report on programme manipulation - Independent Inquiry Committee

INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME
REPORT ON PROGRAMME MANIPULATION
CHAPTER TWO
OIL TRANSACTIONS AND ILLICIT PAYMENTS
on January 16, 2003 by Awad Ammora & Co., a Syrian company from which Vitol had
purchased oil in Phase XIII. 321
In response to a notice letter from the Committee, Vitol has stated that “when Vitol refused to
cooperate with Iraq over its surcharge policy, no further allocations were made by SOMO to Vitol
under Vitol’s direct contract/s with SOMO.” However, the Committee notes that Vitol did lift oil
under its direct contracts with SOMO in May, July, and December 2001—after the Government
of Iraq had imposed surcharges and after Mr. Boidevaix informed Vitol about the imposition of
such surcharges. As discussed above, surcharges were paid on these contracts by Peakville
Limited, an entity connected to Vitol. 322
2. Vitol’s Purchase of Oil through Mastek
A significant source of oil for Vitol during the Programme was Mastek. Vitol financed and lifted
a total of 40 million barrels of oil under Mastek contracts. Vitol’s ties to Mastek started in 1999
when one of Mastek’s shareholders, Mr. Sudhir, approached Vitol’s subsidiary in Singapore,
Vitol Asia, with an opportunity to acquire Iraqi crude oil. The oil had been allocated by SOMO
to another Mastek shareholder, Mr. Shareef. 323
Mr. Shareef was an Iraqi-born businessman living in Malaysia who started receiving oil
allocations in Phase V. Mr. Shareef’s oil allocations were tied to political considerations as Iraqi
officials perceived him as someone who could assist in countering the effects of sanctions by
improving Iraq’s ties to Malaysia. This perception was due in part to Mr. Shareef’s family ties to
Abdullah Ahmad Badawi, Malaysia’s Deputy Prime Minister in 1999 and its current Prime
Minister, and Mr. Shareef’s ability to arrange for trade delegations to visit Iraq. 324
321 Committee oil company table, contract no. M/10/78; SOMO bill of lading, bbl/3236 (Dec. 20, 2001)
(relating to M/10/78); SOMO sales contract no. M/13/74 (Jan. 9, 2003); Awad Ammora interview (Sept.
30, 2005) (indicating that he sold his oil allocation in Phase XIII to Vitol); SOMO sale contract no.
M/13/40 (contracting with Awad Ammora); Jordan National Bank record, SOMO account, credit advice
(Jan. 16, 2003) (translated from Arabic) (showing incoming transfer from Awad Ammora in the amount of
$240,988.00; handwritten notation indicates that the payment relates to “Vitol (Mr. Boidevaix) on contract
M/10/78”).
322 Vitol letter to the Committee (Oct. 20, 2005); Robin D’Alessandro interview (Oct. 10, 2005); Serge
Boidevaix interview (Oct. 4, 2005); SOMO bills of lading, bbl/3123 (May 31, 2001) (relating to M/09/97);
ck/5024(2) (July 14, 2001) (relating to M/09/97), bbl/3140(1) (July 28, 2001) (relating to M/09/97),
bbl/3236 (Dec. 20, 2001) (relating to M/10/78).
323 Committee oil company table, contract no. M/07/59 (evidencing that Mastek received 2.4 million barrels
in Phase VII); Vitol and Mastek Phase VII agreement; Committee oil financier table, contract nos.
M/08/60, M/09/18 (evidencing that Vitol purchased 37.9 million barrels of oil from Mastek in Phases VIII
and IX); Jaya Sudhir interview (Aug. 19, 2005); Kho Hui Meng interview (Aug. 19, 2005).
324 SOMO oil allocation table for Phase VI (approved on May 27, 1999) (indicating that an allocation had
been given to Mr. Shareef in the previous phase) (translated from Arabic); Tariq Aziz interview (Aug. 16,
2005) (indicating that Mr. Shareef had many ties to Malaysian political parties); Taha Yassin Ramadan
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