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Summary:
According to the U.S. State Department 2007 International Narcotics Control Strategy Report, "Saudi donors and unregulated charities have been a major source of financing to extremist and terrorist groups over the past 25 years." The September 11, 2001 attacks fueled criticisms within the United States of alleged Saudi involvement in terrorism or of Saudi laxity in acting against terrorist groups. The final report released by the bipartisan National Commission on Terrorist Attacks Upon the United States (the 9/11 Commission) indicates that the Commission "found no evidence that the Saudi government as an institution or senior Saudi officials individually funded [Al Qaeda]." The report also states, however, that Saudi Arabia "was a place where Al Qaeda raised money directly from individuals and through charities" and indicates that "charities with significant Saudi government sponsorship" may have diverted funding to Al Qaeda. U.S. officials remain concerned that Saudis continue to fund Al Qaeda and other terrorist organizations. In numerous official statements, Saudi leaders have said they are committed to cooperating with the United States in fighting terrorist financing, pointing out that Saudi Arabia itself is a victim of terrorism and shares the U.S. interest in combating it. Saudi leaders acknowledge providing financial support for Islamic and Palestinian causes, but maintain that no official Saudi support goes to any terrorist organizations, such as Hamas. Since the September 11 attacks, Saudi Arabia has issued numerous decrees and created new institutions designed to tighten controls over the flow of funds in or through the kingdom, with particular emphasis on increasing the effectiveness of governmental supervision over charitable donations and collections. Al Qaeda affiliated terrorist attacks in Saudi Arabia from 2003 to 2006 appear to have given added impetus to the Saudi leadership in expanding counter-terrorist financing efforts. Since mid-2003, the Saudi government has: set up a joint task force with the United States to investigate terrorist financing in Saudi Arabia; shuttered charitable organizations suspected of terrorist ties; passed anti-money laundering legislation; banned cash collections at mosques; centralized control over some charities; closed unlicenced money exchanges; and scrutinized clerics involved in charitable collections. A planned National Commission for Relief and Charity Work Abroad has not been established. As required by the Intelligence Reform and Terrorism Prevention Act (P.L. 108-458), the President has submitted a strategy for U.S.-Saudi collaboration, with special reference to combating terrorist financing. In the 110th Congress, Section 2043 of the Implementing Recommendations of the 9/11 Commission Act (P.L. 110-53, signed August 3, 2007) finds that "the Kingdom of Saudi Arabia has an uneven record in the fight against terrorism, especially with respect to terrorist financing," and requires the Administration to submit a report 180 days after enactment describing the long term strategy of the United States, "to work with the Government of Saudi Arabia to combat terrorism, including through effective measures to prevent and prohibit the financing of terrorists by Saudi institutions and citizens." For more information about Saudi Arabia, see CRS Report RL33533 - Saudi Arabia: Current Issues and U.S. Relations. This report will be updated to reflect major developments.
