Cabinet OKs Anti-Money Laundering Legislation

[USAcommitteeX]

JEDDAH, 19 August 2003 — The Council of Ministers yesterday endorsed Saudi Arabia’s first ever anti-money laundering law, which stipulates stiff penalties for offenders.

The 29-article law stipulates jail terms of up to 15 years and a fine of SR7 million ($1.86 million) for money laundering through charities or organized gangs.

The Cabinet meeting, chaired by Custodian of the Two Holy Mosques King Fahd, also passed new regulations aimed at combating smoking in public places, organizing gas supply and imposing tax on gas investments and revenues.

The anti-money-laundering law makes financing terrorism or terror organizations punishable offences. It comes into effect 60 days after its publication in the official gazette.

Other money-laundering offenders will face a maximum of 10 years in jail and a fine of $1.3 million, according to the legislation, which was passed by the consultative Shoura Council in June.

The law requires financial institutions to keep records of transactions for a minimum of 10 years and adopt precautionary measures to uncover and foil money-laundering operations. It also requires banks and financial institutions to create financial intelligence units to prepare reports on suspicious transactions to help minimize and detect such illegal operations.

The law allows exchange of information and judicial action against money laundering operations with countries with which the Kingdom maintains official agreements.

The Kingdom has taken a number of anti-money laundering measures since the Sept. 11, 2001 attacks in the United States including freezing several accounts suspected of illegal dealings and taking softer measures against other accounts submitted to the Kingdom by the US on suspicion of funding terrorism.

Saudi Arabia has also pledged to take “every possible action” to prevent funds raised by Islamic charity organizations being misused to finance terrorism, and has set up a body to oversee charity organizations.

In his address to the Cabinet meeting, King Fahd commended the Saudi security forces for the courage and patriotism they displayed in the fight against terrorists, whom he described as murderers.

The Cabinet also praised a statement issued on Saturday by the Council of Senior Islamic Scholars, backing the government’s crackdown on terrorists in various parts of the country. The Council, comprising Saudi Arabia’s most respected religious scholars, described terror attacks as serious criminal acts which warrant severe punishment.

Crown Prince Abdullah, deputy premier and commander of the National Guard, has urged Saudis to be the “eyes, ears and hands” of the security forces in the battle against terrorists, warning there was no place for neutrality.

The Cabinet highlighted Saudi Arabia’s efforts to foster a common Arab position on major issues such as the Palestinian-Israeli conflict and Iraq.

It also noted the positive outcome of Prince Abdullah’s recent talks with Egyptian President Hosni Mubarak and Syrian President Bashar Assad, which focused on the need to unite the Arab ranks.

The Cabinet welcomed the cooperation extended by Arab leaders to the proposals made by the crown prince on improving the Arab situation in general and tackling the issues of Iraq and Palestine in particular. It also noted the ongoing efforts to strengthen the Arab League.

Acting Culture and Information Minister Dr. Fahd Balghaneim said smoking will be banned in a number of public places including the courtyards of mosques, ministries, government departments, educational, health, cultural and sports institutions as well as aboard air, land and sea transport. Defaulters will be fined SR200.

The law also bans cultivation and production of tobacco and its byproducts in the Kingdom. Violators of this rule will be fined SR20,000 and will be asked to bear the cost of destroying the crop.

It urged the departments of Islamic affairs, education, information, sports, health and social affairs to prepare an advanced public awareness program to combat smoking. The law will come into effect a year after its publication in the official gazette, the minister said.


No more money for terrorist?