Editor's Note:
The
testimony of current and past Secretaries of State and Defense and other
national security officials at the National Commission on Terrorist Attacks
Upon the United States, “dubbed the 9/11 commission,” dominated Washington
news last week. It was,
therefore, little noticed that officials from the State Department, Treasury
Department and FBI testified before the House International Relations
Subcommittee on the Middle East and Central Asia.
Cofer Black, Juan Zarate and Thomas Harrington presented their
agencies’ views on the role of Saudi Arabia in the war on terrorism,
specifically addressing progress in combating terrorism financing.
Today,
the Saudi-US Relations Information Service provides their testimony in three
parts:
·
State
Dept. – Mr. J. Cofer Black, Coordinator for Counterterrorism
·
Treasury
Dept. – Mr. Juan C. Zarate, Deputy Assistant Secretary, Executive Office for
Terrorist Financing & Financial Crimes
·
FBI
– Mr. Thomas J. Harrington, Deputy Assistant Director, Counterterrorism
Division
 Testimony
by J. Cofer Black, Coordinator for Counterterrorism, U.S.
Department
of State
Testimony before the House Committee on International Relations Subcommittee
on the Middle East and Central Asia
March 24, 2004
"Saudi Arabia and the Fight Against Terrorist Financing"
INTRODUCTION
Madame
Chairwoman and distinguished members of the Committee: thank you for the
opportunity to testify on U.S. counterterrorism efforts, especially as they
relate to our efforts to staunch terrorist financing with the assistance of
the government of the Kingdom of Saudi Arabia.
We
are continuing our global campaign to root out terrorists and those who
support them, building on the coalition formed in the aftermath of the
September 11th attacks. There can be no sanctuary, no refuge for terrorists,
and we are working closely with our friends and allies in a global coalition
to marshal all of our collective strength in this effort.
While
we have made progress in our global efforts, there is much that remains to be
done, and much that remains unknown. Recent terrorist attacks in Spain,
Israel, Turkey and elsewhere clearly show us that our work remains unfinished.
We must remove these terrorists “root and branch,” and we will need help
from like-minded nations to make this happen.
We
have such a like-minded ally in the Kingdom of Saudi Arabia. It is clear that
the Saudi government “gets it” when it comes to terrorism. The Saudis have
been confronted with the horror of suicide attacks on their own soil, and have
seen how the virtuous intentions of charity can be corrupted for the support
of terrorism and terrorists.
COOPERATION
GROWING CLOSER
Our
dialogue with the Saudis on counterterrorism issues has grown closer over the
past year, and took on a renewed urgency following the May 12, 2003 bombings
in Riyadh. This latest outrageous murder in the global war on terrorism, which
resulted in the death of nine Americans and twenty others, including five
children, shocked the Saudis, and our cooperation has grown closer every day
since.
The
Saudis are a key ally in the Global War On Terror. Their performance has not
been flawless, and they have a large task before them, but we see clear
evidence of the seriousness of purpose and the commitment of the leadership of
the Kingdom to this fight. They must combat the terrorists who have taken root
in their own backyard and simultaneously address those issues -- whether
social, cultural or economic -- which have allowed extremism to take root in
the Kingdom.
With
our colleagues from across the interagency, we have worked closely with Saudi
officials in the Kingdom to enhance our cooperation. This effort has included
a number of initiatives to staunch terrorist financing and bolster law
enforcement and intelligence cooperation. We expect that they will continue to
seek U.S. assistance as they act to address this threat.
As
a part of this continuing effort to engage with the Saudi government on
counterterrorism issues, I have traveled to the Kingdom five times since
January 2003, in the company of interagency colleagues, and more recently with
Deputy National Security Advisor Fran Townsend, who now leads this dialogue.
This has been a labor-intensive effort, but it is bearing fruit.
PROGRESS
AGAINST TERRORIST FINANCING
Counterterrorism
finance has been the central focus of this engagement. The Saudis have
responded with an impressive array of new institutional, legal and regulatory
changes aimed at combating terrorist finance. In fact, some of these steps are
among the most restrictive measures to be found anywhere in the world,
particularly their new regulations related to charities.
Saudi
officials are beginning to make the kind of fundamental and necessary changes
to their financial and charity systems which will choke off the flow of funds
that keep al-Qaida and other terrorists in business. They have also taken a
number of very public steps in the area of terrorist finance. Let me highlight
some recent accomplishments in these areas.
ACCOMPLISHMENTS
-
On
January 22 of this year, we jointly submitted with the Saudi government
the names of four branches of the Riyadh-based al-Haramain Foundation
charity to the UN 1267 Sanctions Committee for world-wide sanctions,
including asset freezing.
