Serbian mortars and mines, sold by a mysterious arms dealer and supposedly bound for Bangladesh, then transported by a Ukrainian plane that crashed in Greece — it sounds like the plot of a political thriller. But this is reality.

In the late evening of July 16, 2022, a Ukrainian Antonov An-12 transport plane crashed near the city of Kavala, in northeastern Greece, killing all eight Ukrainian crew members. The plane had taken off from the city of Nis, in southern Serbia, and was carrying 11.5 tons of Serbian-made mortar rounds and mines.

The person behind the weapons' production is reportedly Slobodan Tesic, allegedly one of the biggest arms dealers in the Balkans and a long-term presence on US sanctions lists. The official country of destination for the munitions was Bangladesh. 

The pilot reported engine problems shortly after takeoff, while flying over the northern Aegean Sea. An emergency landing was no longer possible. The crash near Kavala was devastating and munitions continued to explode into the next day. 

Largest arms producer in the region

The accident has soured diplomatic relations between Greece and Serbia on one hand, and Greece and Ukraine on the other. The Greek government apparently was not aware of the sensitive cargo and it has lodged protests in both countries. 

The catastrophe has also drawn attention to the Serbian weapons and arms industry, which routinely makes headlines for corruption and illegal exports.

Serbia is one of central Europe's largest and most important arms producers, a tradition that stretches back to the era of Yugoslavia. Nearly entirely state-owned, the industry is an important part of the country's economy. When it comes to what's on offer, Serbia has nearly everything, from handguns and mines to artillery and tanks, and even missile systems, drones, fighter jets and electronic equipment like radars.

The Serbian Ministry of Defense estimated the total value of Serbian arms exports in 2020 at some $600 million (€530 million), a figure that represents around 3% of Serbia's overall exports for the year. However, reliable figures are not available.

Arms deliveries to war and conflict zones

The most important buyers of Serbian arms and military equipment are the United Arab Emirates, Cyprus, the US, Bulgaria and Saudi Arabia. The industry's customers span the world and the branch is reportedly not picky about who they sell to, said political scientist Vuk Vuksanovic, of the Belgrade Center for Security Policy.

"The Serbian state really wants to squeeze every dinar possible out of this industry," he told DW. "The red line, however, is that export destination countries must not be under UN sanctions and must not be experiencing armed conflict."

However, Vuksanovic said, Serbia "doesn't always follow these rules."

In reality, over the past two decades, the Western Balkan nation repeatedly exported weapons to war and conflict zones and delivered them to countries that were under an arms embargo.

In fall 2019, it was revealed that Serbian weapons had made it into the hands of militant Islamists in Yemen via Saudi Arabia. In summer 2020, Azerbaijan's military discovered Serbian weapons that had been sold to Armenia and had landed in the disputed region of Nagorno-Karabakh. And in February of this year, a network of Serbian investigative journalists uncovered that Serbian weapons had been delivered to Myanmar even after the military coup of February 2021.

Sanctions for arms dealer

The man whose name repeatedly comes up in connection with illegal Serbian arms dealings is Slobodan Tesic. The 64-year-old has been in the Balkan weapons business for decades. From 2003 to 2013, he was on a US sanctions list for having illegally delivered arms to Liberia. In December 2017, sanctions were once again placed on him for numerous illegal arms dealings. They remain in place today and include, among other things, a travel ban and the seizure of his US-based assets. American officials refer to him as the biggest dealer of arms and munitions in the Balkans.

Tesic is also at the center of multiple corruption affairs within the Serbian arms industry, including what's known as the Krusik export scandal, which came to light in fall 2019. Companies belonging to Tesic reportedly bought products from state-owned arms manufacturer Krusik well below market price, then sold them at a much higher price abroad — even though the state-owned company Yugoimport SDPR is responsible for managing Serbia's international arms deals.

Money for the president?

Money transfers to the ruling party of President Aleksander Vucic, the Serbian Progressive Party (SNS), are also said to have been part of business transactions between state-owned arms companies and private firms. Tesic is one of the largest SNS donors. According to Serbian media he also has a diplomatic passport.

The current Serbian Defense Minister's father, now deceased, is said to have been involved in similar weapons deals for years, something both Vucic and the minister, Nebojsa Stefanovic, have consistently denied. 

It's no surprise that Tesic's name has surfaced in relation to the intended arms delivery to Bangladesh and the plane crash. He reportedly is behind Valir DOO, the company which was officially responsible for the deal. Tesic has not made any public remarks about the events or the allegations against him.

Belgrade's balancing act

There is also speculation as to whether the weapons were not actually destined for Bangladesh at all but for Ukraine. Both Defense Minister Stefanovic and the manager of the Ukrainian company Meridian, which owned the downed plane, have denied this.

But Vuksanovic believes that important questions remain. "The public is owed an answer as to why a Ukrainian plane was transporting Serbian weapons right now, while a major international conflict is raging on Ukrainian territory," he said.

The political scientist sees the affair as an expression of Belgrade's "seesaw" policies , attempting to balance between different major international powers.

"This would mean, on the one hand, secret munitions for Ukraine in order to please the West," he said. "On the other hand, concessions are being made to Russia by Serbia. All of this is part of the behavior of Belgrade's elites, their balancing between different international powerhouses in order to buy themselves services in return. For Serbia, the question is now whether these policies will collapse at a certain point because one of those powerhouses is angry."

This article was originally published in German.