Companies dealing with the distribution of domestic weapons, ammunition and military equipment began receiving export permits again at the beginning of September, after a two-and-a-half-month ban, Radar has learned from well-informed sources close to people involved in this lucrative business.
One private company confirmed at the end of last week that the export “blockade” imposed at the end of June had been lifted and that they were preparing deliveries for a foreign partner based on a contract signed last year, with the agreed quantities to be shipped during September and October.
Although they are eagerly awaiting them, as their warehouses are full to the brim, the leading state-owned military factories, which form part of the Defence Industry of Serbia group – Zastava Arms from Kragujevac, Prvi Partizan from Užice, Sloboda from Čačak, Milan Blagojević from Lučani, Prva Iskra from Barič – as well as Krušik from Valjevo, had not received export permits by the end of last week. Krušik, after years of production and business difficulties, has since February 2022 and the start of Russia’s aggression against Ukraine been operating day and night, in three shifts, at full capacity.
In these state-owned companies, they believe that the delay in receiving export permits is due to the “complicated procedure for their issuance.” However, the same procedure should apply to private companies registered for the export of weapons, ammunition and military equipment. At least, that is how it ought to be – but clearly it is not. This is yet more proof that the authorities are openly favouring private companies, whose owners are close to the current political leadership, and that they prioritise their interests over those of companies owned by the state of Serbia.
All export permits issued so far apply exclusively to deliveries of weapons and ammunition contracted before the ban on 23 June this year, Radar has learned. It remains uncertain whether the military industry will be allowed to conclude export contracts for 2026 by the end of this year, which highlights the state’s total confusion, its lack of a clear foreign policy orientation, and the absence of any strategy for the future of the defence industry.
A public secret where Serbian weapons and ammunition end up
It is a public secret that almost all rockets, mines and shells produced at Krušik from March 2022 until 23 June this year ended up in Ukraine, and it is almost certain that, following the resumption of exports, the lion’s share of that factory’s products will once again follow the same route.
To remind, two and a half months ago, on 23 June, Serbian President Aleksandar Vučić announced that from that day all exports of Serbian weapons, ammunition and military equipment would be halted. It was a paradox that this decision also applied to the export of hunting and sporting weapons and ammunition, which directly hit Zastava Arms and Prvi Partizan the hardest, as these companies export precisely such weapons and ammunition to the USA, while the Užice factory exports to other countries as well. The export ban came into effect at the height of Israel’s fiercest attacks on Iran and amid mounting pressure from Moscow on Belgrade over the supply of Serbian artillery and infantry ammunition, via intermediary countries, to the Ukrainian army.
“We have now stopped everything. And there must be special, exceptional permits if anything is to be exported,” Vučić said on 23 June. Just ten days earlier, and before Israel’s attack on Iran, he had publicly boasted that “Serbia is the only country in Europe doing business with Israel in the field of military ammunition.” Whom Vučić intended this message for can only be speculated, but it is, to say the least, highly unusual to disclose the end users of delivered weapons and ammunition in such a manner, particularly when those goods end up in global conflict zones, as the Middle East has been for decades.
On the other hand, the “blockade” on the export of domestic weapons and ammunition was imposed only two days after, on 21 June, Iran officially warned that its army would consider any shipments of military aid to Israel as “participation in aggression against Iran and a legitimate target.” Russia treated deliveries of Serbian ammunition to Ukrainian security forces in a similar way, with Moscow declaring that this constituted “an indirect attack on Russia.”
Whose interests do the state authorities represent?
Just a few hours after Vučić, on 23 June, the Ministry of Defence also confirmed that exports had been suspended – until further notice. In its statement, the Ministry said that in the future, in addition to the consent of four relevant ministries (Trade, Defence, Interior and Foreign Affairs), approval from the National Security Council would also be required for the export of domestic weapons and ammunition. This council includes the president and prime minister, the ministers of defence and interior, and their operational associates.
Vučić and the Ministry of Defence, however, “wisely kept quiet” on 23 June about the fact that the export ban was set to expire on 9 August. In the meantime, the military factories had filled their warehouses to the brim with finished products, with no idea what to do with them, which increasingly jeopardised their business operations. For this reason, the unions of the Defence Industry of Serbia group, which brings together companies of the defence sector, jointly appealed to the Government, the Ministry of Defence and President Vučić, requesting that exports be allowed again and that a meeting be organised to seek solutions to the deepening business crisis caused by the total export ban.
Despite this, by 9 August, when the ban was due to expire, the Government of Serbia had neither lifted the decision nor officially extended it beyond that date. As Radar has learned, after the unions, the directors of leading state-owned military factories also appealed to the authorities, demanding a resolution to the mounting uncertainty and crisis caused by the export ban.
A particular problem is that, under Vučić’s directive, the Ministry of Defence and the Government of Serbia effectively halted the execution of contracts that domestic companies had signed last year with foreign partners, who had already paid part or all of the sums in advance for the agreed quantities of rockets, mines, shells, other ammunition and weapons. The domestic factories had long since spent these advances but, through no fault of their own, were unable to deliver the goods to foreign buyers. In this way, Radar’s sources argue, trust is lost with foreign business partners, along with competitiveness on the global market. At the same time, stockpiles are piling up in warehouses, further endangering the operations of domestic arms producers.
Decisions by the Serbian authorities more harmful to domestic factories than new US tariffs
President Vučić and the Government of Serbia also inflicted great damage on the domestic military industry in 2023, when they, by many assessments, imposed an absolutely unnecessary, even senseless, ban on the export of weapons and ammunition from Serbia. It is estimated that this year’s ban will cause incomparably greater long-term harm, as shown by the termination of the decades-long cooperation between Milan Blagojević from Lučani and Igman from Konjic in Bosnia and Herzegovina.
