Blackwater Worldwide is a private military company and security firm founded in 1997 by Erik Prince and Al Clark. It has alternatively been referred to as a mercenary organization by numerous reports in the international media and has been the subject of arms smuggling allegations. On September 22, 2007, U.S. federal prosecutors announced an investigation into whether Blackwater employees illegally smuggled weapons into Iraq, that were later possibly transferred to the Kurdistan Workers Party (PKK), a Kurdish Marxist-nationalist group designated a terrorist organization by the US, NATO and the European Union.

The investigation is being handled by North Carolina United States Attorneys' Office with assistance from auditors of the Defense and State departments in accordance with the evidence that Turkey provided demanding clarification. Turkish security forces have started recovering US made rifles and pistols from dead PKK militants. On September 22, The Associated Press reported that officials had stated that there is enough evidence to file charges.

Blackwater initially denied the claims and declared them baseless. According to Blackwater spokeswoman Anne Tyrrell, "Allegations that Blackwater was in any way associated or complicit in unlawful arms activities are baseless," and they have "no knowledge of any employee improperly exporting weapons." In early 2007, two Blackwater employees pled guilty to illegally shipping weapons. In November 2008, the U.S. State Department prepared to slap a multimillion-dollar fine on Blackwater for shipping hundreds of automatic weapons to Iraq without the necessary permits. Some of the weapons were believed to have ended up on the country’s black market.