Military group Sandline removed two Mi-8 helicopters from Defence Department custody in 1999 after successfully obtaining a "civilian" classification for the cargo.

Prime Minister John Howard and senior ministers only learned of the export a month after it left the Port of Brisbane, as the Defence Department's International Policy Division had lost involvement with the case.

Defence Minister Robert Hill has refused to comment on department records which indicate 25 boxes of ammunition clips were included with the helicopters, possibly in breach of Customs regulations.

Sandline, a private military company, was engaged by the Papua New Guinea Government in January 1997 to end years of conflict on Bougainville.

But local and international pressure forced the PNG Government to request Sandline's arsenal be diverted to Australia, where it was unloaded at the Tindal RAAF base near Darwin.

After a two-year legal battle which determined Sandline still owned the four helicopters and assorted ammunition at Tindal, the company hired Brisbane export agents to sell the items.

Sandline was told to deal only with the IPD, but documents obtained by The Courier-Mail show the export agents approached a different wing of the department and had the helicopters classified as "civilian" exports.

The helicopters were sold to a mining company in Senegal but neither Sandline nor the department would name the company. Sandline has a mining subsidiary and has been involved in mercenary activity in Sierra Leone, south of Senegal.

The IPD only learned of the export on October 28, 1999 – three weeks after it left Brisbane – in an e-mail from a senior RAAF officer.

The officer also told the IPD the clips had been removed from the ammunition stockpile and "went with the Mi-8s".

The clips – 50,000 of which were stored in 25 boxes – are used to connect rounds of 12.7mm bullets for continuous fire. Senator Hill said his advice was that all ammunition was destroyed and there was no request to export any clips with the Mi-8s.

But the documents show checks by Defence and Customs late last year confirmed the clips were not regarded as ammunition and were removed from the stockpile before the ammunition was destroyed.

The documents contain numerous deletions and it is unclear whether the clips have since been accounted for, but a spokeswoman for Senator Hill would only reiterate that all ammunition had been destroyed.

Sandline commercial adviser Michael Grunberg said any information suggesting the clips had been exported was incorrect.

"To the best of our knowledge they are still in Australia," Mr Grunberg said.

Sandline solicitor Michael Krug and the two export agents involved with Sandline at the time were unable to comment yesterday.

The two Mi-24 attack helicopters which remain in storage at Tindal have been offered for sale by Sandline for $US1.5 million each, but Senator Hill said strict export criteria would apply because of their military classification.

Attorney-General Daryl Williams said Australia remained opposed to the use of mercenaries.

© Queensland Newspapers