Switzerland's largest bank, UBS, has said it will transfer frozen Iraqi-held deposits in the United States to US authorities.

UBS said the funds, blocked in 1990 under United Nations sanctions, had been confiscated by the US Treasury and would be transferred to the US government soon.

The confiscation is part of an order last week from the Treasury Department to 17 banks in the US.

The total money involved, said to be about $1.74 billion (SFr2.41 billion) without interest, comes from transactions between US oil firms and the Iraqi state oil company, the UBS spokesman added.

He declined to reveal how much cash was involved in UBS's case but confirmed it was likely to be in the millions of dollars.

Reconstruction

The US has pledged to use most of the money for a fund earmarked for rebuilding and providing humanitarian aid to the Iraqi population.

The Swiss foreign ministry on Friday reported that Washington had asked Switzerland to freeze any bank accounts held by Iraq's President Saddam Hussein and his associates.

There has been no official reply, but the Swiss finance minister said earlier this month that there were no signs that Saddam Hussein had accounts in the country.

"That statement is still valid. We have no indications that he had money in Switzerland," said Foreign Ministry spokesman Livio Zanolari.

"But you can never rule anything out," he added.

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