British company Weir fined for breaching Iraq sanctions
British engineering firm Weir was fined three million pounds (4.7 million dollars, 3.5 million euros) Wednesday for paying illegal kickbacks to Saddam Hussein's Iraqi regime to secure contracts.
The fine was imposed at the High Court in Edinburgh after Weir admitted two charges of breaching United Nations sanctions in connection with contracts awarded under the UN oil for food programme.
The Glasgow-based firm, which makes pumps and valves for the oil and gas industry, had already agreed to forfeit profits from the deals to the tune of 13.9 million pounds -- a record under Scottish law, according to officials.
Imposing the three-million-pound fine, judge Colin Sutherland said he had considered the need to "deter future offences", as well as the fact that decisions to pay the kickbacks were authorised at a senior level.
"A substantial financial penalty is undoubtedly merited," he said.
Speaking outside court, Weir group chairman Lord Robert Smith said: "What happened back in 2001 was wrong and we accept full responsibility.
"Since 2001, Weir has been transformed. We have a different board and we have a different management team."
He added: "Today, we have in place robust ethical policies and procedures and we operate a zero-tolerance approach to any behaviour that contravenes them."
Weir admitted making payments of 3.1 million pounds to the Iraqi regime through an agent to get contracts worth 35 million pounds between September 2001 and April 2004 to supply spare pumps for drinking water and oil projects.
The agent was also paid about 1.4 million pounds for his work.
The court heard that in 2000, the Iraqi government decreed that companies supplying goods had to pay a kickback to secure contracts, worth 10 percent of their value.
The supplier would then claim the inflated price from funds controlled by the UN as part of the oil for food programme, which was intended to allow Iraq to sell its oil provided the cash was used for humanitarian purposes.
They would keep the true cost of the contract and pay the extra 10 percent to the Iraqi regime.
© 2010 AFP