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UN seeks probe into Swiss firm over Iraqi oil deal

Glencore has admitted to illegally profiting from sales of Iraqi oil Keystone

The United Nations has asked the Swiss authorities to investigate Glencore International, a commodities trader based in canton Zug, amid accusations that the company illegally profited from the UN's oil-for-food programme with Iraq.

This content was published on May 11, 2001 - 13:01

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 (SFr5.24 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 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.

The UN sanctions committee has now asked the Swiss authorities to investigate Glencore's activities. Bern, which has followed the organisation's lead in applying sanctions against Iraq since 1991, has made no comment on the UN's request.

swissinfo with agencies

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