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Terrorism and Its Financing in Saudi Arabia, but Continued Focus on 
Counter Terrorism Financing Efforts Needed' which was released on 
September 29, 2009. 

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Report to Congressional Requesters: 

United States Government Accountability Office: 
GAO: 

September 2009: 

Combating Terrorism: 

U.S. Agencies Report Progress Countering Terrorism and Its Financing in 
Saudi Arabia, but Continued Focus on Counter Terrorism Financing 
Efforts Needed: 

GAO-09-883: 

GAO Highlights: 

Highlights of GAO-09-883, a report to congressional requesters. 

Why GAO Did This Study: 

The U.S. government considers the Kingdom of Saudi Arabia a vital 
partner in combating terrorism. The strong diplomatic relationship 
between the United States and Saudi Arabia, founded more than 70 years 
ago, was strained by the Al Qaeda attacks of September 11, 2001, that 
were carried out in large part by Saudi nationals and killed thousands 
of U.S. citizens. 
 
GAO was asked to report on (1) the U.S. government strategy to 
collaborate with and assist the Kingdom of Saudi Arabia to counter 
terrorism and terrorism financing, and (2) U.S. government agencies’ 
assessment of and the Saudi government’s views on progress toward the 
goals of this strategy. GAO analyzed relevant U.S. and Saudi strategy, 
planning, and evaluation documents related to efforts since 2005, and 
discussed these efforts with subject matter experts and U.S. and Saudi 
officials in Washington, D.C., and Riyadh and Jeddah, Saudi Arabia. 

GAO submitted a copy of this report to intelligence agencies, the 
National Security Council, and the Departments of Defense, Energy, 
Homeland Security, Justice, State, and Treasury for their review and 
comment. 

What GAO Found: 

The U.S. government strategy to collaborate with Saudi Arabia on 
counterterrorism utilizes existing diplomatic and security-related 
efforts to create an active antiterrorism coalition by enhancing the 
Saudi government’s ability to combat terrorists and prevent financial 
support to extremists. These objectives are contained in Department of 
State’s (State) Mission Strategic Plans (MSP) for Saudi Arabia for 
fiscal years 2006 through 2009, and also reflected in a January 2008 
report from State to the Congress on its strategy for Saudi Arabia. The 
MSPs include performance targets to measure progress on efforts to 
combat terrorism and its financing, such as providing security training 
to the Saudi government, strengthening Saudi financial institutions, 
and implementation of relevant Saudi regulations. 

U.S. and Saudi officials report progress on countering terrorism and 
its financing within Saudi Arabia, but noted challenges, particularly 
in preventing alleged funding for terrorism and violent extremism 
outside of Saudi Arabia. In April 2009, State assessed progress related 
to its goal of building an active U.S.-Saudi antiterrorist coalition 
as “on target.” U.S. and Saudi officials report progress in enhancing 
the Saudi government’s ability to combat terrorists, and note the Saudi 
government’s efforts have disrupted Al Qaeda’s terrorist network within 
Saudi Arabia. However, these officials noted Saudi Arabia’s neighbor, 
Yemen, is emerging as a base from which Al Qaeda terrorists can launch 
attacks against U.S. and Saudi interests. U.S. and Saudi officials also 
report progress on efforts to prevent financial support to extremists, 
citing, for example, the Saudi government’s regulations on sending 
charitable contributions overseas, and the arrest and prosecution of 
individuals providing support for terrorism. However, U.S. officials 
remain concerned about the ability of Saudi individuals and charitable 
organizations to support terrorism outside of Saudi Arabia, and noted 
limited Saudi enforcement capacity and terrorists’ use of cash couriers 
as challenges. Despite these concerns, some performance targets related 
to countering terrorism financing were removed from State’s current 
MSP. According to State officials, these changes were made either 
because a specific target was no longer considered feasible or because 
progress was made toward the target. 

Figure: Goal, Objectives, Assessment, and Challenges of U.S. 
Collaboration with Saudi Arabia on Counterterrorism: 

[Refer to PDF for image: illustrated table] 

Goal: Build an active antiterrorist coalition; 
Objectives: Enhance the Saudi government’s ability to combat 
terrorists; 
U.S. Agencies’ Assessment: 
* Saudi government’s efforts have disrupted Al Qaeda’s terrorist 
network within Saudi Arabia; 
Challenges: 
* Yemen is emerging as a base for Al Qaeda to plan attacks against U.S. 
and Saudi interests; 

Goal: Build an active antiterrorist coalition; 
Objectives: Prevent financial support to extremists; 
U.S. Agencies’ Assessment: 
* Progress made in preventing financial support to extremists, but 
concerns remain about the ability of Saudi individuals and charitable 
organizations to support terrorism outside Saudi Arabia; 
Challenges: 
* Limited capacity of Saudi government, the use of cash couriers by 
terrorist financiers, and circumvention of cash declarations laws pose 
challenges to combating terrorism financing. 

Source: GAO analysis of U.S. agency information. 

[End of figure] 

What GAO Recommends: 

GAO recommends the Secretary of State direct the U.S. mission in Saudi 
Arabia to reinstate certain targets related to preventing financing of 
terrorism outside of Saudi Arabia. State agreed with this 
recommendation. 

View [hyperlink, http://www.gao.gov/products/GAO-09-883] or key 
components. For more information, contact Zina D. Merritt at (202) 512-
5257 or merrittz@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

U.S. Government Strategy Is to Create an Active Antiterrorism Coalition 
with Saudi Arabia, but Some Targets to Measure Progress toward This 
Goal Have Been Removed: 

U.S. Agencies and Saudi Officials Report Progress in Combating 
Terrorism and Its Financing in Saudi Arabia, but Challenges Persist, 
Particularly in Preventing Alleged Funding for Terrorism and Violent 
Extremism outside of Saudi Arabia: 

Conclusion: 

Recommendation for Executive Action: 

Agencies Comments, Third-Party Views, and Our Evaluation: 

Appendix I: Objectives, Scope and Methodology: 

Appendix II: Time Line of Key Events in U.S. and Saudi Relations, 1750- 
2004: 

Appendix III: Saudi Ministries and Agencies that Have Functions Related 
to Countering Terrorism and Terrorism Financing: 

Appendix IV: U.S. Agencies Providing Training and Technical Assistance 
to Saudi Arabia, 2005-2008: 

Appendix V: Comments from the Department of State: 

Appendix VI: Comments from the Department of Defense: 

Appendix VII: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Table: 

Table 1: Selected Legislation and Associated Reporting Requirements on 
Efforts to Counter Terrorism and Terrorism Financing, Including Efforts 
Related to Saudi Arabia: 

Figures: 

Figure 1: Map of the Kingdom of Saudi Arabia: 

Figure 2: Interactive Time Line of Key Events in U.S. and Saudi 
Relations, 1750-2004: 

Figure 3: Objectives and Performance Targets of Mission Strategic Plan 
for Saudi Arabia, Fiscal Years 2006-2009: 

Figure 4: U.S. Agencies' Assessment of Progress as of August 2009 on 
Mission Strategic Plan Performance Targets Related to Combating 
Terrorists, Fiscal Years 2006-2008: 

Figure 5: Saudi Arabia's National Campaign against Extremism and 
Terrorism, Examples of Public Outreach: 

Figure 6: Sample of Saudi Literature (with Translated Titles) Designed 
to Combat Extremist Ideology: 

Figure 7: U.S. Agencies' Assessment of Progress as of August 2009 on 
Mission Strategic Plan Performance Targets Related to Preventing 
Financial Support to Extremists, Fiscal Years 2006-2008: 

Figure 8: Official Saudi Customs Declaration Form: 

Abbreviations: 

DHS: Department of Homeland Security: 

DOD: Department of Defense: 

DOE: Department of Energy: 

DOJ: Department of Justice: 

FAA: Foreign Assistance Act: 

FATF: Financial Action Task Force: 

FBI: Federal Bureau of Investigation: 

FIU: Financial Intelligence Unit: 

ICE: U.S. Immigration and Customs Enforcement: 

IIRO: International Islamic Relief Organization: 

INCSR: International Narcotics Control Strategy Report: 

MOI: Ministry of Interior: 

MSP: Mission Strategic Plan: 

NSC: National Security Council: 

OPM-MOI: Office of Program Management-Ministry of Interior: 

SAMA: Saudi Arabian Monetary Agency: 

UN: United Nations: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

September 24, 2009: 

The Honorable Harry Reid: 
Majority Leader: 
United States Senate: 

The Honorable Howard L. Berman: 
Chairman: 
The Honorable Ileana Ros-Lehtinen: 
Ranking Member: 
Committee on Foreign Affairs: 
House of Representatives: 

The U.S. government considers the Kingdom of Saudi Arabia a vital 
partner in combating terrorism and advancing other U.S. foreign policy 
priorities, such as achieving security in Iraq, advancing the Israeli- 
Palestinian peace process, and ensuring stability in world oil markets. 
The strong diplomatic relationship between the United States and Saudi 
Arabia, founded more than 70 years ago, was strained by the Al Qaeda 
attacks of September 11, 2001, that were carried out in large part by 
Saudi nationals and killed thousands of U.S. citizens. Nevertheless, 
the United States and Saudi Arabia currently have an ongoing dialogue 
on a range of counterterrorism issues, which include high-level 
discussions and working-level collaboration. 

The National Commission on Terrorist Attacks upon the United States 
(9/11 Commission) was established in 2002 to prepare a full account of 
the circumstances surrounding the September 11, 2001, terrorist 
attacks, including alleged Saudi links to the attacks.[Footnote 1] The 
9/11 Commission's 2004 report found no evidence that the Saudi 
government funded Al Qaeda, but noted that terrorist groups like Al 
Qaeda raised funds from Saudi individuals and charitable organizations 
headquartered in Saudi Arabia. In addition, media reports continue to 
contain allegations that some Saudi individuals and charitable 
organizations support terrorism and violent extremism outside of Saudi 
Arabia. In 2003 and 2004, a series of terrorist attacks against both 
Saudi and U.S. interests were launched in Saudi Arabia, prompting the 
Saudi government to intensify its efforts to combat terrorism, 
including targeting sources of violent extremism within the country. 

In 2004, the 9/11 Commission recommended that the United States openly 
engage the government of Saudi Arabia to build a cooperative 
counterterrorism relationship. In August 2007, the President signed the 
Implementing Recommendations of the 9/11 Commission Act of 2007, which 
required that the President of the United States report on a long-term 
strategy to work with the Saudi government to, among other things, 
combat terrorism through such measures as preventing the financing of 
terrorists by Saudi institutions and citizens.[Footnote 2] 
Additionally, it required that the report provide an assessment of 
Saudi Arabia's progress in these areas since 2001. Also, at the request 
of the Congress, in 2005, we reported on allegations that Saudi private 
entities and individuals had financed or supported violent extremism. 
[Footnote 3] In our report, we noted that the threat of global 
propagation of violent extremism was emerging not only from Saudi 
sources, but also from sources in other countries, such as Iran, 
Kuwait, and Syria, as well as from indigenous groups within some 
countries. In 2005, we also reported on U.S. government efforts to 
combat terrorist financing abroad that included standards setting and 
training and technical assistance in areas such as preventing cash 
couriers, which refers to criminals' cross-border movements of cash. 
[Footnote 4] 

This report provides information on U.S. and Saudi efforts to address 
alleged terrorism and terrorism financing since 2005. Specifically, we 
report on (1) the U.S. government strategy to collaborate with and 
assist the Kingdom of Saudi Arabia to counter terrorism and terrorism 
financing, and (2) U.S. government agencies' assessment of and Saudi 
government views on progress toward the goals of the U.S. strategy to 
collaborate with and assist the Kingdom of Saudi Arabia. 

To address these objectives, we reviewed and analyzed relevant U.S. 
strategy, planning, and evaluation documents related to U.S.-Saudi 
efforts to counter terrorism and terrorism financing efforts since 
2005. While we did not assess the key elements of a strategy as 
identified by GAO for the U.S. counterterrorism strategy related to 
Saudi Arabia as stated in the Mission Strategic Plans (MSP), we used 
the performance targets stated in these documents as criteria against 
which we assessed progress. Further, we obtained and examined 
documentation from Saudi officials regarding their domestic activities 
to counter terrorism and its financing. We discussed U.S.-Saudi 
counterterrorism efforts with U.S. officials from the Departments of 
State (State), Treasury (Treasury), Homeland Security (DHS), Defense 
(DOD), Justice (DOJ), Energy (DOE), National Security Council (NSC), 
and the intelligence community; Saudi officials from the Royal Embassy 
of Saudi Arabia in Washington, D.C.; and subject matter experts from a 
variety of academic institutions and nongovernmental organizations. 
Additionally, we traveled to Riyadh and Jeddah, Saudi Arabia, where we 
visited the Prince Mohammed bin Nayef Center for Advisory and Care in 
Riyadh--a counseling program designed to reeducate violent extremists--
and met with U.S. officials from State, Treasury, DOJ, DOD, and DHS; 
Saudi officials from the Saudi Arabian Monetary Agency (SAMA), and the 
Ministries of Foreign Affairs, Interior, and Islamic Affairs; and 
representatives from the Saudi charitable organization the World 
Assembly of Muslim Youth. (See appendix I for a complete description of 
our scope and methodology.) 

We conducted this performance audit from July 2008 through September 
2009 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

In this report we recommend that the Secretary of State direct the U.S. 
mission in the Kingdom of Saudi Arabia to reinstate, in consultation 
with relevant U.S. agencies, performance measures related to preventing 
the flow of alleged financial support, through mechanisms such as cash 
couriers, to terrorists and extremists outside Saudi Arabia. 

In commenting on a draft of this report, State concurred with our 
recommendation, and committed to reinstating performance indicators 
relating to Saudi enforcement of cash courier regulations in its 
Mission Strategic Plan for Saudi Arabia. DOD stated that it concurs 
with our report. We also received technical comments from DOD, DOE, 
NSC, State, Treasury, and the intelligence community. Additionally, 
consistent with our protocols, we provided a copy of the draft report 
to Saudi officials, who described the report as a fair and detailed 
review of U.S. and Saudi efforts and offered technical comments. We 
incorporated technical comments as appropriate. 

Background: 

Kingdom of Saudi Arabia: 

Saudi Arabia is known as the birthplace of Islam and is the site of 
Islam's two holiest shrines located in Mecca and Medina. (See figure 1 
for a map of Saudi Arabia.) Millions of Muslims from all over the world 
visit Mecca to undertake the pilgrimages of hajj and umrah.[Footnote 5] 
Like hajj, charitable giving, or zakat, is one of the five pillars or 
duties of Islam.[Footnote 6] Zakat, a form of tithe or charity payable 
for those in need, is an annual flat rate of 2.5 percent of a Muslim's 
assessable capital. Zakat is broader and more pervasive than Western 
ideas of charity, functioning as a form of income tax, educational 
assistance, and foreign aid. 

Figure 1: Map of the Kingdom of Saudi Arabia: 

[Refer to PDF for image: map] 

The following locations are depicted on the map: 
Riyadh; 
Medina; 
Mecca; 
Jeddah. 

Population: 29,000,000[A]; 
GDP per capita: $21,000[B]. 

