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New Information on the Involvement of Far West, Ltd in Illegal Arms Smuggling:
Did Far West, Ltd. Supply SAMS “Igla” to Chechen Separatists?

First, we want to quote a typical piece of news about the evolving scandal with the illegal deliveries of Ukrainian cruise missiles X-55 to China and Iran. It will be followed by additional information

Ukraine Goes After Missile Dealers


KIEV -- A Ukrainian government probe into lucrative illicit weapons sales by officials loyal to former President Leonid Kuchma has led to secret indictments or arrests of at least six arms dealers accused of selling nuclear-capable missiles destined for Russia to Iran and China, a high-ranking intelligence official said Friday.

The deals with Moscow-allied nations -- which violate international nonproliferation treaties -- put pressure on Ukraine's new president to halt the country's well-established illegal arms trades as he tries to boosts ties with and join NATO and the European Union.

President Victor Yushchenko has promised to investigate illicit weapons dealing, including a U.S. allegation that Kuchma approved the sale of a sophisticated Kolchuga radar system to Iraq despite UN sanctions against Saddam Hussein's regime. Kuchma denied the allegations.

Ukraine's intelligence agency, the State Security Service, launched its investigation of the case involving Iran and China on Feb. 14, 2004, during Kuchma's presidency. But the probe was never publicized until this week when lawmaker Hrihoriy Omelchenko -- a reserve colonel in the intelligence service -- wrote to Yushchenko asking him to pursue a full investigation. Omelchenko made his letter available to The Associated Press.

Six missiles purportedly ended up in Iran and another six allegedly went to China, although export documents known as end-user certificates recorded the final recipient of some 20 Kh-55 missiles for sale as "Russia's Defense Ministry," according to Omelchenko's letter. He did not say what happened to the eight remaining missiles.

The missiles allegedly sold to Iran were unarmed, but are designed to carry 200-kiloton nuclear warheads. Western nations have accused Iran of trying to develop a nuclear weapons program, an allegation Tehran denies. China is a declared nuclear weapons state.

Russian Foreign Ministry spokesman Alexander Yakovenko and Defense Ministry spokesman Colonel Vyacheslav Sedov said Ukraine had not informed Russia of the allegations that missiles meant for Moscow had been diverted, and that Moscow would await Ukraine's investigation. Russia's state arms export company, Rosoboronexport, declined comment.

Omelchenko's letter to Yushchenko and another to the Prosecutor General, Svyatoslav Piskun, refer to a Ukrainian Security Service report that includes details of the allegations.

At least three people were arrested and another three were indicted last year in connection with the illicit arms trade -- including some of those mentioned by name in the letters -- according to the intelligence official, who spoke on condition of anonymity.

According to Omelchenko's letter, in 2000 Russian national Oleg Orlov and a Ukrainian partner identified as E.V. Shilenko "exported 20 Kh-55 cruise missiles through a fake contract and end-user certificate" with Russia's state-run arms dealer and with a firm called Progress, which is a daughter company of Ukrspetseksport -- Ukraine's weapons exporting agency.

Last year, Ukrainian prosecutors indicted Orlov and Shilenko in absentia for illegal weapons trading, the intelligence official said. Orlov was detained on July 13 in the Czech Republic.

There is an ongoing extradition procedure to return Orlov to Ukraine for possible prosecution, a spokesman for the Czech Justice Ministry, Petr Dimun, confirmed Friday. Dimun said the procedures were interrupted recently because Orlov suffered a stroke and was hospitalized, although he was "recovering well."

Shilenko remains at large, said Omelchenko's letter, which also notes an attempt on Orlov's life, saying: "The physical elimination of Orlov in a Czech prison was prevented."

The State Security Service has also issued an official inquiry about a Cyprus-based Russian man identified in the letters as G. K. Shkinov, who also remains at large.

"The law enforcement bodies of that country [Cyprus] are performing an investigation," Omelchenko wrote.

Another three Ukrainians were detained last year in connection with the deal, and the case was forwarded to a Kiev court, Omelchenko wrote.

Orlov is reputed to be a prominent weapons broker. In its 2001 report, the UN Security Council implicated Orlov and his Cyprus- and Dubai-based EMM Arab Systems Ltd. in sanctions busting related with ferrying weapons and supplies to Angola's rebel UNITA group. The Kh-55, known in the West as the AS-15, has a range of 2,975 kilometers and is designed to carry a nuclear warhead with a 200-kiloton yield. Iran does not operate long-range bombers but it is believed it could adapt its Soviet-built Su-24 strike aircraft to launch the missile. The missile's range would put Israel and a number of U.S. allies in the region within reach.

Ukrainian weapons dealers ferried missiles to China through a Ukraine-based cargo company run by a former secret service agent, the letters said. Omelchenko also said in 2001 that weapons dealers sent ground targeting systems, maintenance equipment and missile technicians to Iran.

