BNP Paribas rejects UN criticism over oil-for-food

28th October 2005, Comments 0 comments

PARIS, Oct 28 (AFP) - The French bank BNP Paribas rejected on Friday criticism by an international commission that it had been in a conflict of interest and had lacked transparency in its handling of the oil-for-food program in Iraq.

PARIS, Oct 28 (AFP) - The French bank BNP Paribas rejected on Friday criticism by an international commission that it had been in a conflict of interest and had lacked transparency in its handling of the oil-for-food program in Iraq.

The bank, which managed the program's accounts, insisted in a statement that it had carried out its responsibilities "in good faith and in conformity" with the relevant United Nations resolution.

An independent inquiry on Thursday linked prominent industrial and oil corporations to a scandal surrounding the program, which ran from 1996 to 2003, citing evidence of alleged illegal surcharges and kickbacks paid to Iraq.

Amid fears ordinary Iraqis were suffering under international sanctions, the UN Security Council set up the program to allow Baghdad to export a limited amount of its oil to purchase food and medicine under UN supervision.

The inquiry committee, however, found that Saddam's regime manipulated the program to extract 1.8 billion dollars in surcharges and bribes while an inept UN headquarters failed to exert administrative control.

According to the 500-page report, 139 companies paid illegal oil surcharges to Baghdad and 2,253 firms gave Saddam's regime kickbacks on humanitarian-related goods shipped to Iraq.

The report found that the BNP faced a conflict of interest because it was also issuing letters of credit on behalf of private firms purchasing Iraqi oil.

But the bank, in its statement Friday, stressed that UN regulations governing the oil-for-food program permitted such a practice.

The report also alleged that the BNP had failed to intervene or question when obscure companies were depositing and withdrawing vast amounts of money in a flurry of transactions.

The bank on Friday argued that it had "repeatedly warned the UN and the (Iraq) sanctions committee" that many companies selected to benefit from the programme could not honour their contracts without with the mediation of larger oil companies.

Despite its criticism, the commission report determined there was "no proof that it (the BNP) had known about or approved of the use of its services to pay illegal surcharges (on Iraqi oil)".

Copyright AFP

Subject: French news

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