Companies with ties to Serbian arms dealer Slobodan Tesic have exported ammunition to six US firms, including one that works with the Pentagon, despite Tesic being blacklisted by US authorities for the past five years for bribery and violating arms embargos, BIRN can reveal.

This investigation shows how Tesic, 63, has found a “way around” the US sanctions via two Belgrade-registered companies – Valir d.o.o. and Zenitprom – both of which have seen their revenues grow to tens of millions of euros since US sanctions were expanded to a number of other Tesic proxies in 2019.

Since 2020, Valir and Zenitprom have together exported more than 926 tonnes of Serbian-made ammunition to the US.

One Zenitprom shipment, in April this year, went to Global Military Products Inc, part of Global Ordnance, which supplies weapons and ammunition to the US Department of Defence and its allies, notably Ukraine.

The Pentagon declined to comment for this story. The US embassy in Serbia said: “Although we cannot comment publicly on specific cases, the US Government takes seriously all allegations of material support to sanctioned entities.”

Marc Morales uploaded photos on January 29, 2015, of him testing weapons at the Zastava factory, Kragujevac, Serbia. Photo: Facebook

Marc Morales, the owner of Global Ordnance, said he was not aware of any connection between Zenitprom and Tesic, nor had any connection come up in the due diligence his company performed.

“The company is not on any OFAC [Office of Foreign Assets Control] list and the affiliations you are alleging were not known or in any formal documents provided to Global Ordnance,” Morales told BIRN.

Of Tesic, Morales said: “To my knowledge, nobody from my company has ever met him and Global Ordnance definitely does not do business with him. And to clarify, I have never met him either.”

For nearly a decade, Tesic was subject to a United Nations travel ban for violating UN embargo on arms to Liberia; in 2017, the US Treasury Department imposed sanctions on him, describing Tesic as “among the biggest dealers of arms and munitions in the Balkans” who uses bribery and financial assistance for officials to secure arms contracts.

The US expanded the measures in 2019 to a further 11 companies and nine individuals used by Tesic as proxies to circumvent the sanctions.

Some of these firms, however, continue to work with the Serbian state, buying arms from state-run manufacturers – often at preferential rates – for export around the world. Serbia has made reviving the country’s arms export industry a strategic priority and in 2014 Tesic was granted a diplomatic passport by the Serbian foreign ministry, a year after the UN travel ban was lifted.

Zenitprom was founded on May 7, 2018 – a year after Tesic was first targeted by US sanctions – at the Belgrade address Diplomatska Kolonija 14.

The owner and director is Goran Tukic, a former veteran of the state arms import-export firm Yugoimport SDPR. But several sources have told BIRN that real control lies with Tesic.

“He [Tukic] presented himself as Tesic’s associate and offered cooperation in Tesic’s name to a friend of mine who is involved in the arms trade,” said a source with years of experience working in the arms industry but who spoke on condition of anonymity. “Indirectly, they also offered me cooperation.”

Tesic did not respond to BIRN requests for comment.

In March this year, Zenitprom changed its address to Hercegovacka 16, within a new riverside development in the Serbian capital called Belgrade Waterfront. Three months later, an organisation called ‘Human Hearts Foundation’ was registered at Zenitprom’s former address. The foundation is run by Tesic’s wife, Zivana, his daughter, Jelena Petrovic, and her husband, Nebojsa Petrovic. Nebojsa is brother of Zarko Petrovic, director of a company called Araneks, which was sanctioned by the US in 2019 as a Tesic proxy.

Another of Tesic’s daughters, Danijela Vasilijevic, who once worked for Serbia’s foreign ministry, also has a company – Emar – registered at the same address and is on the management of the Human Hearts Foundation. In October 2020, investigative media outlet KRIK broke the news that Vasiljevic had run for parliament in 2012 on behalf of the Serbian Progressive Party, SNS, which has been in power ever since. She was then hired by the foreign ministry.

Additionally,  Zenitprom and Valir are also both represented by the same law firm as Tesic – the Acanski law office. Lawyer Vera Acanski has represented Tesic’s businesses, those of associates and family members for at least 15 years. Five of these companies are under US sanctions as Tesic proxies – Partizan Tech, Technoglobal Systems DOO, Velkom trade, Falcon Strategic Solutions and Vectura Trans.

