This article from The Los Angeles Times points out two problems the US government is having with the Saudi government n terms of getting control over terrorist financing. First, the Saudis have not completed undertakings they have made to establish organization to monitor charitable contributions nor have they acted with the speed the USG believes appropriate in dealing with individuals suspected of financing terrorism.

On the first count, the Saudis certainly stand indictable. This is something the government has promised to do at least five years back. If it cannot do this, it should at least explain why not and what it is doing on this front.

On the second count, the Saudi government claims that while allegations are indeed leveled against individual Saudis, not enough evidence is provided to make a court case. It claims that to act on allegations unsupported by evidence—and apparently it is unable to find evidence itself—it would be manifestly unjust to freeze bank accounts or jail suspects. The USG might be able to do better in identifying individual Saudis it suspects. That way, at least some pressure would be put on those individuals. If the allegations proved false, then certainly harm would be done to the individuals, of course. But at least it would not be the Saudi government facing charges of libeling its own citizens. Not great for the US; somewhat better for the Saudis.

The Saudi government could also act a bit more transparently when it does discover problems, too. Pointing out what actions it has taken to control malefactors would help it in the court of world opinion, even if it proved embarrassing for the government.

As I’ve noted here before, however, there are very real limits to what the Saudi government can do to monitor, never mind control money transfers that happen outside the Kingdom or with money held outside the Kingdom. The government lacks even the most basic tool most Western countries can use to monitor financial transactions: an income tax. It has criminalized the import or export of large amounts of cash to/from the Kingdom, but that has no effect on money being sent from a bank in the West Indies to a bank in the East Indies.

Saudi Arabia is prime source of terror funds, U.S. says
Treasury official expresses frustrations with the administration’s efforts to force action by the kingdom.
A Senate panel orders a review
Josh Meyer

WASHINGTON — Saudi Arabia remains the world’s leading source of money for Al Qaeda and other extremist networks and has failed to take key steps requested by U.S. officials to stem the flow, the Bush administration’s top financial counter-terrorism official said Tuesday.

Stuart A. Levey, a Treasury undersecretary, told a Senate committee that the Saudi government had not taken important steps to go after those who finance terrorist organizations or to prevent wealthy donors from bankrolling extremism through charitable contributions, sometimes unwittingly.

“Saudi Arabia today remains the location where more money is going to terrorism, to Sunni terror groups and to the Taliban than any other place in the world,” Levey said under questioning.

U.S. officials have previously identified Saudi Arabia as a major source of funding for extremism. But Levey’s comments were notable because, although reluctant to directly criticize a close U.S. ally, he acknowledged frustration with administration efforts to persuade the Saudis and others to act.
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