Iraq Central Bank asking for return of frozen assets

UNITED NATIONS -- The acting head of Iraq's Central Bank asked the Security Council on Monday to urge all nations to freeze and transfer assets from Saddam Hussein's regime to a fund for financing humanitarian and reconstruction efforts.

Under a resolution adopted May 22, all 191 U.N. member states are required to identify, freeze and immediately transfer any assets held by Saddam's government or senior regime officials.

The resolution established a Development Fund for Iraq, based at the Central Bank in Baghdad and controlled by the United States and Britain, to receive frozen assets for use in rebuilding the country, along with Iraq's oil revenue.

Fulfilling obligations

In a letter circulated Monday, Central Bank acting governor Faleh Dawod Salman noted the fund has established an account at the Federal Reserve Bank of New York "to allow member states to fulfill their obligations."

Salman's letter was sent to the council by U.S. Ambassador John Negroponte with a cover note from the U.S. administrator in Iraq, L. Paul Bremer III, seeking the council's cooperation.

"The identification of foreign Iraqi assets, and the transfer of these assets to the Development Fund for Iraq ... is a critical part of Iraq's economic reconstruction," Bremer said.

In his letter, Salman noted the council's order applies to funds, assets and resources of the previous Iraqi government and its state bodies, corporations and agencies. The order also applies to senior officials of the former Iraqi regime and their immediate families, and "includes entities owned or controlled by them, directly or indirectly, and persons acting on their behalf or at their direction," he said.

"These funds are urgently needed for humanitarian, reconstruction, civilian administration and other purposes benefiting the people of Iraq," Salman said.

Find and freeze

In late June, U.S. Treasury Secretary John Snow sent a letter to finance ministers of 38 countries seeking their help to find and freeze financial assets of the former Iraqi government and transfer them to the Development Fund. A Treasury Department spokesman would not identify the countries.

Snow also urged the countries to search for and block financial assets belonging to the 55 former Iraqi officials on the U.S. Defense Department's most-wanted list, and transfer those assets to the fund. He said the United States was investigating individuals and entities, including front companies, that may have acted on behalf of the former Iraqi regime.

He did not provide any names.

President Bush has freed up some $1.7 billion in Iraqi assets frozen by the United States in 1990. The money is being shipped into Iraq in small denominations to pay teachers and hospital workers and to secure humanitarian aid.