W. German Firms Probed on Iraq Exports : Arms trade: Seven people were arrested, about 25 firms are under suspicion and 34 firms face fines for illegal weapons or technology exports.

BONN —  Nearly 60 West German firms are being investigated for illegal arms exports to Iraq, the government said today, urging industry to police itself to purge the embarrassing trade.

Economics Minister Helmut Haussmann said about 25 firms are under suspicion for earlier criminal violations that had grabbed headlines because of the Persian Gulf crisis.

A further 34 firms face possible fines for smaller offenses involving illegal weapons or technology exports to Iraq, the Economics Ministry said.

West Germany arrested seven people Friday on suspicion of supplying Iraq with equipment to make poison gas.

Haussmann said in a statement that export control laws are being sharply tightened, and he urged West German industry and business “to be especially careful in its dealings with the export control law.”

“Even negligent violations of the export control law can cause great damage to West Germany’s reputation as a solid partner in international trade,” he said.

“Current events in Iraq and Kuwait show that sensitive technology in the hands of unscrupulous rulers can threaten whole regions of the world and even world peace.

“Careful dealings with such technology must therefore be in the utmost interest of German industry itself,” he said.

The economics ministry said 38 people are being investigated from the 25 firms suspected of violating the export laws in connection with deliveries to Iraq of plants and parts for the production of chemical weapons and munitions.

West German law bans the sale of weapons to conflict areas, which have included Iraq for years, and exporters have to obtain permission to export sensitive equipment or plans.

Haussmann said the laws had been steadily tightened since early 1989 to boost the maximum prison sentence for violations to 10 years from three.

Parliament will pass a law soon to allow a maximum 15-year sentence for cases involving nuclear or chemical weapons.

Two months ago the head of the West German chemical firm Imhausen was jailed for five years for supplying another Arab country--Libya--with equipment to make deadly nerve gases at its Rabta chemical plant.