The probe will be led by Deputy Prosecutor-General Agneta Hilding-Qvarnström, who refused to divulge any further details about what crimes may have been committed or how many people may be under suspicion.
“I'm not going to say anything because the preliminary investigation is just starting,” she told the TT news agency.
The investigation comes following Swedish media reports earlier this month detailing secret plans by the Swedish Defence Research Agency (Totalförsvarets forskningsinstitut – FOI) to help Saudi Arabia build a plant to produce anti-tank weapons.
Part of the plans, dubbed Project Simoom, involved the alleged creation of a shell company in order hide Swedish involvement in the planned construction of the plant.
Following the revelations, which were based on confidential documents reviewed by Svergies Radio (SR), the agency launched an internal investigation in order to answer questions posed by the Ministry of Defence about FOI's relationship with Swedish Security Technology and Innovation (SSTI), the company reportedly created by the agency to manage dealings with the Saudis.
The defence ministry wanted to know more about FOI's ownership stake in the company and the extent to which it was involved in starting and running SSTI.
According to SR's reporting, top managers with SSTI were the same people who had led a project launched in 2007 that called for the Swedes to help the Saudis build the weapons factory, but about which the government later express concerns regarding FOI's involvement.
In early 2008, the government said it didn't want FOI to have responsibility for the construction of the planned Saudi weapons plant because of the sensitivity of the matter.
But the Saudis still wanted FOI, rather than a private company, to lead the work, and felt deceived by the attempt to take FOI off the project.
The agency then created SSTI, which on paper was a private company without any ties to public agencies in Sweden and thus didn't need to seek approval from the government.
FOI's own investigation has revealed information leading the agency to believe “there are suspicions that a crime may have been committed”, it said in a statement, prompting FOI head Jan-Olof Lind to report the incident to prosecutors.
“I take very seriously the information which has come to my attention and which is the basis for my decision to report the suspected crimes,” Lind said in a statement.
FOI has also been reported to Sweden's Chancellor of Justice (Justitiekanslern – JK) on suspicions the agency may have violated rules governing the handling of classified information.
However, the Chancellor's office has not yet decided whether or not to launch its own investigation.
The revelations have also renewed debate in Sweden about the country's arms exports in general, and sales to dictatorships in particular.
Last year, Sweden exported weapons and related defence equipment worth 13.9 billion kronor ($2 billion), with Saudi Arabia being the second largest purchase.
Later in the spring, the government is expected to put launch an inquiry tasked with tightening rules governing Swedish arms exports to non-democratic countries.