Sunday Herald - Yugoslavian Officials 'sold chemical weapons to Iraq'

High-level military and civilian officials of the Federal Republic of Yugoslavia (FRY) have clearly known about, and therefore been implicitly involved in, a massive arms-for-cash trade with Iraq that has continued in the last two years, in violation of international agreements and explicit promises to American and European authorities. The assistance to Iraq, illegal under UN sanctions imposed in 1990 , could end up being used against allied forces should military action be launched against Iraq .

The extent of this Yugo-Iraqi axis is the subject of a detailed report, Arming Saddam: The Yugoslav Connection, from the non-profit international research and advocacy organisation, The International Crisis Group (ICG).

By asserting the large-scale sale of weapons to Saddam Hussein could not, and apparently did not, proceed without the approval of top military brass and key figures in the FRY's civilian leadership, the ICG report, to be released tomorrow, is likely to cause tumult on Capitol Hill and in European capitals. One outcome might be a serious re-evaluation of Western policy towards Yugoslavia, which involves hundreds of million of dollars in aid to the purportedly reformist post-Milosevic government, as well as fast-track efforts to ease the country back into the international community. The country, a federation of Serbia and Montenegro, is struggling to recover from war and sanctions.

The ICG report makes clear the illicit Yugoslav arms trade with Iraq is not the result of unauthorised, 'rogue' operations, as previously claimed by FRY leaders, but a steady pipeline that has generated hundreds of millions, perhaps billions, of dollars for state-run and private companies with ties to political parties and military and civilian leaders -- monies believed to have largely migrated to illegal offshore bank accounts.

The report, a final draft of which was obtained by the Sunday Herald, is based on an analysis of internal Yugoslav government documents, local and inter national news reports, scholarly and technical journals and ICG's extensive interviews with high-ranking Yugoslav government and military officials, defence experts, munitions industry figures and sources within the US government and international community.

ICG was founded in 1995 after concerns over an inadequate international response to crises in Rwanda, the Balkans and elsewhere. The report's main author is James Lyon, director of the ICG's Serbia Project, who has a PhD in Balkan history and is known for his high-level contacts . Shortly after the report was filed, he left the region over concerns for his safety.

The report exposes a rift between the Yugoslav leadership and the country's foreign ministry, which repeatedly warned the FRY government about the illegality of the arms trade to Iraq. Each time such warnings were issued, says the report, officials made cosmetic changes, but the trade continued unabated.

The report concludes that despite recent statements of disavowal from top officials, including the Yugoslav president and Serbian premier, internal documents indicate they must have had prior knowledge of the Iraqi trade. 'Top Yugoslav authorities, including President Kostunica ... knew about the sales, some of them at least as early as July of 2001, and did nothing to halt them.'

The report raises the question of the continuing influence of the Yugoslav old guard in the new government. The report explores the transfer not only of weapons and technology from such entities as Jugoimport-SDPR, (a state- controlled company whose role in sending jet engines and spare parts to Iraq was revealed when international peacekeeping troops in Bosnia seized incriminating documents in October) but also from the stocks of the Yugoslav military. It lays out the procedures and approvals required for the goods and personnel to move from their origin via third countries (chiefly Syria) to Iraq, and focuses on Velimir Radojevic, federal defence minister.

'It is ... inconceivable that Radojevic -- on the basis of his position as defence minister, board member of Jugoimport-SPDR, and his close ties inside the military -- was unaware of the ongoing plunder of VJ [Yugoslav Army] stocks, the arms sales to Iraq, the use of VJ ports, or the travel of VJ officers and military scientists to Iraq. It is inconceivable that he did not inform the federal president, interior minister, foreign minister, Army chief of staff and KOS [military counter- intelligence] of these activities.'

It notes that 'it is inconceivable' that the chief of the KOS, General Aco Tomic, did not know about the weapons sales or inform Kostunica or other key officials 'given the size and sophistication of his intelligence network, as well as his legal responsibility to sign off on weapons exports'.

ICG cites high-level sources in the Democratic Opposition of Serbia, the ruling government coalition, as affirming that the deliberately mislabled cargoes were escorted to the Montenegrin ports of Bar and Tivat by the Serbian, Montenegrin and Yugoslav federal interior ministries.

Although the federal government in October fired key officials in the wake of the Jugoimport revelations, the report lays out the contradictory statements by top leaders and the connections of those men and their parties to people involved with the arms trade. It notes that the general who headed Jugoimport was not fired, but reassigned as a special advisor to the man who replaced him, until US pressure forced his departure. It notes obstructionism by members of a government-appointed commission appointed to look into the allegations -- a body that includes Radojevic, one of those whose approval would have been necessary .

The report spells out some of the potential consequences of Yugo-Iraqi arms trade. 'Over the past two years, the Federal Republic of Yugoslavia appears to have sold cruise and ballistic missile and pilotless vehicle technology to Iraq. Chemical and biological weapons and possibly their manufacturing technology and equipment also appear to have been sold. Yugoslavia appears to have sold Iraq anti-aircraft systems, artillery, munitions, and constructed underground bunker complexes inside Iraq. The combination of technologies provided by Yugoslavia could enable the Iraqi government to create an inexpensive cruise missile with weapons of mass destruction.'

If true, Yugoslavia would have been one of Iraq's key suppliers of weaponry and human assistance, including the building and revamping of military facilities. Among the examples of Iraq dealings described in the report:

lCites 'reliable sources with connections to Kostunica's cabinet' and military counter-intelligence as telling ICG that, beyond the sale to Iraq within the past two years of 'biological and chemical equipment', as reported in the Belgrade press, chemical weapons have been sold. Bilateral co-operation in this area dates to the 1980s, when Yugoslavia assisted Iraq in building a chemical manufacturing compound. Other sources allege the manufacture, during the 1999 Nato bombing campaign, of the gas sarin.

lAsserts that a delegation from the Democratic Party of Serbia (DSS), the political organisation of federal President Kostunica, attended a conference in Baghdad in November 2001 'intended to create a counterweight to the US and globalisation'. The head of the delegation is a key figure in a web of trading companies implicated in the arms traffic, a consortium owned by a man who is also a key financier of the DSS.

lCites a Yugoslav foreign ministry letter noting that as of January this year, Yugoslavia had construction contracts with Iraq, mostly for bunkers and other defense-related purposes, worth in excess of $120 million.

lQuotes a 'technical source' in Belgrade asserting that Yugoslav scientists 'have -- at the very least -- developed a model of a turbojet engine with a diameter that could fit in a cruise missile'.

ICG paints a picture of almost unavoidable temptation, with politicians and military figures who are mortal enemies dividing the spoils of a spectacularly lucrative opportunity. Most of the companies involved in such weapons production are aligned with competing political parties and politicians and it is nearly impossible to track the ultimate recipients of the profits .

Jugoimport, despite tremendous sales volume, claimed 2001 profits of only two million dinars (roughly $33,000). According to a January 2002 foreign ministry letter, one company, EnergoProjekt, may alone have had over $120m in construction contracts with Iraq.

Officials at the Yugoslav foreign ministry and the US Embassy in Belgrade are known to have viewed advance copies of the ICG document. Embassy officials, who were last week hosting a delegation of US arms investigators looking into the trading issue, would not comment, nor would foreign ministry officials.

Zoran Zivkovic, federal interior minister, a member of the federal inquiry panel on the arms transfers -- who was a Jugoimport board member -- declined to respond , but questioned the motivations of ICG, which is known to be a tough critic of the pace of reforms in the country.

'I don't care about their opinion, especially given what I know about their associates in Yugoslavia,' Zivkovic said.

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