Switzerland tightens grip on Iraqi assets

Millions were spent on building Saddam's palaces while other assets were transferred abroad Keystone

The Swiss government has formally blocked all Iraqi assets linked to Saddam Hussein's regime until the United Nations decides where the money should go.

The decision came in response to a request from the United States to prevent the withdrawal of any Iraqi government or corporate funds.

Swiss officials said the measures would not apply to ordinary Iraqi citizens holding bank accounts in Switzerland.

The foreign ministry added that the action complied with US demands that assets of the Iraqi state should be preserved for the people of Iraq.

Under a 1990 UN resolution, Swiss banks are not allowed to transfer any assets they may hold to the Iraqi government or firms linked to the regime.

The latest development tightens these restrictions by requiring banks to freeze deposits.

It also places banks under an additional duty to inform the authorities of the existence of Iraqi government and corporate accounts.

The economics ministry said the new regulations were aimed at making it easier to turn over Iraqi assets to their rightful owners once the war had ended.

UN resolution

However, the Swiss authorities ignored Washington’s demand to hand over assets to a US-controlled Iraqi government, saying the transfer of money depended on a new United Nations resolution.

However, exactly how and when the assets in question will end up in the pockets of Iraqi citizens is not yet certain.

“Switzerland considers that it is still too early to determine under what conditions and in what way such assets could be placed at the disposal of the people of Iraq,” said the foreign ministry.

The US had asked Switzerland on March 21 to block any assets that might belong to Iraqi leaders and to prepare to transfer them to the Iraqi civilian population.

Shortly before the request was sent, the Swiss finance minister, Kaspar Villiger, told parliament that there was no evidence that the Iraqi leader, Saddam Hussein, had a bank account in Switzerland.

At the end of 2001, some SFr510 million ($305 million) was held in Swiss banks.

swissinfo with agencies

Iraqi assets

The Swiss government has extended a freeze on certain Iraqi assets held in the country.

The move is a response to a request sent by the United States in March 2003.

At the end of 2001, some SFr510 million ($305 million) worth of Iraqi assets was held in Swiss banks.