SAMA Pulls Out All Stops in Combating Terror Financing
P.K. Abdul Ghafour, Arab News

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.

The Saudi Arabian Monetary Authority (SAMA) something like the American Federal Reserve System, gave a report before the international anti-terror conference just wrapping up in Riyadh. Of course, they are going to paint themselves in a good light, but what they have done is nevertheless noteworthy. They have made great strides in developing new rules and regulations to better control the flow of money in and out of the country. Better controls means that it has become significantly more difficult to divert funds toward improper ends.

But it doesn’t mean–it cannot mean–that all possibilities of a Saudi getting money to a terrorist are blocked.

Saudi society is still very much a cash-based society and the Saudi Riyal is an easily converted “hard currency”. People go to buy cars with a briefcase full of cash. Cash can flow easily and invisibly. Further, there are hundreds of billions of dollars, owned by Saudis, that are already outside the system, held in banks and investments around the world. That money, too, is invisible to SAMA.

So if you want a guarantee that no Saudi will ever again send money to a putative terrorist, there’s nothing that SAMA can do to fulfill your hope. But it can, and it has, made it significantly more difficult for money to travel through those channels that it can control.