Saudi Arabia effectively combating money laundering

Countries worldwide are taking strict measures to fight money laundering and terror financing. Saudi Arabia is not only at the forefront of the war on terror, it has also taken several steps to curb the flow of funds to any organization or group promoting extremist ideology.

A recent report issued by the Financial Action Task Force (FATF) is testimony to Saudi efforts in this regard. According to the report, the Kingdom has made great progress in curbing money laundering and the financing of terrorism. The report shows that Saudi Arabia is making progress in terms of compliance with international standards and effectively implementing measures to make its financial system more transparent.

FATF is an intergovernmental body established in 1989. Its objectives are to set standards and promote effective implementation of measures to combat money laundering, terror financing and other related issues that pose a threat to the integrity of the global financial system.

In 1990, FATF developed 40 guidelines that are recognized as an international standard for combating money laundering, the financing of terrorism and the proliferation of weapons of mass destruction.

In October 2001, it expanded its mandate to deal with issues related to the funding of terrorist acts and organizations. It took the important step of creating eight (later expanded to nine) special recommendations on terrorism financing. The recommendations were revised again in 2003. They have been endorsed by more than 180 countries, and are universally accepted as the international standard to fight money laundering and the financing of terrorism.

FATF regularly assesses member states’ progress vis-a-vis its recommendations. This evaluation provides in-depth analysis of each country’s system for preventing criminal abuse of the financial system.

The Kingdom’s financial authorities — such as the Saudi Arabian Monetary Authority, the Capital Market Authority and the Saudi Arabian Financial Investigation Unit — regularly assess the country’s financial system and take corrective measures as and when needed to ensure compliance with the international standards set by FATF.

Talat Zaki Hafiz is an economist and financial analyst.