Source: CIA world factbook, adapted by GAO. 

[A] 2009 (estimate). 

[B] 2008 (estimate). 

[End of figure] 

Islam is a source of political legitimacy and guidance for the Saudi 
government, and the country is governed on the basis of Islamic law or 
Sharia. As far back as the mid-eighteenth century, the founder of the 
Saudi ruling dynasty, Muhammad bin Saud, allied himself with the 
conservative Muslim scholar, Muhammad bin Abdul Wahhab. The teachings 
of Abdul Wahhab, which called for a strict interpretation of Islam, 
form the basis of Islam as practiced by the majority of people in Saudi 
Arabia.[Footnote 7] 

The Saudi government is a monarchy headed by the king of Saudi Arabia, 
who also serves as the Prime Minister and the Custodian of the Two Holy 
Mosques in Mecca and Medina. The current king is King Abdullah bin 
Abdulaziz Al-Saud. The king is expected to retain consensus of 
important elements in Saudi society, such as the Saudi royal family and 
religious leaders. The Saudi royal family consists of thousands of 
members, some of whom head government ministries. 

In the mid-1940s, Saudi Arabia started large scale oil production, and 
by the 1970s an increase in oil prices led to a rapid increase in Saudi 
Arabia's per capita income, making it comparable to that of developed 
countries during this time period.[Footnote 8] In part, this 
prosperity, combined with the Islamic religious obligation toward 
charitable giving or zakat, led to the establishment of charitable 
organizations headquartered in Saudi Arabia, known as multilateral 
charitable organizations. These organizations--which include the Muslim 
World League and the World Assembly of Muslim Youth--were established 
in the 1960s and 1970s by Saudi royal decree to spread Islam and 
provide humanitarian assistance around the world, and received funds 
from the Saudi government and citizens. 

U.S.-Saudi Relations: 

Relations between the United States and Saudi Arabia have a long 
historical context. Since the establishment of the modern Saudi state 
in 1932, and throughout the Cold War, the governments of the United 
States and Saudi Arabia developed a relationship based on shared 
interests, including energy production and combating communism. 
[Footnote 9] For instance, both Saudi Arabia and the United States 
became major supporters of the Afghan mujahideen's struggle against the 
Soviet invasion in 1979.[Footnote 10] However, U.S. foreign policies 
related to the Middle East, such as the Israeli-Palestinian conflict, 
have at times tested U.S.-Saudi government relations and fueled a 
growing anti-American sentiment among some segments of the Saudi 
population, as well as in many countries with predominantly Muslim 
populations. (See figure 2 for more information on the historical 
development of U.S.-Saudi relations.) As we have reported previously, 
[Footnote 11] this negative perception of U.S. foreign policy, as well 
as other factors such as economic stagnation, a disproportionate youth 
and young adult population,[Footnote 12] and repressive and corrupt 
governments in certain Middle Eastern countries, have contributed to 
the global spread of an extremist ideology promoting hatred, 
intolerance, and violence that threatens U.S. national security 
interests. 

Figure 2: Interactive Time Line of Key Events in U.S. and Saudi 
Relations, 1750-2004: 

[Refer to PDF for image: timeline. Instructions: Roll your mouse over
the date to see more information. To print expanded information, see 
Appendix II.] 

1750: Mid-18th Century: 
Alliance between Muhammad bin Saud and a conservative Muslim leader. 

1902 to 1926: 
Saudi power and influence expands. 

1932: 
Modern Kingdom of Saudi Arabia established. 

1933: 
U.S.-Saudi diplomatic relations established. 

1940s: 
Saudi Arabia starts large scale oil production. 

1945: 
Saudi King meets with President Roosevelt. 

1948: 
State of Israel established. 

1950s: 
Saudi Arabia allies with the United States in fighting communism. 

1953: 
First U.S. military training mission organized under the terms of the
U.S. and Saudi mutual defense assistance agreement. 

1960s: 
First multilateral charitable organization founded in Saudi Arabia. 

1970s: 
Oil production creates great wealth in Saudi Arabia. 

1979: 
* Iran is established as an Islamic state; 
* Soviets invade Afghanistan; 
* Extremists attack Grand Mosque in Mecca. 

1980s: 
Saudi Arabia and United States aid the mujahideen against the Soviets in
Afghanistan. 

1991: 
United States establishes military installations in Saudi Arabia. 

1993: 
Bombing of the World Trade Center kills 6. 

1994: 
* Saudi government strips Osama bin Laden of citizenship; 
* Islamists arrested in Saudi Arabia. 

1995: 
Terrorist attack in Saudi Arabia kills 5 Americans. 

1996: 
Bombings in Saudi Arabia kill 19 Americans. 

1997: 
Saudi Arabia recognizes the Taliban regime in Afghanistan. 

1999: 
UN Security Council adopts Resolution 1267. 

2000: 
* Start of the Palestinian uprising strains U.S.-Saudi relations; 
* Attack on USS Cole. 

2001: 
* Al Qaeda attacks United States; 
* Saudi Arabia condemns September 11th attacks on the United States; 
* U.S. and allied forces attack the Taliban and Al Qaeda in 
Afghanistan. 

2003: 
* United States begins military operations in Iraq; 
* Major terrorist incidents in Saudi Arabia. 
 
2003 to present: 
Iraqi insurgency attracts foreign fighters, including Saudis. 

2004: 
Escalation in terrorist attacks in Saudi Arabia and Saudi government
retaliation. 

Source: GAO. 

[End of figure] 

According to the U.S. government and experts, some Saudi individuals 
and charitable organizations have knowingly or unknowingly provided 
financial assistance for terrorism and violent extremism. For example, 
according to a report by the 9/11 Commission, some charitable 
organizations, such as the Saudi-based Al Haramain Islamic Foundation, 
had been exploited by extremists as funding mechanisms to further their 
goal of violence against non-Muslims. U.S. government and other expert 
reports have linked some Saudi donations to the global propagation of 
religious intolerance and support to terrorist activities. For example, 
Osama bin Laden and Al Qaeda have Saudi roots and accumulated millions 
of dollars using legitimate charities, nongovernmental organizations, 
and mosques, as well as businesses such as banks and other financial 
institutions, to help raise and move their funds. However, experts 
agree that it is difficult to determine the extent to which donors are 
aware of the ultimate disposition of the funds provided.[Footnote 13] 

Saudi Government Efforts to Combat Terrorism and Terrorism Financing, 
2003-2005: 

Although the Saudi government took actions to combat terrorists 
following the September 11, 2001, attacks, Al Qaeda's attacks against 
Saudi and U.S. citizens in Saudi Arabia in 2003 and 2004 marked a 
turning point in the Saudi government's efforts to combat terrorism and 
terrorism financing, as the Saudi government came to see Al Qaeda as a 
threat to the Saudi regime. Between 2003 and 2005, the Saudi government 
reported that it took a number of actions to combat terrorism and 
terrorism financing within the Kingdom, some with U.S. assistance, such 
as increasing the size, training, and professionalism of Saudi security 
forces. The Saudi and U.S. governments also undertook joint 
designations of several branches of the Al Haramain Foundation as 
financiers of terrorism under UN Security Council Resolution 1267. 
[Footnote 14] (See appendix III for key Saudi agencies involved in 
efforts to combat terrorism and terrorism financing within Saudi 
Arabia.) 

U.S. Assistance to Saudi Arabia to Combat Terrorism and Terrorism 
Financing: 

Since 2005, several U.S. agencies have conducted training and provided 
technical assistance to improve the capacity of the Saudi government to 
combat terrorism and its financing. These efforts have included 
enhancing the investigative capability of Saudi ministries and 
assessing the security of Saudi oil installations, among others. U.S. 
agencies involved in these efforts include DOD, DOE, DHS, DOJ, State, 
and Treasury, as well as the intelligence community.[Footnote 15] (See 
appendix IV for U.S. agencies providing training and technical 
assistance to Saudi Arabia to counter terrorism and terrorism 
financing.) 

Legislative Reporting Requirements: 

The Congress has enacted several laws that require U.S. agencies to 
report on terrorism and terrorism financing issues, including those 
related to U.S. collaboration with Saudi Arabia. (See table 1 for the 
selected legislation and its requirements.) 

Table 1: Selected Legislation and Associated Reporting Requirements on 
Efforts to Counter Terrorism and Terrorism Financing, Including Efforts 
Related to Saudi Arabia: 

Legislation: Foreign Assistance Act (FAA) of 1961 Section 489, as 
amended (22 U.S.C. Section 2291); 
Reporting requirements: A report on the extent to which each country or 
entity that received assistance under Chapter 8 of Part I of the 
Foreign Assistance Act in the past two fiscal years[A] has "met the 
goals and objectives of the United Nations Convention Against Illicit 
Traffic in Narcotic Drugs and Psychotropic Substances" (the "1988 UN 
Drug Convention") Section 489(a)(1)(A). In addition, the Congress also 
mandated the report to identify major money laundering countries (FAA 
section 489(a)(3)(C)) and findings on each country's adoption of laws 
and regulations to prevent narcotics-related money laundering (FAA 
section 489(a)(7)(C)); 
Lead agency: State; 
Agency response: The Money Laundering and Financial Crimes section of 
the Department of State's annual International Narcotics Control 
Strategy Report (INCSR), which includes reporting on Saudi Arabia. The 
2009 INCSR is the 26th such report. 

Legislation: Intelligence Reform and Terrorism Prevention Act of 2004 
(P.L. 108-458) Section 7120(3); 
Reporting requirements: A description of the strategy of the United 
States for expanding collaboration with the Government of Saudi Arabia 
on subjects of mutual interest and importance, including intelligence 
and security cooperation between the United States and Saudi Arabia in 
the fight against extremism; 
Lead agency: State; 
Agency response: Country Reports on Terrorism Starting in 2004, this 
annual report replaced the previously published Patterns of Global 
Terrorism. 

Legislation: Implementing the Recommendations of the 9/11 Commission 
Act of 2007 (P.L. 110-53) Section 2043(c); 
Reporting requirements: A one-time description of the long-term 
strategy of the United States to engage the Government of Saudi Arabia 
on combating terrorism and provide an assessment of Saudi Arabia's 
progress in this area since 2001; 
Lead agency: State; 
Agency response: U.S. Strategy Toward Saudi Arabia. 

Source: GAO: 

AIn fiscal years 2007 and 2008, State reports providing Saudi Arabia 
approximately $400,000 in foreign assistance funding ($300,000 in 
fiscal year 2007 and $99,000 in fiscal year 2008) through its 
Nonproliferation, Antiterrorism, Demining, and Related Programs 
account. 

[End of table] 

U.S. Government Strategy Is to Create an Active Antiterrorism Coalition 
with Saudi Arabia, but Some Targets to Measure Progress toward This 
Goal Have Been Removed: 

In January 2008, in response to the Implementing Recommendations of the 
9/11 Commission Act of 2007, State submitted to the Congress a report 
on the U.S. strategy to collaborate with and assist Saudi Arabia in 
areas including countering terrorism and terrorism financing.[Footnote 
16] The goals and objectives contained in the January 2008 document 
coincide with the plans for collaboration with Saudi Arabia contained 
in State's Mission Strategic Plans (MSP) for Saudi Arabia for fiscal 
years 2006 to 2009. To measure progress toward the goal of building an 
active antiterrorist coalition, the MSPs contain a number of 
performance targets; however, some of the targets relating to 
countering terrorism financing were removed, even though U.S. agencies 
continue to work on those issues in collaboration with the Saudi 
government. 

U.S. Government Strategy Is to Create an Active Antiterrorism Coalition 
with Saudi Arabia: 

Following the September 11, 2001, terrorist attacks, the U.S. mission 
in Saudi Arabia reported expanding its ongoing efforts to collaborate 
with the government of Saudi Arabia to combat terrorism. State's MSPs, 
previously called Mission Performance Plans, for fiscal years 2006 to 
2009 contain goals related to expanding the Saudi government's ability 
to counter terrorism and preventing financial support to extremists. 
According to State documents, the MSP is developed each year by the 
overseas missions to facilitate long-term diplomatic and assistance 
planning and provide a strategic plan to set country-level U.S. foreign 
policy goals, resource requests, and performance targets. State reports 
that its Washington-based bureaus draw on MSPs to gauge the 
effectiveness of policies and programs in the field and formulate 
requests for resources. 

In January 2008, State submitted to the Congress a report on U.S. 
strategy for collaborating with Saudi Arabia on countering terrorism 
and terrorism financing in response to the Implementing Recommendations 
of the 9/11 Commission Act of 2007.[Footnote 17] According to this 
document, the goal of strengthening the U.S. government's 
counterterrorism partnership with Saudi Arabia is to be achieved 
through bilateral cooperation to enhance the Saudi government's ability 
to combat terrorists and to prevent financial support to extremists. 
[Footnote 18] The goals and objectives contained in the January 2008 
document coincide with the plans for collaboration with Saudi Arabia 
contained in MSPs for Saudi Arabia. According to State officials, DOD 
and the Office of the Director of National Intelligence[Footnote 19] 
approved the 2008 document. Moreover, officials from various agencies 
we met with--including Treasury, DOJ, and DHS--noted they are active 
participants in interagency strategic discussions on collaboration with 
Saudi Arabia regarding countering terrorism and terrorism financing. 

According to Saudi officials, the Saudi government agrees with U.S. 
goals to counter terrorism and terrorism financing in Saudi Arabia. 
Additionally, Saudi officials told us that generally there has been 
strong collaboration between U.S. and Saudi agencies, highlighting 
areas such as information sharing and training of security forces. 
However, Saudi officials noted some concerns related to U.S. 
implementation of certain efforts to counter terrorism financing. For 
example, Saudi officials expressed concern about some designations of 
individuals and organizations as supporters of terrorism, specifically 
suggesting that these designations may violate the right to a fair 
legal process. Additionally, Saudi officials noted concerns regarding 
past public statements by senior Treasury officials, such as those in 
April 2008, that individuals based in Saudi Arabia are a top source of 
funding for Al Qaeda and other terrorist organizations. However, 
according to Saudi officials, since Treasury placed a deputy attaché in 
Riyadh, Saudi Arabia, in December 2008, there has been a significant 
increase in information sharing and decrease in issues of concern. 

In addition, the Saudi government has developed its own strategy to 
combat terrorism, which Saudi officials characterized as focusing on 
three areas or pillars: "men, money, and mindset." The "men" pillar of 
the strategy focuses on arresting or killing terrorists. The "money" 
pillar of the strategy focuses on measures to counter terrorism 
financing, such as tightening controls on financial transactions and 
cash couriers, as well as imposing restrictions on Saudi-based 
charities. Finally, the "mindset" pillar of the strategy focuses on 
preventing extremism by addressing the ideology that is used to recruit 
and indoctrinate potential terrorists. Saudi officials stated that the 
"mindset" pillar is the most challenging aspect of its counterterrorism 
strategy and will be a long-term challenge. Nonetheless, Saudi 
officials told us the Saudi government is committed to combating 
extremist ideology through programs such as public information 
campaigns and terrorist rehabilitation programs. 

