- The Washington Times - Wednesday, June 23, 2004

Many paper trails related to the financing of militant Islam and terrorism still lead to Saudi Arabia, despite significant regulatory improvements. A recent study sponsored by the Council on Foreign Relations outlines the strides the Saudi government has made in this area, along with the remaining shortcomings.

The bottom line, according to the study, is that due to Saudi actions over the past year, “al-Qaeda’s current and prospective ability to raise and move funds with impunity has been significantly diminished. These efforts have likely made a real impact on al-Qaeda’s financial picture, and it is undoubtedly a weaker organization as a result.” The terror group still has the ability to raise funds, and Saudi Arabia has failed to address key areas of concern, the study said.

The study catalogs some areas where multilateral and U.S. efforts could also be broadened (to be addressed in a separate editorial), but focuses so centrally on Saudi Arabia, despite the improvements, “because of the fundamental centrality that persons and organizations based in Saudi Arabia have had in financing militant Islamic groups on a global basis.”

The pivotal date for the kingdom’s more aggressive approach to combating terror and its financing was May 12, 2003, when al Qaeda bombed housing compounds in Riyadh used by U.S. and other foreign residents. At that point, and in more recent attacks, terrorism became a serious threat for the kingdom.

Authorities have since established a serious regulatory framework for countering the transfer of funds to terrorist networks and have in practice been able to limit or disrupt this financing. Saudi Arabia removed donation boxes from mosques and shopping malls and invited the Financial Action Task Force, an international anti-money-laundering body, to review its regulatory improvements. Last summer, the United States and Saudi Arabia created the Joint Terrorist Financing Task Force in Riyadh, allowing FBI and IRS investigators to meet with their Saudi counterparts and opening Saudi accounts and witnesses to unprecedented U.S. review. Saudi officials collaborated with other authorities to close some terror-funding charities around the world. Saudi authorities have also substantively improved counter-terror policing, though authorities have rarely captured terrorists alive, hampering the kingdom’s intelligence-gathering capabilities.

More negatively, the kingdom has failed to prosecute a single individual implicated in terror financing. Even after Saudi authorities helped to close charities abroad, they failed to prosecute the heads of those charities in the kingdom. The report names persons who should be put on trial but apparently live freely in the kingdom. Also, the kingdom’s response to problematic charities abroad has been slow, while the government bodies nominally in charge of overseeing their financing don’t have a clear mandate or authority, the study said.

The report addresses another fundamental issue: the cultural underpinnings of militant Islamist ideology. The kingdom has spearheaded some educational reform, which included striking virulent passages from school books. It has also been successful in reining in the firebrand rhetoric of its clerics. However, authorities have not been as energetic about preventing the export of this ideology. They have also been ineffective in preventing their own embassies around the world from spreading a call to jihad.

U.S. officials should continue commending their Saudi counterparts for the improvements made, but should keep the remaining deficiencies the focus of coercive, intense dialogue. Saudi Arabia will continue to be regarded as the financial nucleus of terror financing and militant ideology unless it bolsters accountability within the kingdom.

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