Iraq announced Saturday it has arrested two generals on suspicion of taking bribes to waive customs duties, a practice estimated to cost the state $6.3 billion a year in lost revenues.

Both men worked at the Gulf port of Umm Qasr, a key entry point for imports of foodstuffs and medicines which is reputed to be the most corrupt in Iraq.

The sums allegedly found in their position were tiny given the scale of corruption in Iraq, which is estimated to have cost the country hundreds of billions of dollars since the US-led invasion of 2003.

"$1,000 were found in the office of the general in charge of Umm Qasr North,, while the other general had hidden $2,100 in a waste basket in his office," a source in the state anti-corruption body, the Commission for Integrity, told AFP.

"These were bribes intended to facilitate the smooth passage of cargos," the source said.

In Iraq, every port and border crossing has its corrupt placemen appointed by political parties or armed groups, who ensure a steady flow of illicit revenues to their patrons.

In Umm Qasr, it is mainly pro-Iranian armed groups who dominate through their nominees in the customs department and the security forces, officials say.