RFE/RL Crime, Corruption, and Terrorism Watch
01/10/2002 | Ìàéäàí-²ÍÔÎÐÌ
RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC
________________________________________________________
RFE/RL Crime, Corruption, and Terrorism Watch
Vol. 2, No. 1, 10 January 2002
Reporting on Organized Crime, Corruption, and Terrorism in the former
USSR, East Europe, and the Middle East
**************************************
HEADLINES:
* SPOTLIGHT: ARMING ROGUE STATES
* TAX POLICE BATTLE CORRUPTION IN THE RANKS
* UKRAINE'S DECADE-LONG ILLEGAL TRADE IN ARMS
**************************************
SPOTLIGHT
ARMING ROGUE STATES
Illegal sales of armaments and munitions to rogue regimes and
terrorist groups, along with indirect sales to terrorist
organizations through fake end-user certificates, have been a problem
for former Soviet and Warsaw Pact states.
The countries identified as being most involved in such sales
are Ukraine and Belarus from among former Soviet states, and Slovakia
and the Czech Republic from within the former Warsaw Pact. And
despite numerous inquiries by the United Nations Security Council and
special investigative commissions formed by the UN, the trade seems
to continue.
In Ukraine, the Prosecutor-General's Office recently opened an
investigation of charges against Ukrainian citizens who might have
been involved in such activities.
Recent revelations, published in "The Washington Post," that
senior Belarusian officials sold huge amounts of weapons to rogue
regimes has so far failed to elicit a response from Minsk. The same
holds true for Moldova and some Central Asian countries, such as
Turkmenistan, suspected of having sold arms to the Taliban in the
past.
In a confidential letter that perhaps sheds some light on the
illegal arms trade, the head of the Ukrainian Security Service (SBU),
Yevhen Marchuk discussed the problem of arms sales with the president
of Ukraine at the time, Leonid Kravchuk. It is revealing in that the
SBU head apparently did not know where the arms were destined. As it
turned out, these weapons were bound for the bloody conflict in
Croatia, which subject to a UN-enforced arms embargo. Eventually,
some of these same weapons were resold to the Irish Republican Army
and Basque separatists from ETA by Croatian arms dealers. Today, most
of those responsible for the sales, including a former Ukrainian
citizen, are awaiting trial in a prison in Turino, Italy.
Dated 12 February 1993, the following letter addressed to
President Kravchuk has never been published in its entirety. It reads
as follows:
Esteemed Leonid Makarovych,
The Security Service of Ukraine has in its possession information
regarding violations of existing legislation and established
procedures for the organization and execution of sales of armaments,
military technology, and munitions. Unfortunately, in isolated cases
these sales were concluded on the basis of unfounded references to
your directives.
As I have informed you, the Security Service, on orders from
the Ukrainian Prosecutor-General's Office, is conducting an
investigation around the circumstances of armament sales by the
Defense Ministry to the Panamanian company "Global Technologies Inc."
During the investigation it was found that numerous violations
of existing legislation took place by individual officials of the
Ukrainian Armed Forces who overstepped their official functions. We
have received absolutely reliable information that officers in the
Ministry of Defense were given bribes in U.S. dollars for their role
in exporting armaments. A legal opinion of this will be provided by
the Prosecutor-General's Office of Ukraine.
I want to inform you of the actions and statements made by
individual officials of the Ministry of Defense which can implicate
you personally as well as discredit Ukrainian state policy.
Furthermore, if a criminal case were to be started, their statements
can serve as a basis to have you questioned as a witness during a
trial. They concern two instructions given by you in response to the
inquiries of the foreign company as to military-technical cooperation
which were related to you personally by the president of the company,
Mr. L. Streshinsky.
The first such inquiry was examined by you on 2 October 1992.
In it, Streshinsky requested that he be given the opportunity to
acquire in Ukraine a large amount of armaments and ammunition. Your
instructions were the following: "To Morozov K.P. [Editor's note: the
minister of defense] and Antonov V.I. [Editor's note: the minister of
machine construction, i.e. weapons] Please review this and, if it is
favorable, decide."
As is shown by available documentary materials and explanations
by officials from the Ministry of Defense and the Ministry of Machine
Construction of Ukraine, your instructions were interpreted as an
order to act since the word "decide" was used. Without any evidence
about the possible benefits of this [word illegible] to you on making
the decision, orders were immediately issued to provide the foreign
company with special products [Editor's note: "spezvyrobiv," or
armaments and ammunition] which began with the phrase: "According to
the decision made by the President of UkraineŠ" Thus Minister Antonov
V.I. granted permission to export special products without the prior
review of this matter by a meeting of the State Experts-Technical
Commission and in violation of a resolution of the Cabinet of
Ministers of Ukraine No. 153 of 25 March 1992. Using as justification
your instructions [Editor's note: to Morozov and Antonov] a shipment
was prepared for delivery overseas. This shipment consisted of 6
million rounds of ammunition, 12 thousand artillery shells, 300
machine guns, and other arms which were not included in the contract
or agreement and exceeded the limits specified on the end-user
certificate. They were all delivered to the port of "Oktyabersk"
without any export documentation and loaded onto containers of the
foreign company. The value of this shipment was $4 million.
