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Viewing cable 06WELLINGTON218, NEW ZEALAND'S RESPONSE TO IIC FINDINGS
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
06WELLINGTON218 | 2006-03-21 04:04 | 2011-04-28 00:12 | UNCLASSIFIED | Embassy Wellington |
VZCZCXYZ0002
RR RUEHWEB
DE RUEHWL #0218 0800419
ZNR UUUUU ZZH
R 210419Z MAR 06
FM AMEMBASSY WELLINGTON
TO SECSTATE WASHDC 2547
UNCLAS WELLINGTON 000218
SIPDIS
SIPDIS
STATE FOR IO/PSC/LIZ PARKER AND EAP/ANP/DAN RICCI
E.O. 12958: N/A
TAGS: PREL KFIN PGOV NZ
SUBJECT: NEW ZEALAND'S RESPONSE TO IIC FINDINGS
REF: STATE 40595
¶1. The New Zealand government has investigated two companies named
in the Independent Inquiry Committee's interim report released
October 27, 2005, on allegations of illegal fund transfers to Iraq.
The government investigation found no evidence of such transfers by
the two companies. In addition, the New Zealand government
investigated the dairy cooperative Fonterra, which had a Vietnamese
trading partner that was named in the IIC report. The government
also cleared Fonterra of involvement in illicit payments to Iraq.
The New Zealand government so far has taken no action against
individuals or companies as a result of the IIC's findings.
¶2. The Independent Inquiry Committee (IIC) in its October 27 report
identified two New Zealand companies -- Ecroyd Beekeeping Supplies
Limited and JB Sales International Limited -- as having supplied
products under contracts that allegedly involved illicit fund
transfers to the Saddam Hussein regime. The report also identified
Vietnam Dairy Products Company as paying considerable kickbacks to
the regime. The company purchased whole milk powder from the New
Zealand dairy cooperative Fonterra, repackaged the product in
Vietnam and then sold it to Iraq.
¶3. A check of files by the New Zealand Ministry of Foreign Affairs
and Trade (MFAT) found that Ecroyd and JB Sales sought and received
the proper approvals and exemptions required under the UN sanctions
regime and New Zealand law to export to Iraq, according to a
November 4 statement by Foreign Minister Peters. Caroline Bilkey,
deputy director of MFAT's Legal Division, told post March 15 that
the government investigation found no evidence of illegal kickbacks
by the two companies.
¶4. Ecroyd told MFAT officials in 2002 that it had been asked to pay
an additional 10 percent tax in Iraq. After consulting with the
United Nations, MFAT told the company that such payment was illegal
and that it should refuse to pay it. Ecroyd subsequently reported
that an agent in Jordan said it no longer needed to pay the tax.
¶5. Bilkey said that at some point Fonterra became aware that its
product was being repackaged in Vietnam and sent to Iraq. MFAT then
sought and obtained an exemption from the Foreign Minister for
indirect exports of whole milk powder to Iraq. The government
investigation found no evidence that Fonterra was involved in or had
knowledge of illicit payments to the Iraqi regime. Bilkey noted
that the IIC report mentioned only the Vietnamese company, and not
Fonterra.
¶6. New Zealand is seeking additional information from the IIC to
establish whether there are grounds to prosecute either of the two
companies under New Zealand's anti-bribery laws. To do so, the New
Zealand government would need evidence that the companies had
knowledge and intention regarding the payment of bribes under the
Oil for Food Program. The New Zealand Police have requested that
the IIC share the information it has on these cases, and the IIC is
expected to hold a telephone conference with the police soon.
MCCORMICK