Prosecutors had asked for an eight-year sentence for Menem, who held office from 1989 to 1999 [EPA]

Argentina's former President Carlos Menem has been acquitted of smuggling arms to Croatia and Ecuador in the 1990s.

The 81-year-old senator smiled as a judge read out the "not guilty" verdicts on him and 17 others, including former ministers, retired military personnel and arms makers, on Tuesday.

During the nearly three-year trial, Menem said he was "completely innocent" and had no idea the weapons shipments he authorised to Venezuela and Panama would be diverted to countries that were under arms embargoes.

Argentina was barred from supplying Ecuador with weapons since it played a peace-keeping role after Ecuador and Peru fought a brief war in 1995. Arms sales to Croatia were internationally banned during the wars that tore apart the former Yugoslavia from 1991 to 1995.

Menem has insisted the transactions were legal because the weapons - rifles, artillery, mortars, anti-tank rockets and ammunition - were being sent to peaceful countries.

The weapons to Croatia were sent in seven shipments aboard freighters between 1991 and 1995. The weapons sent to Ecuador arrived aboard three flights in February 1995.

"I have charged 18 people, and every one of them was let off, but my team is going to keep working. We will appeal this ruling," prosecutor Mariano Borinsky said.

Prosecutors had asked for an eight-year sentence for Menem, who held office from 1989 to 1999.

Though he would have enjoyed immunity from imprisonment as a senator, he could have been incarcerated after his term ends in 2014, or if legislators strip him of his privilege.

Menem spent five months under house arrest in 2001 on charges of masterminding the arms deals, but was set free by a Supreme Court ruling.