Saudi Actions to Crack Down on Terrorist Financing
The Kingdom of Saudi Arabia has taken deliberate action to root out terrorism and shut down its sources of financing. In recent months, the Kingdom has stepped up law enforcement and has expanded multilateral action to crack down on international finance networks that support terrorist organizations.
“We are hunting them down, one by one,” said Prince Bandar bin Sultan, the Kingdom’s Ambassador to the United States. “Through close cooperation with the United States and other countries, we have been able to identify the financial network that supports bin Ladin and take the steps necessary to shut it down.” Saudi Arabia has helped identify a network of shell companies and organizations that Osama bin Ladin used to move money around the world. The companies were located in the Middle East, Europe, Asia and the Caribbean. A sophisticated network that weaved through more than 25 nations has been uncovered. Today, that network is substantially handicapped. Since last September, Saudi Arabia has worked with the international coalition to block more than $70 million in terrorist assets.
Other specific actions include:
- Saudi Arabia and the United States maintain a counter-terrorism committee comprised of intelligence and law enforcement personnel who meet regularly to share information and resources and develop plans of action to root out terrorist networks.
- Since September 11, all charitable groups have been audited to ensure that there are no links to suspected groups. Financial control mechanisms are required to ensure that evildoers cannot take advantage of these charitable groups in the future.
- Charitable activities that extend beyond Saudi Arabia must be reported to the Saudi government and are routinely monitored.
- Dozens of bank accounts, suspected to be linked to terrorism, have been frozen.
- Saudi Arabia joined the Finance Ministers and Central Bank Governors of the G-20 to develop an aggressive plan of action directed at the rooting out and freezing of terrorist assets worldwide. Saudi Arabia is proud to have been a leader in the development of this plan and its implementation – key objectives of both the U.S. and international policies for dealing with terrorism now, and in the future.
The Saudi Arabian Monetary Agency (SAMA) instructed Saudi banks to promptly establish a supervisory committee to closely monitor the threat posed by terrorism and to coordinate all efforts to freeze the assets of the identified individuals and entities. The committee, which meets regularly with SAMA, is composed of senior bank officials responsible for risk control, auditing, money-laundering units, legal affairs, and operations.
- Saudi banks have put in place, at the level of their chief executive officers, as well as at the level of the supervisory committee, mechanisms to respond to all relevant inquiries, both domestic and international. To ensure proper coordination and effective response, all Saudi banks route their responses and relevant information via SAMA.
- To further strengthen and implement current regulations, the Ministry of Commerce issued new regulations aimed at preventing and combating money laundering in the non-financial sector. These regulations are aimed at manufacturing and trading sectors and also cover professional services such as accounting, legal and consultancy services.
- The Saudi Government has also taken concrete steps to create an institutional framework for combating money laundering. This includes the establishment of anti-money-laundering units, with trained and dedicated specialist staff. These units work with SAMA and law enforcement agencies. The government has also encouraged the banks to bring money-laundering-related experiences to the notice of various bank committees (such as Chief Operations Officers, Managing Directors, Fraud Committee) for exchange of information and joint action.
- Another major institutional initiative is the creation of a specialized Financial Intelligence Unit (FIU) in the Security and Drug Control Department of the Ministry of Interior. This unit is specially tasked with handling money-laundering cases.
- Saudi Arabia carries out regular inspection of banks to ensure compliance with laws and regulations. Any violation or non-compliance is cause for serious action and is referred to a bank’s senior management and the Board. Furthermore, the government has created a permanent committee of banks’ compliance officers to review regulations and guidelines and recommend improvements, and to ensure that all implementation issues are resolved.
- Saudi authorities have made significant efforts to train staff in financial institutions and the Security and Investigation departments in the Ministry of Interior as well as others involved in compliance and law. Special training programs have been developed for bankers, prosecutors, judges, customs officers and other officials from government departments and agencies. Furthermore, training programs are offered by the Prince Naif Security Academy, King Fahd Security Faculty and Public Security Training City.
According to Prince Bandar, “Saudi Arabia has put into place the tools, resources, laws and regulations to combat terrorism and terrorist financing. In addition, our international cooperation is unprecedented. No one who has the facts can say that Saudi Arabia has been soft on terrorism.”
In response to reports that individual Saudis may have funded terrorist organizations, Prince Bandar stated, “Our laws on this are clear. If there is evidence we will prosecute the guilty to the fullest extent of the law.”