The U.S. Mission Has Established Targets to Measure the Effectiveness 
of Efforts to Combat Terrorism and Its Financing; Some Performance 
Targets Related to Terrorism Financing Were Removed from the MSP: 

The MSP for Saudi Arabia contains goals, performance indicators, and 
performance targets for counterterrorism efforts in Saudi Arabia. While 
the MSP is a State document, officials from DOD, DHS, DOJ, and Treasury 
told us they were aware of relevant portions of the document. According 
to the fiscal year 2009 MSP for Saudi Arabia, the highest priority U.S. 
goal is to strengthen its antiterrorist coalition with Saudi Arabia. 
Performance of this goal is measured by the indicator "Saudi 
effectiveness on measures to combat terrorism and terrorism financing 
activities." To build an active antiterrorist coalition with the 
government of Saudi Arabia, the U.S. Mission to Saudi Arabia focuses on 
objectives related to (a) enhancing the Saudi government's ability to 
combat terrorists, and (b) preventing financial support to extremists. 
To measure progress toward the goal of building an active antiterrorist 
coalition, the MSP contains a number of performance targets each fiscal 
year. (See figure 3 for MSP objectives and targets for fiscal years 
2006 to 2009.) 

Figure 3: Objectives and Performance Targets of Mission Strategic Plan 
for Saudi Arabia, Fiscal Years 2006-2009: 

[Refer to PDF for image: illustrated table] 

Goal: Build an active antiterrorist coalition; 
Objectives: Enhance the Saudi government’s ability to combat 
terrorists; 
FY 2006 Target: 
* Provide security-related training to Saudi government; 
* Saudi authorities arrest “most wanted” terrorist suspects; 
* Strategic Dialogue working group improves cooperation; 
FY 2007 Target: 
* Provide security-related training to Saudi government; 
* Saudi authorities continue publishing “most wanted” list; 
* U.S.-Saudi cooperation on critical infrastructure protection; 
FY 2008 Target: 
* No successful terrorist strikes in Saudi Arabia; 
* U.S.-Saudi cooperation on critical infrastructure protection; 
* Saudi opinion leaders condemn terrorism. 
FY 2009 Target: 
* No successful terrorist strikes in Saudi Arabia; 
* Increased sharing of nonintelligence law enforcement data and other
information; 
* Trials of at least 250 terrorism suspects to begin and 50 to 
conclude; 
* U.S. training for critical infrastructure security; 
* Saudi and Yemeni government cooperation to capture and repatriate 
extremists. 

Goal: Build an active antiterrorist coalition; 
Objectives: Prevent financial support to extremists; 
FY 2006 Target: 
* Saudi financial intelligence unit (FIU) exchanges information with 
regional counterparts; 
* The Saudi government cosponsors the designation of at least one 
individual or organization under United Nations Security Council 
Resolution 1267 related to Al Qaeda and the Taliban (UN 1267), details 
seized assets, and prosecutes the group or individual; 
* Saudi Charities Commission begins operations; 
* Cash courier regulations implemented. 
FY 2007 Target: 
* United States provides training to Saudi FIU; 
* Saudi government implements actions under UN 1267, such as providing
detailed accounting of assets seized from designees, and takes legal
action against individuals or groups that support terrorism; 
* Saudi Charities Commission begins operations; 
* Cash courier regulations implemented and enforced. 
FY 2008 Target: 
* Additional U.S. training to Saudi FIU; 
* Saudi government implements actions under UN 1267, such as providing
accounting of assets seized from designees, and takes legal action 
against individuals or groups that support terrorism; 
* Saudi Charities Commission begins operations; 
FY 2009 Target: 
* Saudi FIU joins the Egmont of financial intelligence units), shares 
data with law enforcement, and receives reports from customs; 
* Saudi government implements actions against UN 1267 designees, such 
as providing an accounting of frozen assets and obstructing the travel 
of designees, and takes legal actions against Saudi entities supporting 
terrorism. 

Source: GAO summary of U.S. agency information. 

[End of figure] 

On an annual basis, the U.S. Mission in Saudi Arabia releases an 
updated MSP, which may contain revised performance targets related to 
building an active antiterrorist coalition with Saudi Arabia. State 
officials told us that MSP performance targets are periodically revised 
to ensure each fiscal year's targets are most relevant to assessing 
progress toward U.S.-Saudi efforts to counter terrorism and terrorism 
financing. Specifically, between fiscal years 2006 and 2009, certain 
performance targets were added, removed, or updated to reflect the 
change in conditions in Saudi Arabia. For instance, new performance 
targets were added for fiscal year 2009 that did not exist in previous 
years, including enhancing Saudi-Yemeni cooperation and conducting 
trials for terror suspects. In addition, the fiscal year 2008 target 
related to the public condemnation of terrorism by the Saudi government 
and religious leaders was omitted in fiscal year 2009 because, 
according to State officials, it had been met. 

However, some targets related to preventing financial support to 
extremists were removed from the MSP, even though U.S. agencies 
reported that efforts to address these issues are important and 
ongoing. Specifically, a performance target related to the 
establishment of a Saudi Charities Commission existed in the MSP from 
fiscal years 2006 to 2008, but was removed for fiscal year 2009. 
According to State officials, the performance target related to the 
Charities Commission was dropped because State determined that other 
strategies to regulate charitable organizations in Saudi Arabia might 
be more effective than a commission. Likewise, a target related to 
implementation of cash courier regulations was part of the MSP in 
fiscal years 2006 and 2007, but was removed in fiscal years 2008 and 
2009. According to State, the performance target related to cash 
courier regulations was dropped because the Saudi government had made 
progress instituting and enforcing these regulations. However, 
according to officials from DHS--which takes the lead on issues such as 
cash couriers--they were not consulted on the decision to remove the 
target related to cash couriers and stated that this target should be 
reinstated in the MSP. As a result, the MSP lacks targets against which 
U.S. agencies can monitor and assess performance in certain areas of 
U.S. concern related to countering terrorism financing. According to 
State and Treasury officials, even though targets related to these 
activities were removed from MSPs, enforcement of regulations to 
prevent terrorism financing are still important U.S. goals, which U.S. 
agencies pursue through diplomatic or training activities. 

U.S. Agencies and Saudi Officials Report Progress in Combating 
Terrorism and Its Financing in Saudi Arabia, but Challenges Persist, 
Particularly in Preventing Alleged Funding for Terrorism and Violent 
Extremism outside of Saudi Arabia: 

U.S. agencies and Saudi officials report progress countering terrorism 
and terrorism financing within Saudi Arabia, but noted challenges, 
particularly those related to preventing the flow of alleged financial 
support to extremists outside Saudi Arabia. In April 2009, the U.S. 
embassy assessed progress towards its goal of building an active 
antiterrorist coalition with Saudi Arabia as "on target."[Footnote 20] 
With regard to counterterrorism efforts, U.S. and Saudi officials 
report progress enhancing the Saudi government's ability to combat 
terrorists, and assess that these efforts have disrupted Al Qaeda's 
terrorist network within Saudi Arabia. While citing progress, U.S. and 
Saudi officials noted Saudi Arabia's neighbor, Yemen, is emerging as a 
base from which Al Qaeda terrorists can launch attacks against U.S. and 
Saudi interests. With regard to preventing financial support to 
extremists, U.S. and Saudi officials also report progress, citing, 
among other examples, the Saudi government's implementation of cash 
courier regulations, ban on the transfer of charitable funds outside 
the Kingdom without government approval, and arrest and prosecution of 
individuals providing ideological or financial support to terrorism. 
Despite these gains, U.S. officials remain concerned about the ability 
of Saudi individuals and multilateral charitable organizations, as well 
as other individuals visiting Saudi Arabia, to support[Footnote 21] 
terrorism and violent extremism outside Saudi Arabia. Moreover, both 
Saudi and U.S. officials cited limited Saudi enforcement capacity and 
terrorist financiers' use of cash couriers as challenges to Saudi 
efforts to prevent financial support to extremists. 

U.S. and Saudi Officials Report Progress Combating Terrorists in Saudi 
Arabia: 

U.S. and Saudi officials report progress enhancing the Saudi 
government's ability to combat terrorists and assess that Saudi efforts 
have disrupted Al Qaeda's terrorist network within Saudi Arabia. The 
U.S. embassy's MSP for fiscal year 2008 lists three performance targets 
related to enhancing the Saudi government's ability to combat 
terrorists. These targets specifically pertain to (1) prevention of 
successful terrorist strikes in Saudi Arabia, (2) improved U.S.-Saudi 
cooperation on critical infrastructure protection, and (3) public 
condemnation of terrorist activities by Saudi government and religious 
leaders. U.S. officials report progress on these performance targets in 
fiscal year 2008, as well as the completion of related targets in 
fiscal years 2006 and 2007. While citing progress, U.S. and Saudi 
officials noted Saudi Arabia's neighbor, Yemen, is emerging as a base 
from which Al Qaeda terrorists can launch attacks, which could 
challenge gains made in combating terrorists in Saudi Arabia. (See 
figure 4 for a summary of reported progress related to MSP performance 
targets.) 

Figure 4: U.S. Agencies' Assessment of Progress as of August 2009 on 
Mission Strategic Plan Performance Targets Related to Combating 
Terrorists, Fiscal Years 2006-2008: 

[Refer to PDF for image: table] 

FY 2006 Target: Provide security-related training to Saudi government; 
FY 2007 Target: Provide security-related training to Saudi government; 
FY 2008 Target: No successful terrorist strikes in Saudi Arabia; 
Status of Activities Related to Targets: 
* No successful terrorist strikes in Saudi Arabia reported since 2007; 
* Saudi government participates in U.S. training on case management and 
infrastructure protection; 
* Saudi government publishes three most wanted lists. 

FY 2006 Target: Saudi authorities arrest “most wanted” terrorist 
suspects; 
FY 2007 Target: Saudi authorities continue publishing “most wanted” 
list; 
FY 2008 Target: No successful terrorist strikes in Saudi Arabia; 
Status of Activities Related to Targets: 
* No successful terrorist strikes in Saudi Arabia reported since 2007; 
* Saudi government participates in U.S. training on case management and 
infrastructure protection; 
* Saudi government publishes three most wanted lists. 

FY 2007 Target: U.S.-Saudi cooperation on critical infrastructure 
protection; 
FY 2008 Target: U.S.-Saudi cooperation on critical infrastructure
protection; 
Status of Activities Related to Targets: 
* In May 2008, U.S. and Saudi governments sign a cooperation agreement 
on critical infrastructure protection; 
* U.S. and Saudi governments establish a joint organization to 
implement the cooperative agreement. 

FY 2006 Target: Strategic Dialogue working group improves cooperation; 
Status of Activities Related to Targets: 
* In fiscal year 2006, Strategic Dialogue working group meets. 

FY 2008 Target: Saudi opinion leaders condemn terrorism; 
Status of Activities Related to Targets: 
* Saudi leaders, including the King, senior government officials, and 
religious leaders, publicly condemn terrorism; 
* Saudi government adopts a number of domestic programs designed to 
combat extremism in Saudi Arabia. 

U.S. Agencies’ Assessment of Overall Progress: 
U.S. officials report progress enhancing the Saudi government’s ability 
to combat terrorists, and assess these efforts have disrupted Al 
Qaeda’s terrorist network within Saudi Arabia. 

Concern remains that Saudi Arabia’s neighbor Yemen is emerging as a
base from which Al Qaeda terrorists can launch attacks against U.S. and 
Saudi interests. 

Source: GAO analysis of U.S. agency information. 

[End of figure] 

No Successful Terrorist Strikes Reported in Saudi Arabia Since 2007: 

Officials from State report that there have been no successful 
terrorist strikes in Saudi Arabia since February 2007. Officials 
attributed this outcome, in part, to Saudi law enforcement actions. 
Experts we interviewed also cited decreased popular support for Al 
Qaeda, due to Muslim casualties caused by the organization, as a factor 
in the declining number of attacks. Both U.S. and Saudi officials cited 
strong intelligence and security cooperation between the U.S. and Saudi 
governments related to counterterrorism. Moreover, experts with whom we 
spoke generally agreed that the Saudi government is serious about 
combating terrorism. 

State officials report that, while there was a major terrorist incident 
in Saudi Arabia in August 2009, there have been no attacks on energy 
infrastructure since 2006 and no successful terrorist strikes in Saudi 
Arabia since February 2007. On August 27, 2009, a suicide bomber 
attempted to assassinate Saudi Arabia's Assistant Minister of Interior 
for Security Affairs, Prince Mohammed bin Nayef, who is also the head 
of Saudi Arabia's counterterrorism efforts. While the bomber, a Saudi 
national who was on the Saudi government's "most wanted" list, was 
killed during the attack, no one else suffered serious injuries. 
According to the Saudi embassy, the attacker was from a region 
bordering Yemen and had offered to coordinate the return of Saudi 
fugitives in Yemen. Al Qaeda in the Arabian Peninsula claimed 
responsibility for the attack. Officials from State and the Saudi 
embassy told us that, while a major attack, the strike was not 
successful, as the Prince was not seriously harmed.[Footnote 22] 
Similarly, a White House press release described the attack as 
unsuccessful. DOD noted, however, that Saudi authorities did not 
disrupt this plot. The White House press release also stated that the 
attack underscores the continued threat posed by Al Qaeda and the 
importance of strong counterterrorism cooperation between the United 
States and Saudi Arabia. 

Saudi Arabia has also undertaken law enforcement activities, including 
arresting and prosecuting terror suspects. According to State 
reporting, since May 2003, the Saudi government has killed or captured 
Al Qaeda's operational Saudi-based senior leadership, as well as most 
of the network's key operatives and many of the Kingdom's most wanted 
individuals. Between 2003 and 2008, U.S. and Saudi officials report the 
Saudi government arrested or killed thousands of terrorism suspects, 
including those suspected of planning attacks on Saudi oil fields and 
other vital installations. Further, the Saudi government has published 
three "most wanted" lists, and U.S. and Saudi sources report Saudi 
Arabia has captured or killed a number of suspects on these lists. In 
2008, the Saudi government announced terrorism trials for approximately 
1,000 individuals indicted on various terrorism-related charges. In 
July 2009, the Saudi government announced that 330 suspects had court 
trials, of whom seven were acquitted and the rest received jail terms 
ranging from a few months to 30 years.[Footnote 23] Saudi officials 
noted that the convictions can be appealed in the Saudi supreme court. 
U.S. and Saudi officials told us, and State reports, that such trials 
could help combat terrorist ideologies. 

Moreover, the U.S. and Saudi governments have implemented joint 
activities to strengthen Saudi law enforcement capabilities, such as 
State-led training to strengthen the Saudi government's antiterrorism 
investigative management and VIP protection capability. Apart from 
joint training courses, U.S. officials told us they have close working- 
level relationships with their Saudi counterparts and noted that Saudi 
security cooperation is significant.[Footnote 24] State, Treasury, FBI, 
DOD, and DHS officials told us that U.S. law enforcement and 
intelligence agencies have benefited and continue to benefit from Saudi 
information on individuals and organizations. The former U.S. 
ambassador to Saudi Arabia described U.S.-Saudi counterterrorism 
cooperation as among the most productive in the world. 

