Leaving previous disputes such as Emirati support for Bosnians during the civil war in the 1990s aside, Serbia and the UAE have established a solid and mutually beneficial relations in the last two decades. While Serbia has been enjoying large UAE investments and thus cash flow, the UAE has found an arms depot with experience of manufacturing, delivering, and legalizing them. The UAE has been distributing these arms to its proxies from Libya to Yemen and Syria in its combat against radical Islamists, Muslim Brotherhood, and Iran-backed elements in the Middle East, North and East Africa in bid to preserve its wealth and power. Mohammed Dahlan, who was granted Serbian citizenship in 2013 and began investing the country before 2010, appears as the key figure, who bridged the two countries through establishing solid ties with several Serbian top politicians as well as middlemen and arms manufacturers.
“[Dahlan’s] previous business had been […] facilitated by the UAE Ambassador at the time and Tomislav Nikolic, the Serbian President at the time, and Alexsander Vucic, the current Serbian President, who had connected him with the “right people”. Dahlan came to SOURCE A to expand, gain access to allocations which were otherwise inaccessible, and to lower his overall prices.”
An Intelligence Report, seen by this author
One of the more aggressive focuses of Abu Dhabi’s forward leaning foreign policy is the ancient nation of Serbia. The last time the Slavs formed a relationship with Muslim rulers was in 1540 when the Ottoman Empire annexed the Christian Orthodox Serbian Empire. They were still smarting from the defeat at the Battle of Kosovo two hundred years earlier. The Serbs maintain a fierce nationalism that is propped up by a history of conflict with Muslim invaders. Not the ideal spot to extend an Arab hegemony. With the application of enough money and political influence which brought in a UAE friendly government. Dahlan and Mohammed bin Zayed (MBZ) managed to create that relationship.
Serbia is in effect Dahlan’s adopted home since he has had Serbian citizenship since February 2013. Along with his wife and children, Dahlan managed to score Serbian passports for eleven of his Palestinian associates.
This diplomatic largesse is linked to the three day January visit of MBZ in 2013, promising billions of dollars in major investments in the country and synchronized with his brother Tahnoon, also double hatted as the head of internal security for Abu Dhabi, in opening a bank to facilitate the flow of funds. As head of the SSD, Tahnoon would become Dahlan’s direct report with MBZ taking a wider view of the relationship. On the other side, for the Serbs, Dahlan was the go-to person to one of the world’s richest families.
October 2012 would be considered the beginning of Abu Dhabi’s goal of making Serbia a forward operating base. Much of their attention would be focused on Serbian nationalist Aleksandar Vučić of the Serbian Progressive Party (SNS) who would win the 2014 election largely based on the economic recovery efforts. October 2012 would be a few months after President Obama signed a Presidential Finding to supply and arm Syrian rebels. The idea put together by then CIA director David Petreaus brought some structure into the willy-nilly shipments of captured Libyan weapons being flown in by Saudi Arabia and Qatar in their efforts to defeat Assad. A decision that would invigorate ISIS in Syria and accelerate the shipment of weapons up until the summer of 2017.
The UAE began wooing Serbia with traditional investments that quickly expanded into the arms business. The UAE’s public facing investment areas are in food production and real estate development. It is clear that the Balkans as a source for manufacturing and exporting weapons to different parts of the world as well as a logistical hub where no questions are asked.
The year after the arranged marriage, investment numbers like the $200 million dollar investment between weapons maker Yugoimport SDPR and the UAE’s at IDEX in Abu Dhabi in 2014 began. The money was to develop Serbian ALAS-C (Advanced Light Attack System) anti-ship missile system. $200 million is not much for a tiny family run nation, which, according to SIPRI, would spend over $2.2 billion the year before. SIPRI estimates that almost half of all weapons are sold to the Middle East.
Serbia buys twice as many weapons than it sells. But those are the legal numbers. In 2018 a close associate of Vučić was implicated in an arms scandal. Branko Stefanovic, the retired father of Serbian Interior Minister Nebojsa Stefanovic was accused of having unusual access to Serbian weapon factory Krusik and via his company GIM Ltd export allowed to purchase Serbian weapons in 2017 at a low price then resell them to a private individual in Saudi Arabia at a considerable markup. Some of these weapons ended up in the possession of ISIS in Syria and Houthi rebels in Yemen. This may seem like a small isolated event but in this 2017 deal the Krušik factory delivered 487,000 mines and 210,000 hand grenades to a broker named GIM for €36.5 million almost three quarters of Serbia’s total arms sales to Saudi Arabia in 2017.
