The Financial Action Task Force (FATF), a multilateral body charged with stopping terrorist financing, will meet this weekend to discuss whether Saudi Arabia is taking sufficient steps to prevent the funding of terrorism. In a recent report, FATF found that the Kingdom was not prioritizing investigations of international terrorism but nonetheless ranked the Kingdom as compliant with FATF’s recommendations, setting up Saudi Arabia for membership in the FATF. Saudi Arabia is keen to join FATF, which would facilitate access to global financial markets. The United States, a key supporter of FATF, should resist Saudi Arabia’s admission until the Kingdom demonstrates an authentic commitment to stopping the flow of money to international terrorists.
Senator Graham who served as a co-chair of the Congressional Joint Inquiry into the September 11th attacks can say with confidence that Saudi Arabia’s historical record with regard to terrorist financing requires that the Kingdom’s bid for membership in the FATF be met with skepticism. Indeed, in the aftermath of the attacks, senior U.S. counterterrorism officials described Saudi Arabia as the “epicenter” of terrorism financing. Professor Ní Aoláin, the United Nations Special Rapporteur on the Promotion of Human Rights While Countering Terrorism has reported that neither are Saudi counterterror laws fit for purpose in combatting terrorism effectively nor do they adequately protect human rights and enhance the rule of law.
More than eight years after the attacks, leaked diplomatic cables apparently issued from the office of Secretary of State Hillary Clinton stated that Saudis remained “the most significant source of funding to Sunni terrorist groups worldwide,” and that “[i]t has been an ongoing challenge to persuade Saudi officials to treat terrorist financing emanating from Saudi Arabia as a strategic priority.” The cables further confirmed that charities funded by the Saudi government “continue to send money overseas and, at times, fund extremism overseas.”
What’s more, there is ample evidence that counterterrorism reforms the Saudis have implemented are aimed at silencing political opposition, rather than aligning Saudi Arabia with international counter-terrorism financing standards. In recent years, Saudi Arabia has rounded up thousands of people alleged to be terrorists. The Special Rapporteur’s mandate has found that many of these individuals are simply government critics or religious minorities. Even where the Kingdom has invoked its counterterrorism laws in cases against individuals involved in actual terrorist activity, its commitment to FATF’s standards is questionable. Indeed, a review of Saudi counterterrorism cases found that in 2014 alone, 145 individuals previously detained by Saudi authorities were reported to have been released only to reengage in terrorist attacks.
FATF acknowledged many of these concerns but nonetheless gave the Kingdom a passing score. It noted that the Saudi counterterrorism statute is “overbroad” and the Kingdom might be diverting counterterrorism resources to “specious” cases. The most important and disturbing conclusion was that, with the exception of a small percentage of cases concerning fighters travelling to Syria and Iraq, Saudi Arabia “has not yet tackled the risk of financing of terrorism by third-party and facilitators, and the financing by individuals for terrorist organisations outside the country.” This suggests that the Kingdom is targeting foot soldiers, not the financiers, and it is addressing the issue only in Saudi Arabia’s own backyard. FATF nonetheless ranked the Kingdom’s efforts “substantially” effective. We both believe that the next step is for States to consider the totality of all information available to their intelligence agencies and in the public domain concerning Saudi Arabia’s compliance with international law.
Saudi Arabia is now supposed to prepare an action plan for addressing shortcomings in its efforts to combat money laundering. This action plan will be presented to the plenary of FATF, which includes the United States.
The review of the action plan presents an opportunity for members of FATF to send a strong signal that the time for action is now and that concrete steps are required. Saudi Arabia should be required to demonstrate progress in addressing these shortcomings before being admitted to the FATF, including release of those wrongly charged as terrorists and revision of its counter-terrorism law. This compliance issue is all the more compelling as demands for transparent accounting for the death of journalist Jamal Khashoggi intensify. Until such time as Saudi Arabia has demonstrated a serious commitment to investigating all financing of terrorists and a genuine commitment to the rule of law– whether internal to the Kingdom or international – it should not be admitted to FATF.
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