Erik Prince, founder of the Blackwater private security firm, is charged along with four others with violating Austria's War Material Act by modifying and exporting two agricultural planes.
One of the two planes was exported in 2014 and flown to South Sudan. The second was sent in 2015 to EU member Bulgaria.
Prince -- who arrived at the Wiener Neustadt regional court dressed in a suit and blue tie flanked by his team of lawyers -- pleaded not guilty, as did the other defendants.
If found guilty, the five could face up to three years in prison.
Prince -- the brother of the former US education secretary Betsy DeVos -- allegedly worked with company Airborne Technologies, based in Wiener Neustadt, which modified the planes.
According to prosecutors, the planes were "modified for combat use", with the company fortifying the cockpit and installing a special camera, as well as hard points where "weapons could be attached", among other changes.
The defence refuted the planes were modified for military use, saying they did not qualify "in any way as war material".
"Everything that was done here is completely legal," Prince's lawyer Norbert Wess told reporters outside the court.
On trial together with Prince, 54, is an Australian pilot, who flew the planes out of Austria, as well as two Airborne executives and another pilot who allegedly acted as a consultant.
A verdict could come after a second hearing next month.
Prince, a former Navy SEAL, drew infamy as the head of Blackwater, whose contractors were accused of killing unarmed Iraqi civilians in Baghdad in 2007.
Four who were convicted were pardoned by Trump in 2020.
Blackwater was renamed Xe in 2009 and became Academi two years later.
UN investigators in 2021 found that Prince violated a United Nations arms embargo on Libya, according to a report detailed by US media.
The report said that Prince deployed a force of foreign mercenaries and weapons to strongman Khalifa Haftar, who fought to overthrow the UN-backed Libyan government in 2019.
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