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Sanctions:
November 28, 2011 - The Arab League (comprising 22 Arab
member states), of which this country is a member, has approved
imposing sanctions on Syria. These include: -
* Cutting off transactions with the Syrian central bank
* Halting funding by Arab governments for projects in Syria
* A ban on senior Syrian officials travelling to other Arab countries
* A freeze on assets related to President Bashar al-Assad's
government
The declaration also calls on Arab central banks to monitor
transfers to Syria, with the exception of remittances from Syrians
abroad.
For further information, click here
The Arab League (comprising 22 Arab member states), of which
this country is a member, has boycotted Israel in a systematic
effort to isolate Israel economically in support of the Palestinians,
however, the implementation of the boycott has varied over time
among member states.
There are three tiers to the boycott. The primary boycott prohibits
the importation of Israeli-origin goods and services into boycotting
countries. The secondary boycott prohibits individuals, as well as
private and public sector firms and organizations, in member
countries from engaging in business with any entity that does
business in Israel. The Arab League maintains a blacklist of such
firms. The tertiary boycott prohibits any
entity in a member country from doing business with a company or
individual that has business dealings with U.S. or other firms on
the Arab League blacklist.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2011:
The Kingdom of Saudi Arabia (KSA) is a growing financial center
in the Gulf Region. Money laundering and terrorist financing are
known to originate from Saudi criminal enterprises, private
individuals, and Saudi-based charities. Based on media reports
and discussions with Saudi officials, there is no indication of
significant narcotics-related money laundering. Saudi bulk cash
smuggling from individual donors and charities has reportedly
been a major source of financing to extremist and terrorist groups
over the past 25 years. With the advent of tighter bank
regulations, funds are reportedly collected and illicitly transferred
in cash, often via pilgrims performing Hajj and Umrah. Despite
serious and effective efforts to counter the funding of terrorism
originating from within its borders, entities in Saudi Arabia
continue to serve as an important source of cash flowing to Sunni-
based extremist groups. Saudi officials acknowledge difficulty in
following the money trail with regard to illicit finance due to the
preference for cash transactions in the country. The government
does not regularly publish official criminal statistics.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
KNOW-YOUR-CUSTOMER RULES:
Covered entities: banks, money exchangers, real estate agents,
dealers in precious metals and stones, lawyers and accountants
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: banks, insurance companies, exchange
companies and institutions, investment and insurance companies,
commercial companies, sole proprietorships, vocational activities
Number of STRs received and time frame: 2,968 (2004 – 2008)
Number of CTRs received and time frame: Not publically available
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: 237 (2004 – 2008)
Convictions: 162 (2004 – 2008)
Assets forfeited: criminally: Not available civilly: Not available
RECORDS EXCHANGE MECHANISM:
With U.S.: NO
With other governments/jurisdictions: YES
The Kingdom of Saudi Arabia is a member of the Middle East &
North Africa Financial Action Task Force (MENAFATF), a Financial
Action Task Force (FATF)-style regional body. Its most recent
mutual evaluation can be found here: http://www.fatf-gafi.
org/dataoecd/47/59/45727237.pdf
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
Money service businesses operating outside of banks and
licensed money changers are illegal in Saudi Arabia. To help
counteract the appeal of these types of unlicensed money
services particularly to many of the approximately eight million
expatriates living in Saudi Arabia, Saudi banks have taken the
initiative to create fast, efficient, high quality, and cost-effective
fund transfer systems that have proven capable of attracting
customers accustomed to using other non-sanctioned methods.
Saudi Arabia's Council of Senior Scholars (the Kingdom's highest
judicial body and equivalent to the U.S. Supreme Court) issued an
edict (fatwa) specifically defining acts of terrorism, specifying that
committing such acts were illegal both in Muslim and non-Muslim
countries, and declaring that financing terrorism, knowingly or
unknowingly, was illegal and punishable under Islamic law. Fatwas
from the Council of Senior Scholars constitute the most definitive
interpretations of Shariah. Nevertheless, Saudi Arabia should
enact a full statutory criminalization of terrorist financing and
structure it as separate from the money laundering offense to
clearly distinguish the money laundering and terrorist financing
offenses.
Wide-sweeping counter-terrorism operations and resulting arrests
over the past 12 months have demonstrated Saudi Arabia's ability
to effectively disrupt planning and financing within the Kingdom.
Contributions to charities are subject to strict guidelines, including
that they must be in Saudi riyals; adhere to enhanced
identification requirements; and payments may be made only by
checks payable to the first beneficiary, which then must be
deposited in a Saudi bank. Regulations also forbid charities from
using ATMs and credit cards for charitable purposes, from making
cash contributions, and from making money transfers outside of
Saudi Arabia.
Saudi Arabia’s capacity to monitor compliance with and enforce its
banking rules has improved and helped to stem the flow of illicit
funds through Saudi financial institutions. The Saudis’ ability to
stop bulk cash smuggling has also improved. However, cash
illicitly collected and transferred via pilgrims on Hajj or Umrah
continues to flow. Underground remittance systems such as
hawala are also present in Saudi Arabia. The Kingdom should
become a party to the UN Convention against Corruption.
____________________________________________________
US State Dept Narcotics Report 2012:
The Kingdom of Saudi Arabia is not a significant transit country
for drugs, nor is there notable drug production reported in the
country. Drug trafficking is illegal and is punishable by death. The
Saudi Arabian government (SAG) has implemented several policy
initiatives aimed at curbing the trafficking and abuse of narcotics
to include sponsoring drug education curricula, drug treatment
facilities, and coordination with neighboring countries on
combating cross border trafficking. However, regular seizures of
fenethylline (a synthetic stimulant also known as Captagon)
indicate a continued trend of smuggling and use of some illegal
narcotic substances.
