A canton Zug-based commodities trader, Glencore International, is to be investigated over allegations that it illegally profited from the United Nations' oil-for-food programme with Iraq.This content was published on May 16, 2001 - 11:22
The Swiss authorities confirmed on Wednesday that they would launch a probe, following an appeal last week by the UN, which says Glencore made an illegal profit of $3 million (SFr5.24 million) from sales of Iraqi oil.
Glencore was owned by the controversial financier Marc Rich, who fled to Switzerland in 1984 to escape a US prison term for tax evasion. He was pardoned by the former US president, Bill Clinton, at the beginning of the year.
Rich sold Glencore along with other parts of his holdings to a Russian consortium, Crown Resources, in February.
In the same month, according to UN officials, Glencore bought one million barrels of oil from Iraq, under the UN's oil-for-food programme, and sold them in Croatia instead of the United States as planned.
The company made a profit of $3 million on the transaction, but did not pass this money to UN. Under the oil-for-food programme, the price of Iraqi oil is fixed, and proceeds from its sale must be handed to the UN, which uses the money for food and medicine for the people of Iraq.
Glencore has since admitted that it profited from the transaction and has offered to hand the money over to the UN.
A diplomat on the UN Security Council told swissinfo last week that this is not first time that Glencore has tried to profit from oil deals with Iraq. The diplomat said that a South African company, Montega trading, which is owned by Glencore, had previously tried to profit illegally from Iraqi oil sales.
swissinfo with agencies
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