On 14 December 1992, the State Expert-Technical Commission
unanimously refused to grant Global Technologies Inc. permission for
exporting a second shipment of armaments. However, on 18 January
1993, Streshinsky with the support of the head of your personal
bodyguard service Lieutenant Colonel Palyvoda V.I. informed you of
his company's request to immediately issue an export license and
fulfill the contract. In the request he stated, without any basis,
that the contract had been cleared by the Security Service (SBU-RK)
and the Ministry of Defense. I want to inform you that neither I, nor
Morozov K.P. had gotten any requests of this nature from anyone. We
knew that if the contract were to be fulfilled it would lead to
losses for the state and tried to increase the sales price by at
least $1 million.
After your instructions "Antonov V.I. please decide without
[word illegible]. Both Morozov K.P. and Marchuk Y.K. support. What is
the question?" and your telephone conversation with him, export
permission was granted and the special products were again prepared
for delivery, again without the approval by the Expert-Technical
Commission. The contract with Global Technologies Inc. was filled
without increasing the sales price and it included only those items
which were agreed upon earlier. Items not agreed upon or not included
in the end-user certificate were not allowed. They are to be returned
to stockpiles or sold abroad under different contracts and for higher
prices.
Therefore, officials from the Ministry of Defense of Ukraine,
justifying their actions by citing your instructions, sold abroad
arms and armaments considerably below world prices. By fulfilling
this contract, the state lost a significant sum of hard currency. As
a matter of fact, in his explanation, Streshinsky himself
acknowledged that he is purchasing armaments from Ukraine at the
lowest possible prices. He confirmed that he gave bribes to those who
assisted him in making the deal. These went to officials in the
Defense Ministry who at first demanded $385,000 but agreed to
$200,000.
I want to inform you, esteemed Leonid Makarovych [Kravchuk]
that throughout the world a president is shielded from making
decisions in regard to commercial deals with foreign companies, even
more so when it comes to the sale of defense technology, armaments,
and ammunition. Without a complete study of the nature of such
questions by competent state organs, there can be severe
consequences. Your instructions in response to proposals from Global
Technologies, while being only recommendations in essence, were
understood to be instructions and "indulgences" toward law-
enforcement agencies in case they were to begin looking into the
legality of their actions. You have already confiscated five copies
of the first letter from the company with your instructions which
certain officers from the Ministry of Defense kept not only in their
offices, but at home as well in case they were to be called upon to
explain the circumstances of the export of arms and ammunition.
Informing you of the above, I find it reasonable to ask you to
retrieve both letters from Global Technologies Inc. with your
instructions as such, which can compromise you personally as well as
Ukrainian state policy. It is also possible that this information can
find its way into the mass media.
Sincerely yours,
Ye. Marchuk,
Head of the Service
[Editor's P.S.: A year after this letter was written, on 8 March
1994, the transport ship, "Yadran Express" was seized in the waters
between Italy and Albania by NATO authorities. It was loaded with
contraband weaponry from Ukraine and Belarus bound for Croatia. The
boat and its cargo are being held as material evidence in the trial
in Turino.]
RUSSIA
BUSINESSMAN LINKED TO PRESIDENTIAL OFFICE IS CHARGED WITH
BRIBING FSB CHIEF. The Russian Prosecutor-General's Office has
brought a charge of bribery against General Director Vyacheslav
Aminov of Prominvest financial group, Interfax reported on 29
December. Aminov was taken into custody last week in late December,
the agency said. Aminov has been released from custody on his own
recognizance and is not allowed to leave Moscow.
Aminov is charged with bribing a public official (an offense
under Art. 291 of the Russian Criminal Code), police sources told
Interfax. The businessman is suspected of giving a $50,000 bribe to
the director of the Federal Security Service (FSB), Nikolai
Patrushev. Aminov's office, apartment, and summer house were searched
the day before his detention, and compromising videocassettes were
confiscated, according to press reports.
Prosecutor-General Vladimir Ustinov confirmed Aminov's
detention and said that criminal proceedings against have been
initiated. However, Ustinov declined to give any details and promised
to supply complete information at the end of investigation.
Aminov is a public adviser to head of the presidential
administration, Aleksandr Voloshin, according to media sources.
TAX POLICE BATTLE CORRUPTION IN THE RANKS. Speaking at a press
conference on 4 January, the head of the Moscow Tax Police
Department, Viktor Vasiliev, said the Federal Tax Police will
concentrate on fighting corruption within its ranks in 2002, RBK News
Agency reported on 8 January. Vasiliev said eight tax policemen faced
criminal proceedings in 2001, adding that figures were similar in
2000. He added that three employees of the Moscow Tax Police were
convicted of abuse of power or bribery-related crimes in 2001, versus
two in 2000.
Vasiliev said the security and anticorruption service within
the Moscow Tax Police had been enlarged and transformed into a
special department to deal with crimes within tax-police ranks. He
added that senior officials within the organization had been replaced
because their performance did not meet with requirements. He stressed
that the special department focused on crime prevention. As a result
of the department's work, more than 20 tax policemen were dismissed
in 2001, according to Vasiliev.
At the same time, Russian tax police will step up their efforts
to fight economic crimes, Vasiliev pledged. He said the Tax Police
will be better-armed to combat economic crimes in 2002, noting that a
new Russian Criminal Procedure Code will come into force on July 1
that expands the powers of tax police.
Vasiliev said his organization supported stricter punishment
for tax-related crimes. He cited offenses that require the creation
and use of complicated schemes of tax avoidance and significantly
affect the state budget, in particular, and repeated tax-related
crimes. Vasiliev said these proposals were being considered by the
relevant State Duma committee and expressed hope that they would be
approved by lawmakers this year.
