FLSmidth and Iraq’s oil for food programme

FLSmidth and Iraq’s oil for food programme
Published: 30 March 2006

The Public Prosecutor for Serious Economic Crime has decided to raise charges against FLSmidth A/S as well as against several other Danish companies.

According to the United Nations report, the case against FLSmidth concerns five deliveries of spare parts to the Iraqi cement industry of an aggregate value of approximately DKK14.5m, the alleged payment of commission amounting to DKK580,000 or nearly four per cent of the total contract value.

As previously mentioned in the Danish press, FLSmidth is among the many international companies that traded with the Iraqi regime under the United Nations Oil-for-Food programme before the invasion in 2003.
 
In the late summer of 2005, a UN inquiry committee announced that it had examined all trade carried out under the Oil-for-Food programme. The inquiry confirmed the suspicion that most of the international companies that had traded with the Iraqi regime under the Oil-for-Food programme had paid commission to the Iraqi regime in violation of the prevailing trade restrictions in order to carry out business. The United Nations has since referred the matter to the respective national authorities for further investigation.
 
When the United Nations originally announced the findings of its inquiry, FLSmidth made an internal investigation of the trade carried out under the Oil-for-Food programme. This internal investigation showed no signs of FLSmidth having paid illicit commission to the Iraqi regime in order to carry out business. Moreover, a recent review of the files of the case has confirmed that FLSmidth did not violate the prevailing trade restrictions.
FLSmidth therefore maintains its refusal of both the grounds for raising the charges and any justification of the company being convicted of having violated the trade restrictions in force at the time in question.