Australia accused the US yesterday of prematurely punishing the country's monopoly wheat exporter over allegations its funds provided kickbacks to the regime of former Iraqi president Saddam Hussein.
The Australian Wheat Board (AWB) said the US Department of Agriculture (USDA) had barred it from US export-credit programs over the UN report into the oil-for-food program.
The UN report alleged last month that Saddam's regime received more than US$220 million in kickbacks through AWB under the oil-for-food program.
However, Foreign Minister Alexander Downer said it was wrong to act against AWB while an Australian government probe into the matter was still under way.
"I don't think Australia's competitors in the international wheat market should be taking precipitous action against the Australian Wheat Board before the Cole inquiry has completed its report," Downer told reporters in South Korea.
Prime Minister John Howard said that US wheat groups which lobbied for the ban were competing with AWB in the lucrative Iraqi market, while Trade Minister Mark Vaile was concerned that AWB's reputation could be tarnished.
"It doesn't look good," Vaile told ABC radio.
AWB said the ban would have no financial impact because it already took no part in the US agricultural export-credit programs nominated by Washington.
"However, the actions by the USDA are unjustified and AWB [USA] will be vigorously defending its position," it said in a statement.
AWB managing director Andrew Lindberg said the US wheat interests which successfully lobbied for the ban needed to be reminded that the report concluded that AWB did not knowingly funnel finds to the Saddam regime.
The Australian government last week announced a commission of inquiry would investigate AWB's involvement in the oil-for-food program from 1996 to 2003, which allowed sanctions-hit Iraq to export oil and import humanitarian goods using part of the proceeds.
The report by former US Federal Reserve chief Paul Volcker found that AWB, the largest humanitarian provider under the UN's oil-for-food program, did not directly pay bribes to the Iraqi government, but that some of its officers probably understood what was going on.
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