A report for the UN Security Council has said the former Irish naval vessel, the LÉ Aisling, was sold to one of the forces in the Libyan civil war in breach of a UN arms embargo.
The report says that a company in the United Arab Emirates was the responsible party in non-compliance.
The Department of Defence says the vessel was decommissioned as a warship before it was sold and it has no trailing obligations in relation to the vessel.
In 2017, LÉ Ailsing was decommissioned as a warship and put up for sale. The report details its journey since then.
It was sold to a Dutch company for over €100,000 and then sold on to a company in the United Arab Emirates for over €470,000.
It was sold again to a company in Libya for €1.3m.
It has now been renamed Al Karama and is under the command of forces loyal to Field Marshal Khalifa Haftar.
Mr Haftar is the leader of the self-styled Libyan National Army.
The UN report said it declared a pleasure yacht then declared for demolition. It said these were deliberate mis-declarations.
But the report also has evidence that the vessel has been refitted with weapons, including two 20mm cannons and a 40mm main gun, which experts say is a clear breach of the UN arms embargo on Libya.
Security analyst Declan Power said he does not think the State can be held accountable for where the ship ended up as it had sold it in good faith.
But Mr Power said he thought it had raised questions again about how little the Lé Aisling was sold for.
In a statement, the Department of Defence said it has no trailing obligations in relation to the vessel.
It said it had received no correspondence from the UN in relation to the sale.