| While
we have made progress in our
global efforts, there is much
that remains to be done.. ..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.
J.
Cofer Black, Coordinator for
Counterterrorism
|
Saudi
Arabia and the Fight Against Terrorist
Financing
Officials
from the US State Department, Treasury
Department and the Federal Bureau of
Investigation gave testimony to the Middle
East and Central Asia Subcommittee of the
House International Relations Committee on
March 24, 2004 on the subject of Saudi
Arabia and the Fight Against Terrorist
Financing. This Item of
Interest provides a summary of the
testimony of J.
Cofer Black (State), Juan
C. Zarate (Treasury) and Thomas
J. Harrington (FBI).
View
from State
J. Cofer Black, Coordinator for
Counterterrorism, U.S.
Department of State
![Amb. J. Cofer Black, Coordinator, Ofice of the Counterterrorism. The State Department is the lead federal agency dealing with international terrorism, and Ambassador Black's office, S/CT, has primary responsibility for developing, coordinating, and implementing U.S. counterterrorism policy. On behalf of the Secretary, Ambassador Black represents the Department on the Counterterrorism Security Group. His office plays a leading role on the Department of State's counterterrorism task forces organized to coordinate responses to international terrorist incidents. Ambassador Black's responsibilities include coordinating U.S. Government efforts to improve counterterrorism cooperation with foreign governments, including the policy and planning of the Department's Antiterrorism Training Assistance Program. [Source: www.State.gov]](https://www.saudi-us-relations.org/images/IOI/2004_03_29b.jpg) Ambassador
Black, a 28 year veteran of the CIA's
Operations Directorate and former head of
the Counterterrorism Center, led his
testimony with an appraisal of
cooperation between Saudi Arabia and the
US, "Our dialogue with the Saudis on
counterterrorism issues has grown closer
over the past year." He noted
cooperation "took on a renewed
urgency" after al-Qaida terrorists
launched attacks
in Riyadh in May 2003. Black,
whose office has primary responsibility
for developing, coordinating, and
implementing U.S. counterterrorism policy,
has visited Saudi Arabia five times since
January 2003. He commented on
interagency coordination saying his US
government colleagues have worked closely
with Saudi officials to enhance bilateral
cooperation, "This effort has
included a number of initiatives to
staunch terrorist financing and bolster
law enforcement and intelligence
cooperation." Black added,
"We expect that they will continue to
seek US assistance as they act to address
this threat."
Counterterrorism
finance, according to Ambassador Black,
has been the "central focus" of
the government to government engagement,
"The Saudis have responded with an
impressive array of new institutional,
legal and regulatory changes aimed at
combatting terrorist finance."
He noted that Saudi officials are making
the changes to financial and charity
systems "which will choke off the
flow of funds that keep al-Qaida and other
terrorists in business." Among
the accomplishments discussed in his
testimony:
-
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.
|
Ambassador
Black said the steps taken have made a
difference in cutting off funds for
terrorists by improving the oversight and
accountability of charities. He
mentioned further cooperation in the
war on terrorism, such as US training for
Saudi officials especially in the area of
terrorist financing.
In
his concluding remarks, Ambassador Black
said, "The Saudis are a strong ally
and are taking unprecedented steps to
address an al-Qaida menace that threatens
us both."
View
from Treasury
Juan C. Zarate, Deputy Assistant
Secretary, Executive Office for Terrorist
Financing & Financial Crimes, U.S.
Department of the Treasury
 Mr.
Zarate prefaced his
testimony with background on the need
for global cooperation in combatting
terrorism, "The ongoing threat of
terrorist financing demands a sustained
and comprehensive commitment from all
governments of the world." He
added that success depended on the
political will and resources of other
governments and that, "The efforts of
the Kingdom of Saudi Arabia fall directly
in line with this international
cooperation and continue to improve in
substantively important ways."
The
"dialogue, engagement and
cooperation" between the US and Saudi
Arabia in fighting terrorist financing has
seen progress, "often quietly,"
over the last two years, according to
Zarate. He witnessed the evolution
of joint efforts first-hand during three
visits to the Kingdom since December 2002
and outlined these "targeted"
and "systemic" actions during
his testimony:
|
Targeted
Actions
Targeted
actions against specific and
identifiable sources and
conduits of terrorist support
have made an immediate impact on
the ability of terrorist cells
and organizations to operate.
-
The
Saudis have taken action on
their own to capture or
otherwise deal with known
operatives, financial
facilitators and financiers
for al Qaida.
-
Aggressive,
proactive steps by the Saudi
government against key
financiers and facilitators
are continuing and serve as
an important disruptive
element of the war against
al Qaida.
