Iraq Seizes Foes’ Assets : U.N. Likely to Impose Air Embargo

Iraqi President Saddam Hussein today seized all foreign assets from countries honoring the embargo on trade with his nation, just days before the U.N. Security Council is expected to toughen its sanctions.

The Iraqi government said it has seized all cash deposits and property of governments, companies and banks--private and government-owned--from countries that are honoring the U.N.-ordered embargo.

In New York, Soviet Deputy Foreign Minister Yuli Vorontsov said today that he expects the U.N. Security Council to approve an air embargo of Iraq this week.

British Prime Minister Margaret Thatcher said today in Hungary that the five permanent members of the Security Council--the United States, Soviet Union, Britain, France and China--have agreed to impose the air embargo. She said the vote probably will not come before Friday.

The state-run Iraqi News Agency said the ruling Revolutionary Command Council ordered the confiscation of assets under a new seven-article law dealing with the protection of “Iraqi interests, money and rights in Iraq and abroad.”

INA did not mention how much money is involved. The U.S. State Department was unable to say how much the American assets seized by Iraq are worth.

“It is not clear from the Iraqi statement in what form or against whom the action will be taken,” State Department spokeswoman Margaret Tutwiler said.

“In any case, actions like this can only make it more difficult for Iraq to return to the international community of nations and to restore economic relations which are crucial for Iraq’s long-term development,” she said in Washington. “The clear way for Iraq to protect its interests is to comply with the Security Council resolutions relating to its invasion of Kuwait.”

The United States and other countries already have frozen Iraq’s foreign holdings. Kuwait’s foreign assets, estimated at about $100 billion, have been turned over to the country’s exiled leaders.

Under the next proposed U.N. resolution, sources said, only flights carrying refugees out of Iraq or Kuwait, or bringing in medical supplies and food specifically authorized by the Security Council would be allowed to travel to those nations.

Planes could not be shot down under the proposed resolution; that action is banned by the 1944 international civil aviation convention. But they could be challenged.

In other developments today:

- The chairman of the Soviet KGB offered to give the CIA intelligence about Iraq, where the Soviet government still has about 5,000 specialists.

- President Bush, on a political visit to San Francisco, warned Hussein today that the United States will take tougher action against Iraq if sanctions and diplomacy fail to work. The President called anew for Iraq to withdraw its invading army from Kuwait, restore the country’s exiled leaders and release all foreign hostages.

He did not specify what additional steps are being contemplated. White House aides said the comment was not intended as a new signal but reinforced earlier statements.

- A U.S.-chartered Iraqi Airways plane carrying 416 mostly American women and children from Kuwait left Baghdad for London, officials said.