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:
- 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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