Switzerland widens its investigation into oil-for-food corruption

September 17, 2006
China Post
Original Source: http://www.chinapost.com.tw/i_latestdetail.asp?id=41094


Swiss prosecutors investigating corruption connected to the United Nations' oil-for-food program in Iraq said Sunday they have widened their probe and are looking into a dozen more companies or individuals. 
No charges have been filed, the Swiss Federal Prosecutor's Office said in a statement to The Associated Press, providing no names and little detail concerning its investigations. 
The major part concerns companies that delivered humanitarian goods to Iraq, spokeswoman Jeannette Balmer said. 
Switzerland has been investigating violations of the embargo it previously maintained on trade with Saddam Hussein's regime. It also is looking into whether companies and individuals illegally laundered money or bribed foreign officials in winning contracts tied to the program. 
Earlier this year, authorities said they were investigating five parties in connection with kickbacks and corruption during the oil-for-food program. Most of the 17 investigations now under way are based on information contained in a U.N.-backed report on alleged oil-for-food corruption, Balmer said. 
The October 2005 report by the Independent Inquiry Committee led by former U.S. Federal Reserve chairman Paul Volcker said about 2,200 companies involved in the U.N. oil-for-food program worldwide paid a total of US$1.8 billion in kickbacks and illicit surcharges to Saddam Hussein's government. 
About 40 Swiss companies were named in the U.N. probe, including engineering firm ABB Ltd. and pharmaceutical giants Novartis AG and Roche Ltd. 
Also mentioned were the Switzerland-based oil trading firms Glencore International AG, Vitol SA and Marc Rich Group, and Taurus Petroleum, which has a trading office in Geneva. 
All four companies denied paying kickbacks in correspondence included in the U.N. report, which was not a criminal inquiry but allowed national authorities to follow up on the information it contained. 
Balmer said further investigations by the prosecutor's office may yet be opened and noted that prosecutors were hurrying to beat a statute of limitation on some cases of purported wrongdoing. 
The alleged illegal payments to Iraq occurred between summer 1999 and beginning of 2003, when the Iraq war broke out, she said, adding that for cases of violation of the Swiss embargo, time is getting tight. 
Switzerland's first embargo rules concerning Iraq were passed in 1990 and provided for a five-year statute of limitation. In 2003, it was set at seven to 15 years for major offenses. Most illegal payments breaking the embargo, however, occurred before the enactment of the new law, Balmer said. 
She said one case has so far been handed over to an examining magistrate, who will then decide whether to submit charges. Another is currently being investigated in Switzerland by cantonal (state) authorities. 
Swiss authorities also have seized several millions Swiss francs (dollars; euros) in bank accounts in connection with their oil-for-food investigations. Balmer denied to give an exact figure for the amount of blocked money. 
One Geneva-based oil-trading company also was fined 50,000 Swiss francs (about US$40,000; €32,000) for paying kickbacks under the oil-for-food program, but Swiss authorities declined to name the firm. 
The oil-for-food program was established in 1996 to help ordinary Iraqis suffering under U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait. It allowed Iraq to sell oil, provided most of the proceeds were used to buy humanitarian goods, and has since become the target of several corruption investigations. 
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Associated Press writer Eliane Engeler in Geneva contributed to this report.