Saudi Arabia has a robust air conflict in Yemen but relies on arming various factions including mercenary groups from Sudan, Chad, Colombia and other nations to fight on the ground. This flow of weapons supposedly for KSA and UAE but deliberately intended for militias and proxies was described as a “systematic diversion of weapons to armed groups accused of committing serious human rights violations” by the Amnesty International. Dahlan and his Palestinian clique in Serbia are also linked to the sales of weapons to Saudi Arabia and the UAE. In addition to supporting a badly thought-out clandestine war in Syria, both Kingdoms had been getting deeper and deeper mired in the war in Yemen since 2015. Both had decided to arm proxies and mercenaries using arms from the Balkans and other suppliers. The UAE and Saudi Arabia provide end user certificates for legal export and then are rerouted to Yemen, Syria, Libya, Egypt, and other countries.
In 2016 total Balkans (Serbia, Bosnia, and Albania) arms exports were estimated at 500 million euros with Saudi Arabia the biggest customer at 118 million euros purchased in that year. Serbia sold 406.6 million euros, Bosnia 104.3 million euros and Albania exported 1.28 million euros worth of arms. Sales by Macedonia, Montenegro, Kosovo were negligible. Between 2016 and 2019 Serbian arms export increased by 80%
Outward weapons sales from the UAE have climbed steadily from only $3 million in 2011 to 191 million in 2020. So, it is clear that the purchase of weapons dwarfs the sale in the UAE. The UAE would begin supporting a series of disastrous wars in Yemen, Libya, Eritrea, and Ethiopia starting in 2015 and Dahlan would be the key to maintaining a steady flow of weapons. With a citizenry of only one million people, the UAE as a disproportionate place on the list of major legitimate arms buyers and producers but the relationship between the Balkans and Dahlan has created a parallel dynamic of illegal arms sales and stockpiling.
Beginning in the summer of 2013 the UAE dispatched Erik Prince to secure weapons from Europe and the Balkans using the old Victor Bout network. After a disastrous attempt to sidestep the traditional players like Slobadan Tesic and the seizure of a large cargo plane loaded with weapons, Dahlan would be tasked with the secret purchase and shipping of tons of weapons from the Balkans with questionable end user certificates. By 2016 Dahlan was moving shiploads and aircraft loads of weapons with various end user certificates.
Dahlan is one of the favorite topics of investigative journalists in the region. Balkan Insight (BIRN) has covered Dahlan and his purchase of the former Serbian President Boris Tadic (2004 – 2012) to illustrate how tightly connected this Palestinian strongman is in Serbia. Purchasing a luxury home from the government would not be unusual event if not for the convoluted nature of the purchase using a middleman and shifting from a lucrative rental agreement to a flat purchase price of 1,584,474.72 Euros. Dahlan had been renting the modern villa for $3600 a month on a long-term lease. Much of this attention has been to keep Dahlan in the spotlight due to his unusual position in Serbian politics.
Dahlan’s presence is not a mystery to the opponents of the ruling party, too. Marinika Tepić vice president of the Freedom and Justice Party (SSP) accused the leader of Serbia of being involved in arms trafficking to the Gulf nations and wanted to know exactly what the relationship was between Dahlan and Vučić, She was ignored.
Dahlan’s task when he first arrived on behalf of the UAE government was to ingratiate himself to Deputy Prime Minister, soon to be President Aleksandar Vucic and his Serbian Progressive Party which came to power in 2012. A billion-dollar loan to Serbia from the UAE was a good calling card for Dahlan. Investments quickly flowed. UAE government airline, Etihad snapped up half of the national airline JAT, the Abu Dhabi-based investment firm Eagle Hills Properties unveiled the glitzy $3.6 – 9.6-billion-dollar Belgrade Waterfront development, which has been called by the Serbian critics “probably the largest money-laundering endeavor in Europe.” For maintaining these operations, Dahlan would use banks in the Balkans to bribe European politicians in Switzerland, Germany, and other EU nations. The plan was to provide an alternative to Maltese, Vatican and other traditional laundering centers that were tightening up controls. Influence operations were also important for example Norwegian NGOs were almost exclusively funded by Dahlan using Balkan banks.
