The New York Times

               September 25, 2003, Thursday, Late Edition - Final

SECTION: Section A;  Page 12;  Column 3;  Foreign Desk

LENGTH: 723 words

HEADLINE: U.S. Remains Leader in Global Arms Sales, Report Says




   The United States maintained its dominance in the international arms market
last year, especially in sales to developing nations, according to a new
Congressional report.

   The United States was the leader in total worldwide sales in 2002, with about
$13.3 billion, or 45.5 percent of global conventional weapons deals, a rise from
$12.1 billion in 2001. Of that, $8.6 billion was to developing nations, or about
48.6 percent of conventional arms deals concluded with developing nations last
year, according to the report.

    Russia was second in sales to the developing world last year, with $5
billion, followed by France with $1 billion.

   While the report focuses on sales and deliveries of conventional weapons from
the industrialized world to poorer nations, it also offers a glimpse into such
issues as missile proliferation by North Korea and foreign weapons transfers to

   The new report, "Conventional Arms Transfers to Developing Nations,
1995-2002," was sent to the House and Senate this week by the Congressional
Research Service, an arm of the Library of Congress. The annual study, written
by Richard F. Grimmett, a specialist in national defense at the research
service, is considered the most authoritative resource available to the public
on worldwide weapons sales.

   From 1999 to 2002, there were no deliveries of surface-to-surface missiles to
the Middle East from arms makers in the United States, Russia, China or Europe,
the report said.

   But the study says 60 surface-to-surface missiles were delivered to the
Middle East by nations in the category "All Others," which includes such
suppliers as Israel, South Africa and North Korea.

   United States officials, both military and civilian, said today that North
Korea was the source of the surface-to-surface missile deliveries listed in the
report, and of 10 anti-ship missiles delivered to the Middle East in that

   President Bush has increased public pressure on North Korea and Iran over
their nuclear programs, and the administration is organizing a number of joint
military exercises to train for the interdiction of possible shipments. The goal
of these exercises is to make it more difficult to transmit components of
chemical, biological and nuclear weapons -- and the missiles to deliver them.

   But difficulties in halting North Korea's missile trade were evident in
December, when a North Korean cargo vessel that was not flying a flag was halted
off the Horn of Africa by two Spanish warships.

   A search revealed 15 Scud missiles hidden beneath the cargo. But the vessel
was eventually allowed to sail on with the missiles to its destination in Yemen
after officials conceded that neither North Korea nor Yemen had violated any

   In addition to the shipment to Yemen, North Korea is suspected of selling
missile technology to Iran and others, Pentagon officials said.

   The study says that none of the major arms makers delivered weapons to Iraq
from 1999 to 2002 -- or at least not in amounts of more than $50 million, the
lowest sales amount included in the study.

   But a category of nations labeled "All Other European," which includes
formerly Communist states in Central and Eastern Europe, delivered about $100
million worth of weapons to Iraq from 1999 to 2002, although the report does not
specify the source of the deliveries.

   Ukraine is believed by American officials to have sold an advanced Kolchuga
radar system to Iraq, Pentagon officials said.

   Arms deals with developing nations in 2002 totaled $17.7 billion, more than
the $16.2 billion for 2001 but the second-lowest total for the years 1995 to
2002. (The report measures sales and deliveries in dollar totals adjusted for
inflation, called "constant 2002 dollars.")

   "Many developing nations have curtailed their expenditures on weaponry
primarily due to their limited financial resources," Mr. Grimmett wrote in the
report. "To meet their military requirements, in current circumstances, a number
of developing nations have placed a greater emphasis on upgrading existing
weapons systems while deferring purchases of new and costlier ones."

   Total arms transfer agreements reached nearly $29.2 billion in 2002, a
decrease from 2001 and the second year in a row that total arms sales dropped,
according to the study.