RIYADH, 16 January — The Saudi Arabian Monetary Agency (SAMA) has set up special units at all Saudi banks to ensure full compliance with legal measures for combating money laundering, the central bank’s governor has said.
"Yes, we have asked the banks to establish such units, and many of them have done so. We are satisfied at the banks’ measures and performance," Hamad Al-Sayyari told reporters after a graduation ceremony at the Institute of Banking here on Monday.
The Kingdom has 10 privately owned commercial banks and several money exchange companies.
Sayyari said SAMA has dealt seriously with lists of accounts suspected of funding terrorism which were released by the United States following the Sept. 11 terror attacks on New York and Washington.
"A majority of the account holders are non-residents of Saudi Arabia, and banking laws and regulations here ban opening accounts for non-residents without the prior approval of SAMA. So, we rarely discovered any of those accounts" on the lists, Sayyari added.
The Kingdom last month set up a financial intelligence unit at the Interior Ministry as part of a series of measures to crack down on money laundering and funding terrorism.
A high-level US team held talks in Riyadh in December as part of the financial war against terrorism and discussed the establishment of a mechanism to supervise the activities of Islamic charities.
A number of Saudi businessmen and organizations who appeared on US lists of people suspected of funding terrorism have categorically denied the charges and some are fighting cases in the courts.
Sayyari confirmed reports that some Saudi overseas private investments have been repatriated following the Sept. 11 attacks and the war on Afghanistan, but gave no figures.
Saudi investors have become more cautious due to the increased risks on foreign investments, as opposed to a higher degree of safety and security at home, Sayyari said.
He said capital flight from the Kingdom had sharply dropped since Sept. 11, and that investment transactions out of the country had also decreased.
He added that Saudi investors are now very cautious in the wake of the risks involved in foreign investment and prefer to put their money in their own country in the light of its security and increasing investment opportunities in the Kingdom.
Figures released by SAMA indicate that local money supply reached $70 billion in October 2001, up 7.5 percent from October the previous year, and shot up to $88 billion at the end of November last year.
Economic analysts attributed the upturn in liquidity to capital repatriation by Saudi businessmen in the wake of the Sept. 11 attacks. Saudis have incurred huge losses as a result of their investments in US dollar, European currencies and American stock market.
Investments held by private Saudis in foreign countries are estimated at between $600 and $800 billion, 45 percent of which are invested in the United States. Government foreign assets are estimated at just above $80 billion.