Vasiliev is convinced that the new Criminal Procedure Code will
enhance citizens' guarantees of civil rights and freedoms, since
criminal proceedings over tax crimes will be launched only in
consultation with the Prosecutor-General's Office. Moreover, he said,
many actions -- including searches and detentions -- will require a
court ruling.
Tax authorities at the press conference said the number of tax-
related crimes had risen in 2001. But they stressed that the nature
of such crimes was at a new and higher level. Representatives of the
Moscow Tax Police said that last year authorities concentrated on
preventing tax crimes across regions and the increasingly
sophisticated schemes of tax criminals.
TERRORISM
JUND AL-ISLAM MEMBERS JOINING ISLAMIC GROUP. The Sulaymaniyah
newspaper "Hawlati" of 31 December noted that a number of members,
cadres, and armed men from the now-outlawed Jund al-Islam have joined
the Islamic Group, or KIG, in Kurdistan. A source told "Hawlati" that
seven "Arab armed men along with their families" have joined and said
more are more to follow. This is the most peaceful alternative to the
recent fighting between the Jund and the Patriotic Union of Kurdistan
(PUK). In another article in the same issue, "Hawlati" reported that
25 houses have been ransacked and burglarized over the past month.
Among the houses and offices ransacked are two telephone and fax
companies, as well as the home of a member of the PUK's organizing
committee in the area (in the Sharazur region of Sulaymaniyah). In
the Hurmal region of the same province, one of the arrested men has
been identified as a Jund al-Islam member. ("RFE/RL Iraq Report,"
vol. 5, number 1, 11 January 2002)
KAZAKH CITIZENS REPORTEDLY FOUGHT FOR AL-QAEDA. Kazakh
nationals fought on the side of international terrorists in
Afghanistan, FBI investigators reportedly stated after they
questioned captured fighters in Afghanistan's Sheberghan (Jowzjan
Province, northern Afghanistan) camp, Kazakh television reported on 4
January.
Kazakh mercenaries who were detained by Operation Enduring
Freedom forces were reportedly members of the Al-Qaeda organization.
U.S. investigators have information that some were middle-ranking
commanders. The reports did not give the exact number of Kazakh
citizens who were suspected members of Al-Qaeda.
The Kazakh Foreign Ministry meanwhile said it knew nothing
about such activities. The head of the analysis department there said
that no information had arrived via diplomatic channels about Kazakh
citizens fighting in Afghanistan.
END NOTE
UKRAINE'S DECADE-LONG ILLEGAL TRADE IN ARMS
By Taras Kuzio
Recent accusations in the Western, Ukrainian, and Russian media that
Ukraine has long been involved in illegal arms exports should not be
of surprise to researchers, governments, and intelligence agencies
who have long written about and monitored such activities. Evidence
is allegedly to be found on the "Kuchmagate" tapes in the possession
of former presidential guard Mykola Melnychenko, who has been seeking
political asylum in the U.S. since April 2001.
Organized crime and corrupt state officials do not respect
state borders in the postcommunist world. In May of last year, an
Ilyushin-76 cargo aircraft was intercepted at the Bulgarian port of
Burgas with $250,000 worth of arms. The guns were Czech-made, the air
company was Ukrainian, the destination was Eritrea, and the end user
was stipulated as Georgia.
Ukraine was in a relatively unique position in that as a front-
line (first echelon) Soviet republic it possessed and inherited the
best quality and large volumes of military equipment. Much of this
was superfluous to Ukraine's security needs after 1992, and so it is
not surprising that much of it found its way abroad, often illicitly.
A Ukrainian parliamentary commission found that Ukraine's 1992
military stocks were worth $89 billion and that, in the course of the
next six years, some $32 billion of that was stolen, with much of it
re-sold abroad. The investigation was headed by a parliamentary
deputy and the former deputy defense minister, Lieutenant General
Oleksandr Ihnatenko, who was court-martialed and stripped of his
rank. Ihnatenko leaked some of his findings to Serhiy Odarych, who
heads the Kyiv think tank Ukrainian Perspectives. Odarych was
accosted and shot in the leg in July 1998 and says he was warned to
stop publicizing those findings. As Odarch recalls, "The police said
I shot myself to grab attention."
That the export of large volumes of arms could not be
undertaken without state officials, the Security Service of Ukraine
(SBU), and other bodies either being complicity involved or, at the
very least turning a blind eye, is obvious. After all, taking a tank
or a batch of Kalashkinovs out of Ukraine requires access to either
an air- or seaport. Up to 80 percent of this Ukrainian trade was
undertaken through the shadow economy, which has remained at
approximately half of GDP throughout the post-Soviet era.
In the last decade, there have been many reports of Ukrainian
arms surfacing in countless places around the world. During the
Bosnian arms embargo, Ukrainian arms turned up on both the Muslim and
Croat sides (as did former Soviet weapons from the then-Russian bases
in the GDR despite Russia's support for Serbia), including 20 C-300
anti-missile batteries. Ukraine's arms also ended up in many other
"hot spots" around the world, including: Sri Lanka in its battle
against Tamil separatists (a military-transport aircraft and Mi-17
military-transport helicopters); Southern Yemen in its secessionist
drive (MiG-29s, artillery, and anti-aircraft guns); Peru in its
border conflict with Ecuador (light weapons and missile launchers);
Angola in support of the MPLA government; and in the civil wars in
Sierra Leone, Liberia, and Rwanda.
