WASHINGTON – Multinational banks and European companies that did business with Saddam Hussein and broke the sanctions imposed on Iraq before his ouster have been awarded contracts by the Iraqi interim government and American officials.

One of the companies receiving Iraqi contracts, Scotland’s giant engineering firm the Weir Group, was highlighted this week in a Senate hearing for having transferred millions of dollars of kickbacks into a secret Swiss bank account in order to secure contracts with Saddam’s regime.

Two banks, Britain’s HSBC and JPMorgan Chase & Company, have also been the beneficiaries of business dealings in Iraq since Saddam was toppled by an American-led invasion, despite the fact that both were fined for violating sanctions imposed on Iraq during the regime of the former dictator.

The Senate’s Permanent Subcommittee on Investigations was presented earlier this week with details of the Weir Group’s kickback scheme under the United Nations’ oil-for-food program. In written testimony, senators were told by investigative counsel Steven Groves that the Glasgow-based group was “not the type of company one would normally associate with shady Iraqi middlemen or with secret Swiss bank accounts. Yet that is what occurred here.”

Senators were told that the engineering group could have refused to pay kickbacks to Saddam’s regime but chose to “move forward with new Iraqi demands” by paying more than $8 million into a Geneva bank account.

The panel heard that Weir was one of more than 3,500 companies worldwide that had contracts with Iraq under the U.N. program, and that hundreds probably paid kickbacks to Saddam.

The Weir Group has approximately $10 million in Iraqi contracts now and is bidding for more. In the summer, the company admitted that the kickback al legations were true, saying it had inadvertently contributed to Saddam Hussein’s regime. Last month, Weir disciplined several key executives.

According to Mr. Groves, in June 2000 the Iraqis told Weir’s agent that they would no longer enter into contracts with the company unless the price of contracts was inflated by 10%, with the additional money being placed in a Swiss bank account for the use of Saddam’s regime.

Mr. Groves testified: “This was the critical moment for Weir. They could have refused to inflate their contracts, they could have refused to pay any money back to the Hussein regime. Unfortunately, they agreed to move forward with the new Iraqi demands.” The United Nations approved the contracts. In all, Weir did about $80 million worth of business under the oil-for-food program.

While acknowledging in a recent interview with London’s Daily Mail newspaper that Weir’s reputation had been damaged, the company’s chairman, Sir Robert Smith, said it was not a serious setback for the engineering group, which has done business in Iraq for a half-century.

“We were there when Saddam was a schoolboy,” Mr. Smith said. “This is a tiny blot on the scutcheon. People think we played it very straight by standing up and talking about it.”

Britain’s HSBC, which the U.S. Treasury Department fined twice for violating sanctions on Saddam’s Iraq, received one of the first foreign banking licenses handed out by the Iraqi interim government. That was despite the fact that the British bank’s American subsidiary, HSBC USA, paid the Treasury Department’s Office of Foreign Assets Control more than $200,000 in fines in 2000 and 2001 to settle allegations of breaking the trade ban.

Under the sanctions, the United Nations prohibited most commercial transactions with Iraq following Saddam’s invasion of Kuwait. In 1996, the United Nations established the oil-for-food program, which permitted U.N.-approved dealings to go ahead. Treasury documents released to The Associated Press show that HSBC was involved in three sanctions-busting transactions totaling more than $500,000.

In October, a CIA report alleged that Saddam’s regime stashed money in an HSBC account in neighboring Jordan, using the money to evade international sanctions.

HSBC said internal bank reviews revealed “no irregularities to date.” In a later statement, the bank said: “Throughout the period of the Iraqi sanctions, we were acutely conscious of allegations that they were being breached and, consequently, of the need for great vigilance.”

JPMorgan Chase & Company, which American officials picked after the ouster of Saddam to oversee the Trade Bank of Iraq, paid a fine four years ago to settle allegations that its Chase Manhattan Bank allowed a $50,000 transfer involving Saddam’s Iraq. Spokesmen for the bank say the transfer was a mistake.

In a statement released by the Weir Group in the wake of this week’s Senate hearings, the Scottish company said: “We do not think it would be appropriate for us to comment further on the information we have given to the Senate committee while their inquiries and other inquiries are ongoing.”

A spokesman for Senator Coleman of Minnesota, chairman of the investigations committee, said he could not comment on the matter yesterday.