WASHINGTON (CNN) - The U.S. Treasury Department announced Thursday the federal government will seize $1.4 billion in Iraqi assets frozen since the first Gulf War, and use the money for humanitarian aid and reconstruction in Iraq.
The department also called on Britain, the Bahamas, the Cayman Islands and other governments and institutions that have an estimated $600 million in frozen Iraqi assets to do the same.
The announcement by Treasury Secretary John Snow came after President Bush Thursday issued an executive order confiscating "non-diplomatic Iraqi government assets in the United States" and authorizing the Treasury Department to "marshal the assets and to use the funds for the welfare of the Iraqi people."
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In a statement, Bush said he had "determined that such use would be in the interest of and for the benefit of the United States."
Thursday's confiscation of Iraqi assets is the president's first use of such power under the U.S. Patriot Act, enacted in the wake of the Sept. 11 attacks.
The Iraqi assets frozen since the first Gulf War in 1991 are in 18 U.S. banks.
Snow also called on other nations to identify and freeze Iraqi government assets, saying, "We are directing a worldwide hunt for the blood money that Saddam (Hussein) and his associates have stolen from the Iraqi people." A senior Treasury official said there is believed to be at least $6 billion dollars worldwide and possibly twice that amount in "corrupted funds" -- including money from "smuggled oil" -- that may be traceable.
"We have reason to believe concealed assets are out there," said the official. "We plan to make a concerted hunt for that money."
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A congressional source briefed on the administration's plans said there are other Iraqi assets scattered worldwide, and there is concern that France, Russia, Germany and other nations that are owed money by Iraq will want to use those assets to repay the debts.
Snow said his department could "take countermeasures and sanctions against any institution that does not comply with these international objectives, including cutting off access to the U.S. financial system."
U.S. officials want other countries and institutions to wire-transfer the money to the Federal Reserve Bank of New York for safekeeping.
The congressional source said the administration may have to go through the United Nations to secure international help in its efforts.