Congressional Record, Volume 150 Issue 123 (Monday, October 4, 2004)

[Congressional Record Volume 150, Number 123 (Monday, October 4, 2004)]
[House]
[Pages H8015-H8031]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

TO CAST ASIDE A FRIEND

The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 2003, the gentleman from California (Mr. Cunningham) is
recognized for half the time before midnight, approximately 30 minutes.
Mr. CUNNINGHAM. Mr. Speaker, I am not going to talk about spending,
deficits, taxes, Democrats, Republicans. I am going to do something a
little different on the floor. I will talk about a vision for world
peace. And the title is ``To Cast Aside a Friend,'' maybe a little
different perspective on Saudi Arabia.
There was a speech in which the individual talked about a Saudi
businessman who was talking about the murderous events on September 11.
We know it as 9/11. The Saudi was worried about the derailment of the
partnership and alliance that Saudi Arabia and the United States have
enjoyed over the past 60 years for the betterment of a free world, both
for Saudi Arabia and for the United States.
I recently visited Saudi Arabia for a couple of weeks, and I want to
talk a little bit about what I found there, the support for the United
States but yet some of the anger towards the United States, not hatred,
but anger.
There has been a fire storm of criticism against Saudi Arabia in the
months since 9/11, and the relationships between Saudi Arabia and the
United States has been condemned and vilified. I believe Saudi Arabia
remains a valuable ally to the United States. The detractors will say
that Saudi Arabia is an incubator for terrorism simply because many
were Saudis on that flight during 9/11, and they were citizens.
The individuals to whom I spoke in the cabinet and the Shura council,
which is like the Congress of the United States, were in disbelief when
they were told that Saudis were on that airplane. One of the reasons
that some of the people who were reported on those airplanes were still
walking around Saudi Arabia, so they said, no, it cannot be. It is
misinformation. And when it was proven that it was, they were in
disbelief.
If you have a gang of thugs in a city, it does not represent the
mainstream of that city. And I found through the citizens I was able to
speak to, businessmen, to teachers, to almost every cabinet member, to
the Shura council, to women in universities and colleges in Saudi
Arabia, and I found nothing but support for the United States, and a
lot want to keep the relationship and better the relationship.
Osama bin Laden was targeting Saudi Arabia, not just the United
States, and more specifically, he was targeting the relationship
between the two countries by using Saudis as hijackers in 9/11. We know
he could have used dozens of different nationalities on those
airplanes, but Osama bin Laden wants to bring down the Saudi regime
which condemned and expelled him years before.
Second, the disparagers will say that Saudi Arabia is an incubator of
terrorism because of school systems.
I will be including this because I do not have time tonight to read
the whole thing, but it goes into talk about the bank system, the
lending system and how Saudis have shut down terrorism.
I would like to first cover what I found about education. We had
about 20,000 Saudi Arabian students in the United States before 9/11.
One of the fathers sent his son back. He was a senior in college. And
after 9/11 he went through the airplane, and INS saw that he was a
Saudi student, held up his visa and made the statement, ``Okay, smile
for me like a terrorist.''
This is the inhumane treatment that many of the students and the ill
treatment that people from the Mideast are receiving when they come
back into the United States. So when I say anger by the Saudis, not
hate, in some cases, I believe it is justified.
I have an individual in my district. He has been an American citizen
for many, many years. His brother still lives in Saudi Arabia. His
brother's son, named Bater, came through the airport as he had many,
many times to come back to school within the United States. He ended up
on some list. No one was able to find out what list or why that list
existed.
Upon arrival, he was put in handcuffs and shackled, his legs shackled
like a common criminal. He was held at the airport and shipped back to
Riyadh. No explanation. When he got back to Riyadh, guess what? The
United States found out that the allegations were not true.
Now, can you imagine how my constituent's brother treated him when he
came back to Saudi Arabia? He still loves the United States. The son,
Bater, loves the United States. But would there be anger? If it was my
son, you bet.
These are the kinds of things that Secretary Colin Powell is working
on to find out, how do we allow the students to come back into the
United States, $1.2 billion just from students coming in from Saudi
Arabia? Seventy-five percent of the Saudi cabinet graduated from U.S.
schools and colleges and universities. Most of them end up with Ph.D.s.
These are the leaders running the country in Saudi Arabia; and every
one of them with whom I spoke

[[Page H8016]]

supported the United States and wanted to regain that kindling
relationship. It is best in their economic and their political lives to
be friends with the United States.
One other area that I have heard criticism of Saudi Arabia, that they
teach Wahhabism. Eighty-five percent of the curriculum in Saudi Arabia
is okay by the United States; 15 percent was marginal; and 5 percent
taught intolerance. Well, guess what? The Saudi government under the
Crown Prince said, all right, imams, the teachers; they fired over
3,000 of these imams who were teaching intolerance. They have changed
the curriculum to go along with a 100-percent okay by the United
States. They either fired these imams or they actually threw them in
jail, and now, they actually have a school curriculum to purport no
intolerance, will be taught within the Saudi schools.
The curriculum had not changed much in 40 years in Saudi Arabia, but
they are doing that because they know that is also in their best
interest. Now, also, 75 percent of the Shura council, that is like our
Congress, Republicans or Democrats or however they are made up over
there, but to the person there when I spoke to them, their Shura
council supported the United States.

{time} 2310

It was an odd thing though, Mr. Speaker. Every person that had just
visited the United States and the Cabinet or the Shura Council had not
made those personal relationships, not made friendships, learned our
economic system, learned why a free society is good. They rejected the
United States and said I do not need the United States; I will send my
son to Australia, or New Zealand or to England to learn.
My fear, Mr. Speaker, is that in a very short time we have 75 percent
of the Cabinet and the Council and the leadership in Saudi Arabia that
is very strong supporters of the United States. If we lose that
relationship because their sons and their daughters and this generation
is going to other countries to study, we are going to lose that mass
friendship toward the United States and the support that we have today,
and that is scary.
The next generation will be lost. Many of the businesses that support
the United States are now purporting to Russia and China and Vietnam to
New Zealand and Australia. We are losing $40 billion a year in just
trade and business because of the way that we are treating Saudi
Arabia.
One of the key issues I think in the relationship is visa delay. It
is critical. Secretary Colin Powell, when I spoke to him, is working
diligently to make sure that we improve the visa situation and at the
same time ensure national security and homeland security in visa
issuance. That is a difficult task but we have got to do it. These visa
restrictions are alienating students and the Saudi people themselves.
In medical care and health care, most Saudis come to the United
States for their health care. One of the groups were talking about
health care a minute ago, but our hospitals and doctors lose over $1
billion a year from Saudis coming to our hospitals. When you take a
look at the hotels, the restaurants, the transportation that they use,
the firms that they contact for business, we are looking in excess of
$15 billion a year that the United States loses in revenue. Four
hundred in new business opportunities have been lost between 2003 and
2004.
Colin Powell once said that like our Statue of Liberty our Nation has
a spine of steel but our torch is a welcome torch, and that is all we
are trying to do, Mr. Speaker, is to make sure that our longest-serving
friend in the Middle East, Saudi Arabia, remains our friend, and we
castigate those that would say otherwise.
I would be a fool to say that Saudi Arabia does not have its own
problems. Are there people that want to kill us in Saudi Arabia?
Absolutely, but I want to tell my colleagues, there are other areas in
what I looked at as well.
The leadership in Saudi Arabia escorted me to several banks where I
witnessed American, Canadian and British auditors in every bank making
sure that every single dollar that goes through there is legitimate and
not going to service terrorism. They have taken their charities into
one group, and anyone that invests in a charity cannot do it with cash.
You cannot use an ATM card. You cannot use a credit card. The
individual that puts the money into the charity has got to be
identified and identify where the money is going to, penny for penny.
We could not do that in this country, but yet Saudi Arabia is trying to
cut off any fiscal resources that the terrorists could use, both
through money laundering in their banks or through charities, and they
have done a good job.
It is not just with the United States. They are working with
Interpol. They are working with MI5. They are working with our
intelligence services on a day-to-day basis on banking, on money
laundering, on charities.
Mr. Speaker, I sit on the Permanent Select Committee on Intelligence,
and I cannot get into a lot of it, but I want to tell my colleagues
that the intelligence that we receive from Saudi Arabia rivals the
information that we receive from our strongest allies, and I want to
tell my colleagues also, Mr. Speaker, they are suffering miserably
against al Qaeda. Just in the past weeks they have killed or captured
300 al Qaeda, at a loss of many of their police and their own military.
Many have realized that if they pet the wolf, the wolf is going to bite
them. They are in full array trying to share as much information as
they can with us and our allies.
Crown Prince Abdallah Aziz and King Fahd are visionaries, Mr.
Speaker. I would like to submit for the Record copies of initiatives
and actions taken by Saudi Arabia to combat terrorism. There are reams
of pages of loss of life of Saudi police and military that talks about
the captures in here. It documents it. It talks about their
international cooperation, the regard to charitable organizations,
combat money laundering, legal and regulatory actions.
I would also like, Mr. Speaker, to submit for the Record political
and economic reforms in the kingdom of Saudi Arabia, and somewhere in
here I think most importantly are the public statements by senior Saudi
officials condemning extremism and promoting modernization.

Political and Economic Reform in the Kingdom of Saudi Arabia

The Government of Saudi Arabia has implemented a number of
political and economic reforms to encourage political
participation, promote economic growth, increase foreign
investment and expand employment opportunities. The Kingdom
has been updating and modernizing its academic curricula, and
monitoring its religious schools. It plans to hold municipal
elections as part of a comprehensive streamlining of local
government. In addition, the Kingdom is promoting its free
market economy by privatizing twenty major state enterprises,
establishing fourteen regulatory authorities to carry out
reforms, improving foreign investment laws, revising a broad
range of commercial laws and implementing intellectual
property rights to foster innovation. It is also becoming a
more significant player in international trade by seeking
membership in the World Trade Organization (WTO).

SAUDI ARABIA AND REFORM IN THE ARAB WORLD

In January 2003, the Kingdom of Saudi Arabia presented a
bold initiative entitled `Charter to Reform the Arab
Position' to encourage economic and political reform in the
Arab world.
The Charter urges Arab states to recognize the need for
internal reform and greater participation by citizens in the
political process as important steps toward the development
of Arab human resources and the democratization of the Arab
world.
The initiative calls on Arab states to implement a Greater
Arab Free Trade Zone by the end of 2005. The goal of this
agreement is for Arab states to implement unified tariffs and
duties within 10 years, which will serve as the basis for the
establishment of a Common Arab Market (CAM). It also
encourages members of the League of Arab States to modernize
local economies, privatize government-owned industries and
open economic development opportunities to outside investment
and participation.
At the end of the 16th Arab Summit in Tunis, May 22-23,
2004, Saudi Arabia along with the other 21 members of the
Arab League issued the ``Tunis Declaration'' and pledged to
carry out political and social reforms, promote democracy,
expand popular participation in politics and public affairs,
and reinforce women's rights.

SAUDI ARABIA AND POLITICAL INITIATIVES AND LEGISLATION

In 1992, Custodian of the Two Holy Mosques King Fahd bin
Abdulaziz introduced three major political developments to
modernize the government within the framework of the
Kingdom's traditions:
The formation of the Consultative Council (Majlis Al-
Shura)--The Consultative Council currently consists of 120
members who serve four-year terms.

[[Page H8017]]

The establishment of Consultative Councils in each of the
13 provinces of Saudi Arabia--The Consultative Councils are
composed of leading citizens who help provide input and
review management of the provinces by their respective local
governments.
The introduction of the Basic Law of Governance--The Basic
Law is similar to a constitution.
On November 29, 2003, King Fahd approved changes that would
enhance the legislative role of the Consultative Council. The
amendments to Articles 17 and 23 of the Consultative Council
System grant the Council the power to propose new bills or
amendments to regulations in force and debate such proposals
without prior approval from the King.

Elections

On October 13, 2003, Saudi Arabia approved groundbreaking
plans to streamline local and municipal governments by
introducing elections for half of the members of each
municipal council to ensure that citizens have a strong voice
in local affairs. A one-year period was given to the
authorities responsible for managing and finalizing the
election procedures.
The proposal for elections marked an important step in the
Kingdom's ongoing reform agenda and followed King Fahd's
address to the Consultative Council on May 17, 2003, where he
said: `` I would like to confirm that we will continue on the
path of political and economic reform. We will work to
improve our system of government and the performance of the
public sector and broaden popular participation in the
political process.''
On July 10, 2004, Saudi Arabia announced that the basic
regulations and systematic procedures for the election
process had been established, and that committees had worked
through the details for establishing election centers,
registering voters and candidates and setting deadlines in
the election of members in 178 municipal councils across all
cities and villages in the Kingdom's 13 provinces.
On September 7, 2004, the Minister of Municipal and Rural
Affairs Prince Met'eb bin Abdulaziz issued directives that a
committee be set up to supervise the upcoming municipal
elections in Riyadh Province. The committee, affiliated with
the Ministry's general committee for the election process,
will supervise implementation of the rules and regulations
and all other preparatory and executive works.
In addition, Saudi Arabia briefed a visiting team of United
Nations experts on the measures completed by the Ministry of
Municipal and Rural Affairs relating to the elections, and
the UN team held meetings with the committees supervising the
process.
On September 11, 2004, dates were announced for the three
phases of the election process: for Riyadh province, February
10, 2005, with voter registration from November 23 to
December 22, 2004; for the four southern provinces and the
Eastern Province, March 3, 2005, with voter registration from
December 14, 2004, to January 12, 2005; and for the rest of
the country, April 21, 2005, with voter registration from
February 15 to March 16, 2005. Candidates can register for
the three phases December 26 to 30, January 30 to February 3,
and March 20 to 24, respectively.

King Abdulaziz Center for National Dialogue

On August 3, 2003, Crown Prince Abdullah announced the
establishment of the King Abdulaziz Center for National
Dialogue to promote the public exchange of ideas as an
essential part of life in Saudi Arabia. So far, three rounds
of talks have taken place, covering standards of education,
the emergence of extremism, and the role of women. The next
national dialogue will be in October 2004 and will focus on
youth issues. In his address to the European Policy Centre on
February 19, 2004, Saudi Arabia's Minister of Foreign Affairs
Prince Saud Al-Faisal said: ``The Center for National
Dialogue was established with a broad agenda including, but
not limited to, reassessment of the standards of education;
dealing with the emergence of extremism; the essential role
women should play in society; and institutional development.
Diversity and tolerance are the guiding principles.''