U.S. and Saudi Governments Report Extensive Cooperation on Critical 
Infrastructure Protection: 

U.S. and Saudi officials report progress in cooperation on protecting 
critical infrastructure targets, such as oil installations, in Saudi 
Arabia. Officials cited the signing of a technical cooperation 
agreement between the United States and Saudi Arabia in May 2008, as 
well as activities to implement the agreement, as evidence of deeper 
cooperation. 

U.S. officials told us that the protection of critical Saudi 
infrastructure, particularly energy production facilities, has been a 
priority since 2006, following an unsuccessful terrorist attack at the 
Abqaiq oil facility,[Footnote 25] one of the world's largest oil 
processing facilities located in Saudi Arabia. According to State 
reporting, critical infrastructure protection is a vital national 
interest, as a successful terrorist attack that disrupts Saudi oil 
production would have a devastating impact on the U.S. and global 
economies.[Footnote 25] 

In May 2008, the U.S. Secretary of State and the Saudi Arabian Minister 
of Interior signed a technical cooperation agreement to provide U.S. 
technical assistance to Saudi Arabia in the area of critical 
infrastructure protection. A joint operational entity called the Office 
of Program Management-Ministry of Interior (OPM-MOI) was established to 
implement the agreement, consisting of representatives from State, DOD, 
DOE, and the Saudi Arabian government. The Saudi Arabian government 
agreed to fully fund the agreement's implementation, including all 
expenses incurred by U.S. agencies for services and contractor costs. 
OPM-MOI is assisting the Saudi government in identifying critical 
infrastructure vulnerabilities; developing security strategies to 
protect critical infrastructure; and recruiting and training a new MOI 
force, the Facilities Security Force, to protect its critical 
infrastructure. State is the lead agency for the implementation of the 
agreement, DOE is contributing expertise in conducting facility 
assessments and developing security strategies for Saudi energy 
production facilities, and DOD will contribute expertise in training 
and equipping the Facilities Security Force, which is intended to have 
more than 35,000 personnel when fully developed. According to U.S. 
officials, the current focus of OPM-MOI is protecting critical 
infrastructure related to oil production. However, officials told us 
OPM-MOI could expand to cooperate with the Saudi government in a number 
of other areas, including border security, maritime security, and cyber 
security. Other U.S. agencies, such as DHS and the Coast Guard, are 
expected to participate in OPM-MOI as the critical infrastructure 
mission expands. 

Saudi Leaders Have Publicly Condemned Terrorist Activities and 
Implemented Programs to Combat Extremism: 

Saudi government and religious leaders have publicly condemned 
terrorism and terrorism financing. Several high-ranking Saudi 
government leaders have spoken out against terrorism and extremism. In 
his remarks at the UN's Culture of Peace conference in November 2008, 
[Footnote 27] King Abdullah bin Abdulaziz noted that "terrorism and 
criminality are the enemies of every religion and every culture." In 
July 2008, the King made similar remarks at the World Conference on 
Dialogue in Madrid. Many other members of the Saudi government, 
including the Ministers of Islamic Affairs, Foreign Affairs, and 
Interior, have issued statements against terrorism and extremism since 
2001. 

Moreover, religious leaders, such as the Grand Mufti of Saudi Arabia, 
[Footnote 28] have issued a number of statements critical of terrorism. 
In the spring of 2008, the Grand Mufti issued a statement on the evils 
of terrorism and warned Saudi citizens not to listen to those who use 
religion to promote terrorism. In October 2007, he delivered a sermon 
cautioning young Saudis not to travel abroad to participate in jihad. 
In the same speech, he urged Saudi citizens not to finance terrorism 
and to be mindful of how their charitable contributions are 
distributed. Later that same year, the Grand Mufti stated that 
terrorists should be subject to severe punishment in accordance with 
Islamic law. According to State, other Saudi Islamic scholars and 
officials also voiced support for the Grand Mufti's statement. 

Further, in May 2009, the Second Deputy Prime Minister of Saudi Arabia 
organized the first national conference on "intellectual security," 
which was to address the "intellectual abnormality" that, according to 
the Saudi government, is "the main reason for terrorism." The 
conference resulted in a communiqué stressing the importance of 
moderation, tolerance, cross-cultural dialogue, nonviolence, and the 
establishment of national strategies for promoting those values. The 
declaration pointed out the moderate nature of Islam and warned against 
the dangers of embracing deviant ideologies. The Deputy Prime Minister 
also expressed hope that the small number of Saudis participating in 
deviant groups abroad would renounce their beliefs and return home, 
noting, Saudi Arabia "is ready to welcome its citizens if they decide 
to opt for the correct path." 

Saudi Activities to Combat Extremism: 

In addition to public statements by Saudi government and religious 
figures, the Saudi government has implemented a number of domestic 
activities designed to undermine extremist ideology within the Kingdom. 
These activities include the following: 

* Initiating a media campaign: According to U.S. and Saudi officials, 
the Saudi government has implemented an extensive media campaign 
against extremist thought. State reports this campaign includes the use 
of advertisements, billboards, text messages and the Internet. (Figure 
5 shows examples of Saudi Arabia's public outreach campaign.) 

Figure 5: Saudi Arabia's National Campaign against Extremism and 
Terrorism, Examples of Public Outreach: 

[Refer to PDF for image: three photographs] 

The Kingdom of Saudi Arabia: 
National Campaign Against Extremism and Terrorism: 

Examples of Public Outreach: 

Photograph: "May the hand of evil-doers be paralyzed." 

Photograph: "The Saudi National Unity Campaign Against Terrorism." 

Photograph: "The General Presidency for Youth Welfare and its regional 
offices, The Saudi Arabian Olympic Committee, Saudi Football 
Federation, sports federations, clubs and youth hostels, join in the 
National Unity Campaign Against Terrorism." 

Source: Royal Embassy of Saudi Arabia. 

[End of figure] 

See [hyperlink, http://www.gao.gov/media/video/gao-09-883/] for a video 
of a Saudi government-sponsored TV advertisement designed to counter 
terrorism. 

* Distributing publications and other materials: Officials from the 
Saudi Ministries of Islamic Affairs and Interior told us Saudi Arabia 
had produced a variety of books and pamphlets designed to combat 
extremist ideology. Saudi officials estimate that approximately 1.8 
million books have been prepared as part of this effort. (Figure 6 
shows a sample of Saudi literature to combat extremism provided to GAO 
by Saudi officials.)[Footnote 29] Additionally, according to Saudi 
officials, the Saudi government distributes, via mosques and schools, 
CDs and cassette tapes with lectures and seminars addressing the issues 
of terrorism and extremism. 

Figure 6: Sample of Saudi Literature (with Translated Titles) Designed 
to Combat Extremist Ideology: 

[Refer to PDF for image: illustrations] 

Seditious (rebellion against authority) Bombings and Assassinations: 
Causes, Impacts, and Remedy. 

Reflections on the Riyadh Bombings. 

The Guidance of Quran and Sunna[A] on Maintaining Security and 
Protecting Lives: The Prohibition Against Hijacking Airplanes. 

The Position of Senior Ulema (religious scholars) on Extremism and 
Terrorism. 

Source: Materials provided by the government of Saudi Arabia; 
translations by GAO. 

[A] The Quran and Sunna (which refers to the customs of Prophet 
Muhammad) form the basis of Islamic jurisprudence. 

[End of figure] 

* Monitoring religious leaders: According to State reporting and Saudi 
officials, the Saudi government continues to monitor the preaching and 
writings of religious leaders, and to reeducate those who advocate 
extremist messages. Saudi officials from the Ministry of Islamic 
Affairs told us their monitoring has covered approximately 20,000 of 
Saudi Arabia's estimated 70,000 mosques, including all of the large 
mosques that hold Friday prayers.[Footnote 30] Additionally, Saudi 
officials told us they have held hundreds of seminars and lectures in 
mosques to help ensure that religious leaders preach a moderate message 
to the public. 

* Monitoring school teachers: According to officials from the Saudi 
Ministry of Islamic Affairs, the Saudi government monitors for school 
teachers who teach extremism. Once identified, such teachers are put 
through reeducation programs. 

* Monitoring Internet sites: According to Ministry of Interior 
officials, Saudi authorities are monitoring Internet chat rooms that 
could be sources of militant recruitment. In September 2008, Saudi 
authorities reported the arrest of three Saudi citizens and two 
expatriates for promoting militant activities on Internet forums, 
engaging online users in dialogue, spreading misleading information, 
and recruiting youth to travel abroad for inappropriate purposes. 
According to Saudi reports, the Ministry of Interior called on all 
Saudis to be vigilant and urged them not to listen to those who promote 
corruption and sedition. In addition, the Ministry published the online 
usernames utilized by the suspects. 

* Encouraging dialogue: The Saudi government reports that it supports 
the activities of the Sakinah (or Tranquility) Campaign, which is an 
independent nongovernmental organization that engages in dialogue, via 
the Internet, with Internet users who have visited extremist Web sites. 
Additionally, in 2008, the King of Saudi Arabia also initiated a series 
of conferences to promote interfaith dialogues. The first conference 
was hosted by the Muslim World League in Mecca in June 2008 and 
consisted of 500 Muslim scholars from around the world. The second 
conference was held in Madrid, Spain, in July 2008 and included 300 
delegates representing different faiths, including Islam, Buddhism, 
Christianity, Hinduism, and Judaism. Finally, the King of Saudi Arabia 
was joined by other heads of states at a Special Session of the UN 
General Assembly on interfaith dialogue in November 2008. 

Saudi Rehabilitation Programs: 

The Saudi government operates rehabilitation programs to reeducate 
those arrested for supporting terrorism or extremism, as well as those 
returning from the U.S. detention facilities at Guantanamo Bay, to 
reintegrate them into society. Rehabilitation programs take place both 
in Saudi prisons and in halfway houses outside of prisons, known as 
aftercare centers.[Footnote 31] In March 2009, we visited the aftercare 
center-- called the Mohammed bin Nayef Center for Advisory and Care--in 
Riyadh and spoke with staff members as well as participants of the 
program, including those arrested for terrorism and violent extremism 
in Saudi Arabia and those formerly detained at Guantanamo Bay. Staff 
members told us the rehabilitation center seeks to "reeducate" its 
participants by engaging them in religious debates and providing 
psychological counseling. The program generally consists of one-on-one 
and group sessions between an offender and religious scholars, 
psychiatrists, and psychologists about their beliefs. Program officials 
attempt to persuade the offenders that their religious justification 
for their actions is based upon a corrupted understanding of Islam. 
Psychological counseling includes traditional methods as well as 
activities such as art therapy. Staff members told us the program draws 
heavily on participants' family and tribal relations. Family members 
can visit and telephone the rehabilitation center, and rehabilitation 
participants are allowed leave to attend family events such as weddings 
and funerals. For instance, when we visited the center, we spoke with 
family members visiting their relatives. Those who complete the 
program, and are deemed eligible for release, are provided social 
support to assist with their reintegration into society, such as 
counseling, job opportunities, and stipends. Moreover, these social 
services are extended to the family and tribal members of released 
participants, as a way to involve participants' larger social network 
in their rehabilitation. Saudi officials told us that individuals 
generally participate in the program for 6 to 8 months. 

Saudi officials report such rehabilitation programs, including those in 
prisons and an aftercare center, have treated 4,300 individuals 
overall. Specifically, Saudi officials told us that, as of March 2009, 
the aftercare center had served approximately 250 individuals, with a 
recidivism rate of about 20 percent. Experts with whom we spoke 
generally praised the Saudi rehabilitation program, but offered some 
caution on the methodology used to measure its results.[Footnote 32] 
State reports it is monitoring these rates closely. Saudi officials 
told us that former Guantanamo detainees account for most of the 
individuals who have recidivated from the aftercare center.[Footnote 
33] For example, in January 2009, two former participants at the center 
appeared in an Al Qaeda recruiting video filmed in Yemen. One of the 
individuals in the video has since turned himself in to Saudi 
authorities. Saudi officials acknowledge such cases illustrate the 
difficulties associated with assessing which participants should be 
released from the rehabilitation center, but told us they are working 
to refine their assessment criteria. U.S. and Saudi officials with whom 
we spoke told us that, despite the challenges associated with 
recidivism, Saudi rehabilitation programs have demonstrated some 
positive results. Moreover, U.S. officials told us these activities, 
among others, demonstrate the Saudi government's commitment to 
undermining extremist ideology within the Kingdom. (See [hyperlink, 
http://www.gao.gov/media/video/gao-09-883/] for a video of GAO's visit 
to a Saudi government operated rehabilitation center.) 

Despite Significant Gains in Combating Terrorists in Saudi Arabia, 
Instability in Yemen Is a Concern: 

While U.S. and Saudi officials told us that Saudi Arabia had made 
progress in enhancing its ability to combat terrorists, they assessed 
that political instability in Yemen,[Footnote 34] Saudi Arabia's 
neighbor, could create challenges to counterterrorism efforts. U.S. and 
Saudi officials expressed concern that Yemen, due in part to lack of 
government control and proximity to Saudi Arabia, is emerging as a base 
from which Al Qaeda terrorists can launch attacks against Saudi and 
U.S. interests in Saudi Arabia. For example, as noted previously, in 
August 2009, Al Qaeda in the Arabian Peninsula--which is based in 
Yemen--claimed responsibility for the failed assassination attempt 
against Saudi Arabia's Assistant Minister of Interior for Security 
Affairs. State has listed Yemen as a terrorist safe haven in its 
Country Reports on Terrorism since 2005. In April 2009, in its Country 
Reports on Terrorism, State reported that, despite some successes 
against Al Qaeda, the response of the government of Yemen to the 
terrorist threat was intermittent due to its focus on internal security 
concerns. Moreover, State noted that border security between Saudi 
Arabia and Yemen remained a problem. Saudi officials also cited 
political instability in Yemen, as well as the porous border between 
Yemen and Saudi Arabia, as challenges to their counterterrorism 
efforts. To address this issue, the Deputy Foreign Minister of Saudi 
Arabia told us that the Saudi government is providing Yemen assistance 
in a number of areas, including counterterrorism, education, and 
health. Saudi officials also stated that Saudi Arabia is building an 
electronic fence on the Saudi-Yemen border.[Footnote 35] 

U.S. and Saudi Officials Report Progress in Preventing Financial 
Support to Extremists, but Concerns Remain about Individuals' and 
Multilateral Charitable Organizations' Ability to Support Terrorism and 
Violent Extremism outside of Saudi Arabia: 

U.S. and Saudi officials report progress in preventing financial 
support to extremists, citing improved Saudi regulation and enforcement 
capacity. Between fiscal years 2006 and 2008, the U.S. embassy's MSP 
listed a number of performance targets related to preventing financial 
support to extremists, which include (1) the United States providing 
additional training and Saudi banks increasing reporting to the Saudi 
Financial Investigation Unit, (2) the Saudi government providing 
accounting of assets seized from individuals and organizations 
designated as terrorists by the United Nations (UN) 1267 Committee and 
taking legal action against nationals and groups providing financial or 
ideological support to terrorists, (3) the Saudi Charities Commission 
naming senior staff and beginning operations, and (4) the Saudi 
government implementing and enforcing cash courier regulations. U.S. 
officials report progress on several of these performance targets. 
However, U.S. officials remain concerned about the ability of Saudi 
individuals and multilateral charitable organizations, as well as other 
individuals visiting Saudi Arabia, to support terrorism and violent 
extremism outside of Saudi Arabia. U.S. officials also noted that 
limited Saudi enforcement capacity and terrorist financiers' use of 
cash couriers pose challenges to Saudi efforts to prevent financial 
support to extremists. (For a summary of reported progress related to 
MSP performance targets from fiscal year 2006 to fiscal year 2008, see 
figure 7.) 