Official arms exports, such as tanks, have gone to Pakistan
since 1996. Recent reports that Ukraine supplied weapons to the
Taliban in Afghanistan could have come via Pakistan, its patron. (See
"RFE/RL Crime, Corruption, and Terrorism Watch," Vol. 1, No. 8, 20
December 2001). Meanwhile, Iran has received MiG-29 fighters, tanks,
and anti-ship missiles.
Ukraine's involvement in this trade has also been assisted by
the Transdniester region, which has long been an economic black hole
through which all types of contraband moves, from cigarettes to oil,
gas, and weapons. The main seaport the Transdniester uses is Odesa.
In 1996, the Moldovans issued eight customs seals to the region and,
by September of this year, the new Moldovan government found that the
Transdniester had made an additional 348 illegal customs seals. Re-
elected Transdniestrian President Igor Smirnov's son heads the
region's State Customs Committee. Moldovan President Vladimir Voronin
recently complained that the Transdniester was a hotbed of smuggling,
which is taking place with Ukraine's assistance. "We in Moldova have
understood that Smirnov is a bandit. It is not clear who he is for
Ukraine," Voronin added.
A major transit point for illicitly exported weapons from the
Transdniester are Ukrainian ports in the Odesa region. The
Transdniestrians have their own people in Illichevsk and Odesa who
fabricate documents for goods shipped via Ukrainian ports allegedly
coming from Moldova. The Ukrainian side has therefore refused to
agree to Moldovan requests for joint customs posts, preferring to
maintain Ukrainian border control with the Transdniester that allows
an uncontrolled flow of such contraband. Last month, Ukrainian
President Leonid Kuchma reiterated his opposition to joint
checkpoints on the Transdniester-Ukrainian border because it would be
tantamount to an economic blockade of the separatist enclave.
Most of these illicitly exported goods are weapons, the
mainstay of the Transdniester economy. In the Soviet era, the
region's military-industrial complex only produced military
components. Currently, they have closed production cycles for small
arms, a full range of different types of mortars, 43 Grad multiple-
missile launchers, and grenade launchers.
A picture of Ukraine's illicit trade in arms can be now gleaned
from millionaire gunrunner Leonid Minin, who was arrested in Italy in
August 2000. Minin is a native of Odesa and emigrated to Israel in
the 1970s before going into business after the collapse of the former
USSR re-exporting oil from Russia. He is an associate of Alexander
Angert (alias "The Angel"), a notorious Odesa godfather.
In Minin's Milan hotel room, Italian police officers found
$150,000 in cash and half a million dollars in African diamonds.
There was also a cache of 1,500 documents detailing his dealings in
oil, timber, gems, and guns. Two weeks before his arrest, Minin
chartered an Antonov-124 transport aircraft in Moscow; had it flown
to Kyiv, where it was loaded with 113 tons of small arms AK-47's and
330 grenade launchers, sniper rifles, night-vision equipment), and
ammunition; and then flown to Abidjan, capital of the Ivory Coast.
Sixteen months earlier, another Antonov aircraft delivered 68 tons of
small arms and ammunition to Liberia and Sierra Leone. The Ukrainian
government protested that the end-user certificate was for Burkino
Faso (which does not use former Soviet military equipment).
Recent accusations have been made by Labor Ukraine (TU) party
leader Andriy Derkach of illegal arms exports in the first half of
the 1990s, when Yevhen Marchuk, former chairman of the SBU and
current secretary of the National Security and Defense Council, was
chairman of the Security Service of Ukraine (SBU). In his defense,
Marchuk claims that as head of the SBU he stopped the illegal trade
in arms that some officers in the Ministry of Defense with Dmytro
Strashynsky, whose license was revoked, had been undertaking [see
Marchuk's letter to Kravchul included in this issue]. Strashynsky is
also being held in an Italian prison.
On 4 January, the Prosecutor-General's Office launched an
inquiry into the allegations. Strashynsky is accused of forging end-
user certificates for Nigeria, Egypt, Sudan, Morocco, Ecuador, and
Guinea -- which provides a glimpse into the global reach of these
exports. The TU-controlled TV station Era alleges that documents it
has received from Italy show that Marchuk persuaded Kravchuk to sell
weapons to Strashynsky, that the Prohres company that had contracts
with him was under the SBU's "protection," and that Marchuk
supervised Strashynsky's activities in Ukraine. Both Kravchuk and
Marchuk have denied these allegations as an attempt to damage their
reputations on the eve of parliamentary elections in Ukraine.
Ukraine has a bad record in the illicit trading of weapons to
conflict zones and other countries in the last decade. Not
surprisingly, Ukraine's media has either been too scared or has
lacked the information to write about this covert trade, and the
Ihnatenko commission was the only Ukrainian attempt to probe its
illicit trade in arms.
Taras Kuzio is a research associate at the Centre for Russian & East
European Studies, University of Toronto.
(Compiled by Roman Kupchinsky)
*********************************************************
Copyright (c) 2002. RFE/RL, Inc. All rights reserved.
