Serbia has recently faced significant backlash from Moscow regarding Serbian-made weapons and ammunition being utilized by the Ukrainian military. Russia’s Foreign Intelligence Service (SVR), after dismissing reports for years, issued two critical statements within just one month. The first, on May 28, stated, “the greed of Serbian arms manufacturers and their backers to profit from the blood of the fraternal Slavic people has entirely overshadowed their awareness of who their genuine allies and adversaries are.”

While outwardly maintaining a facade of military neutrality and closeness to Moscow, the Serbian government is supplying ammunition that, through third countries, ultimately reaches Ukrainian armed forces. After years of denial, President Aleksandar Vučić acknowledged this practice during a June 2024 interview with the Financial Times.

In addition to weapons and ammunition made in Serbian factories reaching Ukraine, BIRN has uncovered that Serbia is permitting the transit of artillery ammunition through its territory, destined for companies supplying the Ukrainian army.

Official documents obtained by BIRN reveal that on June 12, the Serbian Ministry of Internal Affairs, with the consent of the defense and foreign affairs ministries, authorized the transit of 960 Bosnian-made 107 mm HE M155 artillery shells through its territory.

The documentation identifies the Czech Ministry of Defense as the “end user,” a nation that is one of Ukraine’s principal allies and has been spearheading the Initiative for artillery ammunition supply to Ukraine since February 2024.

The vendor is the Bosnian-Herzegovinian company Podin doo, while the shipment was ordered by the Czech firm Omnipol, one of five companies designated by the Czech government to procure artillery shells for the Ukrainian military.

Vuk Vuksanović, a researcher at the Belgrade Center for Security Policy (BCBP), conveyed to BIRN that the Serbian government, which has fostered a pro-Russian stance among some voters for years, is uncomfortable with the disclosure that Serbia is aiding Ukraine’s defense efforts.

“The public evidence that Serbia is facilitating ammunition delivery to Ukraine, along with Russian admonitions, undermines the image Vučić has been crafting domestically for years,” Vuksanović told BIRN.

BIRN’s investigation highlights a segment of the supply chain supplying precious artillery shells to Ukraine – from a small intermediary firm in western Herzegovina, through a state-owned factory in Sarajevo with an influential American minority owner, to a leading Czech defense enterprise that is a key participant in the Czech Initiative for Assistance to Ukraine.

Transit of Grenades – Approved by All Ministries from Serbia

Trucks carrying 132 pallets have received clearance to enter Serbia from Bosnia and Herzegovina via the Sremska Rača border crossing.

Documents acquired by BIRN indicate that the trucks were loaded with 960 grenades. The precise route was mapped out: the trucks would proceed to the village of Kuzmin, along the E-70 highway to Belgrade, and then continue along the E-75 highway to the Horgoš border crossing into the EU.

The Serbian Ministry of Internal Affairs received the request for transit approval on June 3, just six days after the Russian agency issued its initial statement accusing Serbia of participating in a “death strip” against the Russian populace.

Approval was swift.

Three days after the request, the Serbian Ministry of Foreign Affairs granted consent for the transport of the grenades. Three days later, on May 9, the Ministry of Defense also offered its approval, thereby meeting the legal prerequisites for the Interior Ministry to officially greenlight the transit of the world’s most sought-after caliber of grenades on June 12.

The approval stipulates that transportation must occur between the permit’s approval date and July 11 of this year.

Despite claims of neutrality, details indicating that Serbia is indirectly backing Ukraine’s efforts continue to surface publicly. In February 2023, the Russian outlet Mash reported that the Ukrainian military was utilizing Serbian 122 mm GRAD rockets. Two months later, Reuters cited a confidential Pentagon document stating that Serbia had either agreed to supply weapons to Kiev or had already done so. In June of last year, the Financial Times disclosed that Serbian manufacturers had exported €800 million worth of ammunition to Western nations and then to Ukraine.

President Vučić notably confirmed the arrangement in the aforementioned FT interview: “We cannot export to Ukraine or Russia… but we have numerous contracts with the Americans, Spaniards, Czechs, and others. What they ultimately do with it is their concern. Even if I know where the ammunition ends up, that’s not my concern.”

However, on June 23 of this year, Vučić announced a total suspension of arms and ammunition exports. Some interpreted this as a reaction to criticism over Serbia supplying ammunition to Israel; on the same day, the Russian SVR issued a second warning, accusing Serbian arms manufacturers of “greedily” severing traditional ties with Russia, knowing that “rockets and shells would be used to kill Russian soldiers and civilians in Russian territories.”

By issuing two severe statements in a month, Russia has broken years of silence on an issue regarded as an open secret among experts.

Vuk Vuksanović posits that Russia capitalized on Vučić’s political challenges domestically to exert further pressure: “The Russians recognized Vučić’s increasing alignment with the Trump administration and his domestic vulnerability, and they leveraged this to weaken him before his populace and potentially curb deliveries to Ukraine.”

Bosnian-Herzegovinian Production with American Capital

According to documents obtained by BIRN, the grenades are sold by Podin doo, based in Grude, southwestern Bosnia and Herzegovina.

Although officially registered for property rental and management, this company also possesses a license for exporting military equipment and weapons.

The identity of the grenade manufacturer, however, remains ambiguous, as does the reasoning behind a small-town firm, primarily registered for real estate dealings, assuming the intermediary role.

BIRN’s documentation merely notes that the grenades were manufactured in Bosnia and Herzegovina.

