THE HAGUE -- Former Yugoslav president Slobodan Milosevic headed a secret financial network spanning 50 countries, according to a report by prosecutors to the UN Court in The Hague where he is on trial for war crimes, AFP reported.

Used mainly for sanctions busting and illegal arms buying, the network covered dozens of individual and company bank accounts across the globe.

"In my career, I have never encountered or heard of an offshore finance structure this large and intricate," said Morten Torkildsen, the author of the report.

Most of the money entering the network has been identified as coming from the Yugoslav Customs Department, (Savezna Uprava Carine, or SUC) which at the time was one of the main sources of the Yugoslav government's revenue.

Some was sent directly to government departments like the army or the interior ministry forces, bypassing normal channels.

A second portion was channeled through Yugoslav banks, particularly Beogradska Bank, which Milosevic headed before entering politics.

The third part went through screen companies operated by foreign banks, especially in Cyprus, where the Popular Bank of Cyprus was named by the prosecutors, and Greece, where the Hellenic Bank was named.

Companies named by prosecutors as having benefited from Yugoslav money include Aviatrend, set up in 1994 in Gibraltar, which had the suspected Russian arms dealer Valery Sherny, also known to Interpol as Viktor Vassilievich Dudenkov, as one of its main shareholders.

Neocom, a company based in Cyprus and owned until 1998 by Boris Milosevic, Slobodan's brother, and a former Yugoslav ambassador to Russia is also named in the report.

Financial transactions by eight Cyprus based companies which received SUC cash were analyzed by the prosecutors.

"Payments were made from the accounts of these trading companies to businesses located in Israel, Russia and the United States that appear to be involved in the manufacture and sale of equipment that can be used for military operations," said the report.

Bank accounts in Austria, Cyprus, Germany, Greece, Guernsey, the Isle of Man, Jersey, Liechtenstein, Luxembourg, Monaco, Singapore and Switzerland were used to make significant cash transfers but it is impossible to trace all the movements, says the report.

"Accounts held by companies and individuals located in more than 50 countries received funds from the Cypriot companies," it noted.

Spokeswoman for the Prosecutors Office, Florence Hartmann said: "We have part of the body of the octopus but not all the tentacles." Milosevic, who is presently on trial in The Hague for Genocide, crimes against humanity and war crimes, has always denied any financial wrongdoing.

Before he was arrested and sent to The Hague, Milosevic faced charges of corruption in Serbia where it was alleged that he had enriched himself, friends and his Serbian Socialist Party from state coffers.

He strongly denied the charges, saying secret financial arrangements were necessary to evade the impact of international sanctions against Yugoslavia.

In a three-page public declaration in June 2001, Milosevic said some of the secret funds had been used for the benefit of Serb separatists in Bosnia and Croatia and as such were state secrets.