Figure 7: U.S. Agencies' Assessment of Progress as of August 2009 on 
Mission Strategic Plan Performance Targets Related to Preventing 
Financial Support to Extremists, Fiscal Years 2006-2008: 

[Refer to PDF for image: illustrated table] 

FY 2006 Target: Saudi financial intelligence unit (FIU) exchanges 
information with regional counterparts; 
FY 2007 Target: United States provides training to Saudi FIU; 
FY 2008 Target: Additional U.S. training to Saudi FIU; 
Status of Activities Related to Targets: 
* U.S. Treasury and FBI provide training on financial investigative 
skills; 
* State reports increased reporting by banks; 
* Saudi FIU joins the international body of financial intelligence 
units. 

FY 2006 Target: The Saudi government cosponsors the designation of at 
least one individual or organization under United Nations Security 
Council Resolution 1267 related to Al Qaeda and the Taliban (UN 1267), 
details seized assets, and prosecutes the group or individual. 
FY 2007 Target: Saudi government implements actions under UN 1267, such
as providing accounting of assets seized from designees, and takes 
legal action against individuals or groups that support terrorism; 
FY 2008 Target: Saudi government implements actions under UN 1267, such
as providing detailed accounting of assets seized from designees, and 
takes legal action against individuals or groups that support 
terrorism; 
Status of Activities Related to Targets: 
* Saudi government arrests a number of terrorist financiers; 
* State reports Saudi government appears cooperative on efforts to 
freeze assets of designated individuals and entities; 
* State officials note that the Saudi government’s enforcement of the UN
1267 travel ban provision has not been consistent. 

FY 2006 Target: Saudi Charities Commission begins operations; 
FY 2007 Target: Saudi Charities Commission begins operations; 
FY 2008 Target: Saudi Charities Commission begins operations; 
Status of Activities Related to Targets: 
* Saudi Charities Commission is not operational; 
* In its place, the Saudi government has adopted regulations barring 
charitable organizations from sending contributions overseas absent the 
approval of the Saudi government; 
* State and Treasury have expressed concerns that certain charitable 
organizations in Saudi Arabia are not covered by Saudi regulations. 
Saudi government officials contend all organizations are covered by 
their regulations. 

FY 2006 Target: Cash courier regulations implemented; 
FY 2007 Target: Cash courier regulations implemented and enforced; 
Status of Activities Related to Targets: 
* Cash courier regulations enacted by the Saudi government; 
* State has reported that the effectiveness of these regulations 
remains in question; 
* DHS noted that they do not have information—such as the number of
seizures—to assess progress on implementation of cash courier 
regulations. 

U.S. Agencies’ Assessment of Overall Progress: 

U.S. officials report progress in preventing financial support to 
extremists, but concerns remain about the ability of Saudi individuals 
and multilateral charitable organizations to provide financial support 
for terrorism outside of Saudi Arabia. 

Limited capacity, particularly in key Saudi ministries that enforce 
financial regulations, the use of cash couriers by terrorist financiers,
circumvention of cash declaration laws, and pervasive use of cash in 
Saudi society are cited as challenges to combating the financing of 
terrorism. 

Source: GAO analysis of U.S. agency information. 

[End of figure] 

The United States Provided Training to the Saudi Financial 
Investigation Unit: 

In 2005, the government of Saudi Arabia established the Saudi Financial 
Investigation Unit, which acts as Saudi Arabia's financial intelligence 
unit (FIU). Located in the Ministry of Interior, the Saudi FIU receives 
and analyzes suspicious transaction reports and other information from 
a variety of sources, such as banking institutions, insurance 
companies, and government departments. 

Treasury's Financial Crimes Enforcement Network, which is the FIU for 
the United States, and the FBI have provided training to the Saudi FIU 
since its establishment in 2005. According to Treasury officials, these 
training activities were designed to build the capacity of the Saudi 
FIU and assist it in meeting international standards, with the ultimate 
goal of having the Saudi FIU attain membership in the Egmont Group, an 
international body of financial intelligence units. Saudi officials 
told us that the capacity of the Saudi FIU has increased since 2005. 
For instance, they noted the number of suspicious transaction reports 
they analyze grew from approximately 38 per month in 2006 to 110 per 
month in 2008,[Footnote 36] while the staff of the FIU has grown from 
approximately 80 individuals in 2006 to 130 individuals in March 2009. 
Moreover, since 2005, Saudi officials told us the Saudi FIU had 
conducted information exchanges with FIUs in the United States and a 
number of countries in the region, and said they expected these 
exchanges to increase once the Saudi FIU becomes a member of the Egmont 
Group.[Footnote 37] Similarly, Treasury officials told us Saudi 
Arabia's membership in the Egmont Group would assist in preventing 
financial support to extremists by facilitating information exchanges 
between the Saudi FIU and its counterparts. In May 2009, the Saudi FIU 
met the requirements for membership and became an official member of 
the Egmont Group.[Footnote 38] 

The Saudi Government Has Initiated Legal Action against Terrorist 
Financiers, but the United States Has Reported the Need for Further 
Action: 

According to U.S. officials and State reporting in 2007 and 2008, the 
Saudi government has taken legal action against terrorist financiers, 
based on its laws and regulations related to combating terrorist 
financing. In 2003, the Saudi Arabian government enacted an anti-money 
laundering law, which provided a statutory basis for considering money 
laundering and terrorism financing as criminal offenses. That same 
year, the Saudi Arabian Monetary Agency (SAMA) issued updated anti- 
money laundering and counterterrorist financing guidelines for the 
Saudi banking and nonbank financial system.[Footnote 39] The guidelines 
contain a number of provisions, such as requiring that banks (1) have 
mechanisms to monitor all types of "Specially Designated Nationals" as 
listed by SAMA, (2) strictly adhere to SAMA guidance on opening 
accounts and dealing with charity and donation collection, and (3) use 
software to monitor customers to detect unusual transaction patterns. 
Additionally, SAMA has also issued "know your customer" guidelines, 
requiring banks to freeze accounts of customers who do not provide 
updated account information. In July 2004, members of the Financial 
Action Task Force (FATF) and the Gulf Cooperation Council assessed 
Saudi Arabia's legal and regulatory practices with respect to 
countering terrorism financing.[Footnote 40] They found Saudi Arabia to 
be compliant or largely compliant with most FATF benchmarks--a set of 
internationally recognized legal and regulatory benchmarks on money 
laundering and terrorism financing.[Footnote 41] 

Since 2007, U.S. and Saudi officials report that the government of 
Saudi Arabia has arrested and prosecuted a number of individuals 
suspected of financing terrorism. For instance, State reports that the 
Saudi government arrested 56 suspected terrorist financiers in 2008 and 
prosecuted 20 of them. According to Saudi embassy reports, over 40 
people were arrested in 2007 for providing financial support to 
terrorists. As noted earlier in this report, in July 2009, the Saudi 
government announced the convictions of 330 terrorism suspects who were 
charged with crime, including affiliation with terrorist organizations 
as well as facilitating and financing terrorism. U.S. officials we 
spoke with cited these arrests, as well as those against terrorist 
cells more generally, as having a disruptive effect on financing 
networks. Despite these gains, State notes in its most recent Country 
Report on Terrorism that the United States continues to "urge the 
government of Saudi Arabia to pursue and prosecute terrorist financiers 
more vigorously." 

Moreover, State's 2009 International Narcotics Control Strategy Report 
(INCSR) cited the Saudi government as "partially compliant" on 
obligations related to UN Security Council resolutions on terrorism 
financing. UN 1267 requires its signatories to impose certain 
restrictions on individual or entities associated with Al Qaeda and the 
Taliban, such as freezing their assets and preventing their entry or 
transit through signatories' territories (travel ban). In April 2009, 
State reported that the Saudi government had taken action against 
individuals designated by the UN 1267 Committee by freezing their 
accounts and seizing their assets. Moreover, State reports that SAMA 
provides the names of suspected terrorists and terrorist organizations 
designated by the UN 1267 Committee to all financial institutions under 
its supervision. Related to the UN 1267 travel ban provision, State 
officials told us that the Saudi government's enforcement of this 
provision had not been consistent, particularly during hajj. According 
to Saudi officials, the Saudi government's policy is to allow all 
Muslims to visit the Kingdom during hajj[Footnote 42] to fulfill their 
religious obligations and to not arrest individuals during their 
pilgrimage. However, Saudi officials noted they would share information 
with the United States about certain individuals, such as those 
designated under UN 1267, visiting the Kingdom for religious 
obligation. 

The Saudi Charities Commission Is Not Yet Operational, but the Saudi 
Government Has Issued New Regulations Targeting Saudi Charities and 
Multilateral Charitable Organizations: 

State and Treasury have reported that some Saudi charitable 
organizations have been a major source of financing to extremist and 
terrorist groups. In 2002, the Saudi government announced its intention 
to establish a National Commission for Relief and Charitable Work 
Abroad, commonly known as the Charities Commission, to oversee all 
private Saudi charitable activities abroad. U.S. officials told us, and 
Saudi officials confirmed, that the Saudi Charities Commission is not 
operational. Although the Charities Commission is not operational, the 
Saudi government has established regulations barring Saudi charitable 
organizations from sending contributions abroad via banks and other 
formal financial channels without first receiving the approval of the 
Saudi government. Saudi officials told us these regulations are 
preferable to a Charities Commission, as they more effectively prevent 
the flow of funds outside of Saudi Arabia. Similarly, some U.S. 
officials and experts with whom we spoke stated that the current ban 
might be preferable to a Saudi Charities Commission, as a ban may be 
more effective in preventing financial support from reaching extremist 
groups. Other U.S. officials noted that while more effective oversight 
of charitable organizations is needed, it is not necessary that such 
oversight take the form of a Charities Commission. 

Rules related to the banking activities of charitable organization in 
Saudi Arabia were first adopted in 2003, and updated in 2008. However, 
there is some disagreement over whether these rules apply to all Saudi 
charitable organizations. According to U.S. officials, and State 
reporting, charitable organizations in Saudi Arabia include 
organizations termed "charities"--which tend to operate within the 
Kingdom--and organizations dubbed "multilateral" charitable 
organizations--which are based in Saudi Arabia but have branches in 
other parts of the world. Multilateral charitable organizations based 
in Saudi Arabia include the Muslim World League, the International 
Islamic Relief Organization (IIRO), and the World Assembly of Muslim 
Youth. The 2003 rules applied to charitable organizations and 
prohibited them from making cash disbursements and transferring money 
outside of Saudi Arabia.[Footnote 43] U.S. officials have testified 
that the 2003 regulations did not apply to multilateral organizations. 
While State reported in the 2006, 2007, and 2008 INCSRs that the 
government of Saudi Arabia stated the 2003 regulations applied to 
international charities,[Footnote 44] each report also contained 
language recommending the Saudi government enhance its oversight of 
charities with overseas operations. 

Despite the ban on charities transferring money outside of Saudi Arabia 
enacted in 2003, a number of charitable organizations with links to 
Saudi Arabia have been designated by Treasury since 2005 as financing 
terrorist activities. In August 2006, Treasury designated branches of 
the IIRO in Indonesia and the Philippines, as well as a Saudi national 
employed as the Executive Director of the Eastern Province Branch of 
IIRO, for facilitating fundraising for Al Qaeda and affiliated 
terrorist groups. Further, from 2002 to 2004,[Footnote 45] the United 
States designated 13 branches of the Al Haramain Islamic Foundation (Al 
Haramain), including several branches that were designated by both the 
U.S. and Saudi governments.[Footnote 46] In 2004, the Saudi government 
announced that Al Haramain was being dissolved. In June 2008, Treasury 
noted that despite Saudi government efforts, which had largely 
prevented Al Haramain from operating in its own name, the 
organization's leadership had attempted to reconstitute itself and 
parts of Al Haramain continued to operate. Thus, in June 2008, Treasury 
designated all branches of Al Haramain, including its headquarters in 
Saudi Arabia, for having provided support to Al Qaeda as well as other 
terrorists and terrorist organizations. 

After these designations, in rules dated December 2008, the government 
of Saudi Arabia updated its banking regulations to include specific 
language related to multilateral organizations, including Muslim World 
League, IIRO, and World Assembly of Muslim Youth. The rules state that 
transfers from the accounts of these multilateral organizations to any 
party outside of the Kingdom shall not be allowed without approval from 
SAMA, and that any contributions approved for transfer may only be used 
in ways as specified by SAMA. Saudi officials from SAMA and the 
Ministry of Foreign Affairs with whom we spoke told us that no 
charitable contributions, including those from multilateral charitable 
organizations, can be sent abroad through bank accounts without the 
approval of the Saudi government. Moreover, Saudi officials told us 
that, as of July 2009, the Saudi government had not approved any 
transfer of funds from charities and multilateral charitable 
organizations to support charitable activities outside of Saudi Arabia. 
While the Saudi government has not approved the transfer of funds, they 
have approved overseas transfers of in-kind humanitarian assistance, 
such as medical supplies or blankets, through the Saudi Red Crescent 
Society. State reporting acknowledges the Saudi government tightened 
controls on charitable giving in September 2008. Officials from World 
Assembly of Muslim Youth confirmed that the ban on charitable 
contributions leaving Saudi Arabia through a formal financial network 
applies to their activities, and that contributions to their 
organization have declined as a result. While the Saudi government has 
regulations related to the transfer of charitable contributions through 
the formal financial system, World Assembly of Muslim Youth officials 
stated they have moved money out of Saudi Arabia by providing cash to 
individuals or contractors to implement charitable projects outside the 
Kingdom.[Footnote 47] State and Treasury officials noted that, despite 
the tightened regulations on the formal financial system, they are 
still concerned about the ability of multilateral charitable 
organizations to move money out of the country, and in the 2009 INSCR, 
State reports that multilateral organizations operate "largely outside 
of the strict Saudi restrictions covering domestic charities." 

According to U.S. officials and State reporting, a proposal for the 
Charities Commission is still under review by Saudi officials. However, 
the most recent MSP for Saudi Arabia no longer contains a performance 
target related to the operation of a Saudi Charities Commission. U.S. 
officials told us that, even in the absence of this target, the 
regulation of charitable organizations is still a priority that U.S. 
agencies pursue through diplomatic and information-sharing activities 
with the Saudi government. 

Saudi Arabia Has Issued Cash Courier Regulations, but Concerns Remain 
about Implementation of These Regulations: 

In late 2005, the Saudi government enacted stricter customs declaration 
laws that regulate the cross-border movement of cash, jewels, and 
precious metals. The regulations state that money and gold in excess of 
60,000 Saudi riyals (equivalent to $16,000 U.S. dollars) must be 
declared upon entry and exit from Saudi Arabia using official customs 
forms.[Footnote 48] 

That same year, representatives from DHS's Immigration and Customs 
Enforcement (ICE) conducted training for 46 Saudi officials on topics 
related to bulk cash smuggling. ICE officials told us the goal of this 
training was to introduce Saudi officials to interdiction and 
investigative techniques designed to support enforcement of the Saudi 
customs regulations. 