National Human Rights Association (NHRA)

In March 2004, Custodian of the Two Holy Mosques King Fahd
bin Abdulaziz approved the establishment of the first
independent human rights organization in Saudi Arabia. The
National Human Rights Association (NHRA) implements the
international human rights charters signed by the Kingdom.
The NHRA, which includes a special panel to monitor
violations of women's rights, was formed following the
October 2003 human rights conference entitled ``Human Rights
in Peace and War''. The human rights conference concluded
with the issuance of the ``Riyadh Declaration'' which states
that respect for human life and dignity is the foundation of
human rights; that a human being deserves respect, regardless
of race, color or sex; that violation of human rights is a
crime deserving severe punishment; that to hold a human being
in custody without legal basis is forbidden by Islamic laws;
that disregard for privacy and property rights is a violation
of human rights; and that tolerance of faith is required by
Islam, which also prohibits coercing people to follow a
certain religion.

Press law

On July 17, 2001, the Kingdom endorsed a 30-article law to
restructure the press industry and allow journalists to
establish a trade association. On February 24, 2003, the
Saudi Journalists Association was officially established to
protect the rights of journalists in the Kingdom and
coordinate relations between journalists and the media
establishment, and on June 7, 2004, elected a nine-member
board that includes two women. In March 2004, the
Consultative Council passed a resolution urging the Ministry
of Culture and Information to encourage greater freedom of
expression in the Saudi media, and to open up opportunities
for investment in the media to the Saudi private sector.

Education

In Saudi Arabia today, there are eight public universities,
more than 100 colleges and more than 26,000 schools. Some
five million students are enrolled in the education system,
which boasts a student to teacher ratio of 12.5 to 1--one of
the lowest in the world. Of the 5.2 million students enrolled
in Saudi schools, half are female, and of the 200,000
students at Saudi universities and colleges, women comprise
more than half of the student body. The government allocates
about 25 percent of the annual state budget to education.
Recent initiatives include:
In February 2002, Saudi Arabia initiated a process of
evaluating and assessing its school curriculum. This audit
determined that about five percent of textbooks contained
possibly offensive language. A program was put into place to
eliminate such material and textbooks and curricula have been
updated and modernized. Two pilot programs, one in Riyadh
and one in Jeddah, have been established to experiment
with new teaching methods.
Student councils are being set up in public schools to
begin educating young Saudis about civic responsibilities and
participatory governance.
In August 2002, the Department of Statistics reported that
93.2 percent of Saudi women and 89.2 percent of Saudi men are
literate.
Saudi Arabia is open to foreign investment for private
higher education.
In October 2003, Dr. Maha Abdullah Orkubi was appointed
Dean of the Jeddah branch of the Arab Open University (AOU),
the first time for a Saudi woman to be appointed to such a
senior academic position.
Saudi Arabia has introduced English language classes to the
Sixth Grade for the 2004-2005 academic year in order to
improve English teaching at intermediate and secondary
schools.

Religion

During 2003, two thousand imams who had been violating
prohibitions against the preaching of intolerance were
disciplined or removed from their positions, and more than
1,500 have been referred to educational programs. The
Ministry of Islamic Affairs has begun a three-year program to
educate imams and monitor mosques and religious education to
purge extremism and intolerance. On April 27, 2004, at a
reception in New York co-sponsored by the U.S.-Saudi Business
Council and the Council on Foreign Relations (CFR), Saudi
Arabia's Minister of Foreign Affairs Prince Saud Al-Faisal
explained: ``It is the religious establishment in Saudi
Arabia that in fact is proving to be the body most qualified
to de-legitimatize Al-Qaeda's claims, the very religious
community that is being attacked and discredited.'' For more
information about the efforts of Saudi Arabia's religious
establishment, please consult the ``Public Statements by
Senior Saudi Officials Condemning Extremism and Promoting
Moderation'' report, which can be found on the Embassy web
site at <www.saudiembassy.net>.

Judicial Regulations

Saudi Arabia has recently passed several important
regulations to ensure a fair and balanced justice system,
including:

Law of Procedure Before Shari'ah Courts

In September 2001, Saudi Arabia passed the Law of Procedure
Before Shari'ah Courts to regulate the rights of defendants
and legal procedures. In addition to granting defendants the
right to legal representation, the law outlines the processes
by which pleas, evidence and experts are accepted by the
court.

Code of Law Practice

In January 2002, the Code of Law Practice went into effect
in Saudi Arabia. The law outlines the specific requirements
necessary to become an attorney, including education,
registration and admission to the courts as well as
licensing. The law also defines the duties and rights of
lawyers, including the right of attorney-client privilege.

Criminal Procedure Law

In May 2002, the Criminal Procedure Law, a 225-article
bill, was passed to regulate the rights of defendants and
suspects before the courts and police. The law protects a
defendant's rights with regard to interrogation,
investigation, and incarceration and also grants the
defendant access to the Bureau of Investigation and
Prosecution. Members of the Bureau of Investigation and
Prosecution are to ensure, through visits, that the rights of
the defendants and persons in custody are being protected.
The law also outlines a series of regulations that justice
and law enforcement authorities must follow during all stages
of the judicial process, from arrest and interrogation, to
trial and the execution of verdicts, ensuring that the
judicial process remains fair and balanced.
In April 2004, the Ministry of Justice organized a
symposium on the Kingdom's judicial system. The communique
declared that

[[Page H8018]]

Shariah [Islamic Law] is viable at all times and places; that
legal procedures should be filed in a manner that supports
the individual's rights and penal procedures should reflect
human dignity in accordance with Shariah; and that equal
rights should be extended to individuals with regard to
legal aid in all phases of penal lawsuits of a public
nature.

SAUDI ARABIA AND ECONOMIC INITIATIVES AND LEGISLATION

Applying for accession to the World Trade Organization (WTO)

Saudi Arabia is one of the largest economies outside the
World Trade Organization (WTO). Recent steps toward
privatization and market liberalization have called for fresh
negotiations on Saudi Arabia's bid to join the WTO. In the
accession process, the Kingdom is negotiating bilateral
agreements with current WTO members while adopting the
organization's various trade rules. The Kingdom of Saudi
Arabia and the European Union signed a bilateral agreement on
August 31, 2003, guaranteeing free access to goods and
services. Moreover, Saudi Arabia has already signed 35
bilateral trade agreements with other members of the WTO,
including China, Japan, Canada, Brazil, Argentina and
Australia. Talks between Saudi Arabia and the United States
are ongoing in mid-September, 2004.
On July 5, 2004, the Council of Saudi Chambers of Commerce
and Industry (CSCCI) announced plans to set up early next
year a center that will provide technical and support
services to Saudi businesses in preparation for the Kingdom's
accession to the WTO.

On June 9, 2003, the Council of Ministers endorsed the
Copyright Law, a 28-article document that meets the
requirements of the World Trade Organization's Agreement on
Trade Related Aspects of Intellectual Property Rights
(TRIPS), placing Saudi Arabia one step closer to entry in the
WTO. The law protects intellectual property including print
publications, lectures, audio recordings, visual displays, as
well as computer programs and works of art. The law
establishes a range of fines and actions that can be effected
for copyright violations. Saudi Arabia has also joined the
Universal Copyright Convention and the Berne Convention for
the Protection of Literary and Artistic Works to further
protect intellectual property and encourage continued
development and innovative thinking.

Patent Law

On July 17, 2004, the Council of Ministers approved a 65-
article law on patents, integrated circuits, plant varieties
and industrial designs. The new law also meets the
requirements of TRIPS and the Paris Agreement for Industrial
Property.

The Capital Markets Law

On June 16, 2003, the Council of Ministers passed the Saudi
Arabian Capital Markets Law. The law will stimulate and
strengthen the Saudi economy and increase the participation
of Saudi citizens in the capital markets. The law:
Establishes the Saudi Arabian Securities and Exchange
Commission (SASEC) to protect investor interests, ensure fair
business, promote and develop the capital market, license
brokers and offer securities to the public.
Establishes the Saudi Arabian Stock Exchange (SASE), which
will incorporate the national securities depository center.

Foreign Investment Law

The Foreign Investment Law, enacted by the Saudi Arabian
General Investment Authority (SAGIA), was set up to allow
foreign investors to own property, transfer capital and
profits, claim full ownership of their projects and enjoy a
reduction in tax rates. The law protects foreign investors
from confiscation of property without a court order or
expropriation of property, except for public interest,
against an equitable compensation. In August 2002, SAGIA
passed an amendment to the Executive Rules of the Foreign
Investment Act strengthening the legal framework, allowing
foreigners to, for instance, own land and avoid double
taxation.

Capital Gains Tax

On January 12, 2004, the Cabinet cut the capital gains tax
on foreign investors from 45 percent to 20 percent and fixed
the tax on natural gas at 30 percent.

U.S.-Saudi Council for Trade and Investment

On July 31, 2003, Saudi Arabia and the United States signed
an agreement to strengthen commercial and investment
relations. As a result, the U.S.-Saudi Council for Trade
and Investment was established to meet at least once a
year to enable representatives of both countries to review
the signing of additional agreements on trade, protection
of intellectual property rights, investment, vocational
training and environmental issues. There are 337 joint
ventures between the two countries with a total investment
of more than $21 billion. American companies are the
largest group of foreign investors in the Kingdom.

Enacting the GCC Customs Union

The Customs Union was established on January 1, 2003, by
the Gulf Cooperation Council (GCC) to standardize customs
duties in the six member countries. In accordance with the
Customs Union, the Government of Saudi Arabia approved the
reduction to 5 percent of customs for goods formerly charged
between 7 and 12 percent. In addition, the GCC agreed to the
principle of a single port of entry. Most related laws and
regulations will be standardized by the end of 2005.

saudi arabia and agencies that promote reform

The following is a list of agencies established to help
implement economic reform in Saudi Arabia.

Supreme Economic Council (SEC)

In August 1999, Saudi Arabia announced the formation of the
Supreme Economic Council (SEC). The SEC evaluates economic,
industrial, agricultural and labor policies to assess their
effectiveness. Privatization efforts have gained momentum
since the creation of the SEC, which oversees economic
restructuring aimed at opening up Saudi markets and
attracting investments.

Supreme Council for Petroleum and Minerals (SCPM)

Saudi Arabia established the Supreme Council for Petroleum
and Minerals (SCPM) in January 2000, as a body responsible
for policymaking on the exploitation of petroleum, gas and
other hydrocarbon materials. The SCPM passed the Gas
Initiative to develop natural gas fields, transmission
pipelines and petrochemical projects in cooperation with
international as well as national companies.

Supreme Commission of Tourism (SCT)

The Supreme Commission of Tourism (SCT) was established in
April 2000 to help the tourism sector grow and encourage
investment from the private sector. Each year, two million
Muslims from all over the world visit Saudi Arabia to perform
the Hajj, and many more come to perform the minor pilgrimage
of Umrah. The Kingdom is a popular destination for non-
religious activities as well. The Kingdom is rich in history
and culture and has a variety of tourist attractions to
offer, including archeological sites, varied landscapes and
shorelines rich in marine life. On March 15, 2004, the
Cabinet approved a general strategy for developing the
nation's tourism to be carried out by the SCT. The Kingdom's
tourist industry is expected to create 489,000 jobs, a number
that could reach as high as 2.3 million.

Saudi Arabian General Investment Authority (SAGIA)

In April 2000, the Saudi Arabian General Investment
Authority (SAGIA) was set up to further promote foreign
investment and serve the business community as a one-stop
shop for licenses, permits, and other business paperwork. The
2000 Foreign Investment Law included property ownership
rights for foreign investors as well as reduced tax rates for
businesses. SAGIA works with the Supreme Economic Council
(SEC) and the Supreme Commission of Tourism (SCT) and serves
as a mediator between investors and the government.

Food and Drugs Authority (FDA)

In March 2003, a Food and Drugs Authority (FDA) was
established to provide consumer protection and ensure the
safe utilization of all foodstuffs, pharmaceuticals, medical
devices and electronic products.

The Council of Saudi Chambers of Commerce and Industry (CSCCI)

The Council of Saudi Chambers of Commerce and Industry
represents the regional Chambers of Commerce and Industry at
both national and international levels. The Council monitors
and researches economic issues, helps encourage economic
growth, organizes seminars and conferences both within the
Kingdom and abroad, and creates foreign investment
opportunities through trade missions to other nations. In
addition, the Council's work has resulted in the issuance
of new regulations that allow foreign businessmen,
investors, and representatives of foreign firms to acquire
entry visas to the Kingdom without having to consult with
the Ministry of Foreign Affairs.

economic indicators

The best indicator of Saudi Arabia's economic growth is the
increase in the Gross Domestic Product (GDP), from $20
billion in 1970 to $211.20 billion in 2003. Saudi Arabia's
current economy is now the largest in the Middle East.
In 2003 and 2004, Saudi Arabia was given ``A'' credit
ratings by `Standard and Poor's' for longterm local currency
and foreign currency, based on the Kingdom's macro-economic
stability and substantial external liquidity.
Today, Saudi Arabia is the world's 25th largest importer/
exporter, with foreign trade of $78 billion. In 2003, trade
between Saudi Arabia and the United States totaled more than
$22 billion.
Saudi Arabia is the world's largest oil exporter and has
the world's largest spare production capacity. The Kingdom
has utilized oil revenues to expand and diversify the Saudi
economy to reduce its dependence on oil, which has resulted
in impressive gains in the non-oil sector. In 2003, the non-
oil industrial sector is estimated to have grown by 3.9%; the
construction sector by 2.8%; electricity, gas, and water by
6.2%; transport and communications by 4.3%; and wholesale,
retail, restaurants, and hotels by 4.4% in real prices.
In 1975, Saudi Arabia had about 470 industrial plants with
overall investments estimated at $2.7 billion. By 2001, the
total number of factories in the Kingdom exceeded 3,300 with
a total investment of more than $90 billion.

[[Page H8019]]

The role of the private sector has increased substantially
with its GDP rising 28-fold in real terms from 1973 to 2002.
Over that period, non-oil exports increased from $26 million
to over $10 billion, and in 2003, the private sector GDP is
estimated to have grown by 3.7% in current prices and 3.4% in
real terms, according to Deputy Governor of the Saudi Arabian
Monetary Agency (SAMA) Muhammed Al-Jasser in a speech in
April 2004.
The all-share index on the Saudi stock exchange stood at
4384 as of December 11, 2003, compared to 2518 at the
beginning of the year, representing an increase of more than
74%. Value of shares traded amounted to $143.2 billion at the
end of November 2003, compared to $35.73 billion in 2002. In
May 2004, the index reached 6455.
In the past decade, Saudi Arabia's 10 licensed commercial
banks have seen a substantial growth in domestic banking. In
2003, combined capital and reserves of the banks increased to
$12.5 billion with total assets of $145 billion. Recently,
eight leading money exchangers operating throughout the
Kingdom agreed to merge and form the Al-Bilad Bank, which
will be Saudi Arabia's eleventh commercial bank. The Al-Bilad
Bank has a capital of $.08 billion and is expected to launch
its operations in the first quarter of 2005.

