France ordered to repay Taiwan banned commissions (AP)

PARIS – A Paris appeals court has ordered France and French defense company Thales SA to pay back euro630 million (about $913 million) to Taiwan in a long-standing dispute over bribes in a 1991 frigate sale, the French prime minister's office said Thursday.

The ruling brings to a close a two-decade-old dispute over enormous bribes that were specifically forbidden in the contract but became an integral part of the transaction to sell Taiwan six Lafayette frigates.

The Taiwanese navy bought the frigates from French firm Thomson-CSF — which has since changed its name to Thales SA — as well as state-owned shipbuilders. The French government guaranteed the contract.

The contract said that if any commissions to intermediaries were uncovered that sum would have to be turned over to Taiwan. Taiwan's government has said that the military paid $460 million — nearly double the original budget — for each of the six frigates.

The case has bedeviled a series of French governments, but Prime Minister Francois Fillon placed the blame on the Socialist government of President Francois Mitterrand, in power when the contract was signed.

The public coffers "must therefore support today the heavy consequences of the decision taken in 1991 to pay commission contrary to the letter of the contract," a statement from Fillon's office said.

"This episode ... weighs heavily on the image of our naval arms exporting industry," the Defense Ministry said.

Fillon's office said the state's part in the payback amounts to some euro460 million. Thales said in a statement it will pay the remaining 27.46 percent, or about euro170 million. Provisions have already been made for the fine so won't reflect on the company's financial results, Thales said.

However, the French government hopes to recover at least some of the funds, according to the prime minister's statement. It said France hopes to obtain "at least a partial reimbursement" should Taiwanese authorities manage to get "all or part of the commissions paid out" from the intermediaries.

Yahoo! News

U.N.: N. Korea still trades banned arms

North Korea is doing deals in banned weapons with Iran and others, a U.N. report saysThe investigating panel finds "loopholes" and "vulnerabilities" exploited by North Korea"Prohibited ballistic missile-related items" are suspected to have been traded with Iran

United Nations (CNN) -- A new unpublished U.N. report claims North Korea continues to trade banned weapons technology with several countries, including Iran.

The report, which was examined by CNN Monday, was compiled by a U.N. panel of experts looking into Security Council violations by the Democratic People's Republic of Korea.

The report asserts that North Korea has "continued to defy the bans on imports and exports of nuclear-related items, of conventional arms and of luxury goods." In addition, the document says that "the panel has discovered loopholes and other vulnerabilities in shipping and transportation practices that the Democratic People's Republic of Korea and others have exploited."

One of those trading partners in weaponry and technology, according to the report, is the Islamic Republic of Iran. The panel of experts found "prohibited ballistic missile-related items are suspected to have been transferred" between North Korea and Iran "on regular scheduled flights of Air Koryo and Iran Air."

The North Koreans have also used cargo flights and handling because such flights "lack the kind of monitoring and security to which passenger terminals and flights are now subject."

North Korea was targeted with sanctions by the U.N. Security Council starting in 2006 after it had conducted several nuclear and ballistic tests over the years.

The report detailed several examples of illicit arms or technology sales by North Korea that were stopped:

-- Thailand reported North Korean arms seized in December 2009 at Dom Muang Airport. The markings of crates suggested the 35 tons of arms were probably part of multiple shipments, possibly headed to Myanmar.

-- The panel learned about weapons that would have been delivered to Burundi in October 2009 by a Ukrainian company, possibly by the same aircraft that was impounded two months later in Thailand from North Korea.

-- Two states inspected a seized shipment containing propellant for use in Scud-type missiles en route from the North Korea to a Middle Eastern country that diplomats identified to CNN as Iran.

Calls seeking comment from the North Korean mission at the United Nations were not immediately returned.

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