Iraq pleads for asset return

IRaqi money is beginning to trickle home

Iraq is asking for government and private assets frozen overseas to be returned to pay for humanitarian and reconstruction needs.

The money - $1.7bn in the US alone, as well as $600m elsewhere - should be immediately transferred back to Iraq under a UN Security Council resolution of 22 May, according to the man chosen to be acting head of Iraq's central bank.

"These funds are urgently needed for humanitarian, reconstruction, civilian administration and other purposes benefiting the people of Iraq," said Faleh Dawod Salman in a latter sent to the Security Council via US Ambassador John Negroponte.

The Security Council order included holdings of the former government of Iraq, state corporations and agencies, and any people or bodies connected to senior officials, he said.

An investigation by corporate intelligence specialists Kroll Associates in 2000 traced companies and bank accounts linked to more than a dozen members of the regime, much of which ended up in Switzerland, according to documents seen by BBC News Online.

The money should be deposited in the account set up at the Central Bank for the Development Fund for Iraq, controlled by the US and UK as occupying powers, Mr Salman wrote.

"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 and the Coalition Provisional Authority's efforts to assist the Iraqi people," wrote the US head of the CPA, Paul Bremer, in a covering letter.

Return

The money was frozen in May following an announcement by the US that it was taking the lead in promising to return the money to Iraq.

Most of the money is still in a federal account, athough it is now being shipped to Iraq in small denominations to pad out US government spending on public sector workers' pay and humanitarian aid.

Some $300m of the original $1.7bn, however, is being held back to pay claims by US citizens against Saddam Hussein's regime arising out of the IRaqi invasion of Kuwait in 1990.

A total of 11 other countries have frozen money, although most is being held in the UK.

Some, including the Netherlands, have been loath to transfer the funds due to legal question-marks over their right to do so.