MercoPress. South Atlantic News Agency

Court overturns Menem dismissal.

A Buenos Aires court on Friday overturned a ruling dismissing charges against former Argentine President Carlos Menem in a case involving arms smuggling to Ecuador and Croatia between 1991 and 1995

The Economic Crimes Court ruling also annulled another decision to drop charges against Domingo Cavallo, who was economy minister at the time the illegal deals took place.

The court also ordered Judge Julio Speroni, who is in charge of the case, to "expand the investigation" into the arms-smuggling deals and to follow "the money trail" pertaining to the case.

Menem is presently living in Chile and has disregarded summons from Buenos Aires judges who are investigating other criminal charges against him.

Menem, who governed Argentina from 1989-99, was placed under house arrest for six months in 2001 by a Buenos Aires federal court that charged him with "heading a criminal conspiracy" to smuggle weapons to Croatia and Ecuador.

The 74-year-old former president was released in October 2001 after the Supreme Court dismissed the smuggling charges against him.

On Friday, Judge Speroni also indicted and released on bond suspected Argentine arms smuggler Diego Palleros, 78, whose testimony is considered key to clearing up the Croatia and Ecuador arms deals.

Speroni froze $1.6 million of Palleros' assets after charging the former army colonel with "aggravated smuggling" and "participating in a criminal conspiracy." Between 1991 and 1995, Croatia received 6,500 tons of Argentine rifles, cannons and ammunition officially destined for Panama, despite a United Nations' ban on selling arms to the participants in the conflict in the former Yugoslavia.

Likewise, Argentine rifles and ammunition were shipped to Ecuador early in 1995, when the Andean nation was waging an undeclared war against Peru over a border dispute and while there was also a U.N. ban on arms sales to the two countries.

Additionally, Argentina was one of the guarantors of the peace agreement between the two countries.

Menem has also disregarded court summons concerning his alleged failure to declare funds deposited in a Swiss bank account in his name, alleged irregularities in the construction of two prisons and his purported role in the irregular transfer of ownership in a plot of land.

Menem is currently living in Santiago with his Chilean wife, former Miss Universe Cecilia Bolocco, and their infant son.

He claims he is the victim of "political persecution" waged by Argentine President Nestor Kirchner's administration, and has expressed a lack of faith in the Argentine justice system