"RFE/RL Crime, Corruption, and Terrorism Watch" is edited by Roman
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RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC
________________________________________________________
RFE/RL Crime, Corruption, and Terrorism Watch
Vol. 2, No. 1, 10 January 2002
Reporting on Organized Crime, Corruption, and Terrorism in the former
USSR, East Europe, and the Middle East
**************************************
HEADLINES:
* SPOTLIGHT: ARMING ROGUE STATES
* TAX POLICE BATTLE CORRUPTION IN THE RANKS
* UKRAINE'S DECADE-LONG ILLEGAL TRADE IN ARMS
**************************************
SPOTLIGHT
ARMING ROGUE STATES
Illegal sales of armaments and munitions to rogue regimes and
terrorist groups, along with indirect sales to terrorist
organizations through fake end-user certificates, have been a problem
for former Soviet and Warsaw Pact states.
The countries identified as being most involved in such sales
are Ukraine and Belarus from among former Soviet states, and Slovakia
and the Czech Republic from within the former Warsaw Pact. And
despite numerous inquiries by the United Nations Security Council and
special investigative commissions formed by the UN, the trade seems
to continue.
In Ukraine, the Prosecutor-General's Office recently opened an
investigation of charges against Ukrainian citizens who might have
been involved in such activities.
Recent revelations, published in "The Washington Post," that
senior Belarusian officials sold huge amounts of weapons to rogue
regimes has so far failed to elicit a response from Minsk. The same
holds true for Moldova and some Central Asian countries, such as
Turkmenistan, suspected of having sold arms to the Taliban in the
past.
In a confidential letter that perhaps sheds some light on the
illegal arms trade, the head of the Ukrainian Security Service (SBU),
Yevhen Marchuk discussed the problem of arms sales with the president
of Ukraine at the time, Leonid Kravchuk. It is revealing in that the
SBU head apparently did not know where the arms were destined. As it
turned out, these weapons were bound for the bloody conflict in
Croatia, which subject to a UN-enforced arms embargo. Eventually,
some of these same weapons were resold to the Irish Republican Army
and Basque separatists from ETA by Croatian arms dealers. Today, most
of those responsible for the sales, including a former Ukrainian
citizen, are awaiting trial in a prison in Turino, Italy.
Dated 12 February 1993, the following letter addressed to
President Kravchuk has never been published in its entirety. It reads
as follows:
Esteemed Leonid Makarovych,
The Security Service of Ukraine has in its possession information
regarding violations of existing legislation and established
procedures for the organization and execution of sales of armaments,
military technology, and munitions. Unfortunately, in isolated cases
these sales were concluded on the basis of unfounded references to
your directives.
As I have informed you, the Security Service, on orders from
the Ukrainian Prosecutor-General's Office, is conducting an
investigation around the circumstances of armament sales by the
Defense Ministry to the Panamanian company "Global Technologies Inc."
During the investigation it was found that numerous violations
of existing legislation took place by individual officials of the
Ukrainian Armed Forces who overstepped their official functions. We
have received absolutely reliable information that officers in the
Ministry of Defense were given bribes in U.S. dollars for their role
in exporting armaments. A legal opinion of this will be provided by
the Prosecutor-General's Office of Ukraine.
I want to inform you of the actions and statements made by
individual officials of the Ministry of Defense which can implicate
you personally as well as discredit Ukrainian state policy.
Furthermore, if a criminal case were to be started, their statements
can serve as a basis to have you questioned as a witness during a
trial. They concern two instructions given by you in response to the
inquiries of the foreign company as to military-technical cooperation
which were related to you personally by the president of the company,
Mr. L. Streshinsky.
The first such inquiry was examined by you on 2 October 1992.
In it, Streshinsky requested that he be given the opportunity to
acquire in Ukraine a large amount of armaments and ammunition. Your
instructions were the following: "To Morozov K.P. [Editor's note: the
minister of defense] and Antonov V.I. [Editor's note: the minister of
machine construction, i.e. weapons] Please review this and, if it is
favorable, decide."
As is shown by available documentary materials and explanations
by officials from the Ministry of Defense and the Ministry of Machine
Construction of Ukraine, your instructions were interpreted as an
order to act since the word "decide" was used. Without any evidence
about the possible benefits of this [word illegible] to you on making
the decision, orders were immediately issued to provide the foreign
company with special products [Editor's note: "spezvyrobiv," or
armaments and ammunition] which began with the phrase: "According to
the decision made by the President of UkraineŠ" Thus Minister Antonov
V.I. granted permission to export special products without the prior
review of this matter by a meeting of the State Experts-Technical
Commission and in violation of a resolution of the Cabinet of
Ministers of Ukraine No. 153 of 25 March 1992. Using as justification
your instructions [Editor's note: to Morozov and Antonov] a shipment
was prepared for delivery overseas. This shipment consisted of 6
million rounds of ammunition, 12 thousand artillery shells, 300
machine guns, and other arms which were not included in the contract
or agreement and exceeded the limits specified on the end-user
certificate. They were all delivered to the port of "Oktyabersk"
without any export documentation and loaded onto containers of the
foreign company. The value of this shipment was $4 million.
On 14 December 1992, the State Expert-Technical Commission
unanimously refused to grant Global Technologies Inc. permission for
exporting a second shipment of armaments. However, on 18 January
1993, Streshinsky with the support of the head of your personal
bodyguard service Lieutenant Colonel Palyvoda V.I. informed you of
his company's request to immediately issue an export license and
fulfill the contract. In the request he stated, without any basis,
that the contract had been cleared by the Security Service (SBU-RK)
and the Ministry of Defense. I want to inform you that neither I, nor
Morozov K.P. had gotten any requests of this nature from anyone. We
knew that if the contract were to be fulfilled it would lead to
losses for the state and tried to increase the sales price by at
least $1 million.
