Senator John Kerry, D-Mass.
May 21, 2003
Dear Mr. President:
I am writing to request that you instruct the Secretary of the Treasury to identify Saudi Arabia as a primary money laundering concern under the authority provided in Section 311 of the USA PATRIOT Act (P.L. 107-56).
I also request that U.S. financial institutions be required to provide enhanced scrutiny of financial transactions from Saudi Arabia, with particular focus on international charity organizations in Saudi Arabia. Specifically, the Department of Treasury should immediately issue regulations requiring U.S. financial institutions to impose enhanced due diligence on financial transactions involving Saudi Arabian financial institutions, charities and high net-worth individuals to determine whether any transactions pose an unacceptable risk of being related to the finance of terrorism. I believe this will help ensure that funds designated to assist al-Qaida, Hizballah, Hamas or other international terrorist groups do not originate from or pass through Saudi Arabian financial institutions on their way to the United States. It will also help persuade the Saudi Arabian government to crack down on the flow of funds from their country to international terrorist organizations.
Saudi Arabia is a growing financial center in the Gulf Region of the Middle East and should be credited for its increased vigilance in the fight against money laundering since the terrorist attacks on September 11, 2001. The Saudi Arabian government has frozen accounts of individuals and organizations in response to information provided by the United States and is currently considering a proposal to develop specific laws dealing with money laundering offenses.
I remain concerned that a number of charity organizations headquartered within in Saudi Arabia and with operations and office around the world are being used as conduits to provide funds for terrorist organizations. There has been a series of published reports alleging Saudi Arabian charities and individual Saudi Arabians have been providing funds to organizations both in the United States and elsewhere which have direct links to terrorist organizations. Last year, an independent task force sponsored by the Council of Foreign Relations released a report on terrorist financing focusing on the connection between Saudi Arabia and al-Qaida which stated ... it is worth stating clearly and unambiguously what official U.S. government spokespersons have not: For years, individuals and charities based in Saudi Arabia have been the most important source of funds for al-Qaida; and for years, Saudi officials have turned a blind eye to the problem.
As long as al-Qaida retains access to a viable financial network, it remains a lethal threat to the United States. That is why I believe the United States must take any and all necessary measures to stop Saudi Arabian charity organizations from providing any additional funds to international terrorist organizations -- such as al-Qaida, Hamas and Hizballah that could be used to attack either the United States or United States interests abroad.
While the Saudi Arabian government has introduced some controls to limit the transfer of funds to terrorist organizations, I am concerned that their efforts have not gone far enough to stop international terrorist organizations from receiving funding to carry out attacks against the United States or United States interests around the world. The tragic bombing in Riyadh this month demonstrates the lethal ability of terrorists to operate within Saudi Arabia and raises serious concerns over the Saudi governments ability to incapacitate terrorist networks.
The Department of State reports through the International Narcotics Control Strategy Report that some funds from Saudi Arabian charities have been channeled to terrorist organizations. For this reason, your Administration has classified Saudi Arabia as a country to be monitored for potential money laundering.
The United States has the largest and most accessible economic marketplace in the world. Foreign financial institutions and jurisdictions must have unfettered access to markets to effectively work within the international economic system. In 2000, I introduced legislation that became Section 311 of the USA PATRIOT Act to provide the federal government with the authority to leverage the power of United States financial markets to encourage countries like Saudi Arabia to reform and enforce their counter-money laundering and counter-terrorist financing laws. As you are aware, it provides measures that are graduated, discretionary, and targeted, focusing on international transactions involving criminal proceeds, while allowing legitimate international commerce to continue unimpeded.
If we are to lead the world in the fight against terror and increase the security of the American people, we must effectively use our own laws to cut off the flow of laundered funds from terrorist groups through the international financial system. The measured use of Section 311 authority against Saudi Arabia provides the United States an opportunity to demonstrate leadership in the fight against international terrorism and money laundering.
I believe the U.S. must press for action by other nations against those Saudi persons and institutions about which there is substantial reason to believe have supported terrorism. This can be done immediately within the framework of the Financial Action Task Force (FATF). I urge you to discuss this issue in your upcoming meetings with the European Union, the G-8, and other multilateral forums. Thank you in advance for your consideration of my request.
John F. Kerry