Iraqi Deputy Prime Minister Ahmed Chalabi said the former Australian Wheat Board (now AWB) should pay the new Iraqi government compensation for the $290 million it sent to a Jordanian trucking company which later turned out to be a front company for the dictator, The Weekend Australian reported.
"I don't want to be specific but they should organise compensation, because that money, the $US220 million (that Saddam skimmed from Australian wheat contracts) belonged to Iraq and to the Iraqi people," Mr Chalabi said.
AWB must have known the money under the oil-for-food program was
being siphoned off to Saddam, Mr Chalabi said.
The Iraqi Grains Board made the decision to halt Australian wheat purchases, which are up to $800 million each year, he said.
A UN-appointed inquiry into the so-called slush fund found no direct evidence AWB knowingly provided kickbacks to Saddam.
But it did find the AWB should have known the Jordanian company, Alia, whom it was paying trucking fees to, was a front for the Iraqi government and a financial conveyor belt for the dictator's government.
Australia seeks clarification
The Australian government is demanding clarification of the claims amid indications neither AWB Ltd or the government have had confirmation that the contract, worth $800 million a year, had been halted.
The federal government has asked Australia's ambassador in Iraq to seek clarification of the issue, a spokesman for Trade Minister Mark Vaile said.
AWB spokesman Peter McBride said the company had not received any official signal from Iraq on future sales.
AWB in August signed a $US147-million ($A200 million) contract to deliver 650,000 tonnes of wheat to Iraq that was in the process of being shipped.
Mr McBride said wheat exports to Iraq would continue and officials would seek an explanation from the Iraqi Grains Board.
"We've got a contract in place and we are delivering against that contract," he said.
"Regarding the assertion that trade going forward would cease forthwith, we've had no confirmation of that and will be making contact with the Iraqi Grains Corp."