In 2007, State reported concerns related to the enforcement of Saudi 
Arabia's customs declaration laws. For example, Saudi customs had not 
issued the necessary declaration forms. State officials with whom we 
spoke told us that the Saudi government had improved its enforcement of 
the laws, including distributing declaration forms and posting signs, 
which we observed during our visit to the Kingdom (see figure 8). 
Additionally, State has reported that the Saudi government's new cash 
courier regulations have resulted in the investigations of several 
individuals. 

Figure 8: Official Saudi Customs Declaration Form: 

[Refer to PDF for image: illustration] 

Source: Royal Embassy of Saudi Arabia. 

[End of figure] 

According to ICE officials, although they have tried to persuade the 
Saudi government to conduct operational training related to preventing 
bulk cash smuggling, the Saudi government did not express interest in 
undertaking such an exercise until 2008. ICE officials noted that, in 
addition to classroom training, it considers operational training 
necessary to ensure proper enforcement of customs declaration laws 
designed to prevent bulk cash smuggling. Moreover, ICE officials said 
that they do not have information--such as the number of seizures and 
prosecutions--that would allow them to assess progress with regard to 
the Saudi government's efforts to prevent bulk cash smuggling. In its 
2009 INCSR, State reported that the Saudi government has adopted 
stricter regulations; however, information collected by Saudi customs 
on cash declarations and smuggling is not shared with other 
governments, and the implementation and effectiveness of the customs 
regulations remain in question. 

Despite concerns about the Saudi government's enforcement of customs 
declaration laws that include cash courier regulations, the MSP 
performance target related to cash couriers was removed from the MSP 
after fiscal year 2007. U.S. officials told us that, despite the 
omission of the target from the MSP, Saudi implementation and 
enforcement of cash courier regulations are important U.S. objectives 
that U.S. agencies pursue through training and diplomatic activities 
with the Saudi government. 

Further, in the 2008 and 2009 INCSRs, State reported that, in addition 
to bulk cash, some instances of terrorist financing in Saudi Arabia 
have allegedly involved informal mechanisms, such as hawala.[Footnote 
49] U.S. and Saudi officials told us, and State reports, that hawala 
and money services businesses apart from banks and licensed money 
changers are illegal in Saudi Arabia. In 2005, State reported that SAMA 
consolidated the eight largest money changers into a single bank. 
Further, State notes that Saudi banks have created fund transfer 
systems that have attracted customers accustomed to using hawala. 
According to State, this creates an advantage for Saudi authorities in 
combating terrorism financing, as senders and recipients of fund 
transfers through this formal financial sector are required to clearly 
identify themselves. 

Despite Progress, U.S. Officials Remain Concerned about the Ability of 
Saudi Individuals and Multilateral Charitable Organizations to Support 
Terrorism and Violent Extremism Outside of Saudi Arabia: 

Despite reporting progress in Saudi Arabia's efforts to combat 
terrorism financing, U.S. officials expressed concern regarding the 
ability of Saudi individuals and multilateral charitable organizations, 
as well as other individuals visiting Saudi Arabia, to support 
terrorism and violent extremism outside Saudi Arabia. Officials 
stressed this funding allegedly comes from individuals or multilateral 
charitable organizations, not from the Saudi government, and that the 
government of Saudi Arabia is pursuing terrorism financiers and 
cooperating with the United States to counter terrorism financing. 
Further, experts we spoke with agreed that there is no indication that 
the Saudi government is providing funding for terrorism. 

Officials from State, Treasury, and DHS stated that alleged support 
from some Saudi individuals and multilateral charitable organizations 
for terrorism and violent extremism outside of Saudi Arabia remains a 
cause for concern. According to the 2009 INCSR, Saudi individuals and 
Saudi-based charitable organizations continue to be a significant 
source of financing for terrorism and extremism outside of Saudi 
Arabia. For example, Treasury officials have noted that Saudi-based 
individuals are a top source of funding for Al Qaeda and associated 
terror groups, such as the Taliban.[Footnote 50] Moreover, there have 
been concerns that during hajj--when an estimated 2 to 3 million 
Muslims visit Saudi Arabia--non-Saudi individuals associated with 
extremists groups could exchange funds to support terrorism and violent 
extremism outside of Saudi Arabia. Saudi government officials 
acknowledged that Saudi individuals could potentially fund terrorism, 
but, according to these officials, such individuals do so in violation 
of Saudi laws and regulations. Related to charitable contributions, 
Saudi officials told us that no funds have been approved for overseas 
transfer. Saudi officials also told us that if a Saudi-affiliated 
multilateral charitable organization raises funds abroad, it is the 
host country government's responsibility to ensure such funds are used 
appropriately, and stated that they have directed their embassies 
abroad to cooperate with host country governments in this effort. 

U.S. and Saudi officials cited challenges associated with efforts to 
prevent financial support to extremists, including limited Saudi 
enforcement capacity and the use of cash couriers by terrorist 
financiers. First, U.S. and Saudi officials noted enforcement capacity 
presents a challenge to U.S.-Saudi efforts to prevent financial support 
to extremists. While noting progress, U.S. and Saudi officials told us 
that key Saudi enforcement agencies, particularly those agencies that 
enforce financial regulations, could benefit from increased training 
and technical assistance to build their capacity. For instance, U.S. 
and Saudi officials stated that, while the Saudi FIU has expanded its 
capacity since its creation in 2005, more training in financial 
analysis could be beneficial to the organization. 

Second, U.S. and Saudi officials told us that preventing financial 
support to extremists is made more challenging by terrorist financiers' 
use of cash couriers. According to U.S. and Saudi officials, some 
individuals and multilateral charitable organizations have allegedly 
increased their use of more informal financial transaction methods, 
such as couriering cash across borders, in response to Saudi Arabia's 
adoption of regulations making transactions in the formal financial 
sector more challenging. Though Saudi Arabia has implemented cash 
courier regulations, Saudi officials noted that motivated individuals 
can circumvent such regulations by moving amounts of cash that are 
below legal declaration limits. U.S. officials concurred, noting 
circumvention of regulations as an inherent challenge in regulating the 
use of cash couriers in any country. U.S. and Saudi officials also 
cited the prevalent use of cash for transactions as a challenge, 
particularly in Saudi Arabia. According to these officials, because 
large numbers of people in Saudi Arabia and the Gulf region use cash, 
an individual traveling with or declaring large amounts of cash may not 
raise suspicion. Moreover, challenges associated with preventing the 
circumvention of cash courier regulations increase during hajj, which, 
despite efforts by the Saudi government, presents logistical 
enforcement challenges because of the large number of people involved. 
Dealing with the challenges inherently associated with the use of cash, 
according to Saudi officials, requires using intelligence to target 
specific individuals who may be using cash to fund terrorism or violent 
extremism and educating the public not to give cash to individuals they 
do not know, even for allegedly worthy causes. 

Conclusion: 

According to State, goals and performance targets in country-specific 
Mission Strategic Plans (MSP) are used to assess effectiveness of U.S. 
policies and programs in the field and to formulate requests for 
resources. According to U.S. officials, since 2005, several targets to 
assess progress of the U.S. government's counterterrorism and 
antiterrorism financing collaboration with the Kingdom of Saudi Arabia 
have been met. However, some performance targets, specifically those 
related to combating financing of terrorism, were removed from the MSP 
for Saudi Arabia even though U.S. agencies remain concerned about the 
ability of Saudi individuals and multilateral charitable organizations 
to fund terrorist organizations in other countries. U.S. agencies 
stated that, despite the omission of these targets, they continue to 
engage with the government of Saudi Arabia on efforts to prevent 
financial support to extremists. Given that State uses MSP targets to 
assess progress in countering terrorism and terrorism financing in 
Saudi Arabia, it is important that the U.S. mission include targets 
related to key areas of concern to more effectively prioritize U.S. 
efforts and to formulate resource requests for these activities. 

Recommendation for Executive Action: 

We recommend that the Secretary of State direct the U.S. mission in the 
Kingdom of Saudi Arabia to reinstate, in consultation with relevant 
U.S. agencies, performance measures related to preventing the flow of 
alleged financial support, through mechanisms such as cash couriers, to 
terrorists and extremists outside Saudi Arabia. 

Agencies Comments, Third-Party Views, and Our Evaluation: 

State and DOD provided written comments on a draft of this report, 
which are reproduced in appendices V and VI, respectively. State 
concurred with our recommendation and committed to instructing the U.S. 
Embassy, Riyadh, in consultation with key interagency partners, to 
ensure that the Mission Strategic Plan reflect the continued importance 
of cooperation to combat terrorism financing, including by reinstating 
performance indicators related to Saudi enforcement of cash courier 
regulations. DOD also concurred with the report. In addition, we 
received technical comments from DOD, DOE, NSC, State, Treasury, and 
the intelligence community. Additionally, consistent with our 
protocols, we provided a copy of the draft report to Saudi officials, 
who described the report as a fair and detailed review of U.S. and 
Saudi efforts and also offered technical comments. We incorporated 
technical comments as appropriate. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 5 days 
from the report date. At that time, we will send copies to the 
Departments of State, Treasury, Defense, Energy, Homeland Security, 
Justice, the intelligence community, and the National Security Council. 
In addition, the report will be available at no charge on the GAO Web 
site at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-5257, or merrittz@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in appendix VII. 

Signed by: 

Zina D. Merritt, Acting Director:
International Affairs and Trade: 

Appendix I: Objectives, Scope and Methodology: 

In this report, we were asked to report on (1) the U.S. government 
strategy to collaborate with and assist the Kingdom of Saudi Arabia to 
counter terrorism and terrorism financing, and (2) U.S. government 
agencies’ assessment of and the Saudi government’s views on progress 
toward the goals of the U.S. strategy to collaborate with and assist 
the Kingdom of Saudi Arabia. 

Our work focused on the efforts of the intelligence agencies; the
Departments of Defense (DOD), Energy (DOE), Homeland Security (DHS),
Justice (DOJ), State (State), and the Treasury (Treasury); and the 
National Security Council (NSC) to collaborate with Saudi Arabia to 
combat terrorism and terrorism financing since 2005. Within these 
agencies and executive offices, we met with officials from several 
relevant components that are monitoring or working with the Saudi 
government on efforts to combat terrorism and its financing, including 
DHS’s Immigration and Customs Enforcement (ICE); DOJ’s Federal Bureau 
of Investigation (FBI); State’s bureaus of Coordinator of 
Counterterrorism; Economic, Energy, and Business Affairs; International 
Narcotics and Law Enforcement Affairs; and Near Eastern Affairs; and 
Treasury’s Office of Terrorism and Financial Intelligence, Financial 
Crimes Enforcement Network, and the Internal Revenue Service. We 
focused on these agencies and components as a result of previous work 
undertaken by GAO regarding efforts to address violent extremism, our 
review of information since GAO’s previous work indicating which 
agencies were involved in efforts to collaborate with Saudi Arabia, and 
discussions with U.S. agency officials regarding the agencies with 
which they collaborate. 

To examine the U.S. government strategy to collaborate with and assist
the Kingdom of Saudi Arabia to counter terrorism and terrorism 
financing, we reviewed relevant U.S. strategic documents, including the 
U.S. Strategy Toward Saudi Arabia, Report Pursuant to Section 2043(c) of
the Implementing the Recommendations of the 9/11 Commission Act,
and Mission Strategic Plans (MSP) for Saudi Arabia (previously called
Mission Performance Plans) for fiscal years 2005 to 2011. While we did 
not assess these documents for key elements of a strategy as identified 
by GAO, we used the performance targets stated in these documents as
criteria against which we assessed progress. In addition to documents
from U.S. agencies, we obtained documents detailing the Saudi
government’s approach to combating terrorism and terrorism financing
from Saudi officials, and reviewed public information available on the
embassy Web site. We discussed the U.S. government strategy to
collaborate with and assist Saudi Arabia with officials from DOD, DHS,
DOJ, State, and Treasury, as well as representatives from the Saudi 
embassy, including the Saudi Ambassador to the United States.
Furthermore, while in Riyadh, Saudi Arabia, we discussed the U.S. 
strategy to collaborate with Saudi Arabia with officials from the U.S. 
embassy, including the then ambassador, as well as representatives from 
the Saudi government, including representatives from the Ministries of 
Foreign Affairs, Interior, and Islamic Affairs. We met with Saudi 
officials from these ministries as they are involved in efforts to 
combat terrorism and extremism. 

To report U.S. government agencies’ assessment of progress toward the
goals of the U.S. strategy to collaborate with and assist the Kingdom of
Saudi Arabia, we reviewed relevant U.S. planning and evaluation
documents, including MSPs for Saudi Arabia, Country Reports on
Terrorism, and International Narcotics Control Strategy Report: Volume
II, Money Laundering and Financial Crimes, among others. Additionally,
we developed and administered a data collection instrument to agencies
providing training and technical assistance to the Saudi government—
including State, Treasury, DOJ, DHS, DOD, and DOE—to obtain information 
on programs and activities, including goals, description, indicators, 
assessments, and associated funding. We corroborated information 
reported to us in the data collection instrument with information 
obtained during interviews with agency officials and reported in agency 
evaluation documents. Further, we obtained and examined documentation 
from Saudi officials regarding their domestic efforts to counter 
terrorism and terrorism financing, including Rules Governing the 
Opening of Bank Accounts and General Operational Guidelines in Saudi
Arabia, Third Update, December 2008, and reviewed public information
available on the embassy Web site. Although we report on Saudi efforts 
to combat extremism, we did not independently verify all of these 
activities. In Washington, D.C., we discussed progress on U.S.-Saudi
counterterrorism efforts with U.S. officials from DOD, DOE, DHS, DOJ,
State, Treasury, and the intelligence community; as well as with Saudi
officials from the Royal Embassy of Saudi Arabia. We also interviewed
subject matter experts from a variety of academic institutions and
nongovernmental organizations to obtain their assessments of progress.
We selected experts who met at least one of the following criteria: (1)
produced research focusing on Saudi Arabia; (2) traveled to Saudi 
Arabia; and, (3) were recognized as experts in the professional 
community, as determined by the recommendation of other experts. State 
concurred with our list of experts. Additionally, we traveled to Riyadh 
and Jeddah, Saudi Arabia, where we visited the Prince Mohammed bin 
Nayef Center for Advisory and Care—a counseling program designed to 
reeducate violent extremists—in Riyadh, and met with U.S. officials 
from DOD, DHS, DOJ, State, and Treasury; Saudi officials from the Saudi 
Arabian Monetary Agency and the Ministries of Foreign Affairs, 
Interior, and Islamic Affairs; and representatives from World Assembly 
of Muslim Youth. The information on foreign laws in this report is not 
a product of our original analysis, but is based on interviews and 
secondary sources. 

