As first reported in The New York Times last week, a principal supplier of arms to Afghanistan has had its international export activities suspended. In addition, AEY Inc., which is a Miami Beach arms-dealing company led by Efraim E. Diveroli, is under criminal investigation.

AEY had been the principal supplier of munitions to Afghanistan's army and police forces since the U.S. Army awarded it a two-year contract in January 2007. The contract had a potential value of $298 million.

An examination by The Times found Diveroli shipped tens of millions of aging Chinese rifle and machine-gun cartridges from Albania and provided munitions in crumbling and decomposing packaging. The contract and American law prohibit trading in Chinese arms.

Documents from Albania showed that AEY bought more than 100 million Chinese cartridges that had been stored for decades in former cold war stockpiles. The cartridges had been manufactured as long ago as 1960. Diveroli then arranged to have them repacked in cardboard boxes, many of which split or decomposed after shipment to the war. Different lots or types of ammunition were mixed. In some cases the ammunition was dirty, corroded or covered with a film.

The U.S. Army has accused Diveroli of fraud, claiming he shipped Chinese cartridges to Afghanistan after certifying they were made in Hungary. The Army also suspended Diveroli and the company from future federal contracts.

Under federal rules, arms transfers across an international border in which the United States government is not the customer require a State Department license. A State Department official said that barring extraordinary circumstances, Diveroli's applications for licenses would be refused.
The Army's new request specifies ammunition must be less than 20 years old and in durable packaging and in proper condition.