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AB Volvo officials risk prison for Iraqi bribe
Tuesday, 24 January 2012
Managers at Volvo AB paid millions of dollars to Saddam Hussein's regime in exchange for major contracts, Swedish prosecutors claimed. Now they are held accountable for events that are more than ten years ago.

“It's incomprehensible that you can keep this kind of thing alive so long,” says lawyer Hans Strandberg representing one of the two managers accused, both of whom deny the charges.

The men, 61 and 49 years old who from 2000 to 2002 were manager and marketing director respectively for Iraqi operation of  Volvo Construction Equipment in Eskilstuna International, a company within the Volvo Group.


According to the indictment, they are responsible for a so-called kickback of Skr29 million, in violation of UN sanctions against Iraq, paid to the Saddam regime. In exchange, Volvo received contract for wheel loaders and motor graders worth a total of Skr308 million.

It's not about bribery in the ordinary sense - these kickbacks, or side payments, were eventually returned to Volvo by the price of their vehicles were which were written up. The men are thus not indicted for corruption but for serious sanctions violations, which can lead to imprisonment for up to four years.

According to state prosecutor Nils-Eric Schultz, who has "inherited" the case from retired prosecutor, Christer van der Kwast, kickbacks were a way for Iraq to improve liquidity.

The defense claims that the system of kickbacks was widely known in the UN, which did not act to stop them. Furthermore, it was not the Volvo Company, but a dealer in Jordan, which paid them, according to Hans Strandberg.

“It has been assumed that there was something wrong when the dealer has agreed to pay this fee.”

The trial in Eskilstuna district court should have taken place already two years ago, but was then submitted. Another Volvo Head was previously indicted, but the case had been dismissed. The prosecutor is preparing a similar charge relating to AB Volvo's rival,  Scania.
By Scancomark.se Team

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