Kostic, who in late 1991 was chairman of the rump Yugoslav presidency, promised Croatian Serb rebel leader Milan Martic that the Yugoslav People's Army (JNA) would during its withdrawal from Croatia leave Serb forces tanks and heavy weapons, contrary to the Vance plan, prosecutor Hildegard Uertz-Retzlaff said quoting minutes from a meeting of the Serbian leadership in Belgrade.
The witness said he believed that "the UN was not interested in what was whose, but that the JNA withdrew and put heavy weapons in depots, which was done".
He also said that he did not know to what extent Martic's request was accepted as he had asked that, along with heavy weapons, the JNA leave 20,000 soldiers in the territory of the so-called Republic of Serb Krajina, under the guise of special police forces.
A report by the UN Secretary-General from July 1992 concluded that the JNA had left heavy weapons to the Serbs, who violated the Vance plan also by transforming military forces into police units and by continuing the persecution of non-Serbs in the occupied areas.
At the end of today's hearing Milosevic contested allegations about his having had influence over the Croatian Serb leadership and replacing Milan Babic after the latter refused to accept the Vance plan.
Kostic previously confirmed that Milosevic had forced Babic's replacement, after the prosecutor presented him with a document proving it.
Kostic is expected to end his testimony on Wednesday, when the accused will introduce a new witness for the defence.
Milosevic is charged with genocide in Bosnia-Herzegovina and crimes against humanity in Croatia and Kosovo in the 1990s.