``The underlying goal of these reforms is to realize the
country's vast economic potential while creating new
opportunities both inside and outside Saudi Arabia, and to
expand and diversify the Kingdom's economy while creating job
opportunities for a rapidly growing population.''--Ali Al-
Naimi, Minister of Petroleum and Mineral Resources, July 22,
2003.

saudi arabia and privatization

In November 2002, the Kingdom of Saudi Arabia announced
plans to privatize many of its vital economic sectors. The
Supreme Economic Council (SEC) has taken overall charge of
the program, specifying the sectors to be privatized and
setting out a strategic plan and timetable for the
privatization program. Sectors open to privatization include:
telecommunications, civil aviation, desalination, highway
management, railways, sports clubs, health services,
government hotels, municipal services, education services,
operation and management of social service centers, Saudi
employment services, agricultural services, construction
and management of abattoirs, public parks and recreation
centers, and cleaning and waste collection. Concrete
examples of privatization efforts include:

Telecommunications

In December 2002, the Saudi Telecom Company (STC) was
privatized, and 30 percent of its shares were sold to the
public in an Initial Public Offering (IPO) that raised more
than $4 billion.

Postal services

In 2002, the Saudi government approved the transfer of the
responsibilities of the state-run postal services from the
Ministry of Posts, Telegraphs and Telephones (PTT) to the
private sector. In January 2003, Dr. Khaled Al-Otaibi,
Director General of Posts at the Ministry of Posts,
Telegraphs and Telephones (subsequently renamed
Telecommunications and Information Technology), reported that
privatization of the postal services has been operating
successfully, with about 100 agencies established by the
private sector.

Saudi Railway Organization (SRO)

On April 11, 2004, General President of the Saudi Railways
Organization (SRO) Khaled AlYahya confirmed that three major
rail projects have been approved by the Supreme Economic
Council (SEC) for immediate implementation by the private
sector. The first project will extend the existing Dammam-
Riyadh line to Jeddah. The second will connect Makkah with
Madinah through Jeddah. The third will link Riyadh with the
phosphate and bauxite mines in the provinces of Qasim and
Northern Borders.

Airports

The Kingdom will privatize the management and operation of
local and international airports. However, airport security
will remain in the hands of the government. Saudi Arabia has
24 domestic airports and three international, in Riyadh,
Jeddah and Dammam.

Saudi Arabian Airlines (SAA)

Saudi Arabian Airlines is the largest airline in the Middle
East, with a fleet of 117 aircraft carrying more than 12
million passengers per year to 50 cities on four continents.
Research has begun for its partial privatization. The
privatization effort promises to be a successful endeavor
resulting in increased revenues and enhanced performance. In
addition, the SEC approved, in June 2003, the opening of the
Saudi aviation sector to private enterprise, giving private
companies the opportunity to provide domestic airline
services.

Ports Authority

The Ports Authority has assigned several projects to the
private sector to expedite the handling of goods and maritime
services at the Kingdom's eight seaports. For example, at the
Jeddah Islamic Port and the King Abdulaziz Port in Dammam,
the King Fahd Vessel Repair Yard (located at both ports) and
the two areas for processing re-exports are now leased by the
private sector.

Health care sector

The Ministry of Health strongly supports the privatization
of some state-run hospitals, and in 2003 employed a private
company to promote its pre- and post-natal healthcare
education program, with the program introduced in more than
85 percent of the Kingdom's hospitals. To further
privatization efforts, on October 28, 2003, the Minister of
Commerce and Industry, Dr. Hashem bin Abdullah Yamani,
approved the formation of a joint stock company for medical
care that will establish, own and manage health facilities,
including hospitals.

Urban transportation system

Transportation Minister Dr. Jubarah Al-Suraiseri announced
in August 2003 that plans are under way to privatize and
reorganize Saudi Arabia's urban transportation system.

National Company for Cooperative Insurance (NCCI)

On May 18, 2004, the SEC approved selling off government
shares in the Arab world's largest insurance company, the
National Company for Cooperative Insurance (NCCI). The sale
of government shares in NCCI will help open up the Kingdom's
insurance market, which is estimated at more than $2.5
billion. NCCI has assets of about half a billion dollars
and is the only insurance company officially licensed in
Saudi Arabia.

Saudi Arabian Mining Company ``Ma'aden''

On May 19, 2004, the SEC approved the privatization of the
Saudi Arabian Mining Company ``Ma'aden'', which is wholly
owned by the Ministry of Petroleum and Mineral Resources. As
a first step toward privatization, ``Ma'aden'' is setting up
a unit to study and evaluate the precious and base metals
sector starting January 1, 2005.

``First of all, I wish to make clear that the government of
Saudi Arabia has since the very beginning been extremely
supportive of the private economic sector.''--Crown Prince
Abdullah, Asharq Alawsat, (Arabic daily), May 13, 2002.

SAUDI ARABIA AND FOREIGN INVESTMENT

In April 2000, the Saudi Arabian General Investment
Authority (SAGIA) was set up to further promote foreign
investment and serve the business community as a one-stop
shop for licenses, permits, and other business paperwork.
Since its establishment, SAGIA has licensed more than 2,000
projects worth around $15 billion.

Telecommunications

The Saudi Communication Commission (SCC) was established on
December 29, 2001, to open up the market and enable foreign
companies to invest in telecommunications. On August 10,
2004, the Council of Ministers licensed UAE's Etisalat to
establish and operate the second mobile phone network that
includes GSM service.

Insurance

A new Insurance Law was passed on July 14, 2003, that will
establish legal structures governing insurance and
reinsurance transactions in the Kingdom. Foreign companies
are encouraged to invest in the insurance sector.

Saudi Railway Organization (SRO)

In January 2003, the Kingdom of Saudi Arabia short-listed
eight foreign companies to consult on the three railway
projects to connect the western Red Sea port of Jeddah with
the eastern Arabian Gulf port of Dammam, link Jeddah to the
holy cities of Makkah and Madinah, and give access to mining
projects in the north.

Energy sector

Agreements worth more than $7 billion have been reached
with international oil companies for investments in the
energy sector, including a project with Royal Dutch/Shell and
TotalFinaElf, to develop upstream gas operations in the
southern part of the Empty Quarter [Rub' al-Khali]. These are
the first of what is expected to be a total of more than $25
billion of investments over the next few years.

Mining

In April 2003, the Minister of Petroleum and Mineral
Resources announced that a new mining strategy was being
finalized to bolster private investment in the mining sector.
The Mineral Investment Act was passed on September 13, 2004;
it will create jobs and allow local and foreign investors to
explore the country's mineral resources. The Kingdom is rich
in minerals such as phosphate, iron ore, bauxite, zinc, and
copper.

Health care sector

The new laws facilitating the transfer of certain state-run
hospitals to the private sector will allow foreign investors
to own hospitals. The foreign investor does not need to have
a medical background and does not require a Saudi sponsor.

Water and Electricity Sector

In August 2003, the Ministry of Water and Electricity
invited Saudi and international companies to bid on water
desalination and electricity projects worth more than $8
billion. The offers were extended in March 2004.

SAUDI ARABIA AND OIL

In 2003, Saudi Arabia's oil revenue totaled $85 billion.
The Kingdom has always acknowledged that unstable energy
markets and unrealistically low or high oil prices harm both
producers and consumers. Following the horrific attacks on
September 11, 2001, the Kingdom dispatched 9 million
additional barrels of oil to the United States to ensure
price stability and availability. In the fall of 2002, in
order to maintain market stability, Saudi Arabia boosted oil
production

[[Page H8020]]

to compensate for the fall in Venezuelan production, and in
the spring of 2003, it boosted output to compensate for the
loss of Iraqi production.
On August 11, 2004, Saudi Arabia's Minister of Petroleum
and Mineral Resources Al-Naimi stated: ``The Kingdom of Saudi
Arabia, in collaboration with the other OPEC countries,
endeavors to ensure the stability of the international oil
market and prevent oil prices from escalating in a way that
may negatively affect the world economy or oil demand. To
achieve this goal, the Kingdom has increased its production
during the last three months to meet the growing demand for
Saudi oil. This increase amounted to more than one million
barrels per day, bringing to more than 9.3 million barrels
daily the average production of the Kingdom during the past
three months.''

SAUDI ARABIA AND ECONOMIC DIVERSIFICATION

Over the past three decades, the non-oil sector of the
Saudi economy has grown from 35 percent to more than 60
percent of total GDP.
Production of gas--Natural gas is used for the Kingdom's
domestic consumption for power generation, seawater
desalination and various other functions, primarily in the
petrochemical industry. With 234 trillion cubic feet of
natural gas reserves in 2002, the Kingdom has the fourth
largest non-associated gas reserves in the world, and they
are still growing. Part of the Kingdom's oil and gas strategy
includes expanding the capacity of the gas network from 3
billion to 7 billion cubic feet.
Mining--Saudi Arabia has the largest supply of mineral
resources in the region, including precious, base and
industrial minerals. The government is encouraging
enterprises for extracting and processing these minerals--an
area where U.S. companies play a major role.
Construction Materials--The Kingdom of Saudi Arabia is the
largest producer of construction materials in the Middle
East, and construction is the Kingdom's largest non-oil
industry. According to the National Commercial Bank (NCB),
the largest bank in Saudi Arabia, the construction and
building materials sector currently contributes an annual $12
billion to the Saudi economy. Saudi Arabia's construction
products, including cement, tiles, marble, glass, granite,
cable, air-conditioning equipment and fabricated iron and
steel, are all exported throughout the region.
Pharmaceuticals--Saudi Arabia has a $1.17 billion
pharmaceutical market estimated to grow at 15 percent
annually. With more than 2,400 pharmacies and more than 4,600
registered drugs, both generic and patented, Saudi Arabia is
the largest consumer of pharmaceuticals in the Gulf region.
The United States exported more than $82 million worth of
pharmaceuticals to the Kingdom in 2001, a 47 percent increase
from the previous year.
Banks--On October 6, 2003, during a visit by German
Chancellor Gerhard Schroeder, the Kingdom gave Deutsche Bank
approval to open a branch and operate as the first
independent, wholly foreign-owned bank in Saudi Arabia.
Additional possibilities for wholly foreign-owned banks in
Saudi Arabia include BNP Paribas Bank of France and J.P.
Morgan Chase Bank.
Stock Exchange--The Stock market has developed
significantly over the past decade and is, by far, the
largest in the Middle East. Value of shares traded amounted
to $143.2 billion at the end of November 2003, compared to
$35.73 billion in 2002.

SAUDI ARABIA AND EMPLOYMENT

The following information is based on data on the labor
force from the Central Department of Statistics (CDS) of
Saudi Arabia's Ministry of Economy and Planning for the year
2002.

Employment figures

The total population in Saudi Arabia increased from 12
million in 1980 to more than 20 million in 2000. The Saudi
labor force is defined as all Saudis, 15 years of age and
older, who are either employed or seeking a job, and in 2002
amounted to 3.15 million (consisting of 2.68 million males
and 465,000 females) with an unemployment rate of 9.6
percent. The Kingdom is involved in various initiatives to
increase employment levels among young people and women.

The creation of job opportunities

The Saudi government seeks to create jobs through the
various reforms addressed in this booklet such as economic
diversification, privatization, opening up the market and
other initiatives, including:

The National Program for Training and Employment

The National Program for Training and Employment helps
Saudi citizens find jobs in both the public and private
sectors. The Program is responsible for the creation of job
opportunities, job training and Saudization.

Saudization

Saudization is a measure that applies limitations to the
number of foreign workers employed in order to slowly
increase dependency on Saudi workers. In 2002, the non-Saudi
labor force amounted to 3.09 million. The government
continues to provide incentives to create more employment
opportunities for its citizens as well as provide incentives
for participation in job training.

Centennial fund

On July 8, 2004, Custodian of the Two Holy Mosques King
Fahd bin Abdulaziz approved the formation of a charitable
foundation called the ``Centennial Fund'' that will provide
assistance to all Saudi citizens, both men and women, who
seek to achieve economic independence by setting up small
business enterprises. On July 20, 2004, the Centennial Fund
signed an agreement with the Saudi Arabian General Investment
Authority (SAGIA) to work together in helping Saudi
entrepreneurs to translate their commercial ideas into
projects.

Employment of women

In 2002, there were 465,000 Saudi women in the labor force;
this represents 15 percent of the total Saudi labor force.
Saudi women are owners or part owners of more than 22,000
businesses. Accounting, banking and computer training centers
have been established to prepare women for jobs, and as a
result, more opportunities have opened up for women,
including those in the technological, automotive and other
industrial sectors.
____

Initiatives and Actions Taken by the Kingdom of Saudi Arabia To Combat
Terrorism

Following the horrific events of September 11, an
international coalition composed of more than 100 nations was
formed to combat terrorism. Saudi Arabia is an active partner
in this coalition and has been working diligently with the
United States and other nations to destroy terrorist
organizations and eliminate the threat they pose to the
international community.
Saudi Arabia, as the birthplace and cradle of Islam, has a
very special role to play in the war on terrorism. Its
opposition to Al-Qaeda's hateful ideology sends a clear
message to the world that these extremists and their cult do
not represent the peaceful Islamic religion. This stand has
unfortunately made the Kingdom even more of a target, but the
people of Saudi Arabia are determined not to let terrorism
destroy their country or corrupt their faith.
The attached report is a compilation of the Kingdom's
counter-terror efforts to date. The people of Saudi Arabia
remain staunch allies of the international community in its
campaign against terrorism.
In its efforts to confront terrorism, Saudi Arabia has:
Questioned thousands of suspects; arrested more than 600
individuals; dismantled a number of Al-Qaeda cells; seized
large quantities of arms caches; extradited suspects from
other countries; and established joint task forces with the
United States.

``I vow to my fellow citizens and to the friends who reside
among us, that the State will be vigilant about their
security and well-being. Our nation is capable, by the Grace
of God Almighty and the unity of its citizens, to confront
and destroy the threat posed by a deviant few and those who
endorse or support them. With the help of God Almighty, we
shall prevail.''--Crown Prince Abdullah bin Abdulaziz, Deputy
Prime Minister and Commander of the National Guard, May 13,
2003.

ARRESTS AND QUESTIONING OF SUSPECTS

Saudi intelligence and law enforcement authorities have
been working closely with the United States and other
countries as well as with Interpol to identify, question and
when appropriate, arrest suspects. Since September 11, Saudi
Arabia has questioned thousands of suspects and arrested more
than 600 individuals with suspected ties to terrorism.