If these shells aren’t sourced from existing government stockpiles, experts consulted by BIRN suggest that the most probable manufacturer is the Pretis factory, a prominent firm in Bosnia and Herzegovina’s defense sector. Pretis is notably the only producer in the country crafting complete 155mm shells.

The factory is situated in Vogošća, a suburb of Sarajevo, just 1.5 kilometers from the transporting firm Bučan transport doo, which is also noted in the documents obtained by BIRN.

Experts estimate that a single 107 mm HE M155 artillery shell could range between €2,000 and €3,500 on the market – if the buyer is willing to wait.

“For immediate needs, prices can rise to between €5,000 and €8,000 per shell,” remarked Sarajevo-based military technology expert Berko Zečević to BIRN.

According to the Bosnian portal Klix.ba, the Czech Republic has placed orders for over 30,000 artillery shells from the Pretis factory. Notably, while the factory is majority-owned by Bosnia and Herzegovina, the American arms trading firm Regulus Global holds a 41.5% stake and recently proposed a $100 million investment for factory modernization.

Regulus also maintains a 25.7% stake in another significant defense factory, Binas, which is similarly largely owned by BiH. CEO Joe Wallis stated in July to Al Jazeera Balkans that their investment presented “an opportunity to build something that both serves European defense needs and aids Bosnia and Herzegovina’s economic growth.”

Regarding the conflict in Ukraine, Wallis mentioned that artillery is “once again at the forefront” of contemporary warfare.

“Given the thousands of shells Russia is firing daily, it places immense pressure on Western supplies, revealing genuine vulnerabilities within supply chains,” he conveyed to AJB.

Regulus Global boasts of having already supplied “over 100,000″ 155mm shells to Ukraine; however, not every deal with Kiev has proceeded without issues. As the Financial Times reported, the company is currently embroiled in legal proceedings in London concerning an unfulfilled contract totaling $1.7 billion for shell sales to the Ukrainian government.

BIRN reached out to Podin and Pretis regarding their business relationships but received no response prior to publication.

Czech Ammunition Initiative

Like Serbia, Bosnia and Herzegovina does not directly export weapons or ammunition to Ukraine due to opposition from Milorad Dodik, the president of Republika Srpska, who views Russia as an ally supporting his secessionist ambitions.

Ammunition manufactured in Bosnia and Herzegovina is instead sold to NATO member states, including the Czech Republic, which leads the Initiative for the Supply of Ammunition to Ukraine. This initiative commenced in February 2024 as a coalition of nations dedicated to maintaining steady ammunition supplies to Ukraine due to a decrease in US military aid.

Reports from the Biznis.info portal indicate a sharp rise in BiH defense industry exports in the first quarter of this year, with the Czech Republic becoming the largest purchaser, trailing just behind the United States.

As part of the artillery initiative, Omnipol was one of five Czech firms given exclusive rights to broker ammunition deals. However, critics have raised concerns regarding the transparency of this initiative, claiming connections between some companies and government officials, leading to raised commission fees compared to those charged by Ukrainian state-owned arms brokers.

In spite of various issues, Czech President Petr Pavel declared in February that the Prague-led initiative had delivered 1.6 million grenades to Ukraine.

Military technology expert Berko Zečević told BIRN that Bosnia and Herzegovina cannot be held accountable if its ammunition lands in Ukraine, as the end-user certificate holder is the Czech Ministry of Defense. He asserted that “such agreements are coordinated through NATO’s European branch.”

“If any redirection occurs, it’s not compliant with established norms and isn’t related to Bosnia and Herzegovina. The fact remains that the frameworks established over the last four decades have recently become disregarded,” concluded Professor Zečević.

Bosnian “Sun King”

Ljiljanko Palac, the owner of Podin doo, operates businesses in real estate, construction, and solar energy. Media reports suggest he is closely associated with the HDZ in BiH.

Palac’s name has also arisen in a case involving allegations that Zdravko Mamić, the former director of Dinamo Zagreb football club, bribed a high-ranking judge in Bosnia and Herzegovina to evade extradition to Croatia, where he was convicted of tax evasion and embezzling from player transfers. According to the Bosnian prosecutor’s office, one of the gifts – a wristwatch valued at €15,000 – was personally given to the judge by Palac “as a gift.” Nonetheless, Palac has not faced charges in connection with this case, according to the Istraga.ba portal.

Regulus: Controversies in Syria and Ukraine

Regulus Global, founded by Will Somerendayk, ranks among the top American defense and logistics firms collaborating with the Pentagon.

However, its operations have not been devoid of controversy. As reported by the Financial Times, the Ukrainian state-owned company Spetstechnoexport has initiated arbitration proceedings in London, alleging Regulus violated contract terms for a $1.7 billion arms deal.

Spetstechnoexport asserts it has made $162.6 million in advance payments as part of the contract, along with an additional $14 million in other payments, and is now pursuing a refund. Regulus has refuted these claims.

BIRN and OCCRP have previously spotlighted Regulus as one of several companies involved in the Pentagon’s supply chain for arming Syrian rebels against the Islamic State in Iraq and Syria (ISIS). The company faced a lawsuit in 2016 concerning the death of a US Special Operations Command instructor, where it was alleged that it provided dangerous munitions that resulted in an explosion. This case was later settled out of court.

In 2010, the US Department of Justice charged former Regulus President Lee Tolleson and 22 other company directors with attempting to bribe a Gabonese government minister to secure a $15 million arms contract. The Gabon-related charges were ultimately dismissed in 2012.

(BIRN.rs)