March 22, 2018 / 10:06 AM / 7 months ago

UPDATE 2-Tip on illicit exports triggers probe at Swiss arms group

* Whistleblower tips off RUAG to unauthorised deals

* Federal prosecutors open criminal investigation

* RUAG sales exec, Julius Baer banker in Russia suspended (Adds RUAG statement)

ZURICH, March 22 (Reuters) - Swiss federal prosecutors searched state arms group RUAG on Thursday after a whistleblower flagged unauthorised arms exports, the company said.

It did not elaborate, but the Handelszeitung newspaper said the deals sent arms and technology to Russian President Vladimir Putin's bodyguards with the help of a Swiss banker in Moscow.

All weapons exports from Switzerland require government approval.

Also, Switzerland halted arms exports to Russia in 2014 after the annexation of Crimea. It was not clear when the suspected unauthorised exports took place.

RUAG said it was tipped off that one of its sales executives had put together unauthorised deals for its own and rivals' products outside of his official company duties.

"RUAG on its own initiative launched an immediate internal investigation and informed Swiss federal prosecutors. It also filed a criminal complaint," which led to the searches, it said in a statement, adding it was co-operating with authorities.

It suspended the unnamed sales executive in question.

The Office of the Attorney General said it had opened criminal proceedings in connection with laws on war materiel, criminal mismanagement and possible misconduct in public office.

The newspaper said an executive at ammunitions business Ammotec, part of RUAG, and a Julius Baer banker in Russia had covertly colluded for years on arms deals.

Private bank Julius Baer said it was aware of the allegations and was looking into them. "The employee in question will be suspended during the investigation," a spokeswoman said. (Reporting by Michael Shields and John Revill Editing by John Miller and Alison Williams)

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