"We have indications that the same thing also happened in the Croatian-Muslim Federation," Dragan Vrankic, who is also finance minister, said at a press conference.

Bosnia's other entity, Republika Srpska (RS), has been hit by a scandal for selling aircraft parts made by the Bosnian Serb military firm Orao to Baghdad.

Mirko Sarovic, the Serb chairman of Bosnia's three-person central presidency, was forced to resign over the matter last week.

US ambassador to Bosnia Christopher Bond said on Thursday, after talks with RS Prime Minister Dragan Mikerevic, that there were indications that the Croatian-Muslim Federation had also violated the embargo against Iraq.

Vrankic said the Federation's administration was opening an investigation into the matter.

Local press reports say that two of Federation's military firms, Vitezit based in in Vitez 60 kilometers (37 miles) northwest, and Bratstvo in Novi Travnik 120 kilometers northwest of Sarajevo were involved in illegal arms sales to Iraq.

str-ts-smk/fg/rl

SPACE.WIRE