Combating narcotics trafficking and addiction is a priority for the
SAG. As a matter of government policy, the SAG does not
encourage or facilitate illicit production or distribution of narcotic
or psychotropic drugs or other controlled substances, nor does it
encourage or facilitate the laundering of proceeds from illegal
transactions. According to the Ministry of Interior (MOI), security
services arrested 475 people, just under half of whom were Saudi
citizens, between June and September 2011 involved in
trafficking, receiving, or selling drugs with an estimated black
market value of more than $450 million. Between December 2010
and May 2011, Saudi security forces arrested 981 people, half of
whom were Saudi citizens, for similar drug-related crimes.
The MOI leads SAG counternarcotics efforts, and the MOI’s
General Directorate of Narcotics Control (GDNC) cooperates with
the National Commission for Narcotics Control (NCNC) and other
SAG ministries and agencies to combat the smuggling and use of
narcotics. The GDNC maintains overseas drug enforcement
liaison offices with responsibility for counternarcotics efforts.
Saudi Arabia hosts the Naif Arab University for Security Sciences,
which focuses on crime prevention and drug control, and the
Kingdom maintains narcotics-related bilateral agreements with a
number of regional countries. Saudi Arabia is party to the 1988
UN Drug Convention. Saudi Arabia is also a party to the UN
Convention against Transnational Organized Crime and its three
protocols.
Saudi Arabia has adopted both the 1986 “Common Arab Unified
Law” and the 1999 “Arab Anti-drug Strategy” issued by the
Council of Arab Ministers of Interior. Saudi Arabia signed the UN
Convention against Corruption in 2004, but has not yet ratified it.
The government conducts public awareness campaigns aimed at
educating the public on the harmful effects of drugs, and the
country’s influential religious establishment actively preaches
against the use of narcotics. Due to the negative social
perception of drug use, data on drug use in Saudi Arabia is
scarce, and many cases of addiction likely go unreported. SAG
efforts to treat drug abuse are aimed solely at Saudi nationals,
while expatriate substance abusers are usually jailed and
summarily deported. There are four government-run facilities
throughout the country (located in Riyadh, Jeddah, Dammam, and
Qassim) specializing in treating addiction and psychological
rehabilitation.
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 3)
Saudi Arabia is a destination country for men and women
subjected to forced labor and to a much lesser extent, forced
prostitution. Men and women from Bangladesh, India, Sri Lanka,
Nepal, Pakistan, the Philippines, Indonesia, Sudan, Ethiopia,
Kenya, and many other countries voluntarily travel to Saudi
Arabia as domestic servants or other low-skilled laborers, but
some subsequently face conditions indicative of involuntary
servitude, including nonpayment of wages, long working hours
without rest, deprivation of food, threats, physical or sexual
abuse, and restrictions on movement, such as the withholding of
passports or confinement to the workplace. Recent reports of
abuse include the driving of nails into a domestic worker’s body.
Although many migrant workers sign contracts delineating their
rights, some report work conditions that are substantially different
from those described in the contract while others never see the
contract at all, leaving them vulnerable to forced labor, including
debt bondage. Due to Saudi Arabia’s requirement that foreign
workers receive permission from their employer to get an “exit
visa” before they are able to leave the country, some migrant
workers report that they were forced to work for months or years
beyond their contract term because their employer would not
grant them the exit permit. Local and international media reported
in May and June that some Nepalese domestic workers had been
recruited to work in Kuwait and then illegally transported to work in
Saudi Arabia against their will.
Women, primarily from Asian and African countries, were believed
to have been forced into prostitution in Saudi Arabia; others were
reportedly kidnapped and forced into prostitution after running
away from abusive employers. Yemeni, Nigerian, Pakistani,
Afghan, Chadian, and Sudanese children were subjected to
forced labor as beggars and street vendors in Saudi Arabia,
facilitated by criminal gangs. Saudi authorities reported fewer
Yemeni children may have been forced to work in Saudi Arabia
during the reporting period. Some Saudi nationals travel to
destinations including Morocco, Egypt, Yemen, Afghanistan,
Pakistan, India, and Bangladesh to solicit prostitution. Some Saudi
men used legally contracted “temporary marriages” in countries
such as Egypt, India, Mauritania, Yemen, and Indonesia as a
means by which to sexually exploit young girls and women
overseas.
The Government of Saudi Arabia does not fully comply with the
minimum standards for the elimination of trafficking and is not
making significant efforts to do so. In a positive development, the
government undertook some efforts to improve its response to the
vast human trafficking problem in Saudi Arabia, including training
government officials on its 2009 anti-trafficking law and
conducting surprise visits to places where victims may be found.
The government also achieved its first conviction under its human
trafficking law. Nonetheless, the government did not prosecute
and punish a significant number of trafficking offenders or
significantly improve victim protection services during the year.
The government’s policy of allowing Saudi citizens and residents
to sponsor migrant workers and restrict their freedoms, including
exit from the country, continued to obstruct significant progress in
dealing with human trafficking. While Saudi Arabia continued to
discuss alternatives to its sponsorship law, the government did
not implement any new system. Domestic workers – the population
most vulnerable to forced labor – remained excluded from general
labor law protections, and employers continued to regularly
withhold workers’ passports as a means of keeping them in forced
labor.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: The Saudi government continued to build its
counterterrorism capacity and its efforts to counter extremist
ideology. Over the course of the year, Saudi authorities arrested
numerous suspected al-Qa'ida (AQ) associates, uncovered
several AQ arms caches, continued to develop a new facilities
security force, implemented improved border security measures,
and tightened laws to counter terrorist financing. In addition,
prominent officials and religious leaders made public comments
criticizing extremist ideology. Although Saudi Arabia's capacity to
deal with internal threats remained strong, instability in Yemen
provided an opportunity for al-Qa'ida in the Arabia Peninsula
(AQAP) to recruit members, solicit funds, and plan attacks on
Saudi Arabia.
