German chemicals distributor Brenntag has denied circumventing EU law to sell chemical raw materials to a Syrian pharmaceutical company.
The company said a Swiss subsidiary supplied chemicals diethylamine and isopropanol to Syrian drugmaker Mediterranean Pharmaceutical Industries (MPI) to produce a pain killer in 2014. It said the transaction, carried out by its subsidiary Brenntag Schweizerhall AG, was "in accordance with applicable law".
Brenntag said MPI was producing the pain killer under licence for "a well-known Swiss pharmaceutical manufacturer", but did not name the company.
German newspaper Sueddeutsche Zeitung reported that while both chemicals can be used in legitimate pharmaceuticals, they can also be used to create banned nerve agent sarin.
A UN commission report in March found President Bashar Al-Assad had used sarin and chlorine between 2013 and 2019 in attacks on its people.
The government denies using chemical weapons.
The German company said it did not circumvent European Union export restrictions and said the Swiss State Secretariat for Economic Affairs had confirmed compliance with export regulations.
Swiss drugmaker Novartis said it had granted MPI contract manufacturing and local distribution rights for products such as pain relief skin gel Voltaren.
Novartis said that while it supplied the active ingredient for the product in 2014, it was MPI's responsibility to procure other ingredients such as isopropanol or diethylamine and that the Swiss group played no role in that.
Novartis added that it was asked by the Swiss State Secretariat for Economic Affairs to hand over manufacturing documents from MPI in May last year, and voluntarily did so.
Following news reports on Thursday, shares in Brenntag dropped 5.8%.