Foreign Minister Alexander Downer says there is no way his department could have known the monopoly wheat exporter was paying kickbacks to Saddam Hussein's regime.
This comes as farmers in the United States join calls for an investigation into whether AWB executives can be prosecuted for the breach of United Nations sanctions.
In evidence to the Cole Commission of Inquiry on Monday, AWB whistleblower Dominic Hogan said the company said he needed coaching on how to deal with questions about the kickbacks.
Mr Hogan, a former AWB executive said the company’s lawyer contacted him after he had left the company saying AWB wanted all its people inside the tent before a UN investigation began.
He also said he assumed inland trucking payments had been approved by the United Nations, but admitted that the company to his knowledge had no documentary evidence from the UN to support that belief.
In his statutory declaration, Mr Hogan said that his first suspicions the increased transport fees were not for transport arose in February 2001, which he raised them with his immediate superior, however was told to continue working as usual.
He said he was concerned over "exorbitant" fees AWB was paying to two agents in Pakistan to secure wheat sales in the country - one being paid $US4 a tonne for his services, at one point receiving $4m (A$5.3m) for a shipment of wheat.
But he said the Department of Foreign Affairs and Trade played a limited role in approving contracts, describing it as little more than a post box in the approvals process.
Mr Downer said he is confident no one in his department was aware of the kickbacks.
The Jordanian trucking company that was allegedly at the centre of the kickbacks also told the inquiry it never hid its connections to the Iraqi government.
Alia Transport also told the commission of inquiry into AWB's business in Iraq that it never transported a single grain for the Australian company.
In a statement to the inquiry, Alia's general manager Othman Al Absi said his company, which is still 49 percent owned by Iraq's Ministry of Transport, collected transport and after-sales service fees on behalf of the ministry between 1999 and 2003.
But that all trucking services for AWB's wheat were handled by public and private transport firms in Iraq because it was too dangerous for Alia's drivers to work there.
In a statutory declaration, Mr Al-Absi said it wasn't until late 2003 that Alia began providing a transport service for AWB wheat being trucked from the Iraqi port of Umm Qasr.
The inquiry continues on Tuesday.