Specific actions

On September 5, 2004, three security officers were killed
when their car caught fire after being hit by gunfire while
pursuing a suspect vehicle. The officers were part of a
security force carrying out operations in the southern part
of the city of Buraidah. Seven militants were arrested in the
operation. The deaths of Sergeant Mufleh Saad Ruweishid Al-
Rasheedi, Sergeant Sayer Farhan Ghanim Al-Nomasi and Murif
Shakir Eid Al-Rasheedi bring to 36 the total of security
personnel who have lost their lives fighting terrorism since
May 2003.
On September 3, 2004, one security officer, Yousef bin Ayed
Al-Harbi, was killed and three injured during operations in
Buraidah. Surveillance of a suspected residence and vehicle
led to an exchange of fire between security forces and
another vehicle. After a pursuit through a residential
neighborhood, the driver of the second vehicle was killed,
and another individual involved in the incident was arrested.
On September 2, 2004, the Ministry of Interior announced
that Abdullah bin Abdulaziz bin Ahmed Almughrin had
voluntarily surrendered to security authorities. He was
wanted for his involvement in setting up an Al-Qaeda cell in
the Eastern Province, three of whose members were recently
arrested. The cell is suspected of preparing the attack in
Al-Khobar on May 30, 2004. Almughrin is also suspected of
having links to other parties, both inside and outside the
Kingdom, that have been planning acts of terrorism.
On August 30, 2004, security forces in the Eastern Province
were carrying out investigations when a car carrying four
persons tried to break through security barriers. In the
ensuing exchange of fire, one of them was killed, and the
other three wounded, and arrested. The search operation
also led to the arrest of another suspect, and the seizure
of two vehicles that had been under surveillance by the
security forces.
On August 11, 2004, Abdulrahman bin Obaid-Allah Al-Harbi
was killed in the vicinity of the Holy Mosque in Makkah after
he

[[Page H8021]]

attacked security officers who were trying to apprehend him.
He was wanted for his involvement with an extremist group and
the manufacturing of explosives.
On August 5, 2004, Faris Ahmad Jamaan Al Showeel Alzahrani,
one of the leaders of the group that has been calling for
terrorist attacks, was arrested. Saudi Arabia's most-wanted
list now stands at 11 at large, with 12 killed and three in
custody.
On July 22, 2004, Fayez bin Rasheed bin Mohammad Al-
Khashman Al-Dossary surrendered to security authorities in
the city of Taif, expressing the desire to benefit from the
grace period offered by Custodian of the Two Holy Mosques
King Fahd bin Abdulaziz.
On July 20, 2004, in a raid on a suspected hideout in the
city of Riyadh, security forces killed two suspects, one of
whom, Isa Saad Mohammad bin O'ooshan, was on the list of
Saudi Arabia's most-wanted. Recovered during the raid were
the partial remains of Mr. Paul Marshall Johnson, Jr., the
American who was kidnapped and murdered by Al-Qaeda in June.
On July 17, 2004, Ibrahim Al-Sadiq Al-Bakri Al-Qaidi
arrived in the Kingdom from Damascus, where he had
surrendered to the Saudi Embassy, expressing the desire to
benefit from the grace period offered by Custodian of the Two
Holy Mosques King Fahd bin Abdulaziz.
On July 13, 2004, top Al-Qaeda suspect Khalid bin Odeh bin
Mohammed Al-Harbi, also known as Abu Sulaiman Al-Makki,
surrendered to Saudi authorities at the Saudi Embassy in Iran
and was later transported to Saudi Arabia.
On July 3, 2004, the Ministry of Interior confirmed the
deaths of two militants, Rakan Muhsin Mohammed Alsaykhan and
Nasir Rashid Nasir Alrashid, who were on the list of 26 most
wanted that was published in December 2003. The two died of
wounds received in an incident on April 12 in the Riyadh
suburb of Al-Fayha, in which a security officer lost his
life.
On July 1, 2004, terrorist Awad bin Mohammed bin All Al-
Awad, wanted for his involvement in the April 12 incident,
was killed and another suspect was arrested and has been
identified as Abdulrahman bin Mohammed bin Abdulrahman Al
Abdulwahab, wanted in connection with the murder of a German
resident in Riyadh on May 22. A security officer, Private
Muslih bin Saad Al-Qarni, was killed in this incident.
On June 30, 2004, a terrorist was killed in a shootout in
Riyadh, later identified as Fahd bin All Aldakheel Algablan.
Security forces seized, in addition to weapons such as
Kalashnikovs and pistols, a laboratory for preparing
explosive devices, equipment for forging documents, and
materials for medical treatment and first aid.
On June 23, 2004, in a televised address read on behalf of
Custodian of the Two Holy Mosques King Fahd bin Abdulaziz by
Crown Prince Abdullah bin Abdulaziz, Deputy Prime Minister
and Commander of the National Guard, the government of the
Kingdom of Saudi Arabia offered those involved in terrorist
activity a last opportunity to repent and voluntarily
surrender within one month, or face resolute and determined
force: whoever surrendered would be assured due process in
accordance with Shariah [Islamic Law]. Hours later, Sa'aban
bin Mohammed bin Abdullah Al-Lailahi Al-Shihri, wanted for
the past two years, became the first militant to accept the
offer and surrender to authorities. On June 28, 2004, Osman
Hadi Al Maqboul Almardy Alomary became the second to do so;
he is on the list of Saudi Arabia's 26 most-wanted that was
posted last December.
On June 18, 2004, Abdulaziz Abdulmohsen Almughrin, head of
the deviant group that has been terrorizing the Kingdom, and
which was responsible for the brutal murder of U.S. hostage
Paul Johnson, was one of the four suspects killed in a
siege in the Maalaz area of the city of Riyadh. The three
others killed were identified as Faisal bin Abdulrahman
Al-Dakheel, Turki bin Fehaid Al-Mutairi, and Ibrahim bin
Abdullah Al-Duraihem. One security officer was killed, and
two others wounded. Found at the scene were three cars,
one of which had been used in a recent attack on a BBC
journalist and his photographer; ammunition and weapons,
including sub-machine guns, rocket launchers, pipe bombs
and grenades; and a stack of identity papers.
On June 1, 2004, security forces killed two suspects during
a shootout in an isolated area of Al-Hada on the Taif-Makkah
road. The two suspects had been identified as being
implicated in the criminal terrorist attack that took place
in Al Khobar on May 29, 2004, that resulted in the deaths of
22 people, including one American and three Saudis. Security
forces rescued 41 hostages in that incident; one of the four
terrorists was wounded and apprehended.
On May 20, 2004, security forces killed four terrorist
suspects and injured another in a gunfight in Qasim Province.
The security forces came under heavy fire from machineguns
after locating five terrorist suspects in a rest house in
Khudairah, a village in the area of Buraidah. Two security
officers were killed. Weapons and ammunition were
confiscated.
On May 1, 2004, four terrorists were killed after carrying
out an attack in Yanbu that left eight people dead and twenty
others wounded. The four belonged to one family: Sameer
Sulaiman Alansari, Sami Sulaiman Alansari, Ayman Abdulqader
Alansari, and Mustafa Abdulqader Abed Alansari.
On April 22, 2004, five terror suspects were killed
following a shootout with security forces in the Al-Safa
neighborhood in Jeddah. Four of them were identified as Ahmad
Abdulrahman Saqr Alfadhli, Khalid Mobarak Habeeb-Allah
Alqurashi, Mostafa Ibrahim Mohammad Mobaraki, and Talal
A'nbar Ahmad A'nbari, numbers 23, 11, 25, and 13 on the most
wanted list published on December 6, 2003.
On April 18, 2004, the Ministry of Interior issued a
statement explaining the developments following incidents on
April 12 and 13, 2004; confirming that security forces had
seized two trucks loaded with 4,118 kilograms of explosives
ready for detonation, plus a car full of weapons; and adding
that various other items and weapons had also been seized at
different locations. Eight suspects have been arrested in
connection with these events.
On March 15, 2004, security forces killed one of Saudi
Arabia's most wanted terror suspects: Khalid Ali Ali-Haj, who
was on the December 6 list of wanted terrorist suspects. Ali-
Haj was a Yemeni national who trained at Al-Qaeda camps in
Afghanistan where he worked closely with Osama bin Laden.
Security forces searched his car and found six hand grenades,
two Kalashnikov assault rifles, ten Kalashmkov ammunition
magazines, three 9-mm pistols and the equivalent of about
$137,000 in cash.
On February 22, 2004, the Ministry of Interior confirmed
the death of A'amir Mohsin Moreef Al Zaidan Alshihri, who was
on the December 6 list of wanted terrorist suspects. He died
some time after being wounded during a clash with police in
Riyadh on November 6, 2003. The body was recently recovered
from where it was buried, just outside the city, and DNA
tests proved that it was Alshihri.
On January 30, 2004, security forces stormed a rest house
in A1-Siliye district in the east of the city of Riyadh,
arrested seven suspects and seized a number of items
including a car rigged with explosives, five rocket-propelled
grenade launchers, seven machine guns, 11 pistols, five hand
grenades, 21 detonators, military uniforms, and ammunition.
On January 12, 2004, the Ministry of Interior announced
that, over the past six months, large quantities of
ammunition and weapons had been seized. The total weight of
confiscated explosives was 23,893 kilograms. In addition, 301
rocket propelled grenades together with launchers, 431
homemade grenades, 304 explosive belts (ready for use by
suicide bombers), 674 detonators, 1,020 small arms and
352,398 rounds of ammunition were confiscated. The Ministry
of Interior also called on everyone in Saudi Arabia to
cooperate in fighting terrorism and extremism.
On December 30, 2003, Mansoor Mohammad Ahmad Faqeeh, whose
name had been published in a December 6 list of 26 wanted
terrorist suspects, surrendered to security authorities.
On December 8, 2003, the Ministry of Interior announced
that Ibrahim Mohammad Abdullah Alrayis, whose name was on the
December 6 list, had been killed by security forces. The
Ministry statement praised citizens' cooperation with the
security forces, who are pursuing those wanted and those who
are trying to undermine the country's security and safety.
On December 6, 2003, the Ministry of Interior published the
names and photos of 26 suspects wanted by security forces in
connection with the terrorist incidents that have taken place
in the Kingdom in the past few months, urging them to
surrender to the authorities. The Ministry called on all
citizens and residents to report information they may have
about any of the wanted suspects. Immediate financial rewards
of up to $1.9 million are being offered for information
leading to the arrest of any wanted suspect, or any other
terrorist elements and cells.
On November 26, 2003, a suspected terrorist was arrested.
The suspect's hiding place was linked to the terrorist cell
involved in the November 9 car bombing at the Al-Muhaya
residential complex in Riyadh. Search of the hiding place
revealed large quantities of arms and documents. Items
discovered by security forces include one SAM-7 surface to
air missile, five rocket-propelled grenade launchers, 384
kilogram of the powerful explosive RDX, 89 detonators, 20
hand grenades, eight AK-47 assault rifles, 41 AK-47
magazines, and 16,800 rounds of ammunition. Also recovered
were four wireless communication devices, three computers,
computer disks and CDs, and SR 94,395 in cash, as well as
numerous identity cards and leaflets calling for the
perpetration of acts of terror.
On November 25, 2003, a car bomb plot was foiled in Riyadh.
The encounter with security forces led to the deaths of two
wanted terrorist suspects: Abdulmohsin Abdulaziz Alshabanat,
who was killed in the exchange of fire, and Mosaed Mohammad
Dheedan Alsobaiee, who committed suicide by detonating the
hand grenade he was carrying. The vehicle that was seized was
loaded with explosives and camouflaged as a military vehicle.
On November 20, 2003, Abdullah bin Atiyyah bin Hudeid Al-
Salami surrendered to security authorities. He was wanted for
suspected terrorist activities.
On November 6, 2003, security forces investigating a
suspected terrorist cell in the Al-Suwaidi district of the
city of Riyadh came under fire from the suspects, who
attempted to flee while attacking security forces with
machine guns and bombs. In the exchange of fire, one
terrorist was killed and eight of the security officers
suffered minor injuries. On

[[Page H8022]]

the same day, in the Al-Shara'ei district of the city of
Makkah, two terrorist suspects, who were surrounded by
security forces, used home-made bombs to blow themselves up.
Their suicide followed a firefight during which they refused
to surrender when requested by the security officers.
On November 3, 2003, Saudi police arrested six suspected
A1-Qaeda militants after a shootout in the holy city of
Makkah in Saudi Arabia. The raid on an apartment triggered a
shootout that left two suspected terrorists dead, and one
security officer wounded.
On October 20, 2003, security forces raided several
terrorist cells in various parts of the country, including
the city of Riyadh, the Al-Majma'a District in Riyadh
Province, Makkah Province, the Jeddah District of Makkah
Province, and Qasim Province. Security forces confiscated
items including C4 plastic explosives, home-made bombs, gas
masks, and large quantities of assault rifles and ammunition.
On October 8, 2003, security forces raided a farm in the
northern Muleda area of Qasim Province and were able to
arrest a suspect. Three other suspects fled the scene. Two
security officers suffered injuries.
On October 5, 2003, security forces arrested three suspects
during a raid in the desert to the east of Riyadh.
On September 23, 2003, security forces surrounded a group
of suspected terrorists in an apartment in the city of Jizan.
During a gun battle, one security officer was killed and four
officers injured. Two suspects were arrested and one killed.
The suspects were armed with machine guns and pistols and a
large quantity of ammunition.
On July 28, 2003, security forces killed six terrorist
suspects and injured one in a gunfight at a farm in Qasim
Province, 220 miles north of the capital, Riyadh. Two
security officers were killed and eight suffered minor
injuries. Four people who harbored the suspects were
arrested.
On July 25, 2003, three men were arrested at a checkpoint
in Makkah for possessing printed material that included a
``religious edict'' in support of terrorist acts against
Western targets.
On July 21, 2003, the Minister of Interior announced that
Saudi authorities had defused terrorist operations which were
about to be carried out against vital installations and
arrested 16 members of a number of terrorist cells after
searching their hideouts in farms and houses in Riyadh
Province, Qasim Province and the Eastern Province. In
addition, underground storage facilities were found at these
farms and homes containing bags, weighing over 20 tons,
filled with chemicals used in the making of explosives.
On July 3, 2003, Turki Nasser Mishaal Aldandany, a top Al-
Qaeda operative and one of the masterminds of the May 12
bombings, was killed along with three other suspects in a gun
battle with security forces that had them surrounded.
On June 26, 2003, Ali Abdulrahman Said Alfagsi Al-Ghamdi,
a.k.a. Abu Bakr Al-Azdi, surrendered to Saudi authorities.
Al-Ghamdi, considered one of the top Al-Qaeda operatives in
Saudi Arabia, is suspected of being one of the masterminds of
the May 12 bombings in Riyadh.
On June 14, 2003, security forces raided a terrorist cell
in the Alattas building in the Khalidiya neighborhood of
Makkah. Two Saudi police officers and five suspects were
killed in a shootout. Twelve suspects were arrested, and a
number of booby-trapped Qur'ans and 72 home-made bombs, in
addition to weapons, ammunition, and masks were confiscated.
On May 31, 2003, Yousif Salih Fahad Al-Ayeeri, a.k.a. Swift
Sword, a major Al-Qaeda operational planner and fundraiser,
was killed while fleeing from a security patrol.
On May 27-28, 2003, eleven suspects were taken into custody
in the city of Madinah. Weapons, false identity cards and
bomb-making materials were confiscated. In addition, Saudi
national Abdulmonim Ali Mahfouz Al-Ghamdi was arrested,
following a car chase. Three non-Saudi women without identity
cards, who were in the car he was driving, were detained.
In May 2003, three clerics, All Fahd Al-Khudair, Ahmed
Hamoud Mufreh Al-Khaledi and Nasir Ahmed Al-Fuhaid, were
arrested after calling for support of the terrorists who
carried out the Riyadh attacks. In November 2003, Ali Fahd
Al-Khudair recanted his religious opinions on Saudi TV.
Shortly after, a second cleric, Nasir Ahmed Al-Fuhaid,
recanted and withdrew his religious opinions describing them
as a ``grave mistake''. On December 16, 2003, Ahmed Hamoud
Mufreh Al-Khaledi became the third cleric to recant on
national television.
Saudi Arabia has provided extensive intelligence and
military cooperation in the assault on Al-Qaeda. Given the
sensitivity of these operations, disclosure of specific
actions or the nature of Saudi cooperation in these areas has
intentionally been limited. However, public disclosures to
date have revealed major Saudi contributions to the breakup
of a number of Al-Qaeda cells, the arrests of key Al-Qaeda
commanders, and the capture of numerous Al-Qaeda members.
In June 2002, Saudi Arabia successfully negotiated with
Iran for the extradition of 16 suspected Al-Qaeda members.
In June 2002, Saudi Arabia asked Interpol to arrest 750
people, many of whom are suspected of money laundering, drug
trafficking, and terror-related activities. This figure
includes 214 Saudis whose names appear in Interpol's database
in addition to expatriates who fled Saudi Arabia.
In early 2002, Saudi intelligence and law enforcement
agencies identified and arrested a cell composed of seven
individuals linked to Al-Qaeda who were planning to carry out
terrorist attacks against vital sites in the Kingdom. The
cell leader was extradited from the Sudan. This cell was
responsible for the attempt to shoot down American military
planes at Prince Sultan Airbase using a shoulder-launched
surface-to-air missile.

