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The Diversions

The Bofors AB and Nobel Kemi AB cases involve a number of business transactions in which Swedish arms manufacturing executives deliberately violated or circumvented prohibitions on arms sales to belligerents and on bribes to foreign officials. These include:

Bofors AB selling over 300 RBS-70 missile systems to Bahrain and Dubai via Singapore in 1979. (The RBS-70 contains two US components: a gyroscope and a thermal battery.).

Bofors selling 22 anti-aircraft guns to Thailand via Singapore in 1985.

Bofors selling ammunition to Oman via Italy.

Bofors allegedly selling RBS-70s to Iran via Singapore.

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Bofors allegedly bribing Indian middlemen and officials in connection with New Delhi's $1.5 billion purchase of 155mm howitzers.

Bofors allegedly bribing an official in Singapore in connection with arms resales to other countries.

Bofors allegedly selling naval ordnance to Taiwan.

Bofors allegedly selling explosives to East Germany via Austria.

Nobel Kemi AB--a subsidiary of Bofors--selling 2139 metric tons of munitions to Iran, Iraq, Syria, Egypt and Burma via Austria, East Germany, Italy, and Yugoslavia, with approximately two-thirds of these munitions going to Tehran.

Private Swedish businessman Karl-Erik Schmitz acting as an international broker for arms sales to proscribed countries, including sales involving Swedish-produced weapons.

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The Investigations

Since reports of the diversions began to spread in 1984--through a tip from former Bofors employee Ingvar Bratt to the Swedish Peace and Arbitration Association--a number of official inquiries have been initiated. Few of these have produced any tangible results. In approximate order of inception, the investigations are:

County Prosecutor: Stig Age, the Prosecutor from Orebro County--where Bofors is located--began pulling together a case against the arms producer in 1984. He has not yet taken his findings against Bofors to court because new evidence continues to surface--even though Anders Carlberg, the head of Bofors' parent company, Nobel Industries, admitted in March 1987 that top Bofors executives Claes-Erik Winberg and Martin Ardbo deliberately skirted

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CONFIDENTIAL

Approved for Release: 2017/09/13 C06141809