Weir to admit breaking UN sanctions

Weir to admit breaking UN sanctions

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Weir makes pumps and valves for the oil and gas industry

Engineering group Weir is to plead guilty to breaking United Nations sanctions after it admitted giving kickbacks to Saddam Hussein’s regime.

Glasgow-based Weir, which makes pumps and valves for the oil and gas industry, expects to receive a fine and pay a confiscation order worth £13.9 million when the case is heard in the High Court in Edinburgh on Tuesday.

It has admitted two charges of breaching United Nations sanctions in connection with a number of Oil For Food contracts between 2000 and 2002.

Weir made £3.1 million of payments to the dictatorship through an agent who arranged contracts in Iraq.

The payments were in breach of the Oil For Food programme, which was introduced by the UN to enable Iraq to sell its oil provided the cash was used for food, medicine and other humanitarian needs and was designed to prevent Iraq building its weapons capability.

An investigation started in 2004 when the Glasgow-based company discovered the payments on top of the commission it paid for its activities, which included the supply of water pumps and pipelines.

Lord Smith, chairman of Weir, said: “What happened was wrong. As I said in 2004, I am bitterly disappointed that this went on within the Weir Group. Since 2004, when we first disclosed the issue, we have radically overhauled procedures. A strong ethics culture is in place across the group and it is the reference point for everything we do.”

Weir said it took action as soon as it became aware of a problem.

An external investigation of all contracts under the Oil For Food programme was carried out by independent legal advisers Herbert Smith. The company said it took comprehensive steps to improve its procedures and it now regularly monitors compliance.

Last month Weir announced it expects profits to be ahead of previous expectations as it benefits from the growing global demand for oil. It forecasts profits in the second half of 2010 of about £145 million, which is £50 million more than the same period the previous year. Weir, which was founded in 1871, employs 9,000 staff. It has UK operations in Manchester, Huddersfield and Bristol.

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