Legislation and Law Enforcement: Saudi Arabia cooperated to
prevent acts of terrorism against the U.S. homeland, citizens, and
interests. On October 29, international authorities intercepted two
mail bombs destined for the United States based on timely
information from Saudi authorities.
Saudi Arabia continued to improve border security measures,
including installing biometric scanners at entry points throughout
the Kingdom. U.S. government officials worked with Saudi officials
on a number of border security issues, including the Advance
Passenger Information/Passenger Name Record program and
compliance with the International Ship and Port Facility Security
Code. In April, 12 officials from the Ministry of Interior participated
in a customs and border patrol exchange in the United States,
and Saudi officials continued to request opportunities to learn
about U.S. law enforcement "best practices."
Saudi authorities offer one million Saudi riyals (approximately US$
270,000) to anyone who supplied information that led to the arrest
of a terrorist, and five million riyals (approximately US$ 1.4 million)
to anyone who supplied information about a terrorist cell. The
reward for anyone supplying information to foil a terrorist attack is
seven million riyals (approximately US$ 1.9 million).
Arrests:
On March 24, Saudi officials announced the arrest of more than
100 AQ suspects since November 2009. Those arrested were
accused of planning attacks against government and oil
installations across the Kingdom. They included 47 Saudis, 51
Yemenis, one Somali, one Bangladeshi, and one Eritrean. One of
the arrestees, a woman named Haylah Al Qassir, allegedly helped
AQ recruit young women and youths, hide fugitives, and plan and
finance operations. During the arrests, police seized weapons,
ammunition, video recording devices, computers, communication
devices, money, and documents. In this operation, security
officers also uncovered two six-member suicide bombing cells
linked to AQAP. Officers arrested all 12 members as they were in
the early stages of planning attacks against oil and security
facilities in the Eastern region of Saudi Arabia.
On November 26, Saudi officials announced that 149 AQ
suspects had been arrested since April. These suspects had
been part of 19 cells across Saudi Arabia and included 124
Saudis. The suspects allegedly planned to poison Saudi officials
and journalists with gifts of perfume; to finance operations by
robbing banks and companies; and to build explosive devices
from mobile phones. They were also accused of sheltering suicide
bombers who illegally entered the country from Yemen to attack
civilian and military facilities in Saudi Arabia.
Countering Terrorism Finance: Saudi Arabia is a member of the
Middle East and North Africa Financial Action Task Force
(MENAFATF), a Financial Action Task Force (FATF)-style regional
body. Saudi Arabia is also a member of the Gulf Cooperation
Council, which itself is a member of the FATF, and its Financial
Intelligence Unit is a member of the Egmont Group.
On May 6, Saudi Arabia's Council of Senior Scholars, the
country's highest religious body, published, and King Abdullah
endorsed, a fatwa criminalizing terrorist acts and the financing,
aiding, or abetting of terrorists. The edict declared that these
injunctions apply both within Muslim and non-Muslim countries,
and it paved the way for comprehensive legislation and
implementing regulations for the Saudi Arabian government to
prosecute terrorist financing cases.
Saudi Arabia actively participated in the UNSCR 1267 Committee
process, proposing individuals for listing and imposing the
required asset freeze and travel ban on those listed. The June
2010 Mutual Evaluation Report of Saudi Arabia, conducted as a
joint exercise between the FATF and MENAFATF, identified areas
of progress and suggested areas for further improvement.
According to its mutual evaluation report, Saudi Arabia has not
implemented UNSCR 1373.
The Kingdom, due to a large number of transient workers,
appeared to be the world's second largest market for remittances.
Due to strict rules for banking and remittances in the Kingdom, a
considerable part of the remittance sector may be underground.
While there is no public data available on illegal remittances in
2010, these underground networks likely still exist.
Regional and International Cooperation: Since 2008, Saudi Arabia
has been a member of the Global Initiative to Combat Nuclear
Terrorism. Saudi Arabia has security-related bilateral agreements
including counterterrorism cooperation with the United States,
Italy, the United Kingdom, India, Iran, Turkey, Senegal, Pakistan,
Tunisia, Oman, Morocco, Libya, Yemen, Iraq, Jordan, and Sudan.
Saudi government officials also issued statements encouraging
enhanced cooperation among Arab League states on
counterterrorism issues.
Countering Radicalization and Violent Extremism: Countering
extremist ideology by ensuring what it calls “ideological security”
was a key part of the Saudi government’s counterterrorism
strategy. The Ministry of Islamic Affairs continued its extensive
media campaign to educate young Saudis on the "correct"
teachings of Islam to prevent their being drawn to extremist
doctrines. The campaign included messages incorporated into
Friday sermons at mosques, distribution of literature and tapes,
and article postings on the Internet. In 2007, Saudi Arabia issued
identification cards to imams and religious leaders to curb
instances of unauthorized persons delivering Friday sermons. In
2010, the government continued to monitor these licensed imams
and counseled them when necessary. According to the Ministry,
they have not dismissed any imams for espousing extremist views
since 2008.
As part of coordinated efforts to ensure ideological security, the
ministries of Civil Service, Education, and the Interior moved over
2,000 teachers to administrative positions over the past two years
for promoting extremist ideology. Over the summer, the Ministry of
Education trained school principals and supervisors to report
teachers who believed in extremist ideas or lack allegiance to the
homeland. Although some overtly intolerant statements were
removed or modified, educational textbooks continued to contain
such statements against non-Muslim religious groups.
In September, King Abdulaziz University hosted a two-day
seminar targeting youth on "The Saudi Moderate Approach." The
seminar aimed to instill a culture of tolerance, reduce extremism,
and develop patriotism.
