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Published 27th June 2003, 2:36pm

Grand Cayman - In April 2003, in accordance with the powers conferred on the Governor under the Iraq (United Nations) (Sequestration of Assets) (Dependent Territories) Order 1993, a circular was sent to all Cayman Islands licensed banks seeking confirmation of assets held, if any, that belonged to the government of Iraq. There would have been activity related to the Order in 1993, but with the passage of time, it was considered prudent to confirm the position.

Returns from licensed Cayman Islands banks in response to the circular indicate that prior to March 2003, there was a total of approximately U.S. $140 million in Iraqi funds on the books of Cayman Islands banks. In all cases, the funds were originally in the accounts of international banks licensed in the U.S., and frozen in the U.S. in the 1990's under various United Nations resolutions at that time relating to Iraq. The funds were subsequently booked by the U.S. banks to their respective Cayman Islands branches or subsidiaries in order to comply with a U.S. requirement that any blocked or frozen funds be held in interest bearing accounts.

According to information from the returns, the U.S. banks involved transferred the total of U.S. $140 million to the New York Federal Reserve pursuant to directives issued by the U.S. Treasury in March 2003. There is therefore no action required by the Cayman Islands Government in respect of these funds, but the Government will, of course remain vigilant regarding any related matters in the future. Returns were received from over 300 Cayman Islands licensed banks.

[Note: Additional information on the U.S. Treasury directives relating to this issue can be found on the web site of the U.S. Department of the Treasury in the Office of Foreign Assets Control Section (Executive Order 13290 of 20103/03 and subsequent Directive License IQ 2243)].


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