We conducted this performance audit from July 2008 through September
2009 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis 
for our findings and conclusions based on our audit objectives. We 
believe that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Time Line of Key Events in U.S. and Saudi Relations, 1750-
2004: 

Summary: Alliance between Muhammad bin Saud and a conservative Muslim 
leader; 
Date: Mid-18th century; 
Description: Muhammad bin Saud, founder 
of the precursor to the modern Saudi state, strikes an alliance with 
the conservative Muslim leader, Muhammad bin Abdul Wahhab. This marks 
the start of the close association between Saudi political and 
religious establishment. 

Summary: Saudi power and influence expands; 
Date: 1902 to 1926; 
Description: Abdul Aziz Al Saud expands Saudi power to other regions of 
the Arabian Peninsula, including Riyadh and the holy Muslim city of 
Mecca. 

Summary: Modern Kingdom of Saudi Arabia established; 
Date: 1932; 
Description: The modern Kingdom of Saudi Arabia is formally established 
under the reign of King Abdul Aziz Al Saud with a system of government 
based on Islamic law. 

Summary: U.S.-Saudi diplomatic relations established; 
Date: 1933; 
Description: United States and Saudi Arabia establish diplomatic 
relations. 

Summary: Saudi Arabia starts large scale oil production; 
Date: 1940s; 
Description: Saudi Arabia starts large scale oil production after World 
War II. 

Summary: Saudi King meets with President Roosevelt; 
Date: 1945; 
Description: The meeting between King Abdul Aziz and President Franklin 
D. Roosevelt to discuss oil and security is considered the start of 
more robust U.S.-Saudi relations. 

Summary: State of Israel established; 
Date: 1948; Description: In 1948, 
Israel is established with support from the United States and 
overwhelming Arab opposition. 

Summary: Saudi Arabia allies with the United States in fighting 
communism; 
Date: 1950s; 
Description: U.S. and Saudi governments pursue 
some common national security objectives, including combating the 
global spread of communism. U.S. administrations consider the Saudi 
monarchy as an ally against nationalist and socialist governments in 
the Middle East. 

Summary: First U.S. military training mission organized under the terms 
of the U.S. and Saudi mutual defense assistance agreement; 
Date: 1953; 
Description: United States provides military training assistance to 
Saudi Arabia under the terms of the Defense Assistance Act of 1949 and 
the Mutual Security Act of 1951. 

Summary: First multilateral charitable organization founded in Saudi 
Arabia; 
Date: 1960s; 
Description: The Muslim World League, one of 
several multilateral charitable organizations, is established with 
headquarters in Saudi Arabia to promote Islam and extend economic aid 
to Muslim nations. 

Summary: Oil production creates great wealth in Saudi Arabia; 
Date: 1970s; 
Description: Oil production in the 1970s makes Saudi Arabian per 
capita income comparable to that of other developed countries. As the 
price of oil rises, Saudi Arabia's wealth and political influence 
increase. 

Summary: Iran is established as an Islamic state; Soviets invade 
Afghanistan; Extremists attack Grand Mosque in Mecca; 
Date: 1979; 
Description: The Islamic Republic of Iran is established after the 
ouster of the Shah, signaling the rise of political Islam as a 
challenge to existing regimes in the region. The Soviet army invades 
Afghanistan in December, prompting opposition from some Arab 
governments as well as from the United States and its allies. 
Religious extremists seize the Grand Mosque of Mecca; the Saudi 
government regains control and executes the perpetrators. 

Summary: Saudi Arabia and United States aid the mujahideen against the 
Soviets in Afghanistan; 
Date: 1980s; 
Description: Volunteers from some Muslim countries, including Saudi 
Arabia, join the Afghan mujahideen (the name given to Afghan resistance 
fighters) in their fight against the Soviets. The United States and 
Saudi Arabia play a leading role in supporting the mujahideen. 

Summary: United States establishes military installations in Saudi 
Arabia; 
Date: 1991; 
Description: The United States establishes military installations in 
Saudi Arabia during the U.S.-led and Saudi-supported ouster of the 
Iraqi army from Kuwait. The bases draw intense opposition from Al 
Qaeda, which was founded 3 years earlier. 

Summary: Bombing of the World Trade Center kills 6; 
Date: 1993; 
Description: Terrorists, some with links to Al Qaeda, use a car bomb to 
attack the World Trade Center in New York City killing 6 people and 
injuring 1,042. 

Summary: Saudi government strips Osama bin Laden of citizenship; 
Islamists arrested in Saudi Arabia; 
Date: 1994; 
Description: Citing his support of extremist movements, Saudi Arabia 
strips Osama bin Laden of Saudi citizenship. Saudi authorities arrest 
hundreds of Islamists who have been openly critical of the Saudi 
government. 

Summary: Terrorist attack in Saudi Arabia kills 5 Americans; 
Date: 1995; 
Description: Saudi terrorists use a truck bomb to attack the Riyadh 
headquarters of the U.S.-operated training center of the Saudi 
National Guard resulting in the death of 5 Americans, among others. 

Summary: Bombings in Saudi Arabia kill 19 Americans; 
Date: 1996; 
Description: Terrorist bombings at U.S. military complex in Khobar, 
eastern Saudi Arabia, kill 19 Americans and wound many others. The 
attack is conducted by Saudi Hizaballah. 

Summary: Saudi Arabia recognizes the Taliban regime in Afghanistan; 
Date: 1997; 
Description: The Taliban rise to power in Afghanistan in 
1996, imposing a strict interpretation of Islamic law on Afghan 
society. In 1997, Saudi Arabia becomes one of three countries to 
recognize the Taliban regime. 

Summary: UN Security Council adopts Resolution 1267; 
Date: 1999; 
Description: The United Nations Security Council adopts Resolution 1267 
imposing financial and other sanctions applying to individuals and 
entities associated with Al Qaeda, Osama bin Laden, and/or the 
Taliban. 

Summary: Start of the Palestinian uprising strains U.S.-Saudi 
relations; Attack on USS Cole; 
Date: 2000; Description: Dissatisfaction in Saudi Arabia and many parts 
of the Arab world with U.S. policies related to the second Palestinian 
intifada (or uprising). Frustrated by a lack of U.S. response to 
Israeli-Palestinian violence, in a letter to President Bush in 2001, 
Saudi Crown Prince Abdullah warns of a serious rift between the two 
governments. Al Qaeda attack on the USS Cole harbored in Yemen kills 17 
American soldiers. 

Summary: Al Qaeda attacks United States; Saudi Arabia condemns 
September 11th attacks on the United States; U.S. and allied forces 
attack the Taliban and Al Qaeda in Afghanistan; 
Date: 2001; 
Description: On September 11th, the World Trade Center in New York and 
the Pentagon in Washington, D.C. are the targets of terrorist attacks, 
and a hijacked plane crashes in Pennsylvania. The attacks are carried 
out by 19 Al Qaeda hijackers, including 15 Saudi nationals. Saudi 
Arabia condemns the attack and withdraws its official recognition of 
the Taliban government in Afghanistan, which is an ally of Al Qaeda. 
U.S. forces, along with those of several allies and Afghanistan's 
Northern Alliance, topple the Taliban regime and remove the safe haven 
for Al Qaeda in Afghanistan. Some Al Qaeda survivors return to their 
countries of origin, including Saudi Arabia. 

Summary: United States begins military operations in Iraq; Major 
terrorist incidents in Saudi Arabia; 
Date: 2003; Description: The United States and its coalition of allies 
begin military operations in Iraq in March. Saudi Arabia publicly 
opposes the U.S.-led invasion of Iraq, but reportedly allows the U.S.-
led forces the use of military facilities in the Kingdom in support of 
operations in Iraq. However, virtually all U.S. troops are withdrawn 
from the Kingdom by August. Several terrorist incidents in Saudi 
Arabia, including attacks in May and November on residential compounds, 
kill dozens of people. 

Summary: Iraqi insurgency attracts foreign fighters, including Saudis; 
Date: 2003 to present; 
Description: Iraqi insurgency attracts foreign fighters, including 
Saudi nationals. 

Summary: Escalation in terrorist attacks in Saudi Arabia and Saudi 
government retaliation; 
Date: 2004; 
Description: A series of terrorist attacks throughout Saudi Arabia 
results in dozens of victims. The targets include Saudi Arabia's oil 
infrastructure and the U.S. Consulate in Jeddah. Saudi security forces 
intensify their antiterrorist campaign, with casualties on both sides, 
including Abdulaziz al-Mughrin, the head of Al Qaeda in Saudi Arabia. 

Source: GAO. 

[End of table] 

[End of section] 

Appendix III: Saudi Ministries and Agencies that Have Functions Related 
to Countering Terrorism and Terrorism Financing: 

Saudi ministries and agencies: Ministry of Interior; 
Description: 
Primary ministry responsible for efforts to combat terrorism and 
terrorism financing. It has issued "most wanted" list of terrorists and 
its security forces have killed or arrested terrorist suspects. The 
ministry also includes investigative units and oversees the Saudi 
rehabilitation program for terrorism suspects. The ministry oversees 
public security, coast guards, civil defense, fire stations, border 
police, and special security and investigative functions, including 
criminal investigation. 

Saudi ministries and agencies: Saudi Arabian Financial Investigation 
Unit; 
Description: This unit, which is within in the Ministry of 
Interior, was created in 2005 and tasked with handling money laundering 
and terror finance cases. All banks are required to file suspicious 
transaction reports with this unit. It collects and analyzes these 
reports and other available information and makes referrals to relevant 
Saudi agencies, including the Mabahith for further investigation and 
prosecution. 

Saudi ministries and agencies: Mabahith; 
Description: Also referred to as the General Investigation Directorate, 
it investigates cases related to terrorism, among other activities. 

Saudi ministries and agencies: Saudi Arabian Monetary Agency; 
Description: Serves as the central bank of the Kingdom of Saudi Arabia. 
It plays a central role in overseeing all anti-money laundering and 
combating financing of terrorism programs and supervises all banking, 
securities, and insurance activities in the country. 

Saudi ministries and agencies: Ministry of Foreign Affairs; 
Description: Oversees political, cultural, and financial international 
relations; monitors diplomatic relations. Signs bilateral agreements, 
including those related to counterterrorism, and coordinates efforts 
with other governments. 

Saudi ministries and agencies: Ministry of Finance; 
Description: Oversees government finance, including budgeting and 
expenditure of all ministries and agencies; controls national economic 
growth, zakat, income tax, and customs. 

Saudi ministries and agencies: Ministry of Islamic Affairs, Endowments, 
Call and Guidance; 
Description: Oversees all Islamic affairs, including maintenance of 
mosques and monitoring of clerics. The ministry is reported to have 
dismissed a large number of extremist clerics and sent them to be 
reeducated. 

Saudi ministries and agencies: Ministry of Education; 
Description: Oversees all schools, including physical infrastructure 
and curriculum. One of its priorities is to increase awareness and 
religious tolerance among teachers. 

Source: GAO summary of Saudi government information. 

[End of table] 

[End of section] 

Appendix IV: U.S. Agencies Providing Training and Technical Assistance 
to Saudi Arabia, 2005-2008: 

U.S. agency: Department of Defense (DOD); 
Associated activities: 
* Along with State and DOE, assists the Saudi government with the 
protection of critical infrastructure assets, such as oil 
installations, through the Office of Program Management-Ministry of 
Interior (OPM-MOI)--a U.S.-Saudi joint organization. 

U.S. agency: Department of Energy (DOE); 
Associated activities: 
* Along with DOD and State, assists the Saudi government with the 
protection of critical infrastructure assets, such as oil 
installations, through OPM-MOI. DOE has provided training to Saudi 
officials on conducting facilities assessments, as well as performed 
joint assessments of key facilities. 

U.S. agency: Department of Homeland Security; 
Associated activities: 
* Provided training to Saudi Customs officials on interdiction and 
investigation related to bulk cash smuggling. 

U.S. agency: Department of Justice; 
Associated activities: 
* Provided training to Saudi officials, through the Federal Bureau of 
Investigation, on financial investigation techniques. 

U.S. agency: Department of State (State); 
Associated activities: 
* Leads the U.S. Mission in Saudi Arabia; 
* Provided training to Saudi government officials related to building 
investigative capability and consulted on oil installation security; 
* Along with DOD and DOE, assists the Saudi government with the 
protection of critical infrastructure assets, such as oil 
installations, through OPM-MOI. 

U.S. agency: Department of the Treasury; 
Associated activities: 
* Through the Financial Crimes Enforcement Network, provided training 
to, and conducted assessments of, the Saudi Arabian Financial 
Investigation Unit; 
* Through Internal Revenue Service-Criminal Investigations, provided 
training to Saudi officials on financial investigation techniques. 

U.S. agency: Intelligence community; 
Associated activities: 
* Engages in information sharing with Saudi ministries. 

Source: GAO analysis of U.S. agency information. 

[End of table] 

[End of section] 

Appendix V: Comments from the Department of State: 

United States Department of State: 
Washington, D.C. 20520: 

September 14, 2009: 

Ms. Jacquelyn Williams-Bridgers: 
Managing Director: 
International Affairs and Trade: 
Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548-0001: 

Dear Ms. Williams-Bridgers: 

We appreciate the opportunity to review your draft report, "Combating 
Terrorism: U.S. Agencies Report Progress Countering Terrorism and Its 
Financing in Saudi Arabia, but Continued Focus on Counter Terrorism 
Financing Efforts Needed," GAO Job Code 320592. 

The enclosed Department of State comments are provided for 
incorporation with this letter as an appendix to the final report. 

If you have any questions concerning this response, please contact Josh 
Harris, Desk Officer, Near Eastern Affairs at (202) 647-7750. 

Sincerely, 

Signed by: 

James L. Millette: 

cc: 
GAO - Mona Sehgal: 
NEA - Jeffrey Feltman: 
State/OIG - Mark Duda: 

[End of letter] 

Department of State Comments on GAO Draft Report: 

Combating Terrorism: U.S. Agencies Report Progress Countering Terrorism 
and its Financing in Saudi Arabia, but Continued Focus on Counter 
Terrorism Financing Efforts Needed (GAO-09-883, GAO Code 320592): 

The Department of State appreciates the opportunity to comment on GAO's 
draft report entitled Combating Terrorism: US. Agencies Report Progress 
Countering Terrorism and its Financing in Saudi Arabia, but Continued 
Focus on Counter Terrorism Financing Efforts Needed. 

The GAO report recommends the following to the Secretary of State: 

Recommendation: We recommend that the Secretary of State direct the 
U.S. mission in the Kingdom of Saudi Arabia to reinstate, in 
consultation with relevant U.S. agencies, performance measures related 
to preventing the flow of alleged financial support, through mechanisms 
such as cash couriers, to terrorists and extremists outside Saudi 
Arabia. 

Response: The Department concurs that, although Saudi Arabia has made 
considerable progress in the fight against terrorism and violent 
extremism, more work remains to be done in the critical area of terror 
financing. To that end, the Department continues to support close 
cooperation with the Saudi authorities to prevent the flow of funds 
from private donors inside Saudi Arabia to extremist groups outside the 
Kingdom. The Department agrees with the recommendation and will 
instruct U.S. Embassy Riyadh, in consultation with key interagency 
partners, to ensure that the Mission Strategic Plan reflect the 
continued importance of cooperation to combat terror financing, 
including by reinstating performance indicators relating to Saudi 
enforcement of cash courier regulations. 

