18 March 2010 23:04 [Source: ICIS news]
HOUSTON (ICIS news)--UK specialty chemicals and fuel additives producer Innospec pleaded guilty on Thursday to charges of bribery and kickbacks made by the company to Iraqi government officials, and will pay $40.2m (€29.3m) in fines and settlements stemming from a multi-agency probe into the company's activities in Iraq, Indonesia and Cuba, regulators said on Thursday.
In addition, Innospec also admitted to selling chemicals to Cuban power plants, in violation of the US embargo against Cuba, the US Department of Justice said.
As part of its plea agreement with the Department of Justice, Innospec will pay a $14.1m criminal fine.
From 2000-2003, Innospec's Swiss subsidiary, Alcor, was awarded five contracts worth more than €40m under the UN Oil for Food Program, the Department of Justice said. Under the contracts, Alcor was to sell tetraethyl lead (TEL) to refineries operated by the Iraqi Ministry of Oil, the Department of Justice said.
However, to win those contracts, Alcor paid or promised to pay at least $4m in kickbacks, the Department of Justice said.In addition, Alcor was to pay more than $1.5m in bribes to secure sales of TEL to Iraq, the Department of Justice said. It paid another $150,000 in 2006 to ensure that competing products were rejected for use in Iraqi payments.
In a related matter, Innospec settled a civil lawsuit filed by the Securities and Exchange Commission (SEC), agreeing to pay the regulator $11.2m to settle allegations accusing the company of bribing government officials in Iraq and Indonesia, a US regulator said on Thursday.
In all, Innospec will pay $40.2m in fines and settlements to the US and UK, the SEC said.
The SEC had sued the company, alleging that Innospec routinely paid millions of dollars in bribes to sustain sales of TEL to state-owned refineries and oil companies in Iraq and Indonesia.
The SEC also accused Innospec of paying kickbacks to Iraqi officials in order to win contracts under the UN oil for food programme.
The bribes allegedly took place in 2000-2007, according to the SEC. During that time, Innospec paid more than $6.3m and promised an additional $2.8m, the SEC alleged.
In return, Innospec allegedly won contracts worth roughly $176m, the SEC said. Profits totalled $60m, the SEC alleged.From 2000 through 2003, Innospec obtained five oil for food programme contracts for the sale of TEL lead to the Iraqi Ministry of Oil and its component oil refineries (MoO) and paid kickbacks equaling 10% of the contract value on three of the contracts and offered kickbacks on the remaining two contracts, the SEC said.
Innospec said it had no comments on the allegations or the settlement.
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