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"The Arms Control Association’s work is an important resource to legislators and policymakers when contemplating a new policy direction or decision."

– General John Shalikashvili
former Chairman of the Joint Chiefs of Staff
Serb Arms Companies in Illegal Deals With Iraq

November 2002

By Wade Boese

The Federal Republic of Yugoslavia (FRY) fired two public officials and launched a government investigation October 22 in response to evidence that Serbian companies have been illegally upgrading Iraqi combat aircraft. The United States, which recently suspended some U.S. aid to Ukraine for its president’s authorization two years ago of arms sales to Iraq, welcomed the Yugoslav moves and urged all countries to abide by the 1990 UN arms embargo on Iraq.

NATO troops conducted an October 11-13 inspection of the Orao aviation firm in the Republika Srpska, discovering contracts revealing unreported, illegal weapons exports. A NATO spokesperson refused to specify October 22 where the exports were going, but U.S. officials reported the deals were with Iraq and done in cooperation with Yugoimport, a company based in the FRY. An additional report appeared a few days later in The Washington Post, claiming that the United States also suspects FRY companies of helping Iraq develop cruise missiles, but U.S. officials refused to comment on the issue.

The FRY and the Republika Srpska, which is part of Bosnia and Herzegovina, are both predominantly Serbian entities of the former Yugoslavia. Republika Srpska is under the jurisdiction of NATO’s Stabilization Force, which was established in 1996 to oversee and help implement the 1995 Dayton Peace Accords that ended fighting in the former Yugoslavia.

Responding quickly to the news, the FRY denied that the illicit Iraq activities were approved by the central government and removed the deputy minister of defense responsible for overseeing its weapons exports and the director of Yugoimport. A special committee was also formed to investigate the matter further.

The Republika Srpska has also reacted by removing three officials: the head of Orao, a top air force official, and the individual in charge of its arms trade. But Washington says Republika Srpska has not done enough because the evidence indicates a concerted program to aid Iraq. Bosnia and Herzegovina subsequently banned all arms exports and imports.

Unlike the case with Ukraine, the United States has not imposed sanctions on any of the Yugoslav entities or companies. Washington, however, encouraged both the FRY and Bosnia and Herzegovina to improve their controls governing arms exports and, in the words of State Department spokesman Richard Boucher, “to make sure it doesn’t happen again.”

The Yugoslav evidence became public the day after U.S. and British officials completed an eight-day visit to Ukraine investigating whether it had actually transferred early-warning systems to Iraq. The investigation team has not yet released a report on its findings.