Profits from the sales were estimated at $2.1 million or more, the letters said.

Valery Malev, the head of Ukrspetseksport, has also been implicated in the deals. But he died in 2002 in Ukraine when his car collided with a truck. Police concluded he fell asleep behind the wheel, but many speculate his car had been tampered with.

"Valery Malev, the head of Ukrspetseksport, knew that missiles were not exported to Russia but to third countries and with forged documents," Omelchenko wrote.

A multimillion-dollar deal involving sales of oil-processing equipment to Iran was used as a mask for the sales, Omelchenko's letters claim. They add that a Cyprus-based company, S.H. Heritage Holding Ltd., and Iran-based Satak Co. Ltd. of NIOC were involved in the concealment. Internet search and telephone inquiries turned up no information about the companies.

S.H. Heritage owner Haider Sarfraz, an Australian national, died in a 2004 car accident, the letters claim. They do not specify where the accident occurred.

Although Ukraine in the 1990s renounced the nuclear armaments it inherited in the Soviet breakup, the country remains a sizable producer of weapons including missiles, aircraft and tanks.

The country has also remained under scrutiny for its murky weapons deals. In 2000, the United States accused Ukraine of selling infantry weapons to Afghanistan's Taliban regime. Russia has charged Ukraine with doing the same for Chechen rebels.

In 2001, Kuchma acknowledged that $32 billion worth of Ukrainian military hardware had found its way illegally into international markets during the 1990s. Last year, Ukrainian police arrested four men from Greece, Pakistan and Iraq, on suspicion of attempted illegal weapons trade and hiring mercenaries in a deal worth more than $800 million for an unspecified force fighting in Iraq.

In March 2004, former Defense Minister Yevhen Marchuk warned that several hundred SA-2 surface-to-air missiles brought to Ukraine for decommissioning were unaccounted for, due to "accounting problems" and "the absence of records."
(The Moscow Times 07.02.05)

Comments by burtsev.ru

Let us begin with several details omitted in this article.

Company "Progress" was paid by the US firm "TECHNOCALITY, INC"

  1. for the delivery of 6 X-55 to China in April 2000: in May the firm transferred $600, 000 to "Central European International Bank" (Budapest) received by "Progress".  In its turn TECHNOCALITY, INC received from two Cyprus firms $500,000 (from Investworld, Ltd) and $200,000 (from EMM ARAB SYSTEMS, Ltd)
  2. for the delivery in May 2001 of six X-55 and the system KHO-120 to Iran, TECHNOCALITY, INC  paid to PROGRESS $800,000.  As a cover up they used  a fictive contract between the Iranian firm  SATAK Co. Ltd. of NIOC and the companyS. H. Heritage Holding, Ltd. owned by Haider Sarfrazand registered in Cyprus.  The contract was allegedly for delivery to Iran equipment for oil distilleries. The Iranians had one condition: regular technical service of these missiles.  In 2002-2003 Ukrainian military specialists made trips to Iran for this purpose.

The information and what follows is from the piece published in January 4 2006 at the forums of compromat.ru and pravda.info. i 

"The Ukrainian public learned about these swindles in spring 2005 from the Prosecutor Genera Stanislav Piskun and the SBU Director Alexander Turchinov.  Victor Yushchenko confirmed their statements 'with bitterness.'  But already in September 2005 Piskun and Turchinov had to leave their posts.  However, according to the source close to Turchinov, the ex-Director continues to monitor the situation.

The collected information allows to expand the information, already made public by the press, about  the role of the middleman company FAR WEST LTD with headquarters in Switzerland and the two offshores in Panama: ISOFERT TRADING COMPANY INC and TRANSCHEM INTERNATIONAL INCii 

According to this information, the opening of the criminal investigation in February 2004 was prompted by the documents which came from Germany.  In October 2003, the Ukrainian businessman Sergei Petrov, iii  formerly one of the CIOs of FAR WEST, LTD, turned to German law enforcement agencies.  He accused his former companions in arms smuggling in violation of international agreements and sanctions. iv    Specifically, Petrov revealed the shipment of portable SAMs "Igla" to FARC in exchange to 600 kilograms of cocaine in August 2002 through Brazil.   Incidentally, one of the participants of this deal was soon after blown up in the suburbs of Moscow.  v 

Another episode relates to  illegal shipments of light arms, mortars and ammunition from Belorussia to Kosovo and Palestinian Autonomy in 2001.  These arms were immediately used by the Albanians in the ethnic conflict in Macedonia and by the Palestinians against Israel.

