France Assails Iraq at U.N. : Kuwait’s Currency Outlawed

French President Francois Mitterrand today called Iraq a warlike state as world leaders opened a U.N. General Assembly session by condemning Baghdad for its invasion of Kuwait.

“How could we not be disgusted by the taking of thousands of hostages?” the French leader asked the General Assembly.

Meanwhile, in a significant move to underscore its domination of Kuwait, Iraq today declared the Kuwaiti currency invalid and withdrawn from circulation.

Iraq will reimburse those who possess Kuwaiti dinars with the Iraqi currency on a one-for-one basis, the official Iraqi News Agency said.

The Iraqi currency is not convertible on international markets.

Mitterrand stressed that the sovereignty of Kuwait is not negotiable.

Iraq’s ambassador to the United Nations listened silently, but high-level Iraqi officials, including Foreign Minister Tarik Aziz, were absent.

Iraq said today it had rejected a U.S. offer to allow an Iraqi plane to fly the Iraqi delegation to New York--provided that about 1,000 Americans held in occupied Kuwait and Iraq were allowed to leave.

In his address, Mitterrand said, “In order to prevent this anarchy and theory of might makes right, and avoid a situation in which one powerful person might be replaced by another, I can’t find any other answer than the rule of law, of right.”

Mitterrand also pointed out the danger to other Persian Gulf nations, “these neighboring peoples, who, if things get out of control, will depend on the expansionist determination of one man, on one warlike state.”

Brazil provided the first speaker at today’s session--President Fernando Collor de Mello.

“The crisis that has befallen Kuwait presents an unexpected and serious threat to collective peace,” he said.

The exchange of currency will be carried out until Oct. 6, after which the Kuwaiti dinar will be considered illegal tender, the Iraqi news agency quoted the government’s economics committee as saying.

Iraq has methodically dismantled Kuwaiti institutions following its Aug. 2. seizure and subsequent annexation of the neighboring oil-rich emirate.

Also today, Iran said it had arrested 29 people for trying to smuggle food to neighboring Iraq.

The announcement by the Iranian news agency IRNA was the first concrete action reported by Iran to enforce U.N. trade sanctions imposed on Iraq for its Aug. 2 invasion of Kuwait.

Iran, which has condemned both Iraq’s takeover of Kuwait and the ensuing foreign military buildup in the Persian Gulf, has repeatedly said it would observe the U.N. sanctions.

But U.S. officials have voiced concern about press reports Iran was considering an oil-for-food deal with its former Gulf War enemy.

Meanwhile, the White House today shrugged off President Saddam Hussein’s threat over the weekend to destroy the oil fields of the Middle East, calling it predictable rhetoric from Iraq’s leader.

“We get a daily diatribe from Saddam, and this is one of them,” White House spokesman Marlin Fitzwater said.