After your instructions "Antonov V.I. please decide without
[word illegible]. Both Morozov K.P. and Marchuk Y.K. support. What is
the question?" and your telephone conversation with him, export
permission was granted and the special products were again prepared
for delivery, again without the approval by the Expert-Technical
Commission. The contract with Global Technologies Inc. was filled
without increasing the sales price and it included only those items
which were agreed upon earlier. Items not agreed upon or not included
in the end-user certificate were not allowed. They are to be returned
to stockpiles or sold abroad under different contracts and for higher
prices.
Therefore, officials from the Ministry of Defense of Ukraine,
justifying their actions by citing your instructions, sold abroad
arms and armaments considerably below world prices. By fulfilling
this contract, the state lost a significant sum of hard currency. As
a matter of fact, in his explanation, Streshinsky himself
acknowledged that he is purchasing armaments from Ukraine at the
lowest possible prices. He confirmed that he gave bribes to those who
assisted him in making the deal. These went to officials in the
Defense Ministry who at first demanded $385,000 but agreed to
$200,000.
I want to inform you, esteemed Leonid Makarovych [Kravchuk]
that throughout the world a president is shielded from making
decisions in regard to commercial deals with foreign companies, even
more so when it comes to the sale of defense technology, armaments,
and ammunition. Without a complete study of the nature of such
questions by competent state organs, there can be severe
consequences. Your instructions in response to proposals from Global
Technologies, while being only recommendations in essence, were
understood to be instructions and "indulgences" toward law-
enforcement agencies in case they were to begin looking into the
legality of their actions. You have already confiscated five copies
of the first letter from the company with your instructions which
certain officers from the Ministry of Defense kept not only in their
offices, but at home as well in case they were to be called upon to
explain the circumstances of the export of arms and ammunition.
Informing you of the above, I find it reasonable to ask you to
retrieve both letters from Global Technologies Inc. with your
instructions as such, which can compromise you personally as well as
Ukrainian state policy. It is also possible that this information can
find its way into the mass media.
Sincerely yours,
Ye. Marchuk,
Head of the Service
[Editor's P.S.: A year after this letter was written, on 8 March
1994, the transport ship, "Yadran Express" was seized in the waters
between Italy and Albania by NATO authorities. It was loaded with
contraband weaponry from Ukraine and Belarus bound for Croatia. The
boat and its cargo are being held as material evidence in the trial
in Turino.]
RUSSIA
BUSINESSMAN LINKED TO PRESIDENTIAL OFFICE IS CHARGED WITH
BRIBING FSB CHIEF. The Russian Prosecutor-General's Office has
brought a charge of bribery against General Director Vyacheslav
Aminov of Prominvest financial group, Interfax reported on 29
December. Aminov was taken into custody last week in late December,
the agency said. Aminov has been released from custody on his own
recognizance and is not allowed to leave Moscow.
Aminov is charged with bribing a public official (an offense
under Art. 291 of the Russian Criminal Code), police sources told
Interfax. The businessman is suspected of giving a $50,000 bribe to
the director of the Federal Security Service (FSB), Nikolai
Patrushev. Aminov's office, apartment, and summer house were searched
the day before his detention, and compromising videocassettes were
confiscated, according to press reports.
Prosecutor-General Vladimir Ustinov confirmed Aminov's
detention and said that criminal proceedings against have been
initiated. However, Ustinov declined to give any details and promised
to supply complete information at the end of investigation.
Aminov is a public adviser to head of the presidential
administration, Aleksandr Voloshin, according to media sources.
TAX POLICE BATTLE CORRUPTION IN THE RANKS. Speaking at a press
conference on 4 January, the head of the Moscow Tax Police
Department, Viktor Vasiliev, said the Federal Tax Police will
concentrate on fighting corruption within its ranks in 2002, RBK News
Agency reported on 8 January. Vasiliev said eight tax policemen faced
criminal proceedings in 2001, adding that figures were similar in
2000. He added that three employees of the Moscow Tax Police were
convicted of abuse of power or bribery-related crimes in 2001, versus
two in 2000.
Vasiliev said the security and anticorruption service within
the Moscow Tax Police had been enlarged and transformed into a
special department to deal with crimes within tax-police ranks. He
added that senior officials within the organization had been replaced
because their performance did not meet with requirements. He stressed
that the special department focused on crime prevention. As a result
of the department's work, more than 20 tax policemen were dismissed
in 2001, according to Vasiliev.
At the same time, Russian tax police will step up their efforts
to fight economic crimes, Vasiliev pledged. He said the Tax Police
will be better-armed to combat economic crimes in 2002, noting that a
new Russian Criminal Procedure Code will come into force on July 1
that expands the powers of tax police.
Vasiliev said his organization supported stricter punishment
for tax-related crimes. He cited offenses that require the creation
and use of complicated schemes of tax avoidance and significantly
affect the state budget, in particular, and repeated tax-related
crimes. Vasiliev said these proposals were being considered by the
relevant State Duma committee and expressed hope that they would be
approved by lawmakers this year.