The governmental Mohammed Bin Naif Center for Counseling and
Care program continued to operate at least nine centers to
rehabilitate those with extremist ideologies. These centers
employed more than 100 scholars and academics specializing in
Islam and Sharia law, and more than 30 psychiatrists and social
researchers. Since its inception in 2006, the program has enabled
over 300 former extremists, including former Guantanamo
detainees, to be re-integrated into Saudi society. The Ministry of
Interior estimates recidivism rates for former Guantanamo
detainees to be 20 percent and for all other program participants
to be less than 10 percent.
In addition to rehabilitation, the Ministry of Interior continued a
program of counter-radicalization within the prison system. The
Ministry worked with specialists, clerics, and teachers to stop
violent extremist groups from recruiting prisoners. Since its
inception in 2004, 3,200 prisoners have participated in 5,000
counter-radicalization meetings.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
November 28, 2011 - The Arab League (comprising 22 Arab
member states), of which this country is a member, has approved
imposing sanctions on Syria. These include: -
* Cutting off transactions with the Syrian central bank
* Halting funding by Arab governments for projects in Syria
* A ban on senior Syrian officials travelling to other Arab countries
* A freeze on assets related to President Bashar al-Assad's
government
The declaration also calls on Arab central banks to monitor
transfers to Syria, with the exception of remittances from Syrians
abroad.
For further information, click here
The Arab League (comprising 22 Arab member states), of which
this country is a member, has boycotted Israel in a systematic
effort to isolate Israel economically in support of the Palestinians,
however, the implementation of the boycott has varied over time
among member states.
There are three tiers to the boycott. The primary boycott prohibits
the importation of Israeli-origin goods and services into boycotting
countries. The secondary boycott prohibits individuals, as well as
private and public sector firms and organizations, in member
countries from engaging in business with any entity that does
business in Israel. The Arab League maintains a blacklist of such
firms. The tertiary boycott prohibits any
entity in a member country from doing business with a company or
individual that has business dealings with U.S. or other firms on
the Arab League blacklist.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2011:
The Kingdom of Saudi Arabia (KSA) is a growing financial center
in the Gulf Region. Money laundering and terrorist financing are
known to originate from Saudi criminal enterprises, private
individuals, and Saudi-based charities. Based on media reports
and discussions with Saudi officials, there is no indication of
significant narcotics-related money laundering. Saudi bulk cash
smuggling from individual donors and charities has reportedly
been a major source of financing to extremist and terrorist groups
over the past 25 years. With the advent of tighter bank
regulations, funds are reportedly collected and illicitly transferred
in cash, often via pilgrims performing Hajj and Umrah. Despite
serious and effective efforts to counter the funding of terrorism
originating from within its borders, entities in Saudi Arabia
continue to serve as an important source of cash flowing to Sunni-
based extremist groups. Saudi officials acknowledge difficulty in
following the money trail with regard to illicit finance due to the
preference for cash transactions in the country. The government
does not regularly publish official criminal statistics.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
KNOW-YOUR-CUSTOMER RULES:
Covered entities: banks, money exchangers, real estate agents,
dealers in precious metals and stones, lawyers and accountants
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: banks, insurance companies, exchange
companies and institutions, investment and insurance companies,
commercial companies, sole proprietorships, vocational activities
Number of STRs received and time frame: 2,968 (2004 – 2008)
Number of CTRs received and time frame: Not publically available
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: 237 (2004 – 2008)
Convictions: 162 (2004 – 2008)
Assets forfeited: criminally: Not available civilly: Not available
RECORDS EXCHANGE MECHANISM:
With U.S.: NO
With other governments/jurisdictions: YES
The Kingdom of Saudi Arabia is a member of the Middle East &
North Africa Financial Action Task Force (MENAFATF), a Financial
Action Task Force (FATF)-style regional body. Its most recent
mutual evaluation can be found here: http://www.fatf-gafi.
org/dataoecd/47/59/45727237.pdf
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
Money service businesses operating outside of banks and
licensed money changers are illegal in Saudi Arabia. To help
counteract the appeal of these types of unlicensed money
services particularly to many of the approximately eight million
expatriates living in Saudi Arabia, Saudi banks have taken the
initiative to create fast, efficient, high quality, and cost-effective
fund transfer systems that have proven capable of attracting
customers accustomed to using other non-sanctioned methods.
Saudi Arabia's Council of Senior Scholars (the Kingdom's highest
judicial body and equivalent to the U.S. Supreme Court) issued an
edict (fatwa) specifically defining acts of terrorism, specifying that
committing such acts were illegal both in Muslim and non-Muslim
countries, and declaring that financing terrorism, knowingly or
unknowingly, was illegal and punishable under Islamic law. Fatwas
from the Council of Senior Scholars constitute the most definitive
interpretations of Shariah. Nevertheless, Saudi Arabia should
enact a full statutory criminalization of terrorist financing and
structure it as separate from the money laundering offense to
clearly distinguish the money laundering and terrorist financing
offenses.
Wide-sweeping counter-terrorism operations and resulting arrests
over the past 12 months have demonstrated Saudi Arabia's ability
to effectively disrupt planning and financing within the Kingdom.
Contributions to charities are subject to strict guidelines, including
that they must be in Saudi riyals; adhere to enhanced
identification requirements; and payments may be made only by
checks payable to the first beneficiary, which then must be
deposited in a Saudi bank. Regulations also forbid charities from
using ATMs and credit cards for charitable purposes, from making
cash contributions, and from making money transfers outside of
Saudi Arabia.
Saudi Arabia’s capacity to monitor compliance with and enforce its
banking rules has improved and helped to stem the flow of illicit
funds through Saudi financial institutions. The Saudis’ ability to
stop bulk cash smuggling has also improved. However, cash
illicitly collected and transferred via pilgrims on Hajj or Umrah
continues to flow. Underground remittance systems such as
hawala are also present in Saudi Arabia. The Kingdom should
become a party to the UN Convention against Corruption.