For example, Dahlan has set up accounts and the required permits for Egyptian generals and members of the Sisi-led junta who came to power in a military coup in 2013.
General Tarek Zaghloul in Montenegro.
Lt General Mohamed Farid Hegazy, Chief of Staff of the Egyptian Armed Force with a bank account in Montenegro.
Lt General Fouaad Fouaad Abu el Nasr with an account in Belgrade.
Lt General Mohamed Ahmed Zaki Mohamed (former Egyptian Minister of Defense) with bank account in Belgrade and Bosnia.
Global Network for Rights and Development set up a Palestinian Louay Deeb part of a global network to GNRD 12 NGOs set up to move money. Dahlan uses this network to move money to people and organizations.
Belarussian citizen and arms dealer Alexander Sadovy business partner of Mark Voloshin was set up in Belgrade with citizenship banking and housing. Sadovy was an executive of Air Baltic linked to a series of IL-76 sales to the UAE and Voloshin (former business partner of Viktor Bout and Slobadan Tesic) in setting an air bridge for the UAE. They are believed to the architects of the effective air bridge that uses IL-76s registered in Central Asia that fly into nations under embargo or being used by the UAE and Saudi Arabia for support in their dirty wars.
There is also a massive agricultural project purchased in March 2013 under market value by al Dahra Agricultural Company. $400M went to purchase eight state owned agricultural companies and a loan for $400 was also provided. Further plants are planned to be established. Probably the most strategic investment since the UAE imports 85% of their food.
In January of 2013, Emirati company Aabar as Arabtec Holding promised $3 Billion to create a waterfront development. The project features a 140,000 square meter shopping mall, 5700 homes for 14,000 people and eight hotels comprising a total of 2200 rooms built over a period of 30 years.
There is a strategic plan. The growth of outward Foreign Direct Investment by the UAE started in 2000 and is currently at around $13 billion per year. By 2015 UAE investments abroad were an estimated $63 billion The UAE wants to plan for a non-carbon future and invest in aviation, urban construction, military technology and food security through agriculture. Underlying all this is the idea of the UAE being a rentier state. A nation that does not engage its citizens through taxation or political engagement and collected funds or “rents” by owning large corporations. Additionally, there is little interest in rentier states in creating domestic manufacturing. The local companies also benefit. JAT or Air Serbia went from a 73-million-dollar loss in 2013 to a profit on 2.7 million a year after the UAE investment of 49%.
The arms industry was badly damaged during the 1999 bombings by NATO but sprang back quickly with UAE funds. Weapons business is controlled through the Serbian government and exported from 16 companies via Yugoimport-SDPR. Arms sales have grown 30% since 2002. By 2008, Serbian military exports were worth US$200 million, but between 2009 and 2011 exports of arms and military equipment were valued at t US$1.2 billion. The sector employs 10.000 people and accounts for 4% of the Serbian economy.
The Strongman Principal
The narrative is that Prime Minister Aleksandar Vučić met MBZ for lunch (Vučić was then minister of defense and deputy prime minister) and hit it off. Triggering a massive wave of investments in government owned companies. This happy concept ignores the fact that Serbia has rapidly begin to grow as a source of cheap weapons for U.S., Israeli and Gulf interests, especially when Dahlan had a fast-tracked Serbian passport. It also ignores that the UAE has been looking to cultivate and sometimes forcibly impose leaders who support authoritarian rule of nations. Egypt, Syria, and Libya being good examples of this with Sisi, Assad and Haftar being role models of the UAE’s strong man model.
The ability to move money and influence into Europe using the Balkans as a springboard without worries about investigation or consequences makes Serbia ideal for the Nahyan family and for Dahlan. Concessional loans and aid to the the Balkans overall from the UAE totaled US$61 million between 2009 to 2013 which has rapidly expanded to super projects Bosnia Herzegovina, in Albania, Macedonia, Montenegro and Serbia. What is more complex is the UAE, essentially a family dictatorship, endorsing the self determination of an Albanian Kosovo in direct conflict with Serbian history. The UAE was an earlier recognizer of Kosovo’s independence in 2008 despite Serbia claiming the region as their own. Russia supports Serbia’s claim.
