The democratic government elected in Belgrade in 2000 did not end the extensive busting of arms sanctions engaged in for many years by its predecessor, the Milosevic dictatorship. The NATO (SFOR) troops who raided an aircraft factory in Bosnia’s Republika Srpska on 12 October 2002 found documents that have begun to strip the veils of secrecy from this significant scandal. From ICG’s own investigations, as well as from those initial revelations and stories that have appeared subsequently in the Serbian press, it appears that arms deals of considerable monetary value continued with Iraq and Liberia despite the change of administrations.

In the case of Iraq, the international community still needs to ascertain or clarify many important details, but it is already apparent that the Federal Republic of Yugoslavia (FRY) has engaged in transactions respecting missile, aviation and chemical technology and equipment that contravene United Nations sanctions. These transactions may have assisted Saddam Hussein’s efforts to develop a primitive cruise missile and to maintain or develop chemical weapons capabilities, as well as to repair or preserve his conventional military capabilities with respect to air defence, artillery, and security of bunkers. Weapons grade nuclear material does not appear to have been involved though the possibility of nuclear technology transfer to third countries requires further exploration. Extensive, though less technically sophisticated, Yugoslav arms have also been sold to Liberia which is likewise under a UN arms embargo.

This activity raises serious questions about how much has changed in Belgrade since Milosevic’s day, or even since there was a single, unified Yugoslavia – specifically with regard to respect for international obligations (commitments under arms control conventions as well as UN sanctions), the power of Communist-era networks linking military, industrial and criminal elites, and the willingness or ability of civilian political leaders to control the security sector.

Significant elements of the arms activity, as the NATO raid indicates, were spread across borders to include not only the Serb entity in Bosnia but also the Federation. Likewise, there was Montenegrin involvement. Top authorities, including President Kostunica, Federal Premier Pesic, Serbian Premier Djindjic, Defence Minister Radojevic, the Chief of the General Staff, and the Federal and Serbian Interior Ministers either knew about the sales and did nothing to halt them – or should have known and acted.

The disclosures open a window on the real power structures inside Yugoslav politics. That the special relationship with Iraq (and with Liberia) continued indicates that civilian control over the military is still absent, that connections between criminal, military and political elements are extensive, and that the two strongmen of the post-Milosevic era, Kostunica and Djindjic, have thus far been impotent or unprepared to assert civilian control over the military or remove Milosevic cronies from top positions.

Belgrade’s political leadership and the international community must get to the bottom of the arms scandal itself and attack the fundamental problems it illustrates. The ultimate responsibility for these twin tasks falls on the FRY authorities. The political paralysis produced by the long-running Kostunica-Djindjic power struggle as well as the apparent convergence of interests between many politicians and arms merchants, however, make it likely that serious remedial measures will only be taken if the international community insists – firmly and consistently.

The stakes are high. Failure to achieve reform would leave the FRY still a potential threat to regional stability. Moving this important Balkan country toward Euro-Atlantic integration will require the international community to use all the diplomatic and economic tools at its disposal to weaken the extensive remnants of the old guard and strengthen reformers in Belgrade. The time for special treatment for Yugoslavia because it has rid itself of Milosevic has passed.

Belgrade/Brussels, 3 December 2002