INTERNATIONAL COOPERATION

Multilateral cooperation is essential in order to
successfully defeat terrorism. Saudi Arabia has supported
many international and regional efforts in the fight against
terrorism through multilateral and bilateral agreements. The
Kingdom is committed to working closely with the European,
Asian and U.S. governments, and with the United Nations, to
ensure that information is shared as quickly and effectively
as possible.

Specific actions

On July 22, 2004, the final report of the National
Commission on Terrorist Attacks Upon the United States
confirmed: that there is no evidence the government of Saudi
Arabia funded Al-Qaeda; that the post 9-11 flights that
repatriated Saudi citizens, including members of the bin
Ladin family, were investigated by the FBI and ``no one with
known links to terrorism departed on these flights''; and
that the Saudi government had been pursuing Osama bin Laden
prior to the attacks on the United States.
On July 2, 2004, the Financial Task Force (FATF) released
its fifteenth annual report, which contains an evaluation of
Saudi Arabia's laws, regulations and systems to combat money
laundering and terrorist financing. According to this
evaluation: ``Saudi authorities have focused heavily on
systems and measures to counter terrorism and the financing
of terrorism. Specifically, they have taken action to
increase the requirements for financial institutions on
customer due diligence, established systems for tracing and
freezing terrorist assets, and tightened the regulation and
transparency of charitable organizations.''
On April 29, 2004, the Office of the Coordinator for
Counter-Terrorism of the U.S. Department of State released
its 2003 `Patterns of Global Terrorism' report. The report
praises the Kingdom of Saudi Arabia for its ``unprecedented''
efforts to fight terrorism both inside its borders and
abroad. Ambassador J. Cofer Black, Coordinator for Counter-
Terrorism, states in his introductory remarks: ``I would cite
Saudi Arabia as an excellent example of a nation increasingly
focusing its political will to fight terrorism. Saudi Arabia
has launched an aggressive, comprehensive, and unprecedented
campaign to hunt down terrorists, uncover their plots, and
cut off their sources of funding.''
U.S. Secretary of the Treasury John W. Snow said on January
22, 2004: ``The United States, Saudi Arabia, and our other
partners around the globe have spoken out loud and clear--
terrorism has no place in a civilized world. We will continue
to work with Saudi Arabia and all our allies in the war
against terror to seek out those who bankroll terrorist
organizations and shut them down.''
President George W. Bush said on November 22, 2003: ``Crown
Prince Abdullah is an honest man . . . And he has told me
that we are joined in fighting off the terrorist
organizations which threatened the Kingdom and they threaten
the United States, and he's delivering.''
SAMA has also created a committee to carry out self-
assessment for compliance with the FATF recommendations and
these self-assessment questionnaires have been submitted. The
FATF conducted a mutual evaluation on September 21-25, 2003.
Attorney General John Ashcroft commended Saudi Arabia's
efforts in the war on terrorism and stated, on August 29,
2003: ``I believe that progress is being made and I think not
only that it (cooperation) is good but it continues to
improve.''
Saudi Arabia and the United States established a second
joint task force in August 2003, this one aimed at combating
the financing of terror. The task force, which was initiated
by Crown Prince Abdullah, is further indication of the
Kingdom's commitment to the war on terrorism and its close
cooperation with the United States in eradicating terrorists
and their supporters.
In May 2003, a Saudi-U.S. task force was organized from
across law enforcement and intelligence agencies to work side
by side to share ``real time'' intelligence and conduct joint
operations in the fight against terrorism. The U.S.
Ambassador to Saudi Arabia, Robert Jordan, described the
cooperation of Saudi investigators with the U.S. law
enforcement representatives as ``superb''.
On April 30, 2003, Ambassador Cofer Black, Coordinator for
Counterterrorism, released the Annual Patterns of Global
Terrorism 2002 report and stated that ``The Saudi Government
has made significant strides, certainly in the last year.
They are a strong partner in the war on terrorism. In the
past several months, we have made significant strides in our
counterterrorism cooperation. The Saudi Government continues
to work with us in identifying and working to counter al-
Qaeda and other terrorist groups . . . In recent months, I've
made two separate trips to Saudi Arabia to work with senior
officials. This is, in part, what we believe to be a long-
term pattern of close coordination on terrorism issues.''
Saudi Arabia redeployed Special Forces to enhance security
and counter-terrorism efforts.

[[Page H8023]]

Saudi Arabia maintains close relationships with the
intelligence and law enforcement agencies of many other
nations intensifying counter-terrorism cooperation.
Saudi government departments and banks are required to
participate in international seminars, conferences and
symposia on combating terrorist financing activities. Saudi
Arabia has also hosted many seminars, conferences and
symposia on combating terrorism; and is a member of the
Financial Action Task Force (FATF) established by the G-7 in
1988.
In 2002, Saudi Arabia completed and submitted two FATF
self-assessment questionnaires: one regarding the 40 FATF
recommendations on the prevention of money laundering and the
other regarding its eight special recommendations on
terrorist financing.
SAMA exchanges information on activities related to money
laundering and terrorist financing with other banking
supervisory authorities and with law enforcement agencies.
Saudi Arabia has appointed Price Waterhouse Coopers as
advisors for the FATF Mutual Evaluation and the IMF-sponsored
FSAP examination. In addition, the Kingdom has appointed an
executive task force representing SAMA and other government
agencies for a successful outcome of these evaluations.

ACTIONS TAKEN WITH REGARD TO CHARITABLE ORGANIZATIONS

Charitable giving is an important part of Islam and there
are thousands of legitimate charities throughout the Middle
East. Since September 11, Saudi Arabia has conducted a
thorough review of its charitable organizations and has made
a number of specific changes.

Specific actions

On June 2, 2004, a press conference was held at the Royal
Embassy of Saudi Arabia in Washington, DC to announce that
Saudi Arabia and the United States had jointly designated
five branch offices of the Al-Haramain Islamic Foundation as
financial supporters of terrorism. It was also announced that
Saudi Arabia is folding Al-Haramain and other charities which
used to operate abroad into the Saudi National Commission for
Relief and Charity Work Abroad.
On February 27, 2004, the Custodian of the Two Holy Mosques
King Fahd bin Abdulaziz issued a royal order approving the
creation of the Saudi National Commission for Relief and
Charity Work Abroad, which, in order to eliminate any misdeed
that might undermine Saudi charitable operations, is charged
exclusively with responsibility for all donations and
contributions outside the Kingdom.
On January 29, 2004, one week after Saudi Arabia and the
United States requested the designation of four branch
offices of the Al-Haramain Islamic Foundation, the United
Nations Security Council announced that Al-Haramain's offices
in Indonesia, Pakistan, Kenya and Tanzania had been added to
its consolidated list of terrorists tied to Al-Qaeda, Osama
bin Laden and the Taliban. Now that these offices are under
UN sanctions, member states are obligated to take legal
action against them.
On January 22, 2004, Crown Prince Abdullah's Foreign
Affairs Advisor Adel Al-Jubeir and Secretary of the Treasury
John Snow held a joint press conference in Washington, DC to
announce that Saudi Arabia and the United States had asked
the UN Sanctions Committee to designate four branch offices
of the Al-Haramain Foundation as financial supporters of
terrorism. The branches are located in Kenya, Tanzania,
Pakistan and Indonesia and subject to the laws and
regulations of those countries.
On December 22, 2003, Saudi Arabia and the United States
took steps to designate two organizations as financiers of
terrorism under United Nations Security Council Resolution
1267 (1999). These organizations are the Bosnia-based Vazir
and the Liechtenstein-based Hochburg AG. Mr. Safet Durguti, a
representative of the Vazir organization, has also been
designated under the relevant United Nations Security Council
Resolutions as a terrorist financier. This was the third
joint action taken against terrorist financing by the United
States Treasury Department and the Kingdom of Saudi Arabia.
In May 2003, the Saudi Arabian Monetary Agency (SAMA)
distributed an update entitled ``Rules Governing Anti-Money
Laundering and Combating Terrorist Financing'' to all banks
and financial institutions in Saudi Arabia requiring the full
and immediate implementation of nine new policies and
procedures. The new regulations include:
All bank accounts of charitable or welfare societies must
be consolidated into a single account for each such society.
SAMA may give permission for a subsidiary account if
necessary, but such an account can only be used to receive,
not to withdraw or transfer, funds.
Deposits in these accounts will be accepted only after the
depositor provides the bank with identification and all other
required information for verification.
No ATM cards or credit cards can be issued for these
accounts. No cash withdrawals are permitted from the
charitable institution's account, and all checks and drafts
are to be in favor of legitimate beneficiaries and for
deposits in a bank account only.
No charitable or welfare society can open or operate these
bank accounts without first presenting a valid copy of the
required license.
No overseas fund transfers are allowed from these bank
accounts.
SAMA's approval is required to open a bank account.
Only two individuals duly authorized by the Board of a
charitable institution shall be allowed to operate the main
account.
In May 2003, Saudi Arabia asked the Al-Haramain Islamic
Foundation and all Saudi charities to suspend activities
outside Saudi Arabia until mechanisms are in place to
adequately monitor and control funds so they cannot be
misdirected for illegal purposes.
Also in May 2003, SAMA instructed all banks and financial
institutions in the Kingdom to stop all financial transfers
by Saudi charities to any accounts outside the Kingdom.
On April 30, 2003, Ambassador Cofer Black, Coordinator for
Counterterrorism stated: ``We are pleased with the steps the
Saudis are taking to ensure that all charitable donations by
Saudis reach their intended good works and that no funds from
Saudi Arabia are diverted by those who would use them for
evil purposes.''
In December 2002, a special Financial Intelligence Unit was
established to track charitable giving to ensure that no
funds reach evildoers.
In the summer of 2002, in another successful joint anti-
terrorism action, the Kingdom of Saudi Arabia and the United
States took steps to freeze the assets of a close bin Laden
aide, Wa'el Hamza Julaidan, who is believed to have funneled
money to al-Qaeda. Julaidan served as the director of the
Rabita Trust and other organizations.
In March 2002, the U.S. Treasury Department and Saudi
Arabia blocked the accounts of the Somalia and Bosnia
branches of the Saudi Arabia-based Al-Haramain Islamic
Foundation. While the Saudi headquarters for this private
charity is dedicated to helping those in need, the United
States and Saudi Arabia determined that the Somalia and
Bosnia branches supported terrorist activities and terrorist
organizations such as al-Qaeda and AIAI (al-Itihaad al-
Islamiya). In May 2003, Saudi Arabia asked the Al-Haramain
Islamic Foundation and all Saudi charities to suspend
activities outside Saudi Arabia until mechanisms are in place
to adequately monitor and control funds so they cannot be
misdirected for illegal purposes.
Saudi Arabia has established a High Commission for
oversight of all charities, contributions and donations. In
addition, it has established operational procedures to manage
and audit contributions and donations to and from the
charities, including their work abroad.

FREEZING SUSPECTED TERRORIST ASSETS, COMBATING MONEY LAUNDERING

In the wake of the events of September 11, the Kingdom of
Saudi Arabia took prompt action on September 26, 2001 and
required Saudi banks to identify and freeze all assets
relating to terrorist suspects and entities per the list
issued by the United States government on September 23, 2001.
Saudi banks have complied with the freeze requirements and
have initiated investigations of transactions that suspects
linked to Al-Qaeda may have undertaken in the past.

Specific actions

In August 2003, the Council of Ministers approved new
legislation that puts in place harsh penalties for the crime
of money laundering and terror financing. This legislation
stipulates jail sentences of up to 15 years and fines up to
$1.8 million for offenders.
The new law: Bans financial transactions with unidentified
parties; requires banks to maintain records of transactions
for up to 10 years; establishes intelligence units to
investigate suspicious transactions; and sets up
international cooperation on money-laundering issues with
countries with which formal agreements have been signed.
In February 2003, the Saudi Arabian Monetary Agency (SAMA)
began to implement a major technical program to train judges
and investigators on legal matters involving terrorism
financing and money-laundering methods, international
requirements for financial secrecy, and methods followed by
criminals to exchange information.
Saudi Arabia was one of the first countries to take action
against terrorist financing, freezing the assets of Osama bin
Laden in 1994.
Saudi Arabia has investigated many bank accounts suspected
of having links to terrorism and has frozen more than 40
accounts.
Saudi Arabia, as a member of the G-20, approved an
aggressive plan of action directed at the rooting out and
freezing of terrorist assets worldwide. Saudi Arabia is proud
to have been a leader in the development of this plan and its
implementation, and of key objectives for U.S. and
international policies for dealing with terrorism now and in
the future.
SAMA instructed Saudi banks to promptly establish a
supervisory committee to closely monitor the threat posed by
terrorism and to coordinate all efforts to freeze the assets
of the identified individuals and entities. The committee is
composed of senior bank officers who are in charge of risk
control, auditing, money-laundering units, legal affairs, and
operations. The committee meets regularly in the presence of
SAMA officials.
Saudi banks have put in place, at the level of their Chief
Executive Officers, as well as at the level of a supervisory
committee, mechanisms to respond to all relevant inquiries,
both domestic and international. To ensure proper
coordination and effective response, all Saudi banks route
their responses and relevant information via SAMA.

