O 291146Z MAY 09
FM AMEMBASSY RIYADH
TO SECSTATE WASHDC IMMEDIATE 0864
INFO AMEMBASSY ISLAMABAD IMMEDIATE 
AMEMBASSY KABUL IMMEDIATE

C O N F I D E N T I A L RIYADH 000716

EO 12958 DECL: 05/22/2019
TAGS PREL, PTER, EFIN, AF, PK, SA
SUBJECT: SAUDI INTERIOR MINISTRY BRIEFS SPECIAL ADVISOR
HOLBROOKE AND TREASURY DAS GLASER ON TERRORISM FINANCE

REF: RIYADH 702 

Classified By: CDA DAVID RUNDELL, 1.4 (b),(d) 

¶1. Key points: 

-- (SBU) Special Advisor Ambassador Richard Holbrooke and 
Treasury DAS Glaser were briefed on Saudi terror finance 
efforts at a May 16 meeting with Interior Ministry (MOI) 
officials at the Security Forces Officers Club in Riyadh. 
Holbrooke also received a briefing on Saudi counterterrorism 
strategies (reftel). 
-- (SBU) Saudi Arabia will join the Egmont Group by the end 
of May 2009. 
-- (C) Holbrooke pushed for stronger cooperation in pursuing 
sources of funding for the Taliban, particularly in the Gulf 
States. 
-- (C) The Hajj is still a major security loophole for the 
Saudis, since pilgrims often travel with large amounts of 
cash and the Saudis cannot refuse them entry into Saudi 
Arabia. A new Saudi law requires arriving travelers to 
declare cash over certain amounts. 
-- (C) The MOI is concerned about funds flowing to Hizballah 
from the Saudi Shi'a community. 
-- (C) The political situation in Pakistan affects MOI's 
intelligence cooperation with Pakistan's ISI. 


New saudi fiu promises better cooperation 

¶2. (C) The briefing was delivered by officials from the 
MOI's new Financial Intelligence Unit (FIU). They said the 
Saudi FIU's mission is to cooperate with all other 
authorities to combat money laundering and terrorism finance, 
and outlined the divisions of FIU and their responsibilities 
to receive, analyze, investigate, and act upon reports of 
terrorist finance activities in concert with other Saudi 
financial and law enforcement agencies. The FIU had a budget 
of $31 million in 2008. 

¶3. (C) Holbrooke asked how the U.S. was working with the new 
FIU. DAS Glaser said FIU cooperation will enable Saudi 
Arabia to plug into the global terror finance context. The 
U.S. has tested the Saudi system with three requests and has 
received a good response. Glaser added that Saudi success in 
rolling up domestic terror cells has had a positive impact 
but the need now was to target financial donors and networks 
that channel the funds to AQ and the Taliban. The daily work 
of exchanging information with Saudi Arabia was going well. 

¶4. (C) Holbrooke asked whether the relationship could be 
further improved. The Saudis replied that Saudi Arabia would 
join the Egmont Group by the end of May 2009. Holbrooke said 
terrorists exploit the seams between countries such as 
borders, free trade zones, and international networks such as 
Hawala systems, and that in this respect drug proceeds were 
not the primary source of funds for the Taliban; rather 
private donations from the Gulf were the chief source of 
Taliban financing. This indicated the need for a new level 
of cooperation, he said, to address funds flowing from the 
Gulf to the Taliban, AQ, and South Asian terrorist groups. 
In particular, the UAE, Pakistan, and the UK must be on board. 

¶5. (C) MOI counterterrorism advisor xxxxxxxxxxxx
said Saudi Arabia was working to create a 
"coherent plan" on terrorist finance that included 
establishing a legal basis for taking action against 
financiers. The MOI had no problem targeting organizations, 
he said, but preferred to go after financiers on an 
individual basis: "the bad apples, not the whole barrel," he 
said. With the FIU in place, he said, the MOI would be 
better able to "turn leads into tangible evidence" and follow 
up with counterpart authorities in other countries. "We used 
to call Dubai the 'Black Hole'," of terrorist finance, he 
said. Glaser agreed with the need for a comprehensive 
strategy. He said he understood the Saudi approach to focus 
on individuals rather than organizations, but there was 
another more common model that focused on organizations as 
part of a broader terrorist network. 


Hajj, hizballah, and pakistan 

¶6. (C) MOI Senior Advisor xxxxxxxxxxxx
said the Saudi approach was based on the fact that Saudi 
Arabia had been in a war and had to act. Saudi authorities 
had detained over 4,000 individuals, some of whom were 
suspected of terrorist financing offenses and would act if 
supplied with information. Hajj was still a big problem for 
the Saudis, since they could not refuse to let pilgrims enter 
the country. Some of the non-Saudi terrorism detainees in 
Saudi Arabia had entered as pilgrims. The Saudi government 
recently passed a law requiring arriving travelers to declare 
cash above a certain amount, but Hajj was still "a vacuum in 
our security," he admitted. Another problem was money going 
to Hizballah from Saudi Shiites. The Saudis' focus had been 
on funds from Sunni sources, but they needed to focus on the 
Shi'a too,xxxxxxxxxxxx said. 

¶7. (C) Holbrooke noted that Pakistan was also a center for 
terrorist financing through Islamic charities and asked 
whether the Saudis were monitoring the large Pakistani 
community in Saudi Arabia, and whether the Saudis were 
consulting with the governments of Pakistan, India, and 
Bangladesh about the issue. xxxxxxxxxxxx said the Saudis had 
detained numerous individuals from these countries and were 
seeking cooperation to investigate their activities. He 
added that "we talk to ISI (Pakistan's intelligence agency) 
and get a good response, but we think ten times before 
approaching them; things are changing there and we are 
advised to be careful." Political unrest and new ISI 
leadership were the principal changes, he said. As a result, 
he concluded, "We only trust face-to-face transmission of 
information." The MOI had shared information with ISI on 
Pakistanis in Saudi Arabia suspected of terror finance, but 
ISI had not responded. 


Don't forget iran 

¶8. (C) Holbrooke asked whether the Taliban still found 
support in Saudi Arabia. xxxxxxxxxxxx answered that support 
from Saudi Arabia was less than it had been in earlier years, 
such as the 1980s, but was still present. Holbrooke asked 
about Iran, and xxxxxxxxxxxx replied that in the Saudi view, 
Iran was a "serious contributor" to terrorism activities in 
many places, including Yemen, North Africa, and Latin 
America. 

¶9. (C) Holbrooke concluded by assuring his hosts of the U.S. 
commitment to cooperation on fighting terrorism and for 
better relations with the Muslim world. 

¶10. (U) Meeting participants 

U.s. 

Special Advisor Ambassador Richard Holbrooke 
Barnett Rubin, Senior Advisor 
Dan Glaser, Deputy Assistant Secretary of the Treasury 
David Rundell, Charge d'Affaires 
Andrew Roth, Embassy Riyadh 
Edwin Brown, Embassy Riyadh (notetaker) 
Jeff Smith, Embassy Riyadh 

Saudi Arabia 

xxxxxxxxxxxx, Ministry of 
the Interior 

Major General xxxxxxxxxxxx, 
xxxxxxxxxxxx
Ministry of the Interior 

xxxxxxxxxxxx, Ministry of 
the 
Interior 

xxxxxxxxxxxx
FIU briefers 

¶11. (U) Amb. Holbrooke cleared this telegram. 

Rundell