An inquiry into Australian companies' roles in the Iraq oil-for-food scandal has been told the role of the Department of Foreign Affairs and Trade (DFAT) is being investigated.

The inquiry, which is headed by Terrence Cole, is looking at payments made by three Australian companies that may have breached United Nations sanctions against Iraq.

It is focussing first on $290 million that wheat exporter AWB paid in kickbacks to the regime of Saddam Hussein.

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