Company Not Involved in Handling Any Funds for Payment of Goods

    WASHINGTON, Oct. 5 /PRNewswire/ -- Andre Pruniaux, Senior Vice President
of Cotecna Inspection, testified before the Subcommittee on National Security,
Emerging Threats, and International Relations today to describe the role of
Cotecna as a United Nations (UN) contractor under the UN's Oil-for-Food (OFF)
program.
    Speaking as the operations manager for activities in Africa and the Middle
East, Pruniaux explained that Cotecna was, in its contract with the UN OFF,
narrowly charged with the "authentication," rather than the traditional
inspection, of goods entering Iraq under the UN Resolution 986 OFF program.
    "Cotecna fulfilled its responsibilities consistently and according to our
industry's best practices," He said.  "Since the inception of its contract in
Iraq, Cotecna has authenticated the arrival of goods in Iraq worth a total of
$29.2 billion of which no single authentication has been proven to be
erroneous."
    Cotecna was not involved in handling any funds for the payment of any
goods, he also told the subcommittee.
    "Under normal circumstances," said Pruniaux, "Cotecna is hired to perform
inspection services in the traditional sense, which would involve a broad
range of tasks in support of full customs inspection services.  This would
include price analysis and quantity/quality inspection at port-of-origin
and/or the port-of-destination.  However, in the case of the UN OFF program,
Cotecna was hired only to authenticate that the goods had arrived in the
country.  Importantly, the term 'authentication' is unique to the UN OFF
program.  In the world of customs inspections, the term does not appear.  The
parameters of this contract, I would add, were originally established by the
Security Council working with UNOIP and the original incumbent contractor,
Lloyd's Register which performed authentication services from the inception of
the Program in 1996 until December 1998."
    Pruniaux explained that Cotecna played a limited technical role in
verifying that goods entering Iraq matched the list of goods authorized for
importation, and in the case of food stuffs, assessing their fitness for human
consumption.  He also affirmed that Cotecna was not involved in selecting the
goods to be imported, establishing the products' specifications, selecting
suppliers or negotiating prices or sales commissions.
    "The responsibility of inspections under this contract effectively fell on
the shoulders of exporting countries that were responsible for issuing export
licenses under the 986 OFF program," Pruniaux explained.
    Outlining the differences between the two ways goods were entering Iraq
under UN authority and approval, Pruniaux explained the first set of goods
entered the country through the Oil-for-Food program pursuant to Security
Council Resolution 986.  Under Security Council Resolution 661, similar types
of goods were entering Iraq, but at a volume double that of the 986 program.
    "These '661 goods' were the subject of private contracting and were not
financed by the OFF program, as individually approved by the UN's Office of
the Iraq Program," said Pruniaux.  "Therefore, Cotecna had neither
responsibility nor authority to either authenticate or inspect them."
    Pruniaux further explained to the Committee that under Cotecna's contract
with the UN OFF program, Cotecna authenticated 100 per cent of "986" imports,
and, with the exception of the quality control testing of all food items,
Cotecna was required to perform physical examination on not to exceed 10 per
cent of the non-food items.
    "We consistently fulfilled all of our mandates in what was a difficult and
challenging physical and political environment," he testified.
    Pruniaux cited tensions with UN humanitarian agencies, "because these
agencies adopted a more sympathetic attitude towards Iraqi and Kurdish
entities," and with the Iraqi government "which often used aggressive
intimidation of inspectors in order to influence the authentication and
payment process for financial gain."
    "When there were problems, and there were many," he said, "we reported
those problems."
    Pruniaux told the subcommittee that Cotecna has been pleased to cooperate
with the panel and would continue to do so throughout its investigations.

    Cotecna Inspection, S.A. is headquartered in Geneva, Switzerland and has
over 4,000 employees in over 100 offices around the world.  Incorporated in
1974, Cotecna specializes in the inspection of a variety of goods on behalf of
private traders and governmental entities.

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