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Volvo settles Iraq bribery case with US authorities

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17:05 CET+01:00
Volvo has agreed to pay $19.6 million in fines, as well as return past profits with interest from contracts implicated in a bribery scandal related to the UN Oil-for-Food Programme in Iraq.

Under the settlement, Volvo enters into a consent agreement with the U.S. Securities and Exchange Commission (SEC) and a deferred prosecution agreement with the U.S. Department of Justice (DOJ) resolving issues related to the activities of two of its subsidiaries in Iraq under the UN programme.

“The incident is, of course, regrettable, but we do note with some satisfaction that the authorities spoke favourably of the cooperation by Volvo as well as Volvo's own investigation and measures”, said Volvo CEO Leif Johansson in a statement.

“It is important that we all now learn from what occurred.”

Volvo was one of 2,000 firms listed in a United Nations investigator's 2005 report detailing bribes to former Iraqi dictator Saddam Hussein's regime, in contravention of international sanctions against the country.

The bribes are alleged to have been made within the framework of the now scandal-ridden Oil for Food programme. Saddam Hussein gained up to $1.8 billion in bribes during the sanctions era.

Volvo will charge $10 million of the fines to its 2008 first quarter operating income.

The settlement also stipulates that Volvo will improve internal compliance measures between Volvo and its subsidiaries.

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