A company owned by the Reserve Bank of Australia made illegal attempts to strike a business deal with the Iraqi dictator Saddam Hussein.
Secret files show officials from the bank's Note Printing Australia went to Iraq at the height of United Nations sanctions in an aborted bid to sell plastic banknotes to the Iraqi government, the ABC reports.
The deal was called off after Australian diplomats warned the company might be breaching international law.
Associate Professor David Chaikin from the University of Sydney says there was a breach.
"Given the clarity of such a violation of Australian law and international law, this should have rung alarm bells to the highest levels of the bank, because what was happening potentially would destroy and undermine the reputation not only of Note Printing Australia but its owner, the Reserve Bank".
In a statement issued on Monday, the Australian central bank describes the 1998 trip to Iraq as "ill-advised".