[End of section] 

Appendix VI: Comments from the Department of Defense: 

Office Of The Assistant Secretary Of Defense: 
Special Operations, Low-Intensity Conflict, and Interdependent 
Capabilities: 
2500 Defense Pentagon: 
Washington, D.C. 20301-2500: 

September 10, 2009: 

Ms. Janet A. St. Laurent: 
Managing Director, Defense Capabilities and Management: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548: 

Dear Ms. St. Laurent: 

This is the Department of Defense (DoD) response to the GAO Draft 
Report GAO-09-883, `Combating Terrorism: U.S. Agencies Report Progress 
Countering Terrorism and Its Financing in Saudi Arabia, but Continued 
Focus on Counter Terrorism Financing Efforts Needed,' dated August 28, 
2009, (GAO Code 320592). The Department has reviewed and concurs with 
the GAO report. 

SO/LIC&IC recognizes the tremendous scope of the GAO engagement subject 
and applauds the effort of the GAO study team to highlight the 
terrorism threats our Nation faces. DoD appreciates the opportunity to 
comment on the GAO draft report. 

Sincerely, 

Signed by: 

Garry P. Reid: 
Deputy Assistant Secretary of Defense for Special Operations: 
Combating Terrorism: 

[End of section] 

Appendix VII: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Zina D. Merritt, (202) 512-5257 or merrittz@gao.gov: 

Staff Acknowledgments: 

In addition to the person named above, Jason Bair (Assistant Director), 
Ashley Alley, Alexandra Bloom, Joe Carney, Tom Costa, Martin de 
Alteriis, Mark Dowling, Jonathan Fremont, Etana Finkler, Phillip Farah, 
Joel Grossman, Julia Jebo, Charles M. Johnson, Jr., Bruce Kutnick, 
Elizabeth Repko, Mona Sehgal, and James Strus made key contributions to 
this report. Elizabeth Curda, Davi D'Agostino, Muriel Forster, Barbara 
Keller, Eileen Larence, Armetha Liles, Sarah McGrath, and Theresa 
Perkins also provided technical assistance. 

[End of section] 

Related GAO Products: 

Combating Terrorism: Actions Needed to Enhance Implementation of Trans-
Sahara Counterterrorism Partnership. [hyperlink, 
http://www.gao.gov/products/GAO-08-860]. Washington, D.C.: 
July 31, 2008. 

Combating Terrorism: The United States Lacks Comprehensive Plan to 
Destroy the Terrorist Threat and Close the Safe Haven in Pakistan's 
Federally Administered Tribal Areas. [hyperlink, 
http://www.gao.gov/products/GAO-08-622]. Washington, D.C.: 
April 17, 2008. 

Combating Terrorism: State Department's Antiterrorism Program Needs 
Improved Guidance and More Systematic Assessments of Outcomes. 
[hyperlink, http://www.gao.gov/products/GAO-08-336]. Washington, D.C.: 
February 29, 2008. 

Combating Terrorism: Law Enforcement Agencies Lack Directives to Assist 
Foreign Nations to Identify, Disrupt, and Prosecute Terrorists. 
[hyperlink, http://www.gao.gov/products/GAO-07-697]. Washington, D.C.: 
May 25, 2007. 

Terrorist Financing: Agencies Can Improve Efforts to Deliver Counter-
Terrorism-Financing Training and Technical Assistance Abroad. 
[hyperlink, http://www.gao.gov/products/GAO-06-632T]. Washington, D.C.: 
April 6, 2006. 

Terrorist Financing: Better Strategic Planning Needed to Coordinate U.S 
Efforts to Deliver Counter-Terrorism Financing Training and Technical 
Assistance Abroad. [hyperlink, http://www.gao.gov/products/GAO-06-19]. 
Washington, D.C.: October 24, 2005. 

International Affairs: Information on U.S. Agencies' Efforts to Address 
Islamic Extremism. [hyperlink, http://www.gao.gov/products/GAO-05-852]. 
Washington, D.C.: September 16, 2005. 

Border Security: Strengthened Visa Process Would Benefit from 
Improvements in Staffing and Information Sharing. [hyperlink, 
http://www.gao.gov/products/GAO-05-859]. Washington, D.C.: September 
13, 2005. 

Border Security: Actions Needed to Strengthen Management of Department 
of Homeland Security's Visa Security Program. [hyperlink, 
http://www.gao.gov/products/GAO-05-801[. Washington, D.C.: July 29, 
2005. 

Terrorist Financing: U.S. Agencies Should Systematically Assess 
Terrorists' Use of Alternative Financing Mechanisms. [hyperlink, 
http://www.gao.gov/products/GAO-04-163]. Washington, D.C.: November 14, 
2003. 

Combating Terrorism: Interagency Framework and Agency Programs to 
Address the Overseas Threat. [hyperlink, 
http://www.gao.gov/products/GAO-03-165]. Washington, D.C.: May 23, 
2003. 

[End of section] 

Footnotes: 

[1] The National Commission on Terrorist Attacks upon the United States 
is an independent bipartisan entity created by the Congress. 

[2] Implementing Recommendations of the 9/11 Commission Act of 2007, 
August 3, 2007 (Pub. L. No. 110–53, Sec. 2043). 

[3] GAO, International Affairs: Information on U.S. Agencies’ Efforts 
to Address Islamic Extremism, [hyperlink, 
http://www.gao.gov/products/GAO-05-852] (Washington, D.C.: Sept. 16, 
2005). 

[4] GAO, Terrorist Financing: Better Strategic Planning Needed to 
Coordinate U.S. Efforts to Deliver Counter-Terrorism Financing Training 
and Technical Assistance Abroad, [hyperlink, 
http://www.gao.gov/products/GAO-06-19] (Washington, D.C.: Oct. 24, 
2005). 

[5] The annual pilgrimage of hajj is one of the five pillars of Islam 
and required to be undertaken by all Muslims who are physically and 
financially able to do so at least once in their lifetime. Another 
pilgrimage to Mecca is called the umrah, which, unlike the hajj, can
be undertaken at any time of the year and is not considered compulsory. 

[6] Islam has five pillars or duties required of all observant Muslims. 
These duties are: (1) shahada (profession of monotheistic faith), (2) 
salat (praying five times a day), (3) zakat (charitable giving), (4) 
sawm (fasting annually as a religious observance), and (5) hajj 
(pilgrimage to Mecca). 

[7] Muhammad bin Abdul Wahhab called for a return to the fundamentals 
of Islam as embodied in the Quran, Islam’s holy book, and life of the 
Prophet Mohammad. 

[8] In contrast, according to World Bank reporting, from 1980 to 1992 
Saudi Arabia’s gross national product per capita declined on average by 
3.3 percent annually. 

[9] For more information on U.S.-Saudi relations, also see 
Congressional Research Service, Saudi Arabia: Background and U.S. 
Relations, August 13, 2009. 

[10] Muslims from many countries, including Saudi Arabia, joined the 
Afghan mujahideen as an expression of their religious solidarity as 
well as to fight communism. 

[11] [hyperlink, http://www.gao.gov/products/GAO-05-852]. 

[12] Saudi officials and counterterrorism experts told us that those 
attracted to extremism tend to be young adult males. 

[13] For more information on Saudi Arabia-related terrorism financing 
issues, see Congressional Research Service, Saudi Arabia: Terrorist 
Financing Issues, June 11, 2008. 

[14] United Nations (UN) Security Council resolution 1267 (Oct. 15, 
1999) led to the establishment of a committee that created a list of 
individuals and entities designated for their association with Al 
Qaeda, Osama bin Laden, and/or the Taliban. 

[15] In this report, we focus on U.S. agency efforts to collaborate 
with Saudi Arabia between 2005 and 2009. GAO previously reported (GAO-
05-852) on U.S. agencies’ assistance to Saudi Arabia in 2005. 

[16] U.S. Department of State, U.S. Strategy Toward Saudi Arabia, 
Report Pursuant to Section 2043(c) of the Implementing Recommendations 
of the 9/11 Commission Act, P.L. 110-53, January 30, 2008, p. 1. 

[17] Pub. L. No. 110–53, Sec. 2043(c). 

[18] In this report we did not review the other aspects of the 
strategy, such as broader political, social, and economic reforms in 
Saudi Arabia and U.S. efforts related to the visa lookout system. For 
more information on the processing of visas in Saudi Arabia, see GAO,
Border Security: Strengthened Visa Process Would Benefit from 
Improvements in Staffing and Information Sharing, [hyperlink, 
http://www.gao.gov/products/GAO-05-859] (Washington, D.C.: Sept. 13, 
2005). 

[19] The Director of National Intelligence serves as the head of the 
intelligence community and acts as the principal advisor to the 
President, the National Security Council, and the Homeland Security 
Council for intelligence matters related to national security. 

[20] U.S. officials provided us their assessment of progress related to 
performance targets from fiscal years 2006 to 2008. Since activities 
for fiscal year 2009 were still being implemented at the time of this 
review, U.S. officials provided us an assessment of progress through 
August 2009. 

[21] For the purposes of this report, we define “support” as financial 
assistance or nonfinancial assistance, which may include individuals, 
such as those who go abroad as foreign fighters, and materials, such as 
weapons. For a detailed description of “support” see 18 U.S.C. 
2339A(b). 

[22] State told us that the success of an attack is measured by whether 
or not it meets its objective. In this case, the Prince was not killed, 
which presumably was the objective of the attack. 

[23] According to a Saudi government press release, the 330 suspects 
tried in courts included 41 non-Saudis. Of the 323 people who were 
convicted, 13 were sentenced to prison terms of over 20 years. 

[24] In November 2005, the U.S. and Saudi governments instituted the 
Strategic Dialogues, including a working group on counterterrorism. 
According to State, the Strategic Dialogues constitute a high-level and 
institutionalized forum for coordination of U.S.-Saudi interests. State 
officials told us that the Strategic Dialogues have not met since 2006. 
In place of these meetings, U.S. and Saudi officials told us several 
high-level U.S. officials visited Saudi Arabia, such as the Assistant 
to the President for Homeland Security and Counterterrorism and the 
Under Secretary for Terrorism and Financial Intelligence. Moreover, 
U.S. officials told us that, even though meetings of the Strategic 
Dialogues have not occurred, cooperation and coordination between the 
U.S. and Saudi governments has expanded significantly since 2006, 
especially in the area of counterterrorism. 

[25] State documents describe the Abqaiq oil facility as the most 
important oil processing facility in Saudi Arabia. 

[26] According to the DOE, in 2008 Saudi Arabia produced about 9.3 
million barrels of oil per day, making it the world’s second largest 
oil producer. 

[27] The 2-day Culture of Peace conference was sponsored by Saudi 
Arabia and held at the UN headquarters in New York City. 

[28] State has reported that while the Grand Mufti is not part of the 
Saudi government, he is the most senior religious scholar in Saudi 
Arabia and is influential in shaping Saudi public opinion. 

[29] Although we were provided literature produced by the Saudi 
government to combat extremism, we did not verify the extent of its use 
and distribution within the Kingdom. 

[30] Saudi officials estimated the number of large mosques holding 
Friday prayers to be 14,000. 

[31] The rehabilitation programs in Saudi prisons started in 2004, 
while the first aftercare center started in 2007. Other aftercare 
centers are under construction. 

[32] These experts stated that while initial results after the first 2 
years look promising, recidivism rates for criminology programs are 
generally measured for a 5-year period to accurately assess the success 
of a program. 

[33] The rehabilitation programs have yet to receive the final Saudi 
detainees from Guantanamo. According to Saudi officials, as of July 
2009, 11 Saudi men remain in Guantanamo. Saudi officials told us these 
men have been in Guantanamo for nearly 8 years and represent the most 
difficult cases for rehabilitation. 

[34] Over the past few years, in addition to increased terror attacks 
by Al Qaeda, the government of Yemen has faced a growing insurgency in 
the north and civil unrest in the south. 

[35] In addition, the embassy’s MSP contains a performance target for 
fiscal year 2009 related to Saudi-Yemeni cooperation on capturing and 
repatriating extremists. 

[36] After it analyzes reports, the Saudi FIU refers money laundering 
cases to the Saudi Bureau of Investigation and Prosecution and 
terrorism financing cases to the Mabahith (or the General Investigation 
Directorate), as necessary. Saudi officials estimated that 
approximately 5 percent of the suspicious transaction reports they 
receive pertain to terrorism financing. 

[37] A core goal of the Egmont Group is to facilitate information 
sharing between member FIUs, and its members are given access to a 
secure private Web site on which to share information. 

[38] The United States was a sponsor of Saudi Arabia for Egmont 
membership. 

[39] The Saudi guidelines were issued in accordance with the Financial 
Action Task Force’s (FATF) 40 Recommendations on Money Laundering and 9 
Special Recommendations on Terrorist Financing. 

[40] Financial Action Task Force on Money Laundering, Annual Report 
2003-2004, Annex C, “Kingdom of Saudi Arabia: Executive Summary - FATF 
Recommendations for Anti-Money Laundering and Combating the Financing 
of Terrorism.” 

[41] The assessment found that Saudi Arabia was not compliant with the 
FATF benchmarks in three areas, and noted (1) a clear definition of 
terrorism financing is required to ensure that it is an offense if the 
funds are intended for terrorist use, or derived from a legal source; 
(2) information requests must currently be routed via SAMA, which may 
cause delays; and (3) there is a need to strengthen customer 
identification measures for nonbank financial institutions. In 2009, 
members of the FATF and the Middle East North African FATF Style 
Regional Body conducted another assessment of Saudi Arabia’s financial 
system. U.S. officials told us the results of this assessment would not 
be available until 2010. 

[42] In 2009, State updated its fiscal year 2009 MSP target related to 
UN 1267 to include specific language regarding Saudi enforcement of UN 
1267 travel ban provisions. 

[43] Additionally, according to State, for over 20 years, the Saudi 
government has had regulations requiring all charities to be licensed, 
registered, and audited by the Saudi Ministry of Social Affairs. 

[44] In the INCSR, it is not clear to which organizations the term 
“international charities” applies. 

[45] Between 2002 and 2004, the United States designated branches in 
Afghanistan, Albania, Bangladesh, Bosnia & Herzegovina, Comoros 
Islands, Ethiopia, Indonesia, Kenya, Netherlands, Pakistan, Somalia, 
Tanzania, and the United States. 

[46] The UN 1267 Committee has designated some, but not all, branches 
of Al Haramain Foundation. 

[47] Officials from World Assembly of Muslim Youth stated they would 
prefer a regulatory system that would allow them to more easily 
transfer money to their affiliates abroad, instead of a complete ban on 
the transfer of charitable contributions outside of Saudi Arabia via 
the formal financial system. The officials noted that having to pay 
cash couriers and local contractors results in less funds being 
available for projects. 

[48] By comparison, each individual arriving into the United States is 
required to declare monetary instruments, such as cash, traveler’s 
checks, or money orders, valued at $10,000 or more. 

[49] Hawalas are informal banking systems that allow the transfer of 
funds, both domestically and internationally, without the use of the 
formal financial institutions. 

[50] Treasury officials did not cite an estimated amount of funding 
from Saudi-based individuals to Al Qaeda and associated terror groups. 

[End of section] 

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