____________________________________________________
US State Dept Narcotics Report 2012:
The Kingdom of Saudi Arabia is not a significant transit country
for drugs, nor is there notable drug production reported in the
country. Drug trafficking is illegal and is punishable by death. The
Saudi Arabian government (SAG) has implemented several policy
initiatives aimed at curbing the trafficking and abuse of narcotics
to include sponsoring drug education curricula, drug treatment
facilities, and coordination with neighboring countries on
combating cross border trafficking. However, regular seizures of
fenethylline (a synthetic stimulant also known as Captagon)
indicate a continued trend of smuggling and use of some illegal
narcotic substances.
Combating narcotics trafficking and addiction is a priority for the
SAG. As a matter of government policy, the SAG does not
encourage or facilitate illicit production or distribution of narcotic
or psychotropic drugs or other controlled substances, nor does it
encourage or facilitate the laundering of proceeds from illegal
transactions. According to the Ministry of Interior (MOI), security
services arrested 475 people, just under half of whom were Saudi
citizens, between June and September 2011 involved in
trafficking, receiving, or selling drugs with an estimated black
market value of more than $450 million. Between December 2010
and May 2011, Saudi security forces arrested 981 people, half of
whom were Saudi citizens, for similar drug-related crimes.
The MOI leads SAG counternarcotics efforts, and the MOI’s
General Directorate of Narcotics Control (GDNC) cooperates with
the National Commission for Narcotics Control (NCNC) and other
SAG ministries and agencies to combat the smuggling and use of
narcotics. The GDNC maintains overseas drug enforcement
liaison offices with responsibility for counternarcotics efforts.
Saudi Arabia hosts the Naif Arab University for Security Sciences,
which focuses on crime prevention and drug control, and the
Kingdom maintains narcotics-related bilateral agreements with a
number of regional countries. Saudi Arabia is party to the 1988
UN Drug Convention. Saudi Arabia is also a party to the UN
Convention against Transnational Organized Crime and its three
protocols.
Saudi Arabia has adopted both the 1986 “Common Arab Unified
Law” and the 1999 “Arab Anti-drug Strategy” issued by the
Council of Arab Ministers of Interior. Saudi Arabia signed the UN
Convention against Corruption in 2004, but has not yet ratified it.
The government conducts public awareness campaigns aimed at
educating the public on the harmful effects of drugs, and the
country’s influential religious establishment actively preaches
against the use of narcotics. Due to the negative social
perception of drug use, data on drug use in Saudi Arabia is
scarce, and many cases of addiction likely go unreported. SAG
efforts to treat drug abuse are aimed solely at Saudi nationals,
while expatriate substance abusers are usually jailed and
summarily deported. There are four government-run facilities
throughout the country (located in Riyadh, Jeddah, Dammam, and
Qassim) specializing in treating addiction and psychological
rehabilitation.
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 3)
Saudi Arabia is a destination country for men and women
subjected to forced labor and to a much lesser extent, forced
prostitution. Men and women from Bangladesh, India, Sri Lanka,
Nepal, Pakistan, the Philippines, Indonesia, Sudan, Ethiopia,
Kenya, and many other countries voluntarily travel to Saudi
Arabia as domestic servants or other low-skilled laborers, but
some subsequently face conditions indicative of involuntary
servitude, including nonpayment of wages, long working hours
without rest, deprivation of food, threats, physical or sexual
abuse, and restrictions on movement, such as the withholding of
passports or confinement to the workplace. Recent reports of
abuse include the driving of nails into a domestic worker’s body.
Although many migrant workers sign contracts delineating their
rights, some report work conditions that are substantially different
from those described in the contract while others never see the
contract at all, leaving them vulnerable to forced labor, including
debt bondage. Due to Saudi Arabia’s requirement that foreign
workers receive permission from their employer to get an “exit
visa” before they are able to leave the country, some migrant
workers report that they were forced to work for months or years
beyond their contract term because their employer would not
grant them the exit permit. Local and international media reported
in May and June that some Nepalese domestic workers had been
recruited to work in Kuwait and then illegally transported to work in
Saudi Arabia against their will.
Women, primarily from Asian and African countries, were believed
to have been forced into prostitution in Saudi Arabia; others were
reportedly kidnapped and forced into prostitution after running
away from abusive employers. Yemeni, Nigerian, Pakistani,
Afghan, Chadian, and Sudanese children were subjected to
forced labor as beggars and street vendors in Saudi Arabia,
facilitated by criminal gangs. Saudi authorities reported fewer
Yemeni children may have been forced to work in Saudi Arabia
during the reporting period. Some Saudi nationals travel to
destinations including Morocco, Egypt, Yemen, Afghanistan,
Pakistan, India, and Bangladesh to solicit prostitution. Some Saudi
men used legally contracted “temporary marriages” in countries
such as Egypt, India, Mauritania, Yemen, and Indonesia as a
means by which to sexually exploit young girls and women
overseas.
The Government of Saudi Arabia does not fully comply with the
minimum standards for the elimination of trafficking and is not
making significant efforts to do so. In a positive development, the
government undertook some efforts to improve its response to the
vast human trafficking problem in Saudi Arabia, including training
government officials on its 2009 anti-trafficking law and
conducting surprise visits to places where victims may be found.
The government also achieved its first conviction under its human
trafficking law. Nonetheless, the government did not prosecute
and punish a significant number of trafficking offenders or
significantly improve victim protection services during the year.
