Akzo to pay up to $3.75m in oil-for-food fines

21 December 2007 17:48  [Source: ICIS news]

HOUSTON (ICIS news)--Dutch paints and coatings company Akzo Nobel confirmed on Friday that it has agreed to pay regulators up to $3.75m (€2.6m) to settle accusations connected to the Iraqi oil-for-food programme.

US authorities had accused two former Akzo Nobel subsidiaries, Organon and Intervet International, of paying $280,000 in kickbacks to the Iraqi government. Akzo Nobel sold the pharmaceutical subsidiaries earlier this year to Schering-Plough.

In return for the kickbacks, the Iraqi government awarded contracts to the subsidiaries, US authorities said. Those contracts allowed the subsidiaries to sell goods under the UN's oil-for-food programme.

In the agreement, Akzo Nobel will pay the US Securities and Exchange Commission (SEC) $750,000 in penalties and about $2.2m in profits that the former subsidiaries earned under the kickback scheme.

In addition, Akzo Nobel entered an agreement with another US agency, the Department of Justice (DOJ), in which it admitted that the former subsidiaries paid kickbacks to the Iraqi government, federal authorities said.

According to the DOJ settlement, Organon has 180 days to pay a €381,000 fine to Dutch authorities.

If Organon misses the deadline, Akzo Nobel will pay $800,000 to the US, the Department of Justice said.

As part of the agreement, Akzo Nobel will cooperate with the Department of Justice's investigation into the oil-for-food programme.

In addition, the Department of Justice will not file criminal charges against Akzo Nobel or against its subsidiaries.

An Akzo Nobel spokesman said the company had no comments, outside of confirming the contents of a statement issued by the Department of Justice.

($1.00 = €0.70)

By: Al Greenwood
+1 713 525 2653

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