U.S. Treasury Secretary John Snow will ask finance ministers of the world's major industrialized countries meeting May 17-18 in France to aggressively search for illegal assets of the Saddam Hussein regime and repatriate them to the Iraqi people.

In a May 15 statement, Snow said he also will discuss with his counterparts Iraq's repayment of its debt to lenders. "I believe that no one should expect Iraq to begin to make debt payments for some time," he said.

The Group of Eight (G-8) countries are Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States. The finance ministers' meeting precedes a meeting of the G-8 heads of state June 1-3 in France.

Snow commended the World Bank and the International Monetary Fund (IMF) for starting economic and development needs assessments in Iraq. "We look forward to the full participation of the international financial institutions to help Iraq rebuild and to rejoin the international economy," he said.

Snow said the finance ministers will discuss tailoring debt relief for other countries, "keeping debt restructuring as a last resort."

They also will review progress made in fighting terrorist financing, including an IMF and World Bank pilot project to asses countries' anti-money laundering and anti-terrorist financing regimes, he said.

(Note: In the following text, "billion" equals 1,000 million.)

Thursday, May 15, 2003

Statement by Treasury Secretary John W. Snow in Advance of the G8 Finance Ministers Meeting

I look forward to meeting with my fellow finance ministers in Deauville this weekend in advance of the G-8 Summit in Evian.

Growth must remain our top priority. I underscored this at my first G-7 meeting in February, and when we last met in April, noting that the world economy is falling far short of its potential. This remains the case today. The United States is doing its part by aggressive and timely monetary and fiscal action. The President's Jobs and Growth program will further accelerate the U.S. recovery. But a healthy global economy needs multiple engines of growth. Our G-7 partners must immediately take their own steps, appropriate to their own circumstances, to spur growth, create jobs and contribute to global prosperity. Structural reforms are particularly important to unleash potential in some of our economies.

I also expect to engage my counterparts in a discussion of the needs in Iraq. Coalition forces in Iraq are addressing the humanitarian needs of the country and have begun the arduous but hopeful task of reconstructing Iraq and rebuilding its economy after decades of misrule. I will continue a discussion initiated at our last meeting regarding Iraqi debt. As we previously agreed, debt discussions will take place in the context of the Paris Club. In addition, I would like to explore a role for the IMF in dealing with the issue as well. I believe that no one should expect Iraq to begin to make debt payments for some time.

I commend the World Bank and the IMF for agreeing to begin assessment activity in Iraq. This is good news. We look forward to the full participation of the international financial institutions to help Iraq to rebuild and to rejoin the international economy. It will also be useful this weekend to begin discussions on a process for individual countries to donate funds for ongoing reconstruction efforts in Iraq. Finally, I will urge the ministers to do everything in their power to make seized assets available to the Iraqi people and to aggressively continue the search for the illegal assets of the corrupt regime of Saddam Hussein. Our global efforts to track down, freeze, and repatriate to the people of Iraq assets that have been systematically looted by Saddam Hussein, his family, and his cronies are critical. While major combat operations in Iraq are over and the Hussein regime has been toppled, the search for assets continues. Our task is clear -- identify and repatriate all assets, whether they are held in the name of the former Iraqi government or hidden in the international financial system behind a maze of front companies and straw men. Whatever Hussein's legacy may be, it must not include successfully stealing and hiding billions of dollars in the international financial system.

Improving investor confidence through strengthened corporate governance has been a key focus of G-7 discussions this year. The essence of this effort is reinforcing corporate governance practices, market discipline, transparency and regulation in line with agreed principles. The United States has taken strong steps to punish wrongdoing and improve oversight through the President's Ten-Point Plan and implementation of the Sarbanes-Oxley Act. I will make clear to my colleagues the United States' ongoing commitment to be active in ensuring accountability and promoting transparency.

Clear progress has been made in preventing financial crises and providing for smoother resolution of those that occur. The United States applauds the increasing use of collective action clauses in external debt, with Mexico, Brazil, Uruguay and South Africa all having included these clauses in recent issues. With European Union countries to be issuing soon with collective action clauses and other emerging market countries seriously considering doing so, the momentum is building. Widespread use of these clauses will provide the basis for more orderly debt workouts. We will also discuss this weekend a new way for the Paris Club to address countries' debt problems -- tailoring relief to each country's particular debt sustainability situation while keeping debt restructuring as a last resort.

As time passes, it is important that we maintain focus and momentum in the ongoing fight against terrorism financing. Finance Ministers will review this weekend the significant progress made in this effort, including the IMF and World Bank's pilot project to assess countries' anti-money laundering and terrorist financing regimes. We look to the Financial Action Task Force to continue its work and to cooperate more closely with the United Nations and the IFIs to achieve widespread compliance with international standards.

The challenges of reducing poverty and promoting growth in the poorest countries remain an important part of the G-8 agenda. Achieving results will depend on countries' own commitments to reform, growth and good governance. The President's proposed Millennium Challenge Account (MCA) takes the concepts of rewarding performance and measuring results and turns it into an operational action plan. As reinforcement for the United States' strong commitment to help the poorest countries achieve growth and reduce poverty, the President has requested $1.3 billion for MCA this year, increasing to $5 billion by year three and thereafter. He has also proposed $10 billion in new money to combat HIV/AIDS over the next five years and $200 million in new money to address famine and food security worldwide this year. Of course, strong global growth will help reduce poverty in the world's poorest countries, which again underscores why growth must remain the G-8's top priority.