According to firsthand witnesses, dealers and people working on Dahlan’s projects, the UAE security advisor has straddled both sides of the legal and illegal flow of weapons. Offering arms dealers cooperation to boost their revenues while providing a safe haven for his own illegal arms smuggling. Some media outlets have drawn attention to Dahlan’s growing influence in the region. Dahlan’s rise to prominence in one of his newly adopted homes could just be the UAE blocking Turkey from expanding into the Balkans. Following the development that Serbia quietly granted citizenship to Dahlan. A recently Dahlan-fronted UAE project was to provide a Chinese Covid-19 vaccine called Sinopharm. This brought in China into the Balkans (as well as Slovenia) to create a positive image of the UAE, China and Dahlan. A replica of the UAE’s purchasing of 40,000 doses of Russian Sputnik V vaccine and using Dahlan to distribute it in the occupied areas a month after cutting off aid to the UN agency for Palestinian refugees.
What may dwarf all this investment is the Emirati money that flows via Dahlan into Serbia’s biggest business. Weapons. Experts predict that Serbian arms sales have increased 80% between 2016 and 2019 specifically benefiting a small list of private producers like Krusik while government factories orders shrink. To make this understandable we should focus on the weapons purchased by the UAE’s Dahlan.
This is how the purchase process works. A client individual or state should find an intermediary to contact manufacturers. Naturally, state-run arms manufacturers do not take orders directly for illegal arms trade. An intermediary has the capability to bridge between client and manufacturer. On the other hand, the client states are expected to make investments in these underdeveloped Balkan countries. The middlemen are indispensable since they know what will be become readily available on the market, who will sell what, and the price points. They can also help client’s special needs through looking at multiple manufacturers. After taking the ‘shopping list’ of client, the middlemen, who already know which broker to ask, contact brokers. Then, the manufacturers begin production.
According to an intelligence report, seen by this author, the first shipment arranged by Dahlan for export occurred in 2016, carrying ammunition for warring parties in Libya. Two years later a local arm broker linked to Viktor Bout suggested Dahlan to create arms hubs across Africa. Such a move would increase the UAE’s and possibly Saudi Arabia’s influence, allowing them to back their soft power with arms selling capability. Not only the Balkans but also Ukraine and Jordan were involved for manufacturing weapons.
Another Balkan Insight report sheds light on the use of the Balkans as a weapon depot. The report quoted even Vucic as saying “his country could produce five times the amount of arms it currently makes and still not meet the demand.” The demand was so high that arms manufacturers in Bosnia and Serbia had to reject new orders.
That said, the intelligence report concluded that the arms manufacturers were using maximum 10% of their capacity and allocating the rest for illegal arms sale demands. What is more interesting is that most of these arms companies are state-owned or state-run. It means that Balkan states actively get involved in the illegal arms trade, arousing further curiosity on Dahlan’s and UAE’s investments in these countries. For instance, between the years of 2010 and 2019, the UAE was the fourth largest direct investor in the country, accounting for 3.1% of all investments in Serbia.
The transaction chain is as following:
- The facilitator develops a package with the client.
- The facilitator usually helps develop the package with logistical considerations in mind.
- The facilitator is usually paid a consulting fee, or a percentage of the deal.
- Payments are always made-up front, to both the facilitator and the broker. The facilitator and broker handle the bribes, and factory payments etc.
- The clients usually handle logistics.
- Usually, it is the facilitator that handles logistics if the client is unable to.
- The norm is however to deliver the goods to a warehouse/FOB where the client will then care for the last mile.
- The factories and people thereof, even the bribed ones, are never involved in logistics beyond a warehouse delivery. Even during illegal shipments.
- Permits internally are always handled by the facilitator and broker who have excellent connections to accomplish this.
Middlemen in Mayhem
Dahlan has also been integral in a massive U.S., Israeli, UAE program to move Balkans sourced weapons to conflicts. Investigations that beginning in 2012 over 1.2 billion dollars-worth of weapons were sourced from Bosnia, Bulgaria, Croatia, Czech Republic, Montenegro Slovakia, Serbia, and Romania and sold to legitimate customers like Saudi Arabia, Jordan, UAE, and Turkey for use by factions in Syria and later Yemen. Many of these weapons bankrolled by Saudi Arabia were diverted to Somalia, Libya, Egypt, and other nations and found their way into militias and terrorist groups.