The Lučani factory supplied its Bosnian partner with rocket fuel and gunpowder, but because of the export ban, the Konjic company had to halt production on 2 September and send most of its workers on forced leave. They will only return once deliveries from Serbia resume. It is, of course, not out of the question that the Konjic factory will in the near future turn to other suppliers, such as producers from the Czech Republic or France. All the more so because the sale and purchase of weapons and military equipment is not only an economic matter, but par excellence a political one.
Both military analysts and employees at Krušik believe that their products, via Poland, Bulgaria, the Czech Republic, Turkey, Slovakia, the USA, and sometimes Nigeria, Uganda or Middle Eastern Gulf countries, will once again end up in Ukraine. It remains to be seen to what extent these plans are achievable after Vučić’s recent meeting with Russian President Vladimir Putin in Beijing.
At Prvi Partizan they have long argued that the export ban affects them far more than Trump’s 35 percent tariffs on exports to the USA. At Zastava Arms, they said that during the export ban they were producing infantry weapons for the Serbian Army, but that they eagerly await the “unblocking” of carbine exports to America. Their US partner, Zastava Arms USA, has informed current and potential buyers that the distribution of Kragujevac carbines has been temporarily suspended, and that once it resumes, the rifles will be more expensive than before because of the new customs rates.
The resumption of export permits is also eagerly awaited at Sloboda in Čačak and Milan Blagojević in Lučani, as well as by suppliers to the domestic military industry, especially the Sevojno Copper Mill and Zastava Kovačnica (Zastava Forge).
Who will collect the profits again?
What domestic arms manufacturers certainly cannot look forward to is the fact that, once the export “blockade” is lifted, the cream will once again be taken mostly by private traders and intermediaries in the business. Russia’s Foreign Intelligence Service (SVR) stated in early June that Serbian companies supplying Ukraine with ammunition were “earning hundreds of millions of euros” from these deals. According to the SVR, weapons and ammunition are exported to Ukraine not only by state-owned companies such as Jugoimport SDPR, Krušik, Prvi Partizan and Sloboda, but also by private firms Zenitprom, Sofag and Rejer DTI. The first two, Zenitprom and Sofag, are linked to controversial arms dealer Slobodan Tešić, who is close to the state leadership and the ruling SNS. Sofag’s owner is Tešić’s daughter, Jelena Petrović, while Rejer DTI is owned by a certain Katarina Janković.
The SVR claims that a “simple scheme” is used to execute these export operations, involving “false end-user certificates and intermediary countries,” primarily the Czech Republic, Bulgaria and Poland, and more recently some African states. The British Financial Times already reported on 22 June last year that Serbia had indirectly, through other countries, exported ammunition to Ukraine worth 800 million euros between February 2022 and mid-2024. No official has denied that estimate, and since exports were only suspended in June this year, it may be assumed that the total value of deliveries has in the meantime exceeded one billion euros.
The key question is: where is that money? Working conditions in most military factories are appalling, accidents frequently occur with explosions taking workers and workshops with them, and over the past few decades almost no one has been held accountable. Wages are equally grim – arms workers, even with overtime, earn no more than 100,000 dinars. At Krušik, for example, despite working in three shifts, including overtime and Saturdays, production workers earn less than 90,000 dinars, or around 20 percent less than the national average, which in July stood at 107,075 dinars.
Part of the answer as to where the profits from the sale of weapons and ammunition to foreign buyers end up lies in the fact that Sofag, Tešić’s latest company (formally owned solely by his daughter, Jelena Petrović), recorded revenues of 110.7 million from arms industry exports in just two and a half years, between the beginning of 2023 and the end of April 2025, according to available data.
It is telling that Sofag was registered two months after Russia’s invasion of Ukraine, on 20 April 2022. In its very first year, it achieved revenues of 406.5 million dinars, albeit with a net loss of 7.3 million. By 2023, however, the situation had turned in its favour: revenues multiplied tenfold to over 4.1 billion dinars, and last year they rose again to more than 6 billion dinars, with a net profit of 195.7 million dinars, or almost 1.7 million euros.
Rejer DTI is also relatively young, founded in August 2020, but it has already secured a strong position in this closed market. Last year, it exported weapons and ammunition worth 11.3 million euros to Turkey, Slovakia and the USA, while in just the first four months of this year alone, exports exceeded 17 million euros. It is widely believed that much of that weaponry ended up in Ukraine. The firm has also experienced a meteoric rise, with revenues growing from just 3.5 million dinars in 2021 to 568.7 million dinars in only three years – an increase of over 160 times. More importantly for owner Katarina Janković, the company has stopped posting losses, as it did in 2021 and 2022, and instead recorded a net profit of more than 1.5 million euros (181.4 million dinars) over the past two years.
The financial figures of Zenitprom, formally owned by Goran Tukić but in reality controlled by Slobodan Tešić, have grown at the same pace. That for Tešić’s companies “the sky’s the limit” is illustrated by the fact that Zenitprom’s revenues in 2022 were just 514.5 million dinars, but two years later had increased to 4.25 billion dinars – not a single dinar of which came from the domestic market, but entirely from foreign buyers.
In the first half of this year alone, Serbia exported around 55 million euros worth of weapons and ammunition to Israel, something Vučić publicly boasted about. And it is unlikely to stop there. Especially in light of reports that Serbia has recently contracted a new purchase of Israeli arms worth 1.6 billion dollars, suggesting that the trade will not flow in one direction only, but both ways.
(Radar, 15.09.2025)
https://radar.nova.rs/ekonomija/zabrana-izvoza-oruzja-podignuta/