The police swoop conincided with Tokyo's tightening of controls on North Korean ships amid allegations that some of them have ferried missile parts to the Stalinist state and smuggled drugs into Japan.

The five -- the president and officials of a Tokyo machine manufacturing company -- are suspected of exporting machines which could be used to develop solid fuel for missiles, a spokesman for the Metropolitan Police Department said.

The company, Seishin Enterprise Co. Ltd., was suspected of shipping two jet-mill grinders in 1999 and 2000 to military-related institutions "without government authorisation," the spokesman said.

He said the machines had been sold for "several tens of millions of yen" while the news agency Jiji Press set the price at some 54 million yenUS dollars).

The jet mill uses compressed air to grind solid materials, such as medicines or printer toner ink, into fine powder, and can also be used to increase the burn efficiency of solid rocket fuel.

Seishin has been under police and media scrutiny since December when authorities raided its facilities on suspicion of the unauthorised export to Iran.

Quoting police leaks, the Japanese media has since reported that Seishin exported a jet mill to North Korea much earlier -- in 1994 -- on a North Korean ferry which serves as the only direct traffic link between the two countries which lack diplomatic ties.

But the police spokesman refused to confirm this export to a firm affilated to North Korea's defence ministry. The statute of limitations on the case has now expired.

At a US congressional hearing last month, a man claiming to be a former North Korean engineer testified that the ship, Man Gyong Bong-92, had been used by an association of pro-Pyongyang ethnic Koreans to regularly smuggle missile parts to North Korea.

The defector said 90 percent of parts in North Korean missiles had come from Japan.

The jet mill is on the list of restricted items of the Missile Technology Control Regime (MTCR), an international mechanism to curb exports of missiles as well as missile-linked equipment and technologies.

The regime specially enforces tight controls on exports to Iran, Iraq, North Korea and Libya.

Iran, Iraq and North Korea have been branded by US President George W. Bush as an "axis of evil" bent on spreading weapons of mass destruction.

Japan's trade controls law lists the jet mill along with such items as rocket launchers as strategic goods that require approval from the trade minister for export.

The arrested were Seishin's founder and president Haruhiko Ueda, 68, Seishin's technical development director Hitoshi Ito, 54, and the company's manager in Seoul Akira Kamiya, 41, as well as overseas business chief, Eri Tanemura, 29, and a regional branch manager, Toshitaka Matsuda, 42.

Jiji and other media reports said two jet mills had been sold to a technological university in Tehran and a defence industry group.

Iran has been widely believed to have used North Korean technology in developing a medium-range ballistic missile test-fired in 1998.

SPACE.WIRE