Afghanistan, Albania, Bangladesh, Ethiopia, and the Netherlands. More significantly, Remarkably, no one has gone to jail for allowing Al Haramain to be used as a financial conduit for terrorism, although earlier this year it was announced that the founder and leader of Al Haramain-Aqeel Abdulaziz Al-Aqil-stepped down from his post, and was replaced by his deputy. Before doing so, he asserted last June, without public contradiction by Saudi officials, that his organization has done nothing wrong: "It is very strange that we are described as terrorist..... Maybe there has been a mistake.” We also note that more recently the United States has formally designated Al-Aqil as an individual supporting terrorism, but Saudi Arabia has thus far refused to take this action. Enforcement action against Al Haramain took too long and was frustrated by lethargy and half-steps. Al Haramain, moreover, is only of one of a handful of large Saudi-based charities fueling extremism; some half a dozen others, including some of the largest and most visible, such as the International Islamic Relief Organizatiom (IIRO) and the World Assembly of Muslim Youth (WAMY), have repeatedly been linked to global terrorist organizations." We welcome the announced dissolution of Al Haramain and look forward to the prompt dissolution of other large Saudi-based charities tied to the support of global terrorist organizations. Although the United States is not and should not be at war with any religion or any religious sect, we find that U.S. policy should affirmatively seek to drain the ideological breeding grounds of Islamic extremism, financially and otherwise. To do so, we will 18 17 For example, Kenyan security authorities reportedly expelled the IIRO from Kenya following the 1998 bombings of the U.S. Embassies in Nairobi and Dar es Salaam for "working against the interests of Kenyans in terms of security." Since then, IIRO has also reportedly been accused by U.S. and Philippine officials of serving as a conduit for funding the militant Abu Sayyaf Group. Similarly, WAMY has reportedly directed funds to Pakistani-backed terrorists in Kashmir. WAMY has also reportedly been under federal investigation in the United States for its alleged involvement in terrorist financing activities. 18 In this regard, we agree with the following observation of the May 2003 report of U.S. Commission on International Religious Freedom: "The Commission is concerned about numerous credible reports that the Saudi government and members of the royal family directly and indirectly fund the global propagation of an exclusivist religious ideology, Wahhabism, which allegedly promotes hatred, intolerance, and other abuses of human rights, including violence. The concern is not about the propagation of Islam per se, but about allegations that the Saudi government's version of Islam promotes abuses of human rights, including violent acts, against non-Muslims and disfavored Muslims. The concern is broader than the allegation that the Saudi government is supporting and financing terrorism, which has received substantial attention following the September 11, 2001, terrorist attacks in the United States." See also the Commission's 2004 report and statements. need more demonstrable cooperation from Saudi Arabia, which so far as not been sufficiently forthcoming. 7. The Executive Branch has not widely used the authorities given to it in the USA PATRIOT Act to crack down on foreign jurisdictions and foreign financial institutions suspected of abetting terrorist financing. In our first report, we urged the U.S. government to make use of the new powers given to the secretary of the Treasury to designate individual foreign jurisdictions or foreign financial institutions as being of "primary money laundering concern" to the United States and thereby impose “special measures" that could include cutting off such jurisdictions or banks from U.S. financial markets. At the time of our initial report, those authorities had never been used or even publicly threatened, notwithstanding their obvious potential effectiveness in affecting the behavior of recalcitrant states or financial institutions. Soon after the issuance of our initial report, the U.S. government announced its intention to impose "special measures” against Nauru and Ukraine and, in November 2003, its intention to impose "special measures” against Burma and two Burmese banks—all of which, in our judgment, are appropriately designated as being of “primary money laundering concern" to the United States, but none of which is a modality of terrorist financing. As this report was going to press, the Bush administration used "special measures" for the first time in a terrorist financing context, against a Syrian bank and its Lebanese subsidiary. Several times since we made our October 2002 recommendation, senior officials of the Bush administration have stated, both publicly and privately, that they were considering the wider use of “special measures” in connection with the financing of terrorism-but to date the Bush administration has not used this powerful tool to combat terrorist financing, with the exception of its actions against the Syrian bank and its Lebanese subsidiary noted above. With recent changes to the law that will protect from disclosure classified information used as a basis for such designations, we anticipate, and again strongly urge, the increased use of “special measures,” particularly against problematic foreign financial institutions. 8. Global coordination to curtail the financing of Hamas is inadequate. Targeting the financial support network of Hamas is an important part of the overall war on terrorist financing, affecting both the Middle East peace process and the larger U.S.-led war on terrorism. However, in Saudi Arabia, whose people and organizations may contribute as much as 60 percent of Hamas's annual budget, the government still does not recognize Hamas as a terrorist organization, notwithstanding important recent steps, such as the announced cessation of official efforts to raise money for the families of Palestinian suicide bombers. In this respect, Saudi actions and opinions are widely mirrored throughout Arab and Muslim communities around the world. Even if official support and telethons have stopped, much more needs to be done to monitor the disbursement of private funds. The EU has now officially added Hamas to its list of terrorist groups. But to date, the EU has designated only a small number of Hamas-affiliated entities. Britain and only a handful of other European states have joined U.S.