[[Page H8024]]

A Special Committee was established drawing from the
Ministry of Interior, Ministry of Foreign Affairs, the
Intelligence Agency and SAMA to handle requests from
international bodies and countries with regard to combating
terrorist financing.
Even before September 11, Saudi Arabia had taken steps to
ensure that its financial system is not used for illegal
activities. In 1988 the Kingdom signed and joined the United
Nations Convention against Illicit Trafficking of Narcotics
and Psychotropic Substances. In 1995, Saudi Arabia
established units countering money laundering at the Ministry
of Interior, in SAMA and in the commercial banks.

LEGAL AND REGULATORY ACTIONS TO COMBAT TERRORISM

The Kingdom has a strong legislative, regulatory and
supervisory framework for banking and financial services.
This infrastructure ensures that each bank or other financial
service provider remains vigilant and also has strong
internal controls, processes and procedures to not only know
the identity of its customers but also have awareness of
their activities and transactions. Money-laundering and other
suspicious activities are targeted and all those found
violating laws and regulations are subject to severe
financial penalties and imprisonment. Money-laundering crimes
are high-profile crimes and all cases are referred to a
senior court.

Specific actions

SAMA and the Ministry of Commerce issued instructions and
guidelines to the Kingdom's financial and commercial sectors
for combating money-laundering activities. To further
strengthen and implement the current regulations, the
Ministry of Commerce issued Regulation # 1312 aimed at
preventing and combating money laundering in the non-
financial sector. These regulations are aimed at
manufacturing and trading sectors and also cover professional
services such as accounting, legal affairs, and consultancy.
The Saudi Government has taken concrete steps to create an
institutional framework for combating money laundering. This
includes the establishment of units to counter money
laundering, with trained and dedicated specialist staff.
These units work with SAMA and law enforcement agencies. The
government has also encouraged banks to bring money-
laundering-related experiences to the notice of various bank
committees (such as Fraud Committees, and those of Chief
Operations Officers and Managing Directors) for exchange of
information and joint action.
Saudi banks and SAMA have implemented an online reporting
system to identify trends in money-laundering activities to
assist in policy-making and other initiatives.
In May 2003, SAMA issued instructions to all Saudi
financial institutions to strictly implement 40
recommendations of the FATF regarding money laundering and
the eight recommendations regarding terror financing.
Furthermore, SAMA issued instructions to all Saudi financial
institutions prohibiting the transfer of any funds by
charitable organizations outside the Kingdom.
Another major institutional initiative is the creation of a
specialized Financial Intelligence Unit (FIU) in the Security
and Drug Control Department of the Ministry of Interior. This
unit is specially tasked with handling money-laundering
cases. A communication channel between the Ministry of
Interior and SAMA on matters involving terrorist-financing
activities has also been established.
In May 2002, SAMA issued rules ``Governing the Opening of
Bank Accounts'' and ``General Operational Guidelines'' in
order to protect banks against money-laundering activities.
For instance, Saudi banks are not permitted to open bank
accounts for non resident individuals without specific
approval from SAMA. Banks are required to apply strict ``Know
your Customer'' rules and any non-customer business has to be
fully documented
Saudi Arabia carries out regular inspections of banks to
ensure compliance with laws and regulations. Any violation or
non-compliance is cause for serious action and is referred to
a bank's senior management and the Board. Furthermore, the
Government has created a permanent committee of banks'
compliance officers to review regulations and guidelines and
recommend improvements, and to ensure that all implementation
issues are resolved.
Saudi authorities have made significant efforts to train
staff in financial institutions and others involved in
compliance and law as well as those in the Security and
Investigation departments of the Ministry of Interior.
Special training programs have been developed for bankers,
prosecutors, judges, customs officers and other officials
from government departments and agencies. Furthermore,
training programs are offered by the Nayef Arab University
for Security Sciences (formerly the Nayef Arab Academy for
Security Sciences), the King Fahd Security Faculty, Public
Security Training City, and SAMA.
The Saudi government has established a permanent committee
of representatives of seven ministries and government
agencies to manage all legal and other issues related to
money-laundering activities.
In 1995, SAMA issued ``Guidelines for Prevention and
Control of Money-Laundering Activities'' to Saudi Banks to
implement ``Know your Customer'' rules, maintain records of
suspicious transactions, and report them to law enforcement
officials and SAMA.
The first conference for FATF outside the G-7 countries was
held in Riyadh at the SAMA Institute of Banking in 1994.

other initiatives related to fighting terrorism

Saudi Arabia has publicly supported and extended
cooperation to various international efforts to combat
terrorism. These include:
In January 2004, while in Tunis for the 21st session of the
Arab Interior Ministers' Council, Minister of Interior Prince
Nayef bin Abdulaziz called for better coordination of
counterterrorism efforts throughout the Arab world,
declaring: ``It is painful to have some of our sons as tools
of terrorism, but with the joint efforts by our scholars,
intellectuals and mass media, we can confront this matter and
purify our Islamic and Arab thought from all blemishes.''
Saudi Arabia has signed a multilateral agreement under the
auspices of the Arab League to fight terrorism.
Saudi Arabia participates regularly and effectively in G-20
meetings and the Kingdom has signed various bilateral
agreements with non-Arab countries.
Every 90 days, Saudi Arabia prepares and submits to the UN
Security Council Committees upon their request, a report on
the initiatives and actions taken by the Kingdom with respect
to the fight against terrorism.
The Kingdom has supported the following requirements of
various UN resolutions related to combating terrorism:
Freezing funds and other financial assets of the Taliban
regime based on UN Security Council Resolution 1267.
Freezing funds of listed individuals based on UN Security
Council Resolution 1333.
Signing the International Convention for Suppression and
Financing of Terrorism based on UN Security Council
Resolution 1373.
Reporting to the UN Security Council the implementation of
Resolution 1390.
Saudi Arabia has given support to and implemented
Resolution No. 1368 dated September 12, 2001 related to the
financing of terrorist activities.
____

Public Statements by Senior Saudi Officials Condemning Extremism and
Promoting Moderation

public statements promoting moderation

The Qur'an, the Islamic religion and the Kingdom of Saudi
Arabia reject and condemn all forms of religious extremism
that lead to violence, terrorism and the taking of innocent
lives. Islam teaches peace, understanding and tolerance, not
violence or hatred. The Kingdom of Saudi Arabia is steadfast
in believing that those resorting to violence and extremism
are deviants and criminals who must face the full
consequences of their actions. Following are some of the
public statements made by leading officials and religious
leaders in this regard.

``I believe that no society is immune from deviants and
extremists. This situation exists in every country, in every
society and in every faith. These individuals do not
represent their societies. They do not represent the
prevailing thinking of a society.''--Crown Prince Abdullah
bin Abdulaziz, Deputy Prime Minister and Commander of the
National Guard, January 12, 2003.

statements made by government officials and religious leaders

Custodian of the Two Holy Mosques King Fahd bin Abdulaziz
today received senior officials of the Ministry of Education
and advised all those involved in education to adhere to the
Islamic faith and help the new generation distance themselves
from deviant groups and evildoers.--Saudi Press Agency,
September 5, 2004.
In his Friday sermon at the Grand Mosque in Makkah, Imam
Shaikh Saud Al-Sheraim stressed the need for Muslims to seek
advice in searching for the truth, and to embrace cooperation
and reconciliation. The killing and terrorizing of the
innocent that is taking place in Muslim countries, he stated,
is something evil and a sign of great danger, saying: ``Such
acts must never be ignored or justified but confronted and
stopped by all available means.''--Shaikh Saud Al-Sheraim,
imam at the Grand Mosque in Makkah, July 9, 2004.
``We will not allow a wicked group driven by a deviant
ideology to destabilize the Kingdom's security.''--Custodian
of the Two Holy Mosques King Fahd bin Abdulaziz, June 20,
2004.
Deputy Prime Minister and Commander of the National Guard
Crown Prince Abdullah bin Abdulaziz today received citizens
expressing condemnation of terrorist acts. Crown Prince
Abdullah, thanking them for their stance, urged all citizens
to report abnormal behavior to the security authorities. He
confirmed that leaders of the deviant group had been killed,
and called on others involved to turn themselves in before
they are annihilated, declaring that they are followers of
Satan and enemies of religion and their country.--Saudi Press
Agency, June 19, 2004.
``It is with great sadness and pain that we announce the
death of Paul Marshall Johnson, Jr. . . . Today, we are faced
with the tragedy of his gruesome death at the hands of
barbarians who have rejected the teachings of their faith and
the principles of humanity. His brutal murder illustrates the
cruelty and inhumanity of the enemy we all are fighting.''--
Foreign Affairs Advisor to

[[Page H8025]]

the Crown Prince, Adel Al-Jubeir, June 18, 2004.
Shaikh Dr. Salih bin Abdullah bin Humaid, imam at the Grand
Mosque in Makkah, spoke out against terrorism at Friday
prayer today, reiterating that any terrorist act is criminal
and contrary to religion. The recent criminal acts in the
Kingdom, he said, have targeted Muslims who thought
themselves safe as well as non-Muslims who are under
protection through agreements with Muslims. The perpetrators
of these acts, members of a deviant group, have killed and
intimidated people, destroyed property, and wreaked havoc on
earth; and therefore they will surely be punished in hell in
the hereafter.--Saudi Press Agency, June 18, 2004.
``Saudi Arabia does not condone extremism and does not take
part in it. It is true that we support people who seem to us
to be good Muslims. But they are not extremists . . . Young
Saudis who commit these crimes are influenced by bad ideas.
Intellectuals must explain to them what is true and what is
false.''--Minister of the Interior, Prince Nayef bin
Abdulaziz Al-Saud, June 17, 2004.
The Council of Call and Guidance, in its meeting yesterday,
condemned the explosion [at the General Department of Traffic
in Riyadh on April 21, 2004], and urged confrontation of the
deviant ideas that lead to such criminal acts. The Council,
which comprises representatives from various areas of
jurisprudence including the Islamic Affairs Ministry, the
Presidency of the Two Holy Mosques, and the Islamic
universities, called for fortifying young people against
destructive ideas that run counter to the teachings of
Islam.--Saudi Press Agency, April 26, 2004.
``We strongly warn you against heeding misleading edicts
that promote extremism . . . Nobody will approve such a
horrendous crime. It is a prohibited, nefarious, terrorist
act . . . See how much damage these deviants have done to the
image of Islam, the religion of peace.''--Shaikh Abdul Rahman
Al-Sadais, imam at the Grand Mosque in Makkah, April 23,
2004.
``These people want to disrupt security, horrify people who
consider themselves safe, and kill Muslims. It is forbidden
to cover up for such sinful people and whoever does so, will
be their partner in the crime . . . It is also forbidden to
justify the acts of these criminals . . . You have to be
vigilant and have strong will in defending the religion and
the Muslim country against these people.''--Shaikh Abdulaziz
Al-Ashaikh, Grand Mufti, Chairman of the Council of Senior
Religious Scholars, April 22, 2004.
Interior Minister Prince Nayef bin Abdulaziz today
reiterated that such acts of terrorism do not have anything
to do with Islam, and appealed to those who are contemplating
them to come to their senses and surrender, because they will
be caught, and the resolve of the security forces has only
deepened.--Saudi Press Agency, April 21, 2004.
``It is not lawful to protect these deviants and all of us
should denounce them.''--Shaikh Saleh bin Humaid, imam at the
Grand Mosque in Makkah, April 17, 2004.
``Terrorism is a strange phenomenon in a country like the
Kingdom of Saudi Arabia, which has been unwaveringly
implementing the Islamic Shariah . . . The Ulema (Muslim
scholars) do oppose terrorism, and believe in the importance
of obedience of rulers . . . The terror acts which earlier
took place in Makkah, Madinah, and Riyadh run counter to the
teachings of Islam.''--Shaikh Abdulaziz Al-Ashaikh, Grand
Mufti, Chairman of the Council of Senior Religious Scholars,
January 27, 2004.
Shaikh Abdul Rahman Al-Sudais, imam at the Grand Mosque in
Makkah, today denounced plans by militants to destabilize the
Kingdom and undermine its security. ``They have violated the
sanctity of time and place and committed terrorism, violence,
bombings, crime and corruption. `` Shaikh Al-Sudais also
advised the faithful to make use of Ramadan to win God's
forgiveness and mercy. He stressed the need to teach
moderation to the youth. ``This is the joint duty of mosque,
family, school, university and the media,'' he explained.--
Arab News, November 8, 2003.
``Our youth must be inoculated against alien ideas.
Families, schools and mosques as well as the country's ulema
and intellectuals and the media and every sincere person must
contribute to this effort in order to expose alien thoughts
and show the truth.''--Crown Prince Abdullah, June 30, 2003.
``These misguided groups, whose members' minds have been
possessed by the devil, will be punished and defeated, God
willing, along with those who support them.''--Crown Prince
Abdullah, June 22, 2003.
``Terrorism has nothing to do with Islam . . . Islam should
not be blamed for acts of other people. People should be held
responsible individually for their own acts.''--Shaikh
Abdulaziz Al-Ashaikh, Grand Mufti, Chairman of the Council of
Senior Religious Scholars, May 24, 2003.
``We have entrusted a committee of experienced and
knowledgeable people to propagate the moderate views of
Islam.''--Crown Prince Abdullah, May 21, 2003.
``We will not remain idle and watch certain religious
figures who instigate violence by issuing edicts branding
certain people as `infidels'.''--Minister of the Interior,
Prince Nayef bin Abdulaziz Al-Saud, May 15, 2003.
``Whoever did this will regret it because they have
galvanized this country's determination to extract this
cancer (terrorism) and ensure that it doesn't return . . .
they have turned this country into one fist aimed at putting
an end to this heinous wound in the body of this nation so
that it won't return.''--Minister of Foreign Affairs, Prince
Saud Al-Faisal, May 14, 2003.
``Our schools and our faith teach peace and tolerance . . .
There is no room in our schools for hatred, for intolerance
or for anti-western thinking. We are working very hard to
build a world-class educational system which will help our
children be prepared to make substantial contributions to the
global society.''--Minister of Foreign Affairs, Prince Saud
Al-Faisal, December 9, 2002.
``Islam is a religion of compassion, forgiveness and
goodness . . .''--Shaikh Saleh Al-Luheidan, Chairman of the
Supreme Judicial Council, November 6, 2002.
``Islam, as you know, does not advocate terrorism; and the
hurting or killing of human beings is not acceptable by
anyone whether he is a Muslim or not.''--Crown Prince
Abdullah, March 23, 2002.
``Any attack on innocent people is unlawful and contrary to
Shariah.''--Shaikh Muhammad bin Abdullah Al-Subail, imam at
the Grand Mosque of Makkah, December 4, 2001.
``The recent developments in the United States constitute a
form of injustice that is not tolerated by Islam, which views
them as gross crimes and sinful acts.''--Shaikh Abdulaziz Al-
Ashaikh, Grand Mufti, Chairman of the Council of Senior
Religious Scholars, September 15, 2001.
``As a human community we must be vigilant and careful to
oppose these pernicious and shameless evils, which are not
justified by any sane logic, nor by the religion of
Islam.''--Shaikh Saleh Al-Luheidan, Chairman of the Supreme
Judicial Council, September 14, 2001.

