March 22, 2003	Saturday	Muharram 18, 1424

WASHINGTON, March 21: The United States used special war powers on Thursday to confiscate about 1.74 billion dollars in frozen Iraqi funds held in US banks.

It promised to use most of the money for a fund dedicated to rebuilding and providing humanitarian aid to the Iraqi people.

The US Treasury Department asked foreign banks to divert about another 600 million dollars in frozen Iraqi funds to the use of the Iraqi people.

It also launched a worldwide hunt for “blood money” stashed away by Iraqi President Saddam Hussein and his associates, estimating there were up to six billion dollars in illicit gains.

“Today we launched a financial offensive against the regime of Saddam Hussein,” Treasury Secretary John Snow told a news conference.

President George W. Bush, using sweeping powers granted by the USA Patriot Act, ordered the Treasury to grab the blocked Iraqi money from 18 US banks and put it in a US government account for use in Iraq.

A total of 1.74 billion dollars — excluding money held by diplomats — in blocked funds was lying in the US banks, a senior Treasury Department official said.

But some of the money was subject to court claims, the official said.

Bank accounts holding about 302 million dollars had been attached by the courts for US victims of the Iraqi regime who are claiming about 55 million dollars in damages.

Bush aimed to honour adjudicated claims, he said.

Besides the funds held in the United States, 11 other countries had reported blocking about 600 million dollars of Iraqi funds under UN sanctions, the official said.

The biggest amounts had been blocked by Britain with 400 million dollars, the Bahamas with 85 million dollars, the Cayman Islands with more than 20 million dollars and Japan with more than 14 million dollars.

Other countries blocking money were Senegal, Canada, Saudi Arabia, Lebanon, the Netherlands, Egypt, Germany and Bahrain, he said. Other countries may also have blocked money.

“The world must find, freeze, and return Iraqi money for the Iraqi people and their future,” Snow said.

Foreign banks had a duty to follow international rules to block frozen Iraqi funds, he said.

“We reserve the right to take countermeasures and sanctions against any institution that does not comply with these international obligations, including cutting access to the US financial system,” Snow said.

Officials said they would only “judiciously” use the power, granted to Bush under the USA Patriot Act in the month after the September 11 terrorist attacks.—AFP