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US, UK officials knew about Saddam kickbacks

An executive of P and O Nedlloyd, a shipping company, said a 10% "after sales tax", was paid into a bank account in Jordan.

india Updated: Feb 24, 2006 20:06 IST
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US and British defence officials were aware from 2001 that Saddam Hussein's Iraq regime was demanding kickbacks in violation of UN sanctions, a shipping executive said on Friday.

The general manager of P and O Nedlloyd (PONL), Michael Wallbanks, said officials from both countries were aware that kickbacks were paid to the Iraqi government.

He said that a 10 per cent "after sales tax", which was generally paid into a bank account in Jordan, was common knowledge among shippers working in Iraq.

"It was well known and widely communicated, and anyone involved in shipping goods to Iraq from August or September 2001 would have known about it," Wallbanks said in a statement.

His remarks came during hearings into whether Australia's monopoly wheat exporter AWB paid millions of dollars paid to Saddam's regime under the UN's discredited oil-for-food programme.

The inquiry asked PONL for evidence in relation to another Australian supplier accused of paying kickbacks, engineering firm Rhine Ruhr, which used the shipping line to transport oil industry parts to Iraq.

At the time, the Australian Navy was part of a multinational force helping police UN sanctions against Iraq by inspecting ships in the Gulf.

Wallbanks said he arrived in Dubai in 2000 and when he learned that Iraq imposed the 10 per cent extra charge on all goods shipped there, he made inquiries as to whether it was legal.

He informed the British Embassy in Dubai, the US Navy office and the Royal Navy, who all told him they were aware of the payment, according to his statement.

"They were all aware of the requirement to pay the after sales service tax and advised that if PONL was merely advising exporters what it was told in relation to requirements for shipping goods to Iraq, it was doing nothing wrong," he said in a statement.

The 10 per cent fee was in addition to the "inland transport fees" which Iraq was also demanding, the inquiry has heard previously.

The 1996-2003 oil-for-food programme, under which AWB was the biggest humanitarian supplier, was designed to allow Iraq to export oil to purchase food and medicine.

But a UN inquiry headed by former US Federal Reserve chairman Paul Volcker last year found that Saddam's government was able to collect millions of dollars in foreign currency in breach of UN sanctions by claiming kickbacks.

AWB alone paid 220 million US dollars in "trucking fees" to a Jordanian transport firm which were then passed on to the Iraqi government between 1999 and 2003.

Australian Prime Minister John Howard, who has repeatedly denied he or any government ministers were aware of the kickbacks that AWB allegedly paid, called for an inquiry after Volcker's findings were released.

The opposition Labor Party said the latest evidence made it difficult to believe the Australian defence force was not aware of the sanction-busting payments.

"It now seems that practically the whole world knew what Saddam Hussein was up to at the time -- except, of course, the Howard government," foreign affairs spokesman Kevin Rudd said.

"It absolutely beggars belief that if we have our own ships serving with British and American ships in the Gulf at this time, that this information was not passed across."