The government’s policy of allowing Saudi citizens and residents
to sponsor migrant workers and restrict their freedoms, including
exit from the country, continued to obstruct significant progress in
dealing with human trafficking. While Saudi Arabia continued to
discuss alternatives to its sponsorship law, the government did
not implement any new system. Domestic workers – the population
most vulnerable to forced labor – remained excluded from general
labor law protections, and employers continued to regularly
withhold workers’ passports as a means of keeping them in forced
labor.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: The Saudi government continued to build its
counterterrorism capacity and its efforts to counter extremist
ideology. Over the course of the year, Saudi authorities arrested
numerous suspected al-Qa'ida (AQ) associates, uncovered
several AQ arms caches, continued to develop a new facilities
security force, implemented improved border security measures,
and tightened laws to counter terrorist financing. In addition,
prominent officials and religious leaders made public comments
criticizing extremist ideology. Although Saudi Arabia's capacity to
deal with internal threats remained strong, instability in Yemen
provided an opportunity for al-Qa'ida in the Arabia Peninsula
(AQAP) to recruit members, solicit funds, and plan attacks on
Saudi Arabia.
Legislation and Law Enforcement: Saudi Arabia cooperated to
prevent acts of terrorism against the U.S. homeland, citizens, and
interests. On October 29, international authorities intercepted two
mail bombs destined for the United States based on timely
information from Saudi authorities.
Saudi Arabia continued to improve border security measures,
including installing biometric scanners at entry points throughout
the Kingdom. U.S. government officials worked with Saudi officials
on a number of border security issues, including the Advance
Passenger Information/Passenger Name Record program and
compliance with the International Ship and Port Facility Security
Code. In April, 12 officials from the Ministry of Interior participated
in a customs and border patrol exchange in the United States,
and Saudi officials continued to request opportunities to learn
about U.S. law enforcement "best practices."
Saudi authorities offer one million Saudi riyals (approximately US$
270,000) to anyone who supplied information that led to the arrest
of a terrorist, and five million riyals (approximately US$ 1.4 million)
to anyone who supplied information about a terrorist cell. The
reward for anyone supplying information to foil a terrorist attack is
seven million riyals (approximately US$ 1.9 million).
Arrests:
On March 24, Saudi officials announced the arrest of more than
100 AQ suspects since November 2009. Those arrested were
accused of planning attacks against government and oil
installations across the Kingdom. They included 47 Saudis, 51
Yemenis, one Somali, one Bangladeshi, and one Eritrean. One of
the arrestees, a woman named Haylah Al Qassir, allegedly helped
AQ recruit young women and youths, hide fugitives, and plan and
finance operations. During the arrests, police seized weapons,
ammunition, video recording devices, computers, communication
devices, money, and documents. In this operation, security
officers also uncovered two six-member suicide bombing cells
linked to AQAP. Officers arrested all 12 members as they were in
the early stages of planning attacks against oil and security
facilities in the Eastern region of Saudi Arabia.
On November 26, Saudi officials announced that 149 AQ
suspects had been arrested since April. These suspects had
been part of 19 cells across Saudi Arabia and included 124
Saudis. The suspects allegedly planned to poison Saudi officials
and journalists with gifts of perfume; to finance operations by
robbing banks and companies; and to build explosive devices
from mobile phones. They were also accused of sheltering suicide
bombers who illegally entered the country from Yemen to attack
civilian and military facilities in Saudi Arabia.
Countering Terrorism Finance: Saudi Arabia is a member of the
Middle East and North Africa Financial Action Task Force
(MENAFATF), a Financial Action Task Force (FATF)-style regional
body. Saudi Arabia is also a member of the Gulf Cooperation
Council, which itself is a member of the FATF, and its Financial
Intelligence Unit is a member of the Egmont Group.
On May 6, Saudi Arabia's Council of Senior Scholars, the
country's highest religious body, published, and King Abdullah
endorsed, a fatwa criminalizing terrorist acts and the financing,
aiding, or abetting of terrorists. The edict declared that these
injunctions apply both within Muslim and non-Muslim countries,
and it paved the way for comprehensive legislation and
implementing regulations for the Saudi Arabian government to
prosecute terrorist financing cases.
Saudi Arabia actively participated in the UNSCR 1267 Committee
process, proposing individuals for listing and imposing the
required asset freeze and travel ban on those listed. The June
2010 Mutual Evaluation Report of Saudi Arabia, conducted as a
joint exercise between the FATF and MENAFATF, identified areas
of progress and suggested areas for further improvement.
According to its mutual evaluation report, Saudi Arabia has not
implemented UNSCR 1373.
The Kingdom, due to a large number of transient workers,
appeared to be the world's second largest market for remittances.
Due to strict rules for banking and remittances in the Kingdom, a
considerable part of the remittance sector may be underground.
While there is no public data available on illegal remittances in
2010, these underground networks likely still exist.
Regional and International Cooperation: Since 2008, Saudi Arabia
has been a member of the Global Initiative to Combat Nuclear
Terrorism. Saudi Arabia has security-related bilateral agreements
including counterterrorism cooperation with the United States,
Italy, the United Kingdom, India, Iran, Turkey, Senegal, Pakistan,
Tunisia, Oman, Morocco, Libya, Yemen, Iraq, Jordan, and Sudan.
Saudi government officials also issued statements encouraging
enhanced cooperation among Arab League states on
counterterrorism issues.
Countering Radicalization and Violent Extremism: Countering
extremist ideology by ensuring what it calls “ideological security”
was a key part of the Saudi government’s counterterrorism
strategy. The Ministry of Islamic Affairs continued its extensive
media campaign to educate young Saudis on the "correct"
teachings of Islam to prevent their being drawn to extremist
doctrines. The campaign included messages incorporated into
Friday sermons at mosques, distribution of literature and tapes,
and article postings on the Internet. In 2007, Saudi Arabia issued
identification cards to imams and religious leaders to curb
instances of unauthorized persons delivering Friday sermons. In
2010, the government continued to monitor these licensed imams
and counseled them when necessary. According to the Ministry,
they have not dismissed any imams for espousing extremist views
since 2008.