Petrov also revealed the details of deals with X-55.  According to his testimony [sic], out of six missiles shipped to China (with technical documentation) three were meant for Pakistan.  Besides their payments to PROGRESS, the Chinese transferred $3 million through Cyprus to one of the Panamanian offshores, while Pakistan transferred to another offshore $4 million from Karachi.  In case of Iran, besides payments to PROGRESS,  the executors [of the deal] in Dubai received two tons of golden ingots.  These ingots were taken from Kuwait to Iraq in 1990, and in December 2002, on the eve of US military operation, were shipped to Iran.

Petrov also revealed a number of arms smuggling episodes in the 1990s, such as:

- arms deliveries to the former Yugoslavia from the Western Army Group of Russia, Ukraine, and Belorussia.
- arms deliveries to Yemen (through Chechnya in May-June 1994) and some African countries with armed conflicts. vi 
- arms deliveries to Taliban in Afghanistan in exchange to heroin.
- arms shipments to Saddam Hussein through Belorussia and Syria.
- arms deliveries to Chechen fighters, including a big party of AK rifles from Izhevsk in 1995 and a party of SAMs "Igla" from Ukraine in 1997.

Besides, Petrov informed about the mechanisms of corrupt lobbying for legal arms sales in 1995-2001 from Ukraine and Belorussia of aviation to Yemen, Sudan, and Peru, and tanks to Sudan and Pakistan.  In response to Petrov's information, in December 2003 German special services, together with their French colleagues, interrogated the head of Far West Ltd. Vladimir Filin, his deputies Yakov Kosman and Sultan Suleimenov and the board members Alexei Likhvintsev, Anton Surikov, and Venezuelan citizen Alfonso Davidovich.  They denied all allegations and explained them by Petrov's mental illness.
A month later Petrov was killed (blown up in his car) in SA.  Simultaneously, the  Iran-Australian middleman Haider Sarfraz was killed  in a strange car accident, while driving in the defective car of his Turkish companion Ugur Mekhmed [sic] (aka Ruslan Saidov), a member of the Far West Ltd leadership.  But by that time the Germans lost interest to this case having given the information about it to SBU."

This was the part concerning FWL.  Here follows the information about Orlov and the Americans.  Note that in the piece in The Moscow Times contains not a single word about the US connection.

"SBU arrested Evdokimov and announced international search for Orlov and Shilenko.  The last has disappeared without a trace. As to Orlov, he lived in Karlovy Vara until August 2004, before he attempted to flee from Czechia to Dubai through Frankfurt.  It appears that during those several months [in Chechnya] Orlov bargained with the CIA.  His attempt to escape failed.  He was apprehended.

Apparently, during one and half year since his arrest, the Americans were able to come to an agreement with Orlov.  According to a source close to Turchinov, he was promised a minimal sentence in Ukraine where he apparently will be deported.  Orlov will give testimony agreed upon with the CIA, which will not politically harm the United States.

Specifically, Orlov will tell about the "gray" deliveries of SAMs "Igla" and the anti-tank systems 9K11 "Fagot" to Georgia from Ukraine through Bulgaria in summer 2004, on the eve of his arrest.  It is possible that this deal was meant as a cover for another, when in March 2004 a large party of SAMs "Igla" was sold to Syria from Ukraine through Georgia and Lebanon.  It was paid for by one Islamist foundation in Saudi Arabia.

Another topic is the lobbying of legal arms deals with "problem" countries, allegedly also known to Orlov.  Specifically, it concerns the corrupted mechanisms of access to the highest levels of power in Moscow for Venezuela, Iran, Yemen, Syria, and Sudan, labeled "outlaw regimes" by Washington.  Already after Orlov's arrest, Russia delivered fighter planes MIG-29 to Sudan and Yemen, and began deliveries of light arms to Venezuela, and signed contracts with Iran and Syria for sales of AA systems.  Orlov's trial will be full of scandal."


i  The owner of compromat.ru, Sergei Gorshkov, removed this information from the board several days later without explanations.

ii  On the connection between Far West, Ltd. and these banks, see: http://ru.obkom.net.ua/articles/2005-11/15.1647.shtml?rss

iii  On Sergei Petrov (aka Serge Rodin), see: his intervew <http://left.ru/burtsev/ops/petrov_en.phtml> and his secretely recorded conversation with the leaders of Far West Ltd. <http://left.ru/burtsev/ops/bristol_en.phtml>

iv  See Petrov's interview at http://left.ru/burtsev/ops/petrov_en.phtml

v  His name was Mikhail Vunsh, the owner of the big company OMNIFUD, importer of "Bush's legs."  His car was blown on December 2 2002. The driver and the guard were also killed.  Vunsh was close to Petrov and Roman Tsepov, both killed in 2004.  According top one source, they wanted to split from Filin and take control of cocaine deliveries through Petersburg port. On Vunsh's death , see: http://www.vremya.ru/2002/223/3/29858.html

vi  On deliveries to Aden, Yemen, see: http://left.ru/burtsev/ops/yasenev_en.phtml

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