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. Last Updated: 07/27/2016

In Ukraine, Flea Market For Guns, Jets, Tanks

KHARKOV, Ukraine -- Upwards of $2 billion of arms, including some of the most modem equipment available, have been privately put to tender in the largest bargain-basement sale of its kind yet in the former Soviet Union.


The armaments come from Russia and are reckoned to be enough to equip a national army. The arms are being offered at rock-bottom prices for quick sales by a universal exchange based in an 11-story building, topped by hammers and sickles in Kharkov -- an industrial city in eastern Ukraine. Eighty T-62 and T-64 tanks are being offered for the next month at $200, 000 to $220, 000 each -- less than the price of a Rolls Royce automobile, while MiG-27K bombers are on sale at a fly-away price of $16 million each.


T-80 tanks, considered by some to be the best main battle tanks in the world, are also on sale for a knockdown price of $200, 000. By comparison, Kuwait is spending $200 billion on 236 General Dynamics Abrams M1A2 main battle tanks from the United States.


In total, 151 tanks are listed at the sale, which began last week and will continue for the month.


The offer has been arranged through a Ukrainian-Russian joint venture called the Ukrainian-Siberian Universal Exchange, a holding that controls 52 other enterprises throughout the former Soviet Union.


The company's weekly bulletin, which normally offers everything from metals to cigarettes to soaps, this week contained two pages of arms ranging from Yak bombers to dozens of rockets and missile systems and two diesel-powered submarines.


Igor Taranov, the exchange's president, said that the seller's and buyer's identities were a commercial secret, as would be the weapon's final destinations if they were sold.


"The conditions of sale are that all arms, if bought, must be taken out of the country", Taranov said.


Some goods, such as T-80v tanks and BTR-80 armored personnel carriers, are being advertised as new, suggesting that the manufacturers are offering them direct.


Also offered straight from the factory are wide varieties of antitank and antiaircraft weapons ranging in price from $20, 000 to $650, 000 for an entire S-300v missile system, which its manufacturers bill as similar to the U. S. Patriot missiles used during the Iraq war.


By comparison, Kuwait recently bought five Patriot batteries for $370 million, The Financial Times reported.


Although the exchange's management says that it has received blessing for its brokers to find markets for the goods, Ukraine's prime minister, Leonid Kuchma, said he was unaware of the sale and promised an investigation.


"We have agreed joint sales of arms between Russia and Ukraine, but not through any old exchange. Such a sale is difficult to believe", he said at a briefing in Kiev last week.


Kuchma's remarks illustrated the powerlessness of government to stem a trade that is increasingly attractive to both traders and producers.


Economic links between the former Soviet republics have worsened in the past year, and exchanges are under greater pressure than ever to sell hard-currency goods to buoy profits.


Armament factories, whose official orders have been slashed, are desperate to sell weapons in order to avoid having to close.


At current exchange rates, one sale in dollars can keep a factory running for months rather than forcing management to convert to civilian production.


Rife corruption in government and cynicism toward the West, which lectures on the horrors of the arms trade while sowing overseas markets for its own producers, mean that the authorities here have little influence or desire to control the trade.


Likewise, if a broker can clinch one hard-currency arms sale, he can afford to retire for life. For overseas buyers, the weapons come cheap because of the enormous overspill of production in the former Soviet Union and because few questions are asked.


A buyer needs nothing apart from a bank reference and a license to trade in weapons.


Where the arms go after the initial sale is up to the buyer.


"The bigger the commission of course, the bigger the interest for us", said a young broker at the universal exchange who identified himself only as Vladimir. "We are hoping to sell, although the prices are very high by our standards".