[Press Release, June 15, 2004]

saudi religious scholars promote interfaith peace and condemn terrorist
acts

Both abroad and at home, Saudi religious scholars are
condemning acts of terrorism and promoting the Islamic
principles of peace and tolerance.
At an Embassy press conference in London, U.K., Minister of
Islamic Affairs Shaikh Salih bin Abdulaziz Al-As-Shaikh
stated that Saudi Arabia has achieved a great deal of success
in combating terrorism, with many perpetrators killed or
arrested. The Kingdom, he said, enjoys political, economic
and social stability in spite of the terrorist incidents that
have recently occurred. Islam, he reiterated, is a religion
of love and tolerance that calls for dialogue with others.
Shaikh Abdulrahman Al-Sudais, one of the imams at the Grand
Mosque in Makkah, led Friday prayers on June 11 with over
55,000 worshippers gathered in and around the East London
Mosque. Calling for interfaith peace and harmony, he urged
Muslims to be united in setting an example of ``the true
image of Islam'' in their interactions with other
communities. ``The history of Islam,'' he declared, ``is the
best testament to how different communities can live together
in peace and harmony.''
In Saudi Arabia, a number of well-known Muslim scholars
issued a statement on June 13 strongly condemning the recent
incidents that led to the killing of people and the damaging
of property as outrageous crimes forbidden by the Islamic
religion.
According to Ambassador to the United States Prince Bandar
bin Sultan: ``Senior religious scholars in Saudi Arabia have
continually and unequivocally condemned terrorism. In our war
against terrorism, these condemnations are a powerful
weapon.''

[Press Release, Apr. 28, 2004]

saudi foreign minister on role of religious establishment in war
against al-qaeda

At the Council on Foreign Relations (CFR) in New York
yesterday, Saudi Arabia's Minister of Foreign Affairs Prince
Saud Al-Faisal explained that, contrary to accusations by the
Kingdom's critics, the religious establishment is a critical
asset in the nation's war against Al-Qaeda. During the CFR
conference entitled `The United States and Saudi Arabia: A
Relationship Threatened By Misconceptions', Prince Saud
stated: ``It is the religious establishment in Saudi Arabia
that in fact is proving to be the body most qualified to de-
legitimatize Al-Qaeda's claims, the very religious community
that is being attacked and discredited.''
According to Prince Saud Al-Faisal: ``The insular extremism
of Saudi Arabia's arch-conservatives is being used as
evidence for not only the sympathy, but also the
collaboration of Saudi Arabia and its society with Al-Qaeda's
aims and objectives. Nothing is further from the truth, as
evidenced by the war being waged relentlessly against Al-
Qaeda in Saudi Arabia, and the support that the society is
giving the government's efforts to rid the country of these
evildoers.''
Prince Saud Al-Faisal also explained that attacks on Saudi
Arabia and its religious establishment ``will undermine the
country that is waging total war against them [Al-Qaeda], and
that is probably the country most capable of preventing them
from spreading their cultist ideology in the Islamic world.''
On April 22, the day after the recent bombing in Riyadh,
Shaikh Abdulaziz Al-Ashaikh, the Grand Mufti of Saudi Arabia
and Chairman of the Council of Senior Religious Scholars,
issued a statement calling the incident a ``forbidden and
sinful act''. The statement continued: ``It is also forbidden
to justify the acts of these criminals.'' Shaikh

[[Page H8026]]

Abdulaziz Al-Ashaikh also stated: ``You have to be vigilant
and have strong will in defending the religion and the Muslim
country against these people.''

[Press Release, Feb. 2, 2004]

KING AND CROWN PRINCE ADDRESS PILGRIMS--Statement Condemns Terrorism
and Promotes Tolerance

The Custodian of the Two Holy Mosques King Fahd bin
Abdulaziz and Crown Prince Abdullah bin Abdulaziz, Deputy
Prime Minister and Commander of the National Guard, issued a
joint statement from Mina on the occasion of Eid Al-Adha,
addressing Muslims everywhere as well as the two million
pilgrims gathered for Hajj. The statement, read on their
behalf on Saudi television, unequivocally denounced terrorism
and called for global cooperation in the war against it. The
following are highlights from the statement:
``The entire world, including the Kingdom of Saudi Arabia,
has been harmed by many acts of terror intended to undermine
stability, and spread fear and evil. Some of these events
have been perpetrated by individuals unfortunately claiming
to be Muslims. It is necessary to clarify the position of
Islam concerning these events and their perpetrators. These
acts, and those who carry them out, are deviant. It is
important to oppose them. These acts are a function of false
ideas, contrived by individuals who have strayed from the
truth, and contradict the teachings of religion.''
``The Kingdom opposes all forms of terrorism, and is
fighting it locally and condemning it internationally, and is
working to uproot it and expose its negative impact on
society.''
``The Kingdom urges the international community to
vigorously confront the menace of terrorism, and supports all
peace-loving countries in fighting and uprooting it. A
comprehensive plan for combating terrorism by all countries
must be implemented so that terrorists will not be allowed to
conduct their subversive activities from any territory.''
``Islam is a noble faith. It does not tolerate hatred and
malice.''

[Press Release, Feb. 2, 2004]

SAUDI ARABIA'S TOP CLERIC URGES MUSLIMS TO REJECT TERRORISM

Shaikh Abdulaziz Al-Ashaikh, the Grand Mufti of Saudi
Arabia and Chairman of the Council of Senior Religious
Scholars, delivered a sermon to almost two million pilgrims
at the peak of the Hajj. As Saudi Arabia's highest religious
authority, he used this important occasion to denounce
terrorism and those who perpetrate it in the name of
religion.
During his sermon he highlighted the importance of
educating others about Islam, so that terrorists will not be
able to claim that their reprehensible actions have anything
to do with the true faith: ``You must know Islam's firm
position against all these terrible crimes. The world must
know that Islam is a religion of peace and mercy and
goodness; it is a religion of justice and guidance . . .
Islam has forbidden violence in all its forms. It forbids the
hijacking airplanes, ships and other means of transport, and
it forbids all acts that undermine the security of the
innocent.''

[Press Release, Jan. 28, 2004]

SAUDI ARABIA'S LEADING RELIGIOUS AUTHORITY CONDEMNS TERRORISM

Shaikh Abdulaziz Al-Ashaikh, Saudi Arabia's Grand Mufti and
Chairman of the Council of Senior Religious Scholars,
reaffirmed that Islam does not tolerate bloodshed and
absolutely prohibits acts of terrorism against Muslims and
non-Muslims.
During a lecture in Makkah, Shaikh Al-Ashaikh warned his
listeners of the destabilizing effect that terrorism can have
on society. Acknowledging that terrorism results from deviant
ideas, Shaikh Al-Ashaikh emphasized the importance of
educating and protecting the younger generation from such
misguided thoughts. He remarked that terrorism is an
aberration in a country like the Kingdom of Saudi Arabia,
because the country lives under Islamic law which forbids
violence and terrorism. Shaikh Al-Ashaikh added: ``The terror
acts which earlier took place in Makkah, Madinah and Riyadh
run counter to the teachings of Islam.''
Shaikh Al-Ashaikh has always taken a strong stand against
extremism, warning Muslims that extremism and fanaticism lead
only to violence and the death of innocent people. ``Islam is
not a religion of violence. It is a religion of mercy for
everyone,'' stated Shaikh Al-Ashaikh.

[Press Release, Jan. 8, 2004]

CROWN PRINCE PROMOTES NATIONAL DIALOGUE TO COUNTER EXTREMISM

The King Abdulaziz Center for National Dialogue recently
concluded its Second National Forum for Intellectual
Dialogue. The forum was entitled `Extremism and Moderation: A
Comprehensive Approach'. Some 60 participants, both men and
women, discussed fifteen academic papers prepared by
researchers on topics such as ``Characteristics of the
Extremist Personality'' and ``The Relationship Between Ruler
and Ruled, Rights and Duties of Citizens and Their
Relationship with Extremism.''
Deputy Prime Minister and Commander of the National Guard
Crown Prince Abdullah emphasized the importance of dialogue
when he stated: ``I have no doubt that the establishment of
the Center and the continuation of dialogue within its
boundaries will become a historic achievement that
contributes to the creation of a channel for objective
expression that would have an effective impact in combating
extremism and fostering a pure atmosphere that could give
birth to wise positions and illuminating ideas that reject
terrorism and terrorist thought.''
Following the event, Crown Prince Abdullah hosted a
reception on January 3 in honor of the participants, where he
stressed the importance of tolerance and moderation in both
public and private lives, stating: ``Islam advocates
moderation.'' Crown Prince Abdullah has repeatedly emphasized
the need to address the underlying causes of terrorism. He
has stated: ``The bullets that kill women and children,
terrorize those secure in their safety, and destroy innocent
communities, come not only from rifles, but from deviant
thoughts and misguided interpretations of our great religion
and its noble message.'' One of the goals of the Kingdom's
initiative to promote open dialogue and national debate is
the ultimate rejection of extremist ideology.

[Press Release, Nov. 25, 2003]

KING FAHD, CROWN PRINCE ABDULLAH CALL ON MUSLIMS TO UNITE AGAINST
TERROR, COMBAT ROOTS OF EXTREMISM

The Custodian of the Two Holy Mosques King Fahd bin
Abdulaziz and Crown Prince Abdullah bin Abdulaziz, Deputy
Prime Minister and Commander of the National Guard, in a
joint statement issued today, congratulated Muslims on the
occasion of the blessed Eid Al-Fitr, and called upon them to
``work for the stability and security of Islamic countries
and the whole world and overcome the obstacles to world
peace.''
King Fahd and Crown Prince Abdullah said that the recent
bombings in Riyadh had nothing to do with Islam and that
Muslims should ``work together to combat the roots of
extremism.'' In their message, they stated: ``We must
intensify our efforts and stand united to rectify defects and
distortions, correct erroneous understanding and lead
delinquents to the right path.''
King Fahd and Crown Prince Abdullah also said that ``a true
Muslim does not spread corruption nor does he seek
destruction,'' and urged Muslims to follow the Prophet
Muhammad (peace be upon him) who was an example of tolerance
and mercy.

[Press Release, Sept. 4, 2003]

KING FAHD ADDRESSES ROLE OF MOSQUE IN ISLAM AND CONDEMNS EXTREMISM

The Custodian of the Two Holy Mosques King Fahd bin
Abdulaziz, in a message to the nineteenth session of the
World Supreme Council for Mosques August 30, emphasized the
important mission of the mosque in Islam, which is to promote
peace, tolerance, moderation and wisdom. King Fahd added that
fulfillment of this mission will help show the youth the
correct path of Islam, distancing them from grievance,
aggression and evil.
King Fahd condemned all forms of terrorism and warned that
terror networks were using misguided Muslim youths to further
their cause. King Fahd added: ``By playing into the hands of
terror networks, these youths have tarnished the image of
Islam and Muslims.''

[Press Release, Aug. 21, 2003]

SAUDI ARABIA'S HIGHEST RELIGIOUS AUTHORITY WARNS AGAINST THE DANGERS OF
EXTREMISM

Shaikh Abdulaziz Al-Ashaikh, the Grand Mufti of Saudi
Arabia and Chairman of the Council of Senior Ulema [religious
scholars], issued a statement today warning Muslims that
extremism and fanaticism lead only to violence and the death
of innocent people. Shaikh Al-Ashaikh emphasized that
``Muslims must understand that the path of reform never comes
through violence. Islam is not a religion of violence. It is
a religion of mercy for everyone.''
Shaikh Al-Ashaikh stated: ``One of the fall-outs from
extremism in understanding Islam is that some people call for
jihad for the sake of God without justification These people,
who call for jihad, want to raise the banner of jihad to draw
the youth into their ranks, and not to fight for the Almighty
God.''
Saudi Arabia s religious leaders have repeatedly and
unequivocally condemned terrorism in all its forms. Following
the Riyadh bombings on May 12, Shaikh Al-Ashaikh stated:
``Terrorism has nothing to do with Islam . . . Islam should
not be blamed for the acts of other people. People should be
held responsible individually for their own acts.''

[Press Release (Excerpts), May 20, 2003]

KING FAHD VOWS TO EXPAND REFORMS

No tolerance for terrorism

In an address to the Consultative Council, King Fahd bin
Abdulaziz pledged to expand the breadth and pace of reform in
the country and affirmed the government s resolve to crack
down on terrorism.
``The people of Saudi Arabia oppose all forms of terrorism,
and will never allow any faction of deviant terrorists to
harm the country and undermine the safety of its citizens and
residents. We will not allow any deviant ideology that
encourages and feeds terrorism'', said King Fahd. ``This
nation is determined to eradicate all forms of terrorism.''
The King also emphasized that public education is critical
to religious moderation, tolerance and the peaceful teaching
of Islam. The King called upon religious leaders to promote
social harmony and unity.

[[Page H8027]]

In King Fahd's words: ``It is the responsibility of our
religious leaders to save our youth from the evil of
destructive thoughts that propagate extremism and hatred and
only result in devastation and ruin.
No one can ignore the seriousness of our move toward
reform. And I say to every citizen that each one of us has a
role and a responsibility in this endeavor. I say to each
government official that public service is an honor, which
has obligations to the public good, but does not convey any
special privileges. I say to every businessman that our
economy is not just a source of capital and profit, but it is
an investment in national security and safety. I say to every
woman that this nation is for all and you will be a partner
in making its future. And I say to officials in education
that they are shapers of future generations. Good education
promotes character and instills values in the young for the
benefit of this nation.
``And I say to every citizen that one of the most important
obligations is to confront narrow mindedness, regionalism and
social division. Confronting these ills is a requirement of
our faith and contributes to national unity.
The world we live in is at a crossroads. We are part of
this world and cannot be disconnected from it. We cannot be
mere spectators while the rest of the world is progressing
towards a new global system. This country is the heart of the
Muslim World, and the cradle of Arab identity. Therefore, we
should rise to the challenges and support each other in
carrying out responsibilities and duties.''