Vasiliev is convinced that the new Criminal Procedure Code will
enhance citizens' guarantees of civil rights and freedoms, since
criminal proceedings over tax crimes will be launched only in
consultation with the Prosecutor-General's Office. Moreover, he said,
many actions -- including searches and detentions -- will require a
court ruling.
Tax authorities at the press conference said the number of tax-
related crimes had risen in 2001. But they stressed that the nature
of such crimes was at a new and higher level. Representatives of the
Moscow Tax Police said that last year authorities concentrated on
preventing tax crimes across regions and the increasingly
sophisticated schemes of tax criminals.
TERRORISM
JUND AL-ISLAM MEMBERS JOINING ISLAMIC GROUP. The Sulaymaniyah
newspaper "Hawlati" of 31 December noted that a number of members,
cadres, and armed men from the now-outlawed Jund al-Islam have joined
the Islamic Group, or KIG, in Kurdistan. A source told "Hawlati" that
seven "Arab armed men along with their families" have joined and said
more are more to follow. This is the most peaceful alternative to the
recent fighting between the Jund and the Patriotic Union of Kurdistan
(PUK). In another article in the same issue, "Hawlati" reported that
25 houses have been ransacked and burglarized over the past month.
Among the houses and offices ransacked are two telephone and fax
companies, as well as the home of a member of the PUK's organizing
committee in the area (in the Sharazur region of Sulaymaniyah). In
the Hurmal region of the same province, one of the arrested men has
been identified as a Jund al-Islam member. ("RFE/RL Iraq Report,"
vol. 5, number 1, 11 January 2002)
KAZAKH CITIZENS REPORTEDLY FOUGHT FOR AL-QAEDA. Kazakh
nationals fought on the side of international terrorists in
Afghanistan, FBI investigators reportedly stated after they
questioned captured fighters in Afghanistan's Sheberghan (Jowzjan
Province, northern Afghanistan) camp, Kazakh television reported on 4
January.
Kazakh mercenaries who were detained by Operation Enduring
Freedom forces were reportedly members of the Al-Qaeda organization.
U.S. investigators have information that some were middle-ranking
commanders. The reports did not give the exact number of Kazakh
citizens who were suspected members of Al-Qaeda.
The Kazakh Foreign Ministry meanwhile said it knew nothing
about such activities. The head of the analysis department there said
that no information had arrived via diplomatic channels about Kazakh
citizens fighting in Afghanistan.
END NOTE
UKRAINE'S DECADE-LONG ILLEGAL TRADE IN ARMS
By Taras Kuzio
Recent accusations in the Western, Ukrainian, and Russian media that
Ukraine has long been involved in illegal arms exports should not be
of surprise to researchers, governments, and intelligence agencies
who have long written about and monitored such activities. Evidence
is allegedly to be found on the "Kuchmagate" tapes in the possession
of former presidential guard Mykola Melnychenko, who has been seeking
political asylum in the U.S. since April 2001.
Organized crime and corrupt state officials do not respect
state borders in the postcommunist world. In May of last year, an
Ilyushin-76 cargo aircraft was intercepted at the Bulgarian port of
Burgas with $250,000 worth of arms. The guns were Czech-made, the air
company was Ukrainian, the destination was Eritrea, and the end user
was stipulated as Georgia.
Ukraine was in a relatively unique position in that as a front-
line (first echelon) Soviet republic it possessed and inherited the
best quality and large volumes of military equipment. Much of this
was superfluous to Ukraine's security needs after 1992, and so it is
not surprising that much of it found its way abroad, often illicitly.
A Ukrainian parliamentary commission found that Ukraine's 1992
military stocks were worth $89 billion and that, in the course of the
next six years, some $32 billion of that was stolen, with much of it
re-sold abroad. The investigation was headed by a parliamentary
deputy and the former deputy defense minister, Lieutenant General
Oleksandr Ihnatenko, who was court-martialed and stripped of his
rank. Ihnatenko leaked some of his findings to Serhiy Odarych, who
heads the Kyiv think tank Ukrainian Perspectives. Odarych was
accosted and shot in the leg in July 1998 and says he was warned to
stop publicizing those findings. As Odarch recalls, "The police said
I shot myself to grab attention."
That the export of large volumes of arms could not be
undertaken without state officials, the Security Service of Ukraine
(SBU), and other bodies either being complicity involved or, at the
very least turning a blind eye, is obvious. After all, taking a tank
or a batch of Kalashkinovs out of Ukraine requires access to either
an air- or seaport. Up to 80 percent of this Ukrainian trade was
undertaken through the shadow economy, which has remained at
approximately half of GDP throughout the post-Soviet era.
In the last decade, there have been many reports of Ukrainian
arms surfacing in countless places around the world. During the
Bosnian arms embargo, Ukrainian arms turned up on both the Muslim and
Croat sides (as did former Soviet weapons from the then-Russian bases
in the GDR despite Russia's support for Serbia), including 20 C-300
anti-missile batteries. Ukraine's arms also ended up in many other
"hot spots" around the world, including: Sri Lanka in its battle
against Tamil separatists (a military-transport aircraft and Mi-17
military-transport helicopters); Southern Yemen in its secessionist
drive (MiG-29s, artillery, and anti-aircraft guns); Peru in its
border conflict with Ecuador (light weapons and missile launchers);
Angola in support of the MPLA government; and in the civil wars in
Sierra Leone, Liberia, and Rwanda.
