German industrial giant Siemens yesterday disputed allegations in a UN report it paid bribes to Saddam Hussein's government, but Sweden's Volvo said payments to work in Iraq were considered normal at the time.
A UN-appointed panel investigating the world body's now discontinued oil-for-food programme on Thursday named Siemens and Volvo among 2,200 companies it accused of diverting $1.8 billion to the former Iraqi administration.
"We know of no kick-back payments initiated or tolerated by Siemens to seal contracts related to the oil-for-food programme," a spokesman for the Munich-based engineering firm said.
The UN survey said more than half the firms doing business with Iraq wittingly or unwittingly fed Saddam's need for cash through straight bribes or surcharges on oil sales.
The companies involved came from 66 nations, including the US, Russia, France, Germany and Switzerland.
Switzerland, which functioned as a hub for the oil trade with Iraq, said late on Thursday it had started criminal proceedings against four people and frozen bank accounts after the UN report.
But Russian Foreign Minister Sergei Lavrov was quoted as saying that some of the documents used in the report - which implicated senior Russian officials - were fakes.
Moscow was an ally of Baghdad during Saddam's rule.
"We were in touch several times with the commission and in a number of cases the documents they showed us were fake, in particular the signatures of Russian officials," Itar-Tass news agency quoted Mr Lavrov as saying.
Mr Lavrov did not say, though, if Moscow was disputing the findings, saying only it would study the report carefully.
The oil-for-food programme, which began in 1996 and ended in 2003, was aimed at easing the impact of UN sanctions imposed in 1990 after Baghdad's soldiers invaded Kuwait. It allowed Iraq to sell oil to pay for food, medicine and other goods.
The UN report said all firms and traders contacted by the panel, led by former US Federal Reserve chairman Paul Volcker, denied the allegations except for one oil firm and 26 suppliers of goods.
It said three Siemens units had paid bribes totalling $1.6 million, but the German company said its own investigation had not confirmed the allegations against Siemens France, Siemens Turkey or Osram Middle East.
Swedish truckmaker Volvo, which was said to have paid $535,000, stressed it did not allow bribes. But the company also said its then agent in Iraq had told the commission that he paid money to the regime.
"One can question why, unfortunately, nobody spotted this and raised the alarm about it," spokesman Marten Wikforss said.
"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," he told Reuters in Stockholm.
Volvo said it was examining the UN report.
"If it is confirmed that the accusations are valid and improper actions have occurred, we will naturally take actions," Volvo chief executive Leif Johansson said in a statement.
DaimlerChrysler, accused of paying bribes worth $7,134, said it noted the report's findings, but declined further comment.
Since 1998 it has been a crime for a German to pay a bribe overseas, but German prosecutors said they had not yet launched any criminal investigations.
Other countries, including the United States, Britain, France and Switzerland, have initiated prosecutions related to the oil-for-food programme.
A former British diplomat said the report into how Saddam dodged sanctions and earned billions from oil smuggling and bribes was a lesson to the United Nations how not to handle a possible crisis in neighbouring Iran.
"The Saddam regime was sustained by illegal smuggling that amounted to some $11 billion. The UN Security Council, including the US and Britain, did very little to stop that," said Carne Ross, who was responsible for handling Britain's Iraq policy at the United Nations from 1998 to 2002.
"We should never make that mistake again," he told Reuters.