Zenitprom had modest beginnings, registering an income of around 175,000 euros in 2019, the year after its founding. In 2020, however, after the US expanded its sanctions on Tesic and his associates, Zenitprom reaped more than 5.5 million euros in earnings, and then 34.5 million in 2021.

Representatives of Zenitprom could not be reached for comment.

BIRN has identified 13 Zenitprom shipments of small-calibre ammunition to four US companies since November 14, 2020, totalling 698 tonnes. All the ammunition was produced by the state-owned factory Prvi Partizan in Uzice, western Serbia.

The last shipment was sent on April 19 this year to Global Military Products INC, GMP, a Tampa-registered subsidiary of Global Ordnance.

In February, GMP announced it had won a five-year contract valued at up to $750 million to deliver “Special Ammunition and Weapon Systems” to the US government and its allies. It specified that such munitions and weapons systems “are not type classified into the US inventory, and are used for either training, testing, or delivery to US allies.”

“Many are non-NATO or former Soviet bloc arms and munitions,” it added in a press release.

Marc Morales (L) attending the agreement signing between Global Ordnance with The State Concern Ukroboronprom. Source:globalmlitaryproducts.com

GMP said it had previously delivered over $500 million in Special Ammunition and Weapon Systems to the US and its allies over the past decade; in August 2021, Global Ordnance signed a multi-year cooperation deal with Ukroboronprom, a Ukrainian state agency managing over 100 state-owned defence enterprises.

“Global Ordnance is working diligently in conjunction with the United States Government to assist Ukraine during their darkest hours,” the company said at the time.

In his response for this story, Morales stressed that the rounds his company bought from Zenitprom were for the US commercial market.

Morales had his own run-in with the law; in 2010 he was among 22 arms executives indicted in the US on charges of trying to bribe a government minister in Gabon to secure a $15 million arms contract. The deal was in fact part of an FBI sting operation, but charges were dropped in 2012 after juries failed to reach a verdict on seven defendants – including Morales – during two separate trials and the judge in the second cited “structural deficiencies” in the case.

Morales bounced back, setting up Global Ordnance in 2013 and becoming one of the most important players in the Pentagon’s supply-line arming Syrian rebels fighting the Islamic State in Iraq and Syria at the time. The arms are sourced mostly from state-owned arms producers in the Balkans and Eastern Europe.

Valir d.o.o. had a low profile until an Antonov cargo plane crashed in Greece on July 17 carrying 11.5 tonnes of Serbian ammunition on behalf of Valir to Bangladesh.

Valir was registered in 2019 just two weeks after the US expanded its sanctions against Tesic and his associates.

The company founder and director is Stefan Cupkovic, who also in 2019 became representative of the Belgrade’s branch of Cyprus-headquartered Elvante Limited. Goran Andric, one of Tesic’s closest associates, was director of Elvante and a number of other companies associated with Tesic. Andric was among those sanctioned by the US in 2019.

Cupkovic is also a representative of Lusor d.o.o., which was founded in September 2020 at the same Belgrade address as Elvante Limited – Diplomatska Kolonija 2, a few doors down from Zenitprom’s original headquarters.

Lusor’s is owned by Khaled Hamed, a Yemeni citizen and Tesic associate who – according to a report by the Serbian investigative outlet KRIK – was granted Serbian citizenship in 2016 by Serbia’s then prime minister, now president, Aleksandar Vucic, under a discretionary procedure for individuals deemed of special “national interest”.

Valir counts among its previous legal representatives Sanja Kapetina, who also represented several companies under the control of Tesic, and Dikovic, the legal representative of Emar, the company founded by Tesic’s daughter, Danijela.

Like Zenitprom, Valir has enjoyed significant growth since the US expanded its sanctions to cover a range of Tesic proxies. In 2019, the company had no income; the following year, it had revenues of 12.9 million, rising to 55 million in 2021.

Valir exports mainly to Azerbaijan, Saudi Arabia and the US.

So far, in five recorded shipments to the US, Valir has delivered a total of 17.5 million bullets to two customers – Nemo Arms Inc and Erie Ordnance Depot LLC. All the ammunition was produced by Prvi Partizan.

A representative of Valir d.o.o., who declined to give his name, said claims about the company’s ties to Tesic were “made up stories.” The representative did not elaborate.

NOTE: This article was amended on August 8, 2022, to correct the previously published false claims that Zenitprom’s new address was also the home address of Vera Dikovic, Emar’s legal representative.

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