WASHINGTON, Nov. 13 (UPI) -- This article is extracted from testimony given to the Senate Committee on the Judiciary on Nov. 8, 2005 and is reprinted by permission.
The State Department praised Saudi Arabia for its internal and foreign efforts to fight terrorism in the annual report on "Patterns in Global Terrorism" that it issued in April 2004. Ambassador J. Cofer Black, Coordinator for Counter-Terrorism, stated in his introductory remarks that: "I would cite Saudi Arabia as an excellent example of a nation increasingly focusing its political will to fight terrorism. Saudi Arabia has launched an aggressive, comprehensive, and unprecedented campaign to hunt down terrorists, uncover their plots, and cut off their sources of funding."
There are, however, a number of examples that are a matter of public record. At the initiative of then Crown Prince, now King Abdullah, Saudi Arabia and the United States established two task forces; one to combat terrorism, the other to combat terror financing. Officials from both countries now work side-by-side in the war on terror, and these task forces have become models for international cooperation.
Saudi Arabia has strengthened liaison relationships with other countries. Saudi Arabia held an International Counter-Terrorism Conference in Riyadh in February of this year. Over 50 nations sent high-level representatives who were experts in the area, including the United States, which sent a delegation headed by Fran Townsend, Adviser to the President for Homeland Security. The resulting report and Riyadh declaration has called upon the United Nations to create a new international center to fight terrorism as well as on all countries to strengthen their cooperation and national efforts.
In addition, Saudi Arabia regularly reports to the United Nations Security Council Committees on its actions to against terrorism, and has complied with key U.N. Security Council Resolution (UNSCR) regulations. These include freezing the financial assets of the Taliban regime (Resolution 1267) and funds of listed individuals (Resolution 1333). It has signed the International Convention for Suppression and Financing of Terrorism (Resolution 1373), and implemented Resolutions 1390 and 1368
Saudi Arabia can still do more to fight terrorist financing -- although U.S. Treasury experts have come to praise Saudi cooperation when they initially condemned it. We should understand, however, that governmental efforts to control terrorist financing have sharp limits, and have probably reached the point of diminishing returns.
Individuals in Saudi Arabia, and many other Arab and Islamic countries, will continue to support such organizations or their fronts, and regional governments can only do so much to limit such funding. Merrill Lynch estimates that the capital controlled by wealthy individuals in the Middle East rose by 29 percent during 2003-2004, to a level of approximately $1 trillion dollars raises serious questions about how much governments can do. Much of this capital is in private accounts outside the region, terrorist operations are only moderately expensive, and Merrill Lynch projects a further 9% annual rise in such holdings from 2004 to 2009.
Yet, Saudi Arabia began to try to control such funding in the 1990s -- long before most of the states in the region. It froze Osama bin Laden's assets in 1994. The Saudi Arabian Monetary Agency (SAMA) and the Ministry of Commerce issued guidelines to the Kingdom's financial and commercial sectors for combating money-laundering activities, and began to create units to counter money laundering in the Ministry of Interior, in SAMA and in commercial banks in 1995.
Saudi Arabia has since taken the following steps:
-- Required all Saudi banks on Sept. 26, 2001 to identify and freeze all assets relating to terrorist suspects and entities in response to a list issued by the United States government.
-- Issued rules 'Governing the Opening of Bank Accounts' and 'General Operational Guidelines' in order to protect banks against money-laundering activities in May 2002,
-- SAMA began to implement a major technical program to train judges and investigators on legal matters involving terrorism financing and money-laundering methods, international requirements for financial secrecy, and methods followed by criminals to exchange information in May 2003.
-- Council of Ministers approved new legislation that puts in place harsh penalties for the crimes of money laundering and terror financing in August 2003.
-- Created a Joint task force on terror financing. American and Saudi officials work side-by-side in this area. The United States is providing training programs for Saudi officials in this area.
-- Saudi Arabia has frozen all charitable activity outside the Kingdom. Charities cannot withdraw cash from their accounts.
-- Charities cannot collect cash donations in public places.
-- Saudi Arabia has implemented the 40 recommendations of the Financial Action Task Force (FATF) of the G-8 on money laundering and the 8 recommendations on terror financing. FATF conducted a mutual evaluation of the Kingdom's mechanisms in the Fall of 2003 and found them in line with international standards. The Kingdom is today a member of FATF.
-- FATF found the Kingdom's laws on money laundering and terror financing to be in line with best practices, and pointed to examples of successful prosecutions in the Kingdom.
-- The Kingdom has set up a Financial Intelligence Unit (FIU) and is in the process of joining the Egmond Group. The US Treasury Department has been assisting the Kingdom in this process, which should be completed in the near future.
-- The Kingdom has put in-place regulations for taking cash from or into the country.
-- The Kingdom is in the process of establishing a National Commission for Charitable Activities Abroad through which all private charitable activities will take place. Until such time as this commission is established, no Saudi charity can send funds abroad. Exceptions were made during for the tsunami and the tragedy in Darfur under strict oversight by the Saudi Red Crescent Society, an arm of the Saudi government. In some other cases, funds are delivered by Saudi government institutions to legitimate recipients (for example, aid to the Palestinians; the case is made that Saudi charities raise money for suicide bombers and deliver them. The Saudi Red Crescent Society no longer provides funds directly to entities in the territories. Funds going to the Palestinians are sent to the PA via official channels.
(Anthony H. Cordesman holds the Arleigh A. Burke Chair in Strategy at the Center for Strategic and International Studies, a Washington think tank.)
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