-
The
addition of these four entities made for a total of ten joint U.S.-Saudi
submissions to the UN 1267 Sanctions Committee since December 2002, the
largest number of joint designations with any country over that span.
-
We
continue to work together to look for additional entities and individuals
providing support to al-Qaida, and hope to have additional success in this
arena;
-
On
February 29 the Saudis announced the formation of the National Saudi
Society for Relief and Charitable Works Abroad. We are still awaiting full
details on the form and function of this new body, but this is a welcome
development, as it should allow the government to exert more stringent
oversight of Saudi charitable activities abroad;
-
The
Saudis have already instituted a variety of new laws and regulations that
have the potential to fundamentally alter their banking and charity
systems;
-
Saudi
banks have implemented strict “know your customer” rules which require
additional due diligence on the part of banks to ensure the transparency
of all account holders;
-
Charitable
organizations are now required to use only a single bank account, and they
are prohibited from making or receiving payments in cash. This obviously
allows much greater Saudi Government oversight over the ability of Saudi
charities to operate outside of the Kingdom;
-
The
Saudis have taken fundamental steps to increase accountability and prevent
misuse of the fundamental Islamic tenet of zakat, or charity, including
the removal of all cash collection boxes from mosques and shopping
centers;
-
The
government has reigned-in the activities of hawalas, which are the
informal money transfer services commonly used throughout the Arabian Gulf
region, particularly by foreign workers. Independent hawalas are being
closed down in the Kingdom and replaced with government-regulated
establishments which perform essentially the same function, but with far
greater oversight;
-
In
September 2003, a team of assessors from the Financial Action Task Force (FATF)
and the Gulf Cooperation Council (GCC) visited the Kingdom. FATF is a
multilateral organization of thirty-three members individually and
collectively devoted to combating money laundering. The FATF/GCC team
conducted a formal assessment of Saudi Arabia’s system of anti-money
laundering and counter-terrorism finance laws and regulations, and the
overarching supervisory and regulatory framework.
-
Their
February 2004 report documents that the Kingdom is in compliance or
near-compliance with international standards in almost every indicator of
effective instruments to combat money laundering and terrorist financing.
-
While
significant work remains, particularly in the area of implementation, this
FATF/GCC report is a testament to the advances the Saudi government has
made in shoring up its controls over its banking system and charities.
-
A
new Joint Task Force on Terrorism Finance, which my colleagues from the
FBI describe in greater detail, is in its initial stages; this will
necessarily move much of our day to day and case by case efforts in the
War On Terror away from the interactions of diplomats and put it on an
expedited, real-time, law enforcement basis;
-
The
Saudis have established a Financial Intelligence Unit (FIU), which is
responsible for analyzing and exchanging information related to suspicious
financial transactions with Saudi regulatory and law enforcement entities.
These
efforts have begun to make a real difference. Saudi improvements in the
oversight and accountability of charitable funds have made it more difficult
for terrorists to get their hands on such funding.
We
are seeking to upgrade Saudi counterterrorism capacity by providing training
in a number of fields, particularly in the area of terrorist financing.
For
example, we will continue to provide financial investigative training to the
Saudis to enhance their capabilities to monitor their banking system and
charities for terrorist financing and money-laundering activities.
CONCLUSION
The
Saudis are a strong ally and are taking unprecedented steps to address an al-Qaida
menace that threatens us both. We believe that they are headed in the right
direction, are committed to countering the threat of al-Qaida, and are giving
us extremely strong cooperation in the War On Terrorism. There remains, of
course, much work still to be done, both singly and jointly, but we are
optimistic that our efforts are paying off.
Madame
Chairwoman, distinguished Members of the Committee, I thank you for this
opportunity to appear before you.
Related Material:
- Saudi
Arabia's Role in Combating International Terrorism [Press Release]
Ros-Lehtinen
examines cooperation in Wednesday oversight hearing
-
Meeting
Notice -- Subcommittee on the Middle East and Central Asia
-
Subcommittee
on the Middle East and Central Asia
- House
Committee on International Relations
-
Committee Members in Attendance at
the Hearing:
-
Ileana Ros-Lehtinen, Chair, R-FL
-
Steve Chabot, R-OH
-
Gary L. Ackerman, D-NY
-
Howard L. Berman, D-CA
-
Joseph Crowley, D-NY
-
Thaddeus G. McCotter, R-MI
-
Shelley Berkley, D-NV
-
Joseph R. Pitts, R-PA
-
Ed Royce, R-CA
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