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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 Thomas J. Harrington, Deputy Assistant
Director, Counterterrorism Division, Federal Bureau of
Investigation
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"
Thank you Mr. Chairman and Members of the Subcommittee for the
opportunity to testify about terrorist financing issues, and in
particular, as they relate to our joint efforts with the
government of the Kingdom of Saudi Arabia.
The number one priority of the FBI is to identify terrorists�
activity in sufficient time to disrupt their operations. To do
this, all intelligence and law enforcement investigative and
analytical components must be strategically utilized in a cohesive
manner. This belief lies at the heart of the FBI�s reliance on,
and commitment to,the interagency partnerships we have forged
through our Joint Terrorism Task Forces (JTTFs). With intelligence
collection and exploitation as our principal focus, and criminal
investigative authorities as a vital tool, the JTTFs represent the
fusion of skills and authorities our nation needs to combat
terrorism in the United States. Information sharing and
interagency cooperation are critical parts of this effort;
however, partnerships within the United States will only succeed
if they enjoy the support of our many friends and partners
throughout the world. The FBI is committed to these international
partnerships and recognizes the critical role they play in our
ability to develop actionable intelligence.
Beginning shortly after 9/11/2001, the FBI created its Terrorism
Financing Operations Section (TFOS). Its mission is to identify
and disrupt world-wide terrorism financing activities. Through
joint initiatives and partnerships with other U.S. and foreign
intelligence services, we have realized significant results which
include the prevention of specific acts of international
terrorism. Denying terrorists the financial means to carry out
acts of violence is an integral part of the FBI�s commitment to
countering terrorism and is an area where we have realized
significant success.
The FBI�s long history of success in combating complex financial
schemes in the areas of corporate fraud; financial institution
fraud; and illicit funds transfers/money laundering schemes of
drug traffickers are being successfully applied to the
international terrorism arena.
U.S.-SAUDI COOPERATION
The Kingdom of Saudi Arabia is an important partner in this
international effort and has taken significant steps to deter
global terrorism. There is more that can be done to further this
relationship; however, the steps that have been taken thus far are
very encouraging and promising. For example, since 9-11, Saudi
Arabia has questioned thousands and arrested more than 600 with
suspected ties to terrorism.
Cooperative counterterrorism efforts increased notably after the
Riyadh bombings on May 12th, 2003 when the Kingdom asked the FBI
to send an investigative team to Saudi Arabia to assist its
intelligence and law enforcement services in conducting evidence
collection and post-incident services in conducting evidence
collection and post-incident investigation. In this effort, Saudi
officials allowed the FBI to directly participate in crime scene
analysis and witness interviews, including those of Saudi
citizens.
The current state of cooperation between our two countries is
significant, and information sharing continues to increase in
matters pertaining to al-Qa'ida. Together, we have agreed to focus
increased investigative attention on identifying and eliminating
sources of terrorist funding within the Kingdom and around the
world. In furtherance of this agreement, the Saudis now host the
Joint Task Force on Terrorist Financing (JTFTF), which is
comprised of members of the intelligence and law enforcement
services of the U.S. and Saudi Arabia. The JTFTF was established
in August 2003, with the mission to identify and investigate
persons and entities suspected of providing financial support to
terrorist groups; and recommending appropriate criminal and/or
regulatory sanctions to be undertaken to stem the flow of funds to
terrorists or terrorist organizations. Its purpose is to more
effectively utilize the intelligence capabilities and
investigative authorities of its component members. Working
together, we are identifying sources of terrorist funding and have
initiated significant operations to address them. I cannot over
emphasize the importance of this initiative and the efforts on the
part of both of our countries to make it work. The FBI is a
significant participant in this project and together with our
partnership agencies, including the Internal Revenue
Service-Criminal Investigative Division, is committed to its
success.
As you will hear from my Department of State and Treasury
colleagues, Saudi Arabia has greatly contributed to combating
terrorist financing by joining the U.S. in blocking the assets of
several designated terrorist organizations. In March 2002, Saudi
Arabia and the U.S. jointly blocked the accounts of Wa�el Hamza
Julaidan, an associate of Usama bin Laden who provided financial
and logistical support to Al-Qa'ida. In addition, accounts of the
Bosnia and Somalia branches of the Al-Haramain Islamic Foundation
were blocked in March 2002, and in January 2004, the Saudis and
the U.S. jointly blocked four more Al-Haramain branches in Kenya,
Tanzania, ,Pakistan and Indonesia.
SAUDI FINANCING LEGISLATION
Mr. Chairman, as this Subcommittee knows, the ability to prevent
terrorist acts largely depends on the implementation of laws that
permit investigative intervention. Saudi Arabia has taken several
steps that greatly enhance the activities of our joint efforts to
prevent terrorism financing.