-led enforcement actions against Hamas leaders and fronts, although Britain has not yet taken effective action to close the Palestinian Relief and Development Front (Interpal), perhaps the largest Hamas front organization in Europe. No such action has been taken by other European countries that are home to other Hamas front organizations, such as Austria, France, and Italy. The EU's decision to ban Hamas will remain meaningless until such time as the EU and its constituent member states act aggressively to restrict Hamas financial activities to the maximum extent possible. RECOMMENDATIONS As a general matter, we wish to reaffirm the principal recommendations of our initial report, reproduced here in Appendix A.19 With our new "findings" in mind, we wish to make the following additional recommendations: 1. U.S. policymakers should seek to build a new framework for U.S.-Saudi relations. The Task Force recognizes the broader context of the complex and important bilateral relationship in which the terrorist financing issue is situated. The U.S.-Saudi relationship implicates many critical U.S. interests, including energy security, Iraq, the Middle East peace process, and the broader war on terrorism. And although most of us are not regional experts, we do have experience working on issues of bilateral concern and we feel competent to offer a perspective on U.S.-Saudi relations based on the manner in which Saudi financial support for terrorism one of the most important issues in that relationship has been addressed or avoided by both countries. a. For decades, presidents of both parties built U.S.-Saudi Arabia relations upon a consistent framework understood by both sides: Saudi Arabia would be a constructive actor with regard to the world's oil markets and regional security issues, and the United States would help provide for the defense of Saudi Arabia, work to address the Israeli-Palestinian conflict, and not raise any significant questions about Saudi Arabian domestic issues, either publicly or privately. For decades, this unarticulated framework held despite its inherent tensions. It broadly served the interests of both the U.S. and Saudi Arabian governments. b. Since then, however, al-Qaeda, a terrorist organization rooted in issues central to Saudi Arabian domestic affairs, has murdered thousands of Americans and 19 Some of our initial recommendations have been overtaken by events or otherwise require modification owing to the passage of time. In our initial recommendations, for example, we suggested that banks should build specific anti terrorist financing compliance components and avail themselves of public and private sources of information that identify persons or institutions with links to terrorist financing. As is suggested by our current recommendation seven, the most viable means by which banks can identify persons or institutions that may have links to terrorist financing is for the government to provide relevant information to banks. Extensive work by banks, in coordination with the government, has not yielded any specific anti-terrorist financing compliance tools that will assist banks in identifying persons or institutions related to terrorist financing. Similarly, banks have not been able to rely solely or effectively on public and private sources of information as such information is extremely diverse and often times either inaccurate or not sufficient to provide any meaningful assistance. 20 conspires to kill even more. Thus changing circumstances have called into question at least one key tenet of the historical framework for U.S.-Saudi relations. When domestic Saudi problems threaten Americans at home and abroad, a new framework for U.S.-Saudi relations must be struck, one that includes focused and consistent U.S. attention on domestic Saudi issues that previously would have been "off the table." c. This evolution is already underway, as evidenced by new tensions in the bilateral relationship since 9/11. We believe that U.S.-Saudi relations can and should come to resemble more closely U.S. bilateral relations with other large, important regional powers with which the United States has a complex pattern of bilateral relations and where domestic issues are always "on the table," often to the consternation of the other party. China and Russia (and before it, the Soviet Union) have been forced to confront domestic issues they would otherwise ignore in the context of their bilateral relations with the United States. Consistent U.S. demands for human rights and political and economic freedom in these places may only have or have had a marginal impact on the course of events, but they are a fundamental expression of U.S. interests and values. And just as U.S. demands on China and Russia have become a challenging but fundamentally manageable (and constructive) aspect of our diplomacy, so too will U.S. demands regarding Saudi "domestic" issues like terrorist financing and the global export of Islamic extremism. 20 d. More immediately, both U.S. policymakers and the American people should fully recognize the significance of what is currently taking place in Saudi Arabia. After the bombings this April, Prince Bandar, the Saudi ambassador to the United States, declared that "it's a total war with them now." Some Bush administration officials have privately characterized the current state of affairs as a "civil war" and suggested that the appropriate objective for U.S. policy in this context is to In this regard, we agree with the approach proposed in May 2003 by the U.S. Commission on International Religious Freedom for reformulating the U.S.-Saudi relationship: “As with other countries where șerious human rights violations exist, the U.S. government should more frequently identify these problems and publicly acknowledge that they are significant issues in the bilateral relationship." See also the Commission's 2004 report and statements. We believe that such a declaratory approach should extend beyond human rights issues to include specifically the issues within the mandate and expertise of this Task Force. |