Bank of England Freezes Zarqawi Assets

The Bank of England (search) is ordering a freeze on any assets belonging to a terrorist group that claimed responsibility for kidnapping and beheading two Americans and a Briton in Iraq, Treasury chief Gordon Brown said Thursday.

Brown told lawmakers in the House of Commons that he instructed the bank to direct all financial institutions in Britain to freeze any assets of the Tawhid and Jihad (search) group led by Jordanian Abu Musab al-Zarqawi (search).

The group has been at the forefront of the opposition to U.S.-led forces in Iraq and has claimed responsibility for attacks on American troops and Iraqis, and for the beheadings of several foreign hostages, including American engineers Eugene Armstrong (search) and Jack Hensley (search) and British engineer Kenneth Bigley (search) in the last month.

"We must do all in our power to ensure there is no hiding place for terrorists and no hiding place for those who finance terrorism," said Brown, whose official title is Chancellor of the Exchequer.

The asset freeze makes it a criminal offense for any financial institution to hold or facilitate funds held by the group.

Brown said his decision followed meetings with the World Bank and the International Monetary Fund.

It was unclear whether Tawhid and Jihad has any assets in British accounts. Brown's order will prompt companies to check whether they hold money belonging to the group, a Treasury spokesman said.

"This is the first action by a country on this group and we expect other partners to follow suit," the spokesman said, adding that the United Nations could take action against Tawhid and Jihad.

Britain did not move to freeze the group's assets earlier because "the legislation requires a high standard of evidence to be there before the Chancellor can instruct action to be taken," the spokesman said on condition of anonymity.

Bigley, Armstrong and Hensley were kidnapped from their homes in Baghdad on Sept. 16. The Americans were killed a few days later and Bigley's execution was confirmed Oct. 10.

Al-Zarqawi's group beheaded South Korean translator Kim Sun-il (search), 33, in June and American businessman Nicholas Berg, who was kidnapped in April.

Al-Zarqawi's followers are also suspected of killing two Bulgarian truck drivers.

In March, Brown ordered the Bank of England to freeze any assets of five senior Hamas members suspected of involvement in terrorism. Other organizations targeted in recent years include the Al-Aqsa Foundation, a Palestinian organization with suspected terrorist links, and the Benevolence International Foundation (search), believed to be connected with Usama bin Laden and Al Qaeda.