August 19, 2003	Tuesday	Jumadi-us-Sani 20, 1424

JEDDAH, Aug 18: Saudi Arabia’s government endorsed on Monday the kingdom’s first ever anti-money laundering law which stipulates stiff penalties against offenders, as Riyadh stepped up its fight against terrorism.

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

The law also states that financing terrorism or terror organizations is an act punishable under the legislation provisions.

Other money laundering offenders will be penalized by a maximum of 10 years in jail and a fine of $1.3 million, according to the legislation which was passed by the Shura (Consultative) Council in June.

It becomes effective 60 days after publication in the official gazette.

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 actions against money laundering operations with countries with which the kingdom maintains official agreements.

Under pressure from Washington, Saudi Arabia has taken a number of anti-money laundering measures since the September 11, 2001 attacks in the United States.

The measures included freezing several accounts suspected of illegal dealings and taking softer measures against other accounts submitted to the kingdom by the United States 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. It has already set up a body to oversee charity organizations.

The official Saudi Press Agency said under the law approved by the cabinet financial institutions must verify the identity of a person wishing to carry out a monetary or commercial transaction, and keep a record of transactions for 10 years.

It said an anti-money laundering unit would also be set up, but did not specify what the punishment would be for money laundering activities.

Adel Jubeir, an adviser to Saudi Arabia’s de facto ruler Crown Prince Abdullah, said on Friday his country has made “great strides” in its war on terror from cutting funds of Osama bin Laden’s al Qaeda network to destroying its cells.

Jubeir said the kingdom has been trying to pursue bin Laden’s finances since the early 1990s and had put in place financial intelligence units, greater oversights of banks, anti-money laundering laws and better tracking mechanisms.

Other Gulf Arab states, such as the United Arab Emirates and Qatar, have also passed anti-money laundering laws as part of efforts to combat the financing of global terrorism after the September 11 attacks.—AFP/Reuters