Official arms exports, such as tanks, have gone to Pakistan
since 1996. Recent reports that Ukraine supplied weapons to the
Taliban in Afghanistan could have come via Pakistan, its patron. (See
"RFE/RL Crime, Corruption, and Terrorism Watch," Vol. 1, No. 8, 20
December 2001). Meanwhile, Iran has received MiG-29 fighters, tanks,
and anti-ship missiles.
Ukraine's involvement in this trade has also been assisted by
the Transdniester region, which has long been an economic black hole
through which all types of contraband moves, from cigarettes to oil,
gas, and weapons. The main seaport the Transdniester uses is Odesa.
In 1996, the Moldovans issued eight customs seals to the region and,
by September of this year, the new Moldovan government found that the
Transdniester had made an additional 348 illegal customs seals. Re-
elected Transdniestrian President Igor Smirnov's son heads the
region's State Customs Committee. Moldovan President Vladimir Voronin
recently complained that the Transdniester was a hotbed of smuggling,
which is taking place with Ukraine's assistance. "We in Moldova have
understood that Smirnov is a bandit. It is not clear who he is for
Ukraine," Voronin added.
A major transit point for illicitly exported weapons from the
Transdniester are Ukrainian ports in the Odesa region. The
Transdniestrians have their own people in Illichevsk and Odesa who
fabricate documents for goods shipped via Ukrainian ports allegedly
coming from Moldova. The Ukrainian side has therefore refused to
agree to Moldovan requests for joint customs posts, preferring to
maintain Ukrainian border control with the Transdniester that allows
an uncontrolled flow of such contraband. Last month, Ukrainian
President Leonid Kuchma reiterated his opposition to joint
checkpoints on the Transdniester-Ukrainian border because it would be
tantamount to an economic blockade of the separatist enclave.
Most of these illicitly exported goods are weapons, the
mainstay of the Transdniester economy. In the Soviet era, the
region's military-industrial complex only produced military
components. Currently, they have closed production cycles for small
arms, a full range of different types of mortars, 43 Grad multiple-
missile launchers, and grenade launchers.
A picture of Ukraine's illicit trade in arms can be now gleaned
from millionaire gunrunner Leonid Minin, who was arrested in Italy in
August 2000. Minin is a native of Odesa and emigrated to Israel in
the 1970s before going into business after the collapse of the former
USSR re-exporting oil from Russia. He is an associate of Alexander
Angert (alias "The Angel"), a notorious Odesa godfather.
In Minin's Milan hotel room, Italian police officers found
$150,000 in cash and half a million dollars in African diamonds.
There was also a cache of 1,500 documents detailing his dealings in
oil, timber, gems, and guns. Two weeks before his arrest, Minin
chartered an Antonov-124 transport aircraft in Moscow; had it flown
to Kyiv, where it was loaded with 113 tons of small arms AK-47's and
330 grenade launchers, sniper rifles, night-vision equipment), and
ammunition; and then flown to Abidjan, capital of the Ivory Coast.
Sixteen months earlier, another Antonov aircraft delivered 68 tons of
small arms and ammunition to Liberia and Sierra Leone. The Ukrainian
government protested that the end-user certificate was for Burkino
Faso (which does not use former Soviet military equipment).
Recent accusations have been made by Labor Ukraine (TU) party
leader Andriy Derkach of illegal arms exports in the first half of
the 1990s, when Yevhen Marchuk, former chairman of the SBU and
current secretary of the National Security and Defense Council, was
chairman of the Security Service of Ukraine (SBU). In his defense,
Marchuk claims that as head of the SBU he stopped the illegal trade
in arms that some officers in the Ministry of Defense with Dmytro
Strashynsky, whose license was revoked, had been undertaking [see
Marchuk's letter to Kravchul included in this issue]. Strashynsky is
also being held in an Italian prison.
On 4 January, the Prosecutor-General's Office launched an
inquiry into the allegations. Strashynsky is accused of forging end-
user certificates for Nigeria, Egypt, Sudan, Morocco, Ecuador, and
Guinea -- which provides a glimpse into the global reach of these
exports. The TU-controlled TV station Era alleges that documents it
has received from Italy show that Marchuk persuaded Kravchuk to sell
weapons to Strashynsky, that the Prohres company that had contracts
with him was under the SBU's "protection," and that Marchuk
supervised Strashynsky's activities in Ukraine. Both Kravchuk and
Marchuk have denied these allegations as an attempt to damage their
reputations on the eve of parliamentary elections in Ukraine.
Ukraine has a bad record in the illicit trading of weapons to
conflict zones and other countries in the last decade. Not
surprisingly, Ukraine's media has either been too scared or has
lacked the information to write about this covert trade, and the
Ihnatenko commission was the only Ukrainian attempt to probe its
illicit trade in arms.
Taras Kuzio is a research associate at the Centre for Russian & East
European Studies, University of Toronto.
(Compiled by Roman Kupchinsky)
*********************************************************
Copyright (c) 2002. RFE/RL, Inc. All rights reserved.
"RFE/RL Crime, Corruption, and Terrorism Watch" is edited by Roman
Kupchinsky on the basis of a variety of sources. It is distributed
every Thursday. Direct comments to Roman Kupchinsky at
kupchinskyr@rferl.org. Back issues are online at
http://www.rferl.org/corruptionwatch/
Technical queries should be e-mailed to: iteam@rferl.org
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