UN orders seizure of Iraq's frozen assets

NEW YORK (Reuter) - The United Nations Security Council adopted a resolution last night ordering the seizure of hundreds of millions of dollars in frozen Iraqi oil assets to pay for relief aid to Kurds and compensation to victims of Baghdad's invasion of Kuwait. The unprecedented resolution was adopted by a vote of 14 to 0 with China casting the sole abstention in the 15-member council.

The United States, which has been pushing for the seizure for months, believes the frozen assets would yield anywhere from dollars 300m ( pounds 175m) to dollars 1bn, mostly from US accounts. The resolution allows states to seize oil-related funds frozen abroad and petroleum impounded when economic sanctions were imposed four days after the invasion of Kuwait. Iraq has been able to use some of its frozen funds abroad to purchase humanitarian supplies exempt under the sanctions. But the new resolution would block these provisions and force states to channel such funds through the United Nations, which Iraqi sources have likened to robbery.