Iraq disallows import of Australian wheat

Iraq disallows import of Australian wheat

Iraq has snapped trade ties with AWB, its Australian supplier of wheat, after the company was charged with bribing the Saddam Hussein government during the United Nations oil-for-food program.

Iraq will not resume business with AWB until the Australian government gives it a clean-chit. The government of Australia is investigating whether the private company, which at that time acted as the wheat board for the state, paid an inducement of $222 million to the despotic regime of Saddam Hussein to clench an export deal under the oil-for-food program.

AWB has refuted the allegations of illegal dealing contending that the payment was supposed to cover the transit costs. However the UN is not ready to buy the argument. The company's Managing Director Andrew Lindberg has resigned after evidence pointing at his involvement in the illicit transaction was unearthed. In addition, the company's share price has plummeted by eight percent.

“AWB is disappointed by the decision,” said Brendan Stewart, Chairman of the company. “AWB is determined to take whatever steps are necessary to rebuild its reputation with all customers, growers and shareholders.” Iraq's decision has crashed AWB's hopes of clenching yet another deal of supplying a million tons of wheat to Iraq, a contract floated by the Iraqi government a short time ago. “Iraq has been a very major market for AWB, and a profitable market. AWB will now have to find alternative markets for its grain,” said Grant Saligari, an Analyst at Commonwealth Bank of Australia.

AWB was the biggest among the suppliers under the oil-for-food program of the UN which permitted Iraq to buy vital commodities like food and medicine in exchange of oil, while it was under international trade sanctions. Iraq received 6.8 million tons of wheat during 1996 and 2003 from AWB which in turn got $2.3 billion from the UN as payment.