Bosnia: Ashdown Warning Over Orao Affair

The High Representative for Bosnia has warned the authorities that they face international isolation if the Orao arms dealing scandal is not resolved.

Paddy Ashdown met European Union and NATO officials on Wednesday to discuss the issue, which he described as "a great threat" to Bosnia's future and credibility.

The Orao Aviation Institute in the Bosnian Serb entity Republika Srpska, RS, was recently found to have collaborated with Yugoslav state company Yugoimport to supply the Iraqi regime with parts for its MiG-21 aircraft in defiance of a UN embargo.

Bosnia's ambition to join the EU may be jeopardised if reforms were not introduced to ensure such lapses were not repeated, Ashdown warned.

Hard evidence of the Iraq deals was discovered earlier this month when the NATO stabilisation force SFOR raided the institute after Washington claimed that it had been involved supplying weapons to Iraq.

It is believed that arms smugglers chose Orao because of its location, in the town of Bijeljina close to the Yugoslav border. Military parts produced in other factories could be easily transferred to the institute, then on to Yugoslavia and Iraq without arousing any suspicion.

In Bosnia-Herzegovina, the Federation and RS can separately import and export weapons and military equipment as long as they obtain permission from SFOR. "It is clear that the current system appears to allow parts of the defence industry to operate outside political control," Ashdown said.

The Bosnian authorities announced a blanket ban on all arms exports and imports on Tuesday in response to anger and concern from the international community.

The move followed the resignation of two top RS officials on Monday night. Bosnian Serb defence minister Slobodan Bilic and army commander Novica Simic stepped down, despite the authorities' insistence that there was no proof of their responsibility.

The government later said it had accepted the resignations to "improve the international position of RS".

Five officials have now lost their jobs over the affair. Orao's acting director Milan Prica, RS army general Miljan Vladetic, who was in charge of aviation and air defence, and the entity's military equipment import-export director Spasoje Orasanin, were dismissed on October 24. However, western sources indicate that the international community will not be satisfied until all the culprits are found and punished.

Initially, the RS authorities displayed a complete lack of understanding of the seriousness of the situation by launching a quick investigation, which claimed to have uncovered no evidence of wrongdoing.

At one point RS premier Mladen Ivanic even told state television that the entire affair would soon "blow over", and that sanctions were not a possibility.

However, following confirmation of SFOR's discovery on October 22, the US State Department issued a strongly worded warning to the RS government. They were told that they faced "a variety of sanctions and discretionary penalties" if the situation was not resolved to America's satisfaction.

"You were warned about this activity and did nothing to stop it. The fact that SFOR discovered this material makes a mockery of your government's attempt to investigate the matter," the State Department note added.

The affair has already caused the Belgrade authorities intense embarrassment, and the heat is not yet off, as further allegations have surfaced in Serbia.

Belgrade daily newspaper Blic claimed on October 28 that Yugoslav army experts from the Sava Kovacevic Navy-Technical Association in Tivat, Montenegro, visited Iraq early in July.

It is alleged that around ten officials and engineers spent nearly three weeks in the country inspecting weapons systems on Iraqi war ships, and sought to strike a deal with Baghdad's military. While the contract was never signed, it is believed that the team carried out small repairs on the fleet.

Blic also claimed that a group of private Belgrade companies linked to Jugoimport were involved in the development of Iraq and Libya's ballistic and cruise missile programmes.

In a further development, the Croatian authorities have launched an investigation into a captured Yugoslav cargo ship, which was found to be carrying more than 200 tons of explosives without proper documentation. Speculation is rife in Belgrade that the vessel is somehow connected to the weapon smuggling scandal.

Some local and western analysts suspect that the US had known about the illicit trade for some time, and that the revelations were timed to cause maximum damage to Yugoslav president Vojislav Kostunica ahead of the third round of presidential elections.

Kostunica has been blamed for much of the scandal, with opponents and media claiming his policy of retaining Milosevic-era military officials allowed Serbia's traditional links with Iraq to continue long after the new regime took power in 2000.

Gordana Katana is a correspondent with Voice of America in Banjaluka.