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Volvo: many firms paid to work in Saddam's Iraq

Posted on: Friday, 28 October 2005, 09:16 CDT

STOCKHOLM (Reuters) - Truck manufacturer Volvo, cited in a U.N. report on kickbacks to Saddam Hussein's government, said on Friday it did not allow bribes but noted payments to work in Iraq were considered normal at the time.

The U.N.-appointed panel investigating the oil-for-food program said on Thursday that 2,200 companies, including Volvo, DaimlerChrysler and Siemens, had wittingly or unwittingly made payments totaling $1.8 billion.

"Our agent (in Iraq), which we used at the time but with whom we have not worked for quite a while now, has told the commission that he paid money to the Baghdad regime and we have no reason to doubt that," said Volvo spokesman Marten Wikforss.

"One can question why, unfortunately, nobody spotted this and raised the alarm about it," he told Reuters.

"But one should remember that this was spoken about openly and was perceived as something of a transaction fee which you paid to the Iraqi regime in order to be permitted to do business there. This is evident in the large number of companies which are named here."

He said the government in Baghdad was the legitimate authority at the time and that all deals there were subject to U.N. approval.

"This also contributed to people not really understanding that it was not appropriate," he added.

He said the group was examining the report.

"If it is confirmed that the accusations are valid and improper actions have occurred, we will naturally take action," Volvo Chief Executive Leif Johansson said in a statement.

"Our rules are perfectly clear to ensure that improprieties shall not occur. Nevertheless, we cannot exclude that someone or some people in our organization, or our sales agent in Iraq, have breached the code."

Swedish engineering group Atlas Copco, also among the firms cited in the U.N. report, said one of its units in Belgium had been subject to an investigation by the U.N. committee but noted that its own internal probe had "verified that there were no payments made to the Iraqi government."

"Atlas Copco has strongly objected to the assumption made by the Committee indicating responsibility for the activities of the agent in Iraq at the time," the firm said in a statement.

The firm said it would continue to investigate.

Source: REUTERS

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