Peru last week in Lima signed a contract for the delivery of six Mi-171Sh Hip transport and two Mi-35P Hind attack helicopters, Rosoboronexport said in a statement. Observers say the first post-Soviet arms deal to Peru since 1990 was sparked by a trip of Russian President Dmitry Medvedev to Lima in November 2008, where he lobbied for a revitalization of new defense cooperation.

While Russian media sources estimated the deal to be worth $250 million, a statement on Peru's Defense Ministry Web site said the contract is valued at $107.9 million. Defense Minister Rafael Rey said the two combat helicopters would be delivered this year, with the six transport helicopters following by July 2011.

Rey said the helicopters would be used in the counter-terrorism and anti-narcotics fight in the Valley of the Apurimac and Ene River, where drug production and trafficking has been increasing.

Rosoboronexport accounts for more than 80 percent of Russia's arms sales. The company last year exported weapons worth $7.4 billion and concluded contracts for a total of $15 billion.

Russia has been eager -- and in some instances successful -- to gain a foothold in the quickly growing Latin American defense market.

The biggest deals were clinched with Venezuela, a country that during the past five years has ordered from Russia weapons worth around $4.4 billion.

They include 24 Sukhoi Su-30MK2 fighter jets, 50 attack and transport helicopters from Russia's Mil Moscow Helicopter Plant, a dozen missile systems and 100,000 Kalashnikov assault rifles, Defensenews.com reported.

Rosoboronexport at the Farnborough Air Show outside London this month said that Venezuela may soon buy transport planes from Russia.

Washington is worried by the Venezuelan military expansion and potentially arising black markets in Latin America.

The Stockholm International Peace Research Institute would agree. In its study on the global arms market unveiled in March, it found that weapons sales to Latin America were 150 percent higher during the last five years compared with the beginning of the millennium.

This is due to a significant upswing in both military spending and an almost competitive behavior when ordering arms, SIPRI said.

"This clearly shows we need improved transparency and confidence-building measures to reduce tension in the region," said Mark Bromley, SIPRI's Latin America expert.

related report
Russia slams US doubts of compliance in arms treaties
Russia on Thursday slammed a US State Department report raising doubts about Russia's compliance with international agreements on chemical, biological and nuclear weapons as biased and without proof, Russian foreign ministry said.

"Without giving any factual proof, Russia is listed as a violator of non-proliferation treaties," the ministry said in a statement.

The State Department Compliance Report said that, while Russia had generally complied with the terms of the previous Strategic Arms Reduction Treaty (START) that expired last December, some issues had remained unresolved.

"The Russian side had taken all necessary measures to resolve these concerns and at the time when the treaty expired, the United States had no complaints on how it was met," the ministry said.

As for biological weapons, "the US so-called uncertainty on whether Russia has met its obligations could have been clarified a decade ago, if the United States did not block in 2001 the talks on the Biological Weapons Convention's verification mechanism," the statement said.

The report raised doubts about Russian compliance with the Biological Weapons Convention, which the Soviet Union signed in 1972 and to which successive Russian governments have pledged to adhere.

"Russia has repeatedly proved its adherence to nuclear non-proliferation and its readiness for partnership, and so statements claiming that Russian companies and institutes continued to develop nuclear programs raising US concerns are unacceptable," the ministry said.

"Such reports do not help the much talked-about new spirit of partnership and trust between our countries. Such exercises in public diplomacy, without any basis in facts, do not serve our common goals in non-proliferation," the ministry added.

The Washington Post suggested Republican senators could use the findings to deny President Barak Obama administration's the two-thirds majority it needs to win ratification for the successor START treaty that was signed by the countries' leaders in April.

related report
Russia denies Azerbaijan buys anti-aircraft missiles
A Russian newspaper reported Thursday that ex-Soviet Azerbaijan had bought Russian anti-aircraft missile systems worth 300 million dollars (230 million euros) but Moscow denied the claim.

Quoting Russian arms industry sources, the Vedomosti daily reported that Baku had signed the deal with Russian state arms exporter Rosoboronexport last year to purchase two batteries of S-300 anti-aircraft systems, in the largest purchase of arms from Moscow by an ex-Soviet country.

Russian news agencies however quoted Rosoboronexport denying the sale.

"Rosoboronexport has no information on the supplies of S-300 missile systems to Azerbaijan and has no contract obligations over this," the ITAR-TASS news agency quoted company spokesman Vyacheslav Davidenko as saying.

Azerbaijani defence ministry spokesman Abbas Shirinov also declined to confirm the purchase, saying only: "Azerbaijan continues to strengthen its army."

Awash with cash from oil and gas exports, Azerbaijan has nearly doubled defence spending in the last two years amid rising tensions with arch-rival Armenia over the breakaway Azerbaijani region of Nagorny Karabakh.

The Vedomosti report quoted an unidentified Russian military official as saying the systems would not be useful in a new conflict over Karabakh. Armenia does not have the kind of attack planes or ballistic missiles that the systems would normally be used against.

The official said the purchase was most likely aimed at Azerbaijan securing itself in case of a western strike on neighbouring Iran.

Russia signalled last month it was moving to halt its controversial sale of the same S-300 systems to Iran, in a policy shift the Kremlin said was needed after fresh UN sanctions over Iran's nuclear drive.

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