JEDDAH, 9 February 2005 — Saudi Arabia has been playing a leading role in the global campaign on combating terror financing and money laundering. “The Kingdom has adopted a number of statutory and administrative measures for this purpose,” says the Saudi Arabian Monetary Agency (SAMA) in a paper presented at the Counterterrorism International Conference.
The report said the Kingdom had signed the UN charter to prevent money laundering, enacted new rules and regulations, instructed executive agencies and provided the necessary support to working teams entrusted with the task of regulating financial transactions.
“Saudi Arabia has also implemented all UN Security Council resolutions related to terror financing,” it added.
In August 2003, Saudi Arabia promulgated a law on combating money laundering. The law criminalizes both money laundering and financing terrorism and terrorist organizations. The Kingdom has set up a network to prevent the use of its financial system for money laundering and funding terrorist activities.
“We have instructed banks and other financial organizations to know their customers. We have also issued new regulations for opening bank accounts,” SAMA said.
No money transfers can be carried out in the Kingdom without authenticating the names of sender and receiver. “We have also stopped unauthorized systems of cross-border money transfers,” SAMA said, adding that violators of the rule were warned of tough punishment.
Referring to international charters, SAMA said the Kingdom has implemented UN Security Council Resolutions 1267, 1269, 1333, 1373, 1390, 1455 and 1456 on combating terror funding.
“The Kingdom has also frozen assets of some individuals and organizations related to the Security Council Resolutions 1267 and 1333. It was one of the first countries to freeze the assets of Osama Bin Laden in 1994,” the report said.
On Sept. 26, 2001, Saudi Arabia froze the assets of individuals and organizations whose names appeared on a list published by the United States following the Sept. 11 attacks. “The Kingdom has frozen 62 accounts of 12 individuals and firms with a total amount of $6 million,” SAMA said.
Saudi Arabia has also signed security agreements with a number of Arab and non-Arab countries, which include pacts related to combating money laundering and financing terror.
The Kingdom has set up a special committee comprising experts from interior and foreign ministries, the intelligence agency, and SAMA to deal with matters related to terror financing and requests of international agencies.
The report said Saudi Arabia had implemented the recommendations of the Group of 20 countries on combating terror finance. It also noted the Saudi-US cooperation on fighting money laundering.
Referring to the regulations taken to monitor charity organizations, SAMA said all charitable organizations working in the Kingdom must obtain a license from the Ministry of Social Affairs. Charities must get SAMA approval to open bank accounts and are not allowed to engage in monetary business activities.
On Feb. 26, 2004, the Kingdom established a higher committee to monitor charities. As per the new regulations, charities are not allowed to transfer any amount of money from their accounts to foreign countries. They are allowed to have only one main account. However, they can open branch accounts with the permission of SAMA. Any deposits and gifts coming to their accounts will be acceptable only after identifying their donors. Banks are not allowed to issue ATM or credit cards for accounts of charitable organizations.
Since 1995, the government has set up special units to combat money laundering at the Interior Ministry, SAMA and commercial banks. The Interior Ministry also established a financial intelligence unit to deal with financial and economic crimes.
The Kingdom has also organized a number regional and international conferences and seminars related to money laundering. The first meeting of the financial working group outside Paris was held at SAMA’s Institute of Banking Affairs in Riyadh in 1994.
New regulations do not allow banks to open accounts for non-resident individuals or unlicensed companies without SAMA approval. Banks have been instructed to give reports on suspected money laundering transactions. SAMA officials inspect banks to make sure they follow regulations.