[Press Release, May 13, 2003]

ADDRESS TO THE NATION--CROWN PRINCE ABDULLAH BIN ABDULAZIZ

In the name of God, most compassionate, most merciful
My fellow citizens:
May God's peace and blessing be upon you.
The tragic, bloody and painful events that took place in
the heart of our dear capital, Riyadh, last night, in which
innocent citizens and residents were killed or injured, prove
once again that terrorists are criminals and murderers with
total disregard for any Islamic and human values or decency.
They are no different from vicious animals whose only concern
is to shed blood and bring terror to those innocents under
God's protection.
These tragic events should serve as a warning to the
unwary, and should restore sanity to the deluded. The
perpetrators are but a small group of deviants whose
objective is to do harm to our society by doing damage to its
security.
On the other hand, the whole Saudi nation, old and young,
men and women, stand shoulder-to shoulder in condemning this
heinous act and expressing their rejection of those who
perpetrated it. We will be steadfast in defending our
homeland, the cradle of Islam, and the heart of the Arab
world.
If these murderers believe that their criminal and bloody
act will shake our nation or its unity, they are mistaken.
And if they believe they can disrupt the security and
tranquility of our nation, they are dreaming. This is because
the Saudi people, who have embraced the Holy Book as their
guide and the Shari'a as their way of life, and who have
rallied behind their leaders, who in turn embraced them, will
not permit a deviant few to shed the blood of the innocent
which God Almighty, in His infinite wisdom and justice, has
sanctified. The entire Saudi nation, and not just its valiant
security forces, will not hesitate to confront the murderous
criminals.
There can be no acceptance or justification for terrorism.
Nor is there a place for any ideology which promotes it, or
beliefs which condone it. We specifically warn anyone who
tries to justify these crimes in the name of religion. And we
say that anyone who tries to do so will be considered a full
partner to the terrorists and will share their fate. As
revealed in the Holy Qur'an: ``If a man kills a believer
intentionally, his recompense is Hell, to abide therein
(forever): and the wrath and the curse of God are upon him,
and a dreadful penalty is prepared for him.''
Further, as revealed in the Holy Qur'an, the taking of an
innocent life is a crime against all of humanity. In the
words of the Prophet (God's peace and mercy be upon him):
``He who kills a resident living in peace among you, will
never breathe the air of heaven.''
These messages, which do not require any interpretation,
provide clear evidence that the fate of those murderers is
damnation on earth and the fury of Hell in the thereafter.
I vow to my fellow citizens and to the friends who reside
among us, that the State will be vigilant about their
security and well-being. Our nation is capable, by the Grace
of God Almighty and the unity of its citizens, to confront
and destroy the threat posed by a deviant few and those who
endorse or support them. With the help of God Almighty, we
shall prevail.

[Press Release, May 13, 2003]

PRINCE BANDAR'S STATEMENT ON THE TERRORIST ATTACKS IN RIYADH

His Royal Highness Prince Bandar bin Sultan, Saudi
Ambassador to the United States, issued the following
statement on the terrorist attacks in Riyadh:
The terrorist attacks on Saudi Arabia May 12 are evil and
unforgivable crimes. I send my deepest condolences on behalf
of the people of Saudi Arabia to all of the American victims
and their families and to the Saudi, European, Arab and Asian
families. My government promises that we will not rest until,
together, we hunt down these criminals and bring them to
justice. And when we do, their punishment will be swift and
severe.
No words can express our feelings for the loss of the
innocent people who were murdered and injured. Those victims
were Arabs, Americans, Europeans, and Asians. They were
Muslims as well as Christians. The attack was an attack on
humanity. We reject the terrorists who express their hatred
for our people and our friends through such cowardly actions.
These terrorists have turned their backs on our people and
they have perverted our faith; they do not in any way
represent Islam. They only represent hatred towards all of
humanity. As a nation of peace, the Kingdom of Saudi Arabia
will work to protect our citizens and our friends who live
and work in our country, American, Arab, European, African or
Asian, Muslim or non-Muslim; and we are determined to
eradicate the terrorists who bring violence and hatred to the
whole world, as Crown Prince Abdullah declared today.
The target of the Al-Qaeda terrorists is Saudi Arabia and
the United States and the 70-year relationship that has
benefited both our peoples; and at a time when we are working
together to bring peace and stability to the people of the
Middle East, their aim is to destroy our alliance through
violence. But they will not succeed. We say to the people of
the United States, as your friend and ally, you can rely on
us to do our part as we have done in critical times in the
past. We will continue to hunt down the criminals, we will
continue to cut off their finances and we will bring them to
justice.
On this day, grief and pain weigh on our hearts. I pray
that God Almighty continues to give us the wisdom and courage
that will lead our nations and the world into a new era of
peace and prosperity for all mankind, of all faiths.

[Press Release, Feb. 13, 2003]

saudi king and crown prince address muslims

Statement contains messages of peace, and stance on Iraq

The Custodian of the Two Holy Mosques, King Fahd bin
Abdulaziz, and Crown Prince Abdullah bin Abdulaziz, Deputy
Prime Minister and Commander of the National Guard, issued a
statement Monday from the Holy Site of Mina on the occasion
of Eid Al-Adha 2003, addressing the 2 million pilgrims
gathered for Hajj and all Muslims everywhere.
The following are excerpts from the statement.
``. . . Islam is a religion of peace and tolerance, ease in
the implementation of religious teachings, duties and rites;
and tolerance in day-to-day dealings with people . . .''
``. . . The government of Saudi Arabia has condemned terror
in all its forms. It took a leading role in urging the
international community to challenge this sinister world
phenomenon . . .''
``. . . In this world, the Muslim has a constructive role
to play, and he should strive to prove that he is equal to
the task. He should endeavor to promote the welfare of
mankind and preserve the five necessities as is required by
religion, namely: religion, mind, honor, self and property .
. .''
``. . . The [Kingdom] set into motion the call to Islamic
solidarity to bring Muslims together, overcome dissensions
and eliminate their causes, promote all that may lead to
harmony and eliminate all that may lead to misunderstanding .
. .''
``. . . Towards this end the Kingdom of Saudi Arabia
submitted a peace initiative to the 14th Arab Summit held in
Beirut [in March 2002]. The Saudi initiative was adopted by
the Summit and became an Arab peace plan with international
support.''
``Our attitude towards the Iraq situation and towards
complete disarmament in the area of weapons of mass
destruction is within the aforementioned principles. In fact
it is an endeavor to put these principles into practice. We
are doing all we can to spare Iraq and its people as well the
entire region, the dangers and woes of war and its
ramifications. We hope that the efforts being made to solve
the crisis by peaceful means will be successful. Likewise we
hope that reason will prevail and that constructive dialogue
be given a chance to find a peaceful resolution.''
``With regard to weapons of mass destruction, whether in
this region or in any other part of the world, the Kingdom
lends its full support to international efforts to eliminate
such weapons irrespective of whether they are nuclear,
chemical, or biological. The Kingdom calls on the
international community to do all that is necessary to
support all efforts required to eliminate weapons of mass
destruction . . .''

[Press Release, Feb. 11, 2003]

saudi religious leaders forbid attacks on non-muslims

Saudi Arabia's Council of Senior Ulema (Religious Scholars)
has issued an edict condemning attacks and other violence
against innocents. The edict also conveys that it is a crime
to randomly judge people as ``infidels'' and target them for
violence.
The Grand Mufti of Saudi Arabia and Chairman of the Council
of Senior Ulema Shaikh Abdulaziz Al-Ashaikh said that this is
a very serious matter as it relates to the shedding of
innocent blood, the bombing of buildings, and the destruction
of public and private installations. The edict issued by the
Council on this matter is as follows:
``The acts of shedding the blood of innocent people, the
bombing of buildings and ships, and the destruction of public
and private installations are criminal acts and

[[Page H8028]]

against Islam. Those who carry out such acts have deviant
beliefs and misguided ideologies and are to be held
responsible for their crimes. Islam and Muslims should not be
accountable for the actions of such people. Islamic Law
clearly prohibits leveling such charges against non-Muslims,
warns against following those who carry such deviant beliefs,
and stresses that it is the duty of all Muslims all over the
world to consult truthfully, share advice, and cooperate in
piety and righteousness.''
Violence against Westerners has not been an issue or
problem in Saudi Arabia. However, the religious authorities
took this step to reinforce the prohibition in Islam against
all forms of violence.

[Press Release, Feb. 4, 2003]

statement regarding saudi education system

In 70 years, Saudi Arabia has formed a nationwide
educational system that provides free education from
preschool through university to all citizens. Today, there
are eight universities, over 100 colleges and more than
26,000 schools. Some 5 million students are enrolled in the
educational system, which boasts a student to teacher ratio
of 12.5 to 1.0--one of the lowest in the world.
The Saudi government recently conducted an audit, which
determined that about five percent of school textbooks and
curriculum guides contained possibly offensive language. A
program is now in place to eliminate such material from
schools. Saudi Arabia's Crown Prince Abdullah recently urged
a gathering in Riyadh of young people from around the world
to shun extremism, saying: ``Ours is a tolerant and temperate
faith and we must conduct ourselves accordingly. There is no
room for extremism or compulsion in Islam. In fact, it
violates the tenets of our faith and the traditions of our
Prophet.''
The Crown Prince also told the gathering: ``Wisdom and
reason must guide your statements and actions; you must not
let emotions sway you. It is your responsibility, when you
return to your nations, to counsel people to employ wisdom,
patience and reason in dealing with issues.''
Foreign Minister Prince Saud Al-Faisal recently stated:
``We are working very hard to build a world-class educational
system which will help our children be prepared to make
substantial contributions to the global society. Our schools
and our faith teach peace and tolerance.''
The Saudi commitment to its education system also includes
approved budgets for the construction of 780 new schools as
well as improvements to another 380 schools. Part of this
funding will improve and equip a number of educational
facilities, such as supplying schools with computers and
laboratory equipment. The funding will also provide
maintenance to existing schools.

[Press Release, Jan. 13, 2003]

Saudi Crown Prince Calls for Moderation and Tolerance

At a gathering hosted at his home in Riyadh for
distinguished visitors to the Al-Jenadriyah Festival, Crown
Prince Abdullah called upon regional leaders to promote
moderation and tolerance. He said that this was a time for
deep thought and reflection, for tolerance and moderation,
for honesty and sincerity. He urged scholars and
intellectuals to exert their efforts toward bringing people
together not dividing them.
``The scholar, the author, the thinker, the philosopher and
the poet all must strive to bring humanity together'', stated
the Crown Prince. ``I have faith in your ability to
contribute to the greater good.''
The Crown Prince also commented: ``Reason, patience,
moderation and kind words help bring people together.''
He urged those assembled to reject extremism and
intolerance.

[Press Release, Dec. 7, 2002]

Mosques not to be used as Political Platforms

Official order sent to Imams and Khuttab

In an official letter to Saudi religious leaders, Shaikh
Saleh Al-Ashaikh, Minister of Islamic Affairs, said
restrictions have been put in place to prohibit unauthorized
persons from making speeches at mosques. The order,
distributed as part of a new program for the care of mosques
and their workers, warned speakers at mosques against making
provocative speeches and inciting people.
The letter said that mosques are meant only for prayer,
guidance and other pious activities and should not be used as
political platforms.
Al-Ashaikh warned speakers against misusing mosques to make
provocative speeches or incite people or exploit mosques by
reciting poems in praise of some misguided people. Violators
of the order can be subject to severe punishment, including
removal from office.
Al-Ashaikh also commended the efforts of the imams and
khuttab in fulfilling their religious duties by leading
people in prayers and providing advice and guidance. He also
called upon the imams and khuttab to serve as models for
others by spreading love and brotherhood.

Excerpts from a letter sent by Crown Prince Abdullah to President
George W. Bush on September 10, 2002

``. . . terrorism has no religion or nationality it is pure
evil, condemned and abhorred by all religions and cultures.
``We in Saudi Arabia felt an especially great pain at the
realization that a number of young Saudi citizens had been
enticed and deluded and their reasoning subverted to the
degree of denying the tolerance that their religion embraced,
and turning their backs on their homeland, which has always
stood for understanding and moderation. They allowed
themselves to be used as a tool to do great damage to Islam,
a religion they espoused, and to all Muslims. They also aimed
at causing considerable harm to the historic and strong
relationship between the American people and the people of
Saudi Arabia. I would like to make it clear that true Muslims
all over the world will never allow a minority of deviant
extremists to speak in the name of Islam and distort its
spirit of tolerance. Your friends in the Kingdom of Saudi
Arabia denounced and condemned the September 11 attacks as
strongly as did the American people.
``. . . nothing can ever justify the shedding of innocent
blood or the taking of lives and the terrorizing of people,
regardless of whatever cause or motive. Therefore, we do not
simply reiterate sincere and true condolences to the
relatives of the victims, but assure all of our continued
will and determination to do our utmost to combat this
malignant evil and uproot it from our world.''
One of the things I hear within my own press here in the United
States, why are not more of the Muslim Nations speaking out against
terrorism. Well, Mr. Speaker, here is a book full of it. Who are these
people? The king and crown prince address the Nation; Saudi Arabia's
top clerics urge Muslims to reject terrorism; Saudi Arabia's leading
religious authorities condemn terrorism in public statements; King
Fahd, Crown Prince Abdallah call on Muslims to unite against terror,
combat roots of extremism; Crown Prince Abdallah Aziz statements
against terrorism; and the entire Cabinet and Shura Council statements
on combating terrorism and rejecting it. The key I think in here is the
top leading Muslim leaders within their religious contract purport and
talk about the negligence of terrorism itself.
Mr. Speaker, the dialogue is so key and the things that we do. I have
an article here. I want to talk about peace in the Middle East and a
little bit of how I see that we are going to purport, though this is a
one man's opinion and I wish it had been my vision, but greater men
with greater visions purported this. It has already passed by the
United Nations. It was accepted by the United States. It was supported
by the Arab League, and it was supported by Crown Prince Abdallah Aziz.
This article recently in, I believe it is the New York Times, talks
about a Sharon's plan to reunite the Gaza and the West Bank, primarily
the Gaza in this article.

[From the New York Times, Sept. 13, 2004]

Israelis Protest Sharon's Plan To Oust Jews From Gaza

(By Greg Myre)