As part of coordinated efforts to ensure ideological security, the
ministries of Civil Service, Education, and the Interior moved over
2,000 teachers to administrative positions over the past two years
for promoting extremist ideology. Over the summer, the Ministry of
Education trained school principals and supervisors to report
teachers who believed in extremist ideas or lack allegiance to the
homeland. Although some overtly intolerant statements were
removed or modified, educational textbooks continued to contain
such statements against non-Muslim religious groups.
In September, King Abdulaziz University hosted a two-day
seminar targeting youth on "The Saudi Moderate Approach." The
seminar aimed to instill a culture of tolerance, reduce extremism,
and develop patriotism.
The governmental Mohammed Bin Naif Center for Counseling and
Care program continued to operate at least nine centers to
rehabilitate those with extremist ideologies. These centers
employed more than 100 scholars and academics specializing in
Islam and Sharia law, and more than 30 psychiatrists and social
researchers. Since its inception in 2006, the program has enabled
over 300 former extremists, including former Guantanamo
detainees, to be re-integrated into Saudi society. The Ministry of
Interior estimates recidivism rates for former Guantanamo
detainees to be 20 percent and for all other program participants
to be less than 10 percent.
In addition to rehabilitation, the Ministry of Interior continued a
program of counter-radicalization within the prison system. The
Ministry worked with specialists, clerics, and teachers to stop
violent extremist groups from recruiting prisoners. Since its
inception in 2004, 3,200 prisoners have participated in 5,000
counter-radicalization meetings.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
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| Further Tables |
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*Please note that FATF deems that a country has significant aml deficiencies if any
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated either
Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
| SAUDI ARABIA |
| KnowYourCountry |
|
|
Key Findings from last Mutual Evaluation Report
The Kingdom of Saudi Arabia (KSA) established its Anti Money
Laundering (AML) / Combating the Financing of Terrorism (CFT) regime
officially with the issuance of the Anti-Money Laundering Statute in 2003
and its Implementing Regulations in 2005. The legal AML framework is
quite robust; however, the CFT legal framework is not as developed. In
addition, the effectiveness of the AML and CFT systems needs
improvement.
Legal framework
The legal AML framework in KSA is composed of Shari’ah law and the
Anti Money Laundering Statute (AMLS). This framework effectively
criminalizes money laundering as required by the FATF
Recommendations and international conventions, although criminal
liability of legal persons is missing. A confiscation and freezing
framework was set up, but its effectiveness needs to be much improved.
KSA should also protect the rights of bona fide third parties. Regarding
terrorist financing (TF), it is clear that KSA is committed to prosecute
terrorist financiers as terrorists. However, KSA was already encouraged
in 2004, after it was assessed by the FATF to enact a freestanding
terrorist financing offence in line with the United Nations (UN) Terrorist
Financing Convention. This has still not been done. In addition, despite
the fact that the Kingdom has established a mechanism to implement
United Nations Security Council Resolution (UNSCR) 1267(1999);
UNSCR 1373(2001) has yet to be implemented. On international
cooperation, KSA has signed, ratified and implemented the UN Vienna
Convention. However, the UN Palermo Convention has not fully been
implemented, while the UN Terrorist Financing Convention has not been
implemented. The general framework for mutual legal assistance is
sound on paper, but is relatively untested and, therefore, lacks
experience, which does not enhance effectiveness.
Law enforcement
The KSA Financial Intelligence Unit (SAFIU) is a well equipped and well
resourced organisation that receives and disseminates relatively few
Suspicious Transaction Reports (STRs). Nevertheless, at the time of the
on-site visit, SAFIU faced a backlog of about 30% of STRs over the last
two years that were waiting to be analysed and made available to law
enforcement entities. This backlog accumulation requires constant
management attention and monitoring so that STRs are processed in a
timely manner.
The non-profit sector is a well organised sector. Non-profit organisations
(NPOs) are licensed, registered, supervised and sanctioned, and can
only have one supervised bank account. By law, NPOs are not allowed
to donate or collect funds for distribution outside the Kingdom, nor are
they allowed to operate abroad or accept funds from abroad (these are
Royal privileges). Nevertheless, KSA has not undertaken a review or
periodic reassessments of its NPO sector to identify TF risk as required
by the FATF.
Financial Institutions and Designated Non-Financial
Businesses and Professions
The assessment team noted the existence of a comprehensive
framework for preventive measures for Financial Institutions, even
though the rules for the insurance and securities sectors were only
issued shortly before the onsite visit. Some of the preventive obligations
for Financial Institutions are based on enforceable means rather than
primary or secondary legislation. Some other obligations are not clear or
consistent. For all sectors and for all measures, there is a problem with
the lack of effective implementation. Promising features are the
availability of sufficient resources and advanced software solutions to
process and monitor banking and other financial transactions. This could
be an effective foundation for improved and effective implementation,
provided that these solutions are properly customized to business
needs, and that better training is offered.
The assessment team noted the commitment expressed by the
government to implement an effective STR reporting mechanism for
AML/CFT for FIs. While the upward trend in STR filings over recent years
is a positive sign, reporting levels are generally low. The low number of
TF-related STR filings by Financial Institutions, and some institutions’
perception that their exposure to the risk of TF abuse is low, point at
deficiencies in the TF reporting system that go beyond those for the ML
reporting system. Furthermore, the lack of clear understanding among
financial institutions regarding the distinction between requirements to
monitor transactions and to report transactions that are identified as
suspicious; raises concerns about the effectiveness of the monitoring
and reporting system. For Designated Non-Financial Businesses and
Professions, reporting levels are not as should be expected for these
sectors.
