Truck manufacturer Volvo, cited in a UN report on kickbacks to Saddam Hussein's government, said on Friday it did not allow bribes but noted payments to work in Iraq were considered normal at the time.

According to Reuters, the UN-appointed panel investigating the oil-for-food programme said on Thursday that 2,200 companies, including Volvo, DaimlerChrysler and Siemens, had wittingly or unwittingly made payments totalling $US1.8 billion.

"Our agent (in Iraq), which we used at the time but with whom we have not worked for quite a while now, has told the commission that he paid money to the Baghdad regime and we have no reason to doubt that," Volvo spokesman Marten Wikforss told the news agency.

"One can question why, unfortunately, nobody spotted this and raised the alarm about it," he told Reuters. "But one should remember that this was spoken about openly and was perceived as something of a transaction fee which you paid to the Iraqi regime in order to be permitted to do business there. This is evident in the large number of companies which are named here."

He reportedly said the government in Baghdad was the legitimate authority at the time and that all deals there were subject to UN approval.

"This also contributed to people not really understanding that it was not appropriate," he added, according to Reuters. He also said the group was examining the report.

"If it turns out to be true, it is naturally very serious. We have a code of conduct which is clear as day on this kind of thing. We don't accept or permit bribes in connection with business agreements," he told the news agency.

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more