A SPECIAL intelligence unit will soon be established to monitor trade in military, nuclear and strategic commodities. It is understood the Customs and Excise Department will set up the 20-strong team in the next few months. The role was previously performed by Special Branch, but its recent restructuring has provoked a re-appraisal of intelligence gathering capabilities. Last week, the South China Morning Post revealed the Russian Mafia had been smuggling materials for nuclear arms using ties with Hong Kong and Macau. A quantity of red mercury, thought to be a trigger for a nuclear bomb, is believed to have been transferred to a Hong Kong ship in international waters by a former Russian special services operative Igor Deordienko. Classified intelligence reports in Macau name Deordienko and suspected partner Vladimir Rippin as top figures in the Portuguese enclave's prostitution racket. The new unit will monitor military and nuclear material, chemicals, computers and other items which are not allowed to be shipped through the territory or onto countries not deemed proper recipients. Four Customs officers have just returned from England after receiving training and will set up the team. Commissioner of Customs and Excise, Don Watson, said the move would enhance the department's new intelligence-driven profile. ''It has been decided that it is wise for Customs to have an intelligence capacity,'' Mr Watson said. ''It is not going to be an intelligence operation in the classic sense. ''It will be more along the lines of a criminal intelligence system. It will mean that, at the moment, where we react to information provided by the Government or to a suspicious licence application, we should be able to take a much more pro-active approach. ''This gives us a little more teeth. But, despite all the speculation that Hong Kong is a vast, thriving arms port, there is no evidence to suggest that. ''Improving intelligence in the department is my No 1 priority.'' It is believed the intelligence group will inherit some sensitive material from the Special Branch. But, it will have to forge its own contacts and modes of operation. In the past, the Security Branch, police and other government agencies gave intelligence to the department. The 4,000-strong department roughly operates in two sections - half performing control point duties; the other half dedicated to investigations, consumer protection provisions, ensuring compliance with international obligations and administering excise duties. On Friday, two traders of military equipment were fined a total of $13,200 for importing helmets without a licence. Last year, Hawker Pacific and Jetpower Industrial pleaded guilty to smuggling strategic components to Iran. that would have been used for guiding air to air missiles.