There are two supervisory agencies that supervise and regulate
financial entities in KSA. Both agencies have adequate powers and
financial resources to conduct their activities. While the assessment
team welcomes the authorities’ efforts in enhancing the current
supervisory regime, it also noticed low levels of corrective measures
applied by both supervisory agencies. The assessment team also noted
the need for supervisors to effectively cover all types of Financial
Institutions that are subject to their supervision, and the need to
enhance the number of human resources available to supervise the
insurance and securities sectors. Also, authorities should work closely
and collectively to enhance the guidance issued by supervisory
authorities to be comprehensive and industry specific.
For Designated Non-Financial Business and Profession in KSA in
general, while there are basic obligations in relation to AML/CFT, the
sectors lack the experience and the awareness of AML/CFT risks and
obligations.
The Kingdom of Saudi Arabia (KSA) established its Anti Money
Laundering (AML) / Combating the Financing of Terrorism (CFT) regime
officially with the issuance of the Anti-Money Laundering Statute in 2003
and its Implementing Regulations in 2005. The legal AML framework is
quite robust; however, the CFT legal framework is not as developed. In
addition, the effectiveness of the AML and CFT systems needs
improvement.
Legal framework
The legal AML framework in KSA is composed of Shari’ah law and the
Anti Money Laundering Statute (AMLS). This framework effectively
criminalizes money laundering as required by the FATF
Recommendations and international conventions, although criminal
liability of legal persons is missing. A confiscation and freezing
framework was set up, but its effectiveness needs to be much improved.
KSA should also protect the rights of bona fide third parties. Regarding
terrorist financing (TF), it is clear that KSA is committed to prosecute
terrorist financiers as terrorists. However, KSA was already encouraged
in 2004, after it was assessed by the FATF to enact a freestanding
terrorist financing offence in line with the United Nations (UN) Terrorist
Financing Convention. This has still not been done. In addition, despite
the fact that the Kingdom has established a mechanism to implement
United Nations Security Council Resolution (UNSCR) 1267(1999);
UNSCR 1373(2001) has yet to be implemented. On international
cooperation, KSA has signed, ratified and implemented the UN Vienna
Convention. However, the UN Palermo Convention has not fully been
implemented, while the UN Terrorist Financing Convention has not been
implemented. The general framework for mutual legal assistance is
sound on paper, but is relatively untested and, therefore, lacks
experience, which does not enhance effectiveness.
Law enforcement
The KSA Financial Intelligence Unit (SAFIU) is a well equipped and well
resourced organisation that receives and disseminates relatively few
Suspicious Transaction Reports (STRs). Nevertheless, at the time of the
on-site visit, SAFIU faced a backlog of about 30% of STRs over the last
two years that were waiting to be analysed and made available to law
enforcement entities. This backlog accumulation requires constant
management attention and monitoring so that STRs are processed in a
timely manner.
The non-profit sector is a well organised sector. Non-profit organisations
(NPOs) are licensed, registered, supervised and sanctioned, and can
only have one supervised bank account. By law, NPOs are not allowed
to donate or collect funds for distribution outside the Kingdom, nor are
they allowed to operate abroad or accept funds from abroad (these are
Royal privileges). Nevertheless, KSA has not undertaken a review or
periodic reassessments of its NPO sector to identify TF risk as required
by the FATF.
Financial Institutions and Designated Non-Financial
Businesses and Professions
The assessment team noted the existence of a comprehensive
framework for preventive measures for Financial Institutions, even
though the rules for the insurance and securities sectors were only
issued shortly before the onsite visit. Some of the preventive obligations
for Financial Institutions are based on enforceable means rather than
primary or secondary legislation. Some other obligations are not clear or
consistent. For all sectors and for all measures, there is a problem with
the lack of effective implementation. Promising features are the
availability of sufficient resources and advanced software solutions to
process and monitor banking and other financial transactions. This could
be an effective foundation for improved and effective implementation,
provided that these solutions are properly customized to business
needs, and that better training is offered.
The assessment team noted the commitment expressed by the
government to implement an effective STR reporting mechanism for
AML/CFT for FIs. While the upward trend in STR filings over recent years
is a positive sign, reporting levels are generally low. The low number of
TF-related STR filings by Financial Institutions, and some institutions’
perception that their exposure to the risk of TF abuse is low, point at
deficiencies in the TF reporting system that go beyond those for the ML
reporting system. Furthermore, the lack of clear understanding among
financial institutions regarding the distinction between requirements to
monitor transactions and to report transactions that are identified as
suspicious; raises concerns about the effectiveness of the monitoring
and reporting system. For Designated Non-Financial Businesses and
Professions, reporting levels are not as should be expected for these
sectors.
There are two supervisory agencies that supervise and regulate
financial entities in KSA. Both agencies have adequate powers and
financial resources to conduct their activities. While the assessment
team welcomes the authorities’ efforts in enhancing the current
supervisory regime, it also noticed low levels of corrective measures
applied by both supervisory agencies. The assessment team also noted
the need for supervisors to effectively cover all types of Financial
Institutions that are subject to their supervision, and the need to
enhance the number of human resources available to supervise the
insurance and securities sectors. Also, authorities should work closely
and collectively to enhance the guidance issued by supervisory
authorities to be comprehensive and industry specific.
For Designated Non-Financial Business and Profession in KSA in
general, while there are basic obligations in relation to AML/CFT, the
sectors lack the experience and the awareness of AML/CFT risks and
obligations.
| Last Updated: 19 April 2012 |
AML News / Updates
April 19, 2012 - IMF Report - Saudi Arabia: Financial System Stability
Assessment - Update
Read Report
April 19, 2012 - IMF Report - Saudi Arabia: Reports on the
Observance of Standards and Codes
Read Report
April 19, 2012 - IMF Report - Saudi Arabia: Financial System Stability
Assessment - Update
Read Report
April 19, 2012 - IMF Report - Saudi Arabia: Reports on the
Observance of Standards and Codes
Read Report