Bonn Moves to Stem Illegal Exports : Trade: Proposals answer criticism that German technology helped Iraq develop chemical weapons.

Acting under the intense pressure of national and world opinion, Chancellor Helmut Kohl’s Cabinet on Wednesday approved a series of measures designed to slow the flow of illegal German exports such as those that helped Iraq develop chemical weapons and improved missiles.

The package of 10 measures would give authorities increased manpower and greater investigative powers and provide stiffer penalties for businesses caught violating export restrictions. The measures were ratified by the Cabinet two weeks after they were formally proposed by Economics Minister Juergen Moellemann.

They were formulated after the Kohl government was stunned by disclosures that German companies and technicians had played a pivotal role in supplying Iraq with the technology to extend the range of Soviet-built Scud missiles and to produce chemical weapons.

The fact that poison gas produced with German help threatens Israel and the U.S.-led coalition of forces in Saudi Arabia also caused an international reaction that brought the swift government action.

The package is expected to win quick parliamentary approval and could become law by early spring.

Its most controversial element would authorize the use of telephone taps and other types of covert surveillance against those suspected of “serious” violations of export controls. The eavesdropping would be conducted by a specially trained unit of the federal customs authorities, according to a Finance Ministry spokesman. He said the number of customs criminal investigators would be doubled to 400.

The decision to approve telephone taps followed a bitter debate about the possible use of German counterintelligence services to strengthen the government’s investigative powers. The use of customs investigators in such a role was seen as a compromise that would not heighten public concern. Because of the terror unleashed by the infamous Gestapo during the Third Reich, counterintelligence activities in postwar West Germany were severely restricted.

While members of the Kohl government hailed the measures as giving Germany the toughest export-control legislation in the industrialized world, the opposition Social Democrats said they did not go far enough.

“We have demanded measures such as those passed today for a long time,” said the Social Democrats’ deputy parliamentary leader, Wolfgang Roth. “They could have gone still further.”

The Social Democrats advocate a constitutional ban on the export of all weapons to areas outside the Western alliance. They also want to oblige anyone with knowledge of illegal exports to report it to authorities.

Germany and its predecessor state, West Germany, have long had strict laws forbidding the export of weapons to so-called areas of tension. However, authorities have traditionally had little muscle in stopping other exports that can be used for civilian as well as military purposes. Only with reports in 1989 that a West German chemical company, Imhausen, had built a chemical-weapons plant for Libya did the government begin to tighten its controls.

Among the other elements of the package:

* The amount of evidence deemed necessary to begin an investigation has been sharply reduced. Previously, tips passed by foreign intelligence agencies were often considered too sparse to follow up.

* The minimum penalty for “serious” violations of the U.N. trade embargo against Iraq has been raised from six months to one year in jail. The maximum sentence remains 10 years.

* Profits made from illegal export activities may be confiscated. Imhausen executive Juergen Hippenstiel-Imhausen was jailed in 1989 for his role in providing Libya with a poison-gas plant, receiving the then-maximum three-year sentence. But he will reportedly emerge from prison several million dollars richer because of his business.

Despite the tougher measures passed Wednesday, those familiar with export controls say that halting all illegal trade in weapons materials is as impossible as blocking the traffic in illegal drugs.

Indeed, the German Cabinet’s action came as a nationally televised documentary claimed that German and other European companies are helping Libya build a large underground storage bunker for chemical and nuclear weapons. The German television network ZDF reported that German tunneling technology, including laser and advanced surveying techniques, are being used in the project.