This pipeline began in 2012, one year after Dahlan made his appearance in the Balkans and the UAE began to woo the region. Jordan was the first destination for weapons handed over to moderate Syrian or the Free Syrian Army. A disruption in supply led to Belarus and Ukraine being scoured for weapons. The €1.2bn in weapons sales between 2012 and 2016 breaks to Jordan receiving €155m worth of export permits, UAE with €135m and Turkey brokering €87m. The countries brokering these weapons were simply allowing the Balkans to legitimize the proliferation of weapons.
Mark Voloshin and Slobodan Tesic were also part of this massive transfer of weaponry in Dahlan’s case. The middleman Slobodan Tesic, who was sanctioned by the UN for arms sales to Liberia and by the US in 2017. A long time operative in the Balkans arms trade introduced the Prince and Dahlan to Tesic. Prince’s attempts were short lived but Dahlan’s relationship with Tesic prospered. This relationship also demonstrates that he has been involved in the illegal side of this business. Such brokers are capable of offering weapons with cloned or no serial numbers along with providing logistical support.
Tesic uses arms factories in Serbia and Croatia orders the factories to manufacture demanded arms and ammunition and sends them to warehouses, most of which are located in Cyprus. He outsources the logistical needs to other companies. He also does business with International Global Group, which is a UAE firm owned by Tahnoon Nayhan, the head of the SSD and member of the Emirati royal family.
Mark Voloshin’s expertise is air logistics. His first task was to create an air bridge between Serbia and Egypt since Dahlan had a warehouse in the latter. Voloshin was experienced in this job as he provided aerial logistical support toward several countries, including Kazakhstan, Yemen, Burma, Sri Lanka and North Korea. Source A believes that Voloshin was using IL-76 cargo planes, Kazakh registered air permits and Eastern European flight crews who can fly into conflict areas and cross borders illegally. Some of these carriers like Sigma Airlines, Janis and Azee Air were recently deregistered due to UN pressure in September of 2020 but reregistered in Kazakhstan. It should be noted that the UN estimated that in just Libya alone over 80,000 tons of weapons, cash and other supplies were estimated to be airlifted into Libya and Egypt between January 2020 and August 2020 by two or more UAE chartered IL-76s of Sigma and other linked Kazak registered airlines. Daily flights of two IL-76s flew without AIS beacons to supply the Eastern Libya forces of Khalifa Haftar and the LNA. In all journalists have uncovered 68 flights.
What began as Timber Sycamore in 2013, a way to defeat the growth of ISIS in Syria by training rebels in Jordan mutated into a arms sale free for all. The Free Syrian Army and the attempt to train rebels failed miserably. These weapons were dumped into military bases in Saudi Arabia and the UAE then delivered to military command centers in Turkey and Jordan. Soon the weapons began appearing in Egypt, Yemen, and Libya.
In 2011 the Saudis and Qataris had early purchased vast amounts of weapons from Libya for distribution to Syrian rebels This haphazard program was taken over by the U.S. in 2012 with Jordan and Turkey being training bases. By 2016 the weapons meant to defeat terrorists were in the hands of dozens of terrorist groups. The secret billion-dollar program was shut in July of 2017 by Mike Pompeo. This is not to be confused with the half billion-dollar Pentagon program to train and arm 15,000 Syrian rebels that started under General Petraeus in the summer of 2012 and was canceled in 2015 after fielding only a few dozen Syrian rebels.
It would be wrong to simplify the flow of weapons or the relationship between the UAE and Serbia. Some of these weapons were for the global push against ISIS by the U.S. Special Operations Command and a contracting entity called the Picatinny Arsenal in New Jersey. SOCOM wanted to stockpile soviet style infantry weapons for use against ISIS, al Shabab, Al Qaeda and any number of terrorist groups across the Middle East and Africa. The Balkans pipeline expanded to eastern Europe. The U.S. military hired thirteen contracting companies to procure and deliver these weapons with less than spectacular results. Four were convicted of fraud and other crimes and various government agencies in countries like Jordan resold weapons at local arms markets. The goal was to procure $2.2 billion in weapons and distribute them where needed (separate from the original CIA program called Sage Timber.
All in all, Serbia has been the main arms manufacture system for the conflicts and wars in the Middle East and North Africa as the Gulf countries found a safe haven to have arms manufactured legally to be used illegally. In return, their direct investment in Serbia has prospered the country or at least the brokers, including top politicians. Dahlan, who had already began investing in Serbia along with Montenegro together with some of his family members and comrades from the Fatah Party, has been the man, who gave Serbia’s key to MBZ.
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