Non-Governmental Organizations (NGOs) and charitable organizations
serve legitimate purposes however, they can be vulnerable to abuse
for use as a source of funding for terrorist organizations. The
Kingdom of Saudi Arabia has put new laws in place that are
designed to ensure donations to charities aren�t diverted to
entities other than humanitarian organizations. It also issued
instructions to all institutions prohibiting the transfer of funds
by charitable organizations to recipients outside the Kingdom. New
rules have been codified that impact on the Opening of Bank
Accounts and place new restrictions on the bank accounts of Saudi
charities:
-
All
accounts must be maintained in one single account for each
charity; sub-accounts are permitted, but such an account is
restricted to receiving deposits only;
-
No
ATM or credit cards can be issued for these accounts. All
payments may be made only by checks payable to the
first beneficiary for deposit in a Saudi bank;
-
The
Saudi Arabian Monetary Agency�s (SAMA�s) approval is
necessary to open a bank account, the account must be opened
in Riyals only, and valid customer identification is required
in addition to providing the organization�s license;
-
No
overseas transfers are allowed from these accounts, and only
two individuals who are authorized by the board of a
charitable organization are allowed to operate the account.
Saudi Arabia has taken other actions that benefit joint
terrorism financing efforts. The Ministry of Labor has developed a
database containing financial information relating to all of its
charities, and updates the database on a quarterly basis with
information derived from submitted financial reports. An effort is
underway to integrate the charities licensed by the Ministry of
Islamic Affairs into this database. In addition, the Ministry of
Labor is conducting an audit of all their licensed charities, and
this requirement will reportedly be extended to their licensed
charities, as well.
The Saudis have begun to establish official government-operated
money remitters intended to compete directly with unlicensed money
remitters such as Hawalas and other informal financial systems.
These licensed remitters are called �Speed Cash��, and are
attached to a commercial bank and therefore, subject to all
requirements of the parent bank. Saudi private sector
representatives report that the service has been a profitable
business, and officials believe that it has reduced the extent to
which there is reliance on informal systems. Saudi officials
report that they have begun to crack down on unlicensed money
remitters.
Finally, Saudi Arabia has also strengthened its regulations on
money laundering by requiring financial institutions to verify
customers� identities and placing restrictions on
non-residents� ability to open accounts in the country.
TRAINING
In September 2003, the FBI and the Internal Revenue
Service-Criminal Investigative Division provided the first phase
of counterterrorist financing and anti-money laundering training
to the Saudi Arabian Government in Riyadh. The second phase of
this training was held in Washington, DC in December 2003. A third
such training program is currently scheduled to take place in May
of this year, in Riyadh. This training emphasizes the role of a
field investigator in financial crimes investigations as it
relates to investigations of terrorism financing. The topics
include Methods of Terrorism Financing, Initiating Investigations,
Evidence Acquisition, Computer Forensics, Money Laundering, and
Expenditure Methods of Proof, among others. The training also
includes case scenarios, in which students participate in
practical exercises to increase their understanding of
terrorist-financing investigations. This training has been
completely funded and supported by the State Department and the
interagency Terrorist Finance, Training and Technical Assistance
Working Group, chaired by the State Department, and it will
directly benefit the JTFTF by focusing on methods of identifying
sources of terrorist financing.
In addition to U.S. training, in February 2003, the SAMA
implemented a technical program to train judges and investigators
on terrorism financing and money laundering. The program is
focused on training law enforcement on legal matters including
financing and money laundering methods, international requirements
for financial secrecy, and the methods criminals use to exchange
information. SAMA provides substantial training to both the
private sector and to other Saudi agencies.
CONCLUSION
While the Government of the Kingdom of Saudi Arabia has taken
significant steps to combat terrorism, there are still hurdles
they must overcome. In addition, terrorist-minded extremists are
likely to change tactics and become more sophisticated in their
intelligence collection, communication and financing. The ability
to identify and track terrorism-related financial transactions
will continue to be vital to our mutual success. Saudi Arabia has
contributed to the successful dismantling of Al-Qa'ida cells, the
arrests of key Al-Qa'ida leaders, and the capture of Al-Qa'ida
members in the Kingdom. I look forward to our continued
partnership with the Kingdom and hope our past progress is an
indication of the future steps we will jointly take.
I appreciate the opportunity to appear today and thank you Mr.
Chairman and members of the Subcommittee, for dedicating your time
and effort to this important issue. I will be happy to address
your questions.
Related Material:
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Saudi Arabia's Role in Combating International Terrorism
[Press Release]
Ros-Lehtinen examines cooperation in Wednesday oversight
hearing
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Meeting Notice -- Subcommittee on the Middle
East and Central Asia
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Subcommittee on the Middle East and Central
Asia
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House
Committee on International Relations
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Committee Members in
Attendance at the Hearing:
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Ileana Ros-Lehtinen,
Chair, R-FL
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Steve Chabot, R-OH
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Gary L. Ackerman, D-NY
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Howard L. Berman, D-CA
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Joseph Crowley, D-NY
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Thaddeus G. McCotter,
R-MI
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Shelley Berkley, D-NV
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Joseph R. Pitts, R-PA
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Ed Royce, R-CA
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