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Saudis control funding of islamic extremist groups { March 7 2004 } Original Source Link: (May no longer be active)
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Saudis meet anti-terror finance benchmarks
By Edward Alden in Washington
Published: March 7 2004 21:59 | Last Updated: March 7 2004 21:59
Saudi Arabia, which has faced strong criticism for its past support of Islamic extremist groups, has now put in place world class laws and regulations to combat the financing of terrorism, according to a confidential international assessment.
The report by the Financial Action Task Force of the Organisation for Economic Co-operation and Development concludes that the kingdom has met most of the benchmarks set by the taskforce, officials say.
These include its first law that makes money laundering and terrorist financing criminal offences, new rules governing the capital markets and insurance sectors, and a financial intelligence unit to share information on suspicious transactions.
In the area of charitable giving, new regulations to crack down on abuses at Saudi-based charities "probably go further than any country in the world", said one official involved in the assessment.
The kingdom has banned cash collections at mosques and the transfer of Saudi-raised charitable funds abroad, except with foreign ministry approval, and set up tough new reporting requirements to ensure that money is not diverted to terrorist groups.
A European official said the report "is rather positive, which shows that it's useful to have this kind of peer pressure." A FATF team of officials from five nations, including the US, Italy and Switzerland, spent a week in Saudi Arabia last September meeting with senior Saudi officials.
Countries are measured on 40 anti-money laundering recommendations and eight others focused on terrorism financing that were adopted after the September 11 2001 attacks.
The report was adopted by the FATF last month but under the rules of the inter-governmental group the results remain secret except for a brief public summary to be published in its June annual report. The review also highlighted areas where the Saudis fell short, officials said. The government has yet to ratify the United Nations convention for suppressing terrorist financing and needs to increase the information it requires for wire transfers of funds abroad.
The FATF review is confined to examining the country's laws and regulations, and it did not look at how effectively these are being implemented.
The results have won praise from the US administration, which has kept up steady pressure on the kingdom to bolster its efforts against terror financing.
"This was an issue of high-level attention in the Saudi government," said a senior US official. "They realise the international community's watching and they know that we'll continue to be watching."
The Saudi regime's support for extremist groups came under intense scrutiny after September 11 and subsequent revelations that Saudi-based charities had been funneling millions of dollars to al-Qaeda and other terrorist groups. The families of more than 600 of the September 11 victims have launched lawsuits against Saudi officials and charities, seeking $1,000bn in damages over their alleged roles in supporting terrorism.
A report by the US Council on Foreign Relations in October 2002 accused the Saudi regime of "turning a blind eye" to terrorist fund-raising in the kingdom, and US officials complained that they were receiving little co-operation from the Saudis in shutting down financing networks.
But since al-Qaeda carried out its first bombings inside Saudi Arabia in May 2003, the situation has changed dramatically. "It is a radical policy shift dictated by a radical change in events," said Jonathan Winer, a former State Department official who participated in the COFR report. "It is now in the Saudis' national security interest to make sure there is no terrorist financing coming out of the kingdom."
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