Australia's monopoly wheat exporter, AWB on Tuesday described as an "unjustified" sanction on it by US government over an Iraqi oil-for-food scandal.

A UN inquiry has found AWB involved in funneling 200 million US dollars in kickbacks to Saddam Hussein's government under the UN oil-for-food programs.

In a punitive move, US Department of Agriculture has suspended AWB, which is the biggest single trader of wheat on the US futures market, from a US-funded credit program, which guarantees export sales of grain out of the United States.

Australian Broadcasting Corporation radio quoted AWB Limited spokesman Peter McBride as saying that "we believe that the United States Department of Agriculture has had pressure from US wheat lobby groups. So we believe that it's unjustified and we'll be making a submission to that effect."

He added that the company is not currently using the program and there will not be any effect on Australian wheat farmers, adding "we believe it's probably more a reputation issue."

A spokesman for Trade Minister Mark Vaile says the Federal Government is seeking urgent clarification about the ban against AWB.

The Australian, a leading daily in Australia, said Tuesday "the US action is highly embarrassing for the (John) Howard Government as one of President George W. Bush's staunchest supporters on the invasion of Iraq."

Federal Opposition foreign affairs spokesman Kevin Rudd also said it is a major problem. "Australia's foreign policy reputation is being trashed as a consequence of Australia having broken US sanctions against Saddam Hussein's regime through an arrangement approved by the Howard Government," he said.

Source: Xinhua