-
The
Saudi government has also
taken steps to isolate and
freeze the assets of
individuals and entities
designated as terrorist
supporters.
Details
on joint US-Saudi designations
are included in Mr.
Zarate's testimony.
Systemic
Actions
The
systemic actions undertaken by
the Saudis will take more time
to produce results, but these
changes could have a substantial
long-term effect on the ability
of terrorists to use financing
mechanisms previously abused to
advance terrorist causes and
operations.
These
systemic actions have been taken
regarding areas such as:
charities, alternative
remittance systems (Hawala), and
the formal financial sector.
|
In
addition to successes in joint efforts
against terrorism financing Mr. Zarate
outlined the challenges being faced by
Saudi Arabia. These included:
defusing the religious extremism that
facilitates support and recruitment for
radical Islamist terrorist organizations,
fully implementing and enforcing the
comprehensive measures enacted to prevent
abuse of charities, acting to ensure
performance in anti-money laundering
measures and continuing to publicize and
promote anti-terrorist actions as
necessary measures.
Mr.
Zarate sounded a positive note in his
conclusion on the level and scope of
cooperation between Saudi Arabia and the
US in fighting global terrorism, "The
measures and initiatives adopted by the
Kingdom of Saudi Arabia indicate that the
Kingdom stands committed with us to
defeating this threat. The targeted
actions undertaken by the Kingdom have
already produced tangible results, and the
systemic changes made by the Kingdom could
prove even more effective in defeating
terrorist financing over the long
term." He added, "We
appreciate the efforts of the Kingdom to
date - as they put the lives of their
agents and people on the line to fight
this battle. We anticipate continued
progress in the months ahead."
View
from the FBI
Thomas
J. Harrington, Deputy Assistant Director,
Counterterrorism Division, Federal Bureau
of Investigation
In
his opening remarks Mr. Harrington said
the FBI's highest priority was the
identification of terrorists' activity in
time to disrupt their operations and
partnerships are a key component of their
efforts. He outlined US-Saudi
cooperation noting, "The Kingdom of
Saudi Arabia is an important partner in
this international effort and has taken
significant steps to deter global
terrorism."
Echoing
comments from his colleagues Harrington
said there is more that can be done to
further the relationship, but "the
steps that have been taken thus far are
very encouraging and promising."
He added, "The current state of
cooperation between our two countries is
significant and information sharing
continues to increase in matters
pertaining to al-Qaida.. the Saudis now
host the Joint Task Force on Terrorist
Financing which is comprised of members of
the intelligence and law enforcement
services of the US and Saudi Arabia."
On
the question of joint efforts in law
enforcement, Harrington told the Members
that working together Americans and Saudis
are identifying sources of terrorist
funding and have already initiated
significant operations against them.
He said, "I cannot over emphasize the
importance of this initiative and the
efforts on the part of both of our
countries to make it work."
Mr.
Harrington described the importance of
laws and regulations in combatting
terrorist financing. He discussed
some of the same efforts to prevent abuse
of charities and non-governmental
organizations mentioned by other witnesses
and specifically listed measures to
restrict charities' bank accounts:
-
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.
|
The
cooperation between the FBI and their
counterparts in the Kingdom includes
counterterrorist financing and anti-money
laundering training which is detailed in
Mr. Harrington's testimony. In
addition to US government supplied
training, the Saudi Arabian Monetary
Agency (SAMA) implemented a program to
train judges and investigators on
terrorism financing and money laundering.
Harrington noted that SAMA had embarked on
"significant training to both the
private sector and to other Saudi
agencies."
"While
the Government of Saudi Arabia has taken
significant steps to combat terrorism,
there are still hurdles they must
overcome," according to Harrington in
his conclusion. "The ability to
identify and track terrorism-related
financial transactions will continue to be
vital to our mutual success.. ..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."
| |
| Related
Material:
Subcommittee
on the Middle East and Central
Asia
Committee
Members in Attendance:
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
House
Committee on International
Relations
Related
Articles:
"Of
Virtue and Vice: The
Saudi-American Fight Against
Terror Financing," by Tanya
Hsu and Grant F. Smith,
Saudi-American Forum, December
23, 2003
"The
Prospects for Stability in Saudi
Arabia in 2004 [Part I] -
Reducing the Threat of
Terrorism," by Anthony H.
Cordesman, Saudi-US Relations
Information Service, February
23, 2004
"Saudi
Arabia: Enemy or
Friend?" - Conference Panel
- David Long, Saudi-US Relations
Information Service, February 1,
2004
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