, they were joined by all the other parts, including the mounts. Everything, for the sake of deniability, pointed to the parts, mounts and barrels going to friendly Singapore.

Owned by the Singapore government, Charter Industries' name crops up repeatedly in connection with supplies to Iran and Iraq. A sister company of Charter, Ordnance Development and Engineering, also made 37 components of its own, using tooling and machinery sent out from Grantham.

The actual assembly was overseen by BMARC and Oerlikon technicians.

From Singapore, the guns could not be sent straight to Iran because of the danger of being attacked by Iraq in the Straits of Hormuz and of being found out, breaking the embargo. Instead, they went to another Commonwealth country, Pakistan: Commonwealth countries do not require end-user certificates. If asked, they were going to be used by the Pakistani navy, which had an order with Charter.

The final leg of this marathon journey involved lorries taking the guns north, to the border with Iran.

"It was an enormous effort, but you have to remember this was an on-going order," said the former technical adviser.

He recalled how the former personnel manager had taken him around the Grantham factory on his job interview in 1987.

"Just in conversation, he said `This is for Singapore,' pointing to a stack of gun pieces. I said `How big is it?' and he replied: `£15m.' I said: `That's a lot of guns for Singapore.' He said: `They are not staying there, are they!' "

By the time Oerlikon sold BMARC to Astra in May 1988, Lisi was in full swing. The takeover, he said, did not affect anything, because it had all been handled by BMARC and the same people were still running it.

Nothing was written down in management papers that would have indicated the illicit nature of the contract. "It's all about deniability.Yes, you know it's going on, but you just make sure it's deniable," he said. It was inconceivable, he added, that BMARC's bosses did not know the identity of the real end-user.

If all had gone according to plan, this was just the first of a whole series of Lisis. In the board report, mention is made of Lisi II. Julian Nettlefold, Astra's former public relations adviser, said: "We were hoping to get Lisi II."

But that never happened because BMARC collapsed and went into receivership.