An article on Aug. 17 incorrectly reported information about exports to Iraq by the German company NUKEM. NUKEM did not sell or deliver uranium to Iraq in 1989, and NUKEM has never delivered uranium to Iraq appropriate for the production of nuclear weapons. In addition, NUKEM is not the subject of any investigation or accusation by public prosecutors in West Germany with respect to any such sales. (Published 8/25/90)

BONN, AUG. 16 -- West Germany, which claims to have the world's toughest laws against weapons exports to countries that are likely to become involved in warfare, is investigating allegations that more than 1,000 German businesses have illegally sent arms and military technology to Third World countries, including Iraq, a Foreign Ministry source said.

Public prosecutors are looking into the activities of at least 50 companies alleged to have sold the Iraqis equipment or know-how that could be used to build chemical, biological and nuclear weapons.

Investigations also are underway into companies alleged to have delivered to Iraq centrifuges capable of enriching uranium for use in nuclear bombs, laboratories that could be used to create nerve gas, and steel used to make cannons.

The close ties between Iraq and German industry have sparked a new debate over the role West Germany has played in helping Iraqi President Saddam Hussein turn his country into a military power. Saddam has threatened to use Iraq's chemical weapons if it is attacked.

Opposition Social Democrats allege that Bonn was unable to stem the private flow of information and materials to Iraq, and reports by the news media say that one of West Germany's intelligence agents sent Iraq material needed to produce nerve gas. Bonn has denied that any agent was involved in exports to Iraq.

Since 1984, according to Norbert Gansel, a Social Democrat and leader of a parliamentary committee investigating illegal arms sales, "the Bonn government has known that Iraq, with German support, was producing poisonous gas and missiles. The warnings from our side and the warnings from friendly governments were a waste of breath."

The Iraqis apparently considered West Germany a prime source for materials they needed to produce chemical weapons.

Iraq's ambassador to West Germany, Abdel Jabar Ghani, is a close adviser to Saddam. He arrived in Bonn in 1987 with instructions to buy materials and plants for weapons production for the Iran-Iraq war then raging, according to intelligence sources quoted by the West German news magazine, Der Spiegel.

Ghani vanished from Bonn several days before the Iraqi invasion of Kuwait. According to diplomats here, Western intelligence reported Ghani to be in the Iraqi port of Basra at the time of the invasion, helping to plan it.

Press reports here indicate Ghani's success in lining up materials for chemical-weapons production: More than 50 German companies have been linked to recent sales of sensitive material to Iraq.

"We all know that a number of German companies have allegedly violated these restrictions," a Foreign Ministry official said. "And we have tightened our customs and border checks to guard against this."

Bonn took measures last year when the United States publicized West German industrial involvement in a chemical plant in Libya allegedly intended to produce weapons. Many of the current investigations involving sales to Iraq grew out of the Libyan incident.

Foreign Minister Hans-Dietrich Genscher this week criticized West German businesses that have helped arm Iraq. "West German industry should turn away from those who broke laws to earn money by helping the dictator of Baghdad," Genscher said. "The good name of German industry is at stake here."

Opposition politicians in Bonn have accused the government of Chancellor Helmut Kohl of being insufficiently vigilant. The Federal Economic Office, which reviews export applications, says it does not have a staff large enough to examine thoroughly all 75,000 annual requests for permits.

The main obstacle to preventing the export of materials that could be used to produce chemical weapons is that many such products are equally useful for civilian purposes.

One company that has traded extensively with Iraq, Pilot Plant, sent laboratories purportedly designed to produce pesticides for use against insects that attack fruits, such as dates.

But those same installations can be used to produce chemical weapons, according to charges now being investigated by the public prosecutor. Pilot Plant is alleged to have built two laboratories used at the Iraqi poison gas facility near Samarra, 65 miles northwest of Baghdad.

"Pilot Plant has never denied supplying experimental plants to Iraq for research on pesticides," said Dieter Backfisch, managing director of the company near Frankfurt that owned Pilot Plant and that disbanded the firm after the government probe began. "But C-weapons cannot be produced by this plant. Companies must be prosecuted if they supply illegal products, but these allegations are unfair and careless," he said.

Backfisch defended companies that have traded with Iraq, saying, "If we supply the Sudan today or Malaysia tomorrow, we cannot know if someday they will have a dictator who goes to war."

Bonn officials initially approved the exports Backfisch's company proposed to send to Iraq because the company said the plant was meant only to produce pesticides. But after the United States quietly pressed West Germany, prosecutors here began an investigation six years ago.

Backfisch said the investigators "have been unable to reach any conclusion about whether you could use these materials to produce chemical weapons."

West Germany has joined its allies in banning all trade with Iraq and has forbidden 180 companies that signed up for an Iraqi trade fair this fall to attend.

The government has denied a report that one of its agents helped Iraq acquire the technology to manufacture chemical weapons. Der Spiegel said this week that an executive of a Hamburg company that sent Iraq equipment used to produce nerve gas was an agent of the West German Federal Intelligence Service.

The alleged agent, Al Kadhi, is co-owner of Water Engineering Trading, which is accused of sending Iraq facilities needed to produce nerve gas.

The Federal Intelligence Service said it played no role in delivering chemical weapons technology to Iraq and if Kadhi claimed to be a government agent, he was lying.

Der Spiegel reported that in 1987, Genscher asked for mercy for Kadhi after he was captured by Saddam's secret service and sentenced to death. While Genscher was visiting Baghdad, the sentence was commuted to life imprisonment and Kadhi was released soon thereafter.

Kadhi returned to West Germany, where he is now under investigation for allegedly having violated the foreign trade law by delivering to Iraq a factory that can produce the chemicals needed for two nerve gases, tabun and sarin.

Prosecutors are also investigating at least two companies that have sent Iraq materials that could be used to manufacture nuclear weapons. One firm, Nukem, is accused of selling uranium in various forms last year.

Another, H&H Metalform, allegedly sold Iraq equipment used to build plants that enrich uranium 235, an essential ingredient in nuclear bombs.

An H&H executive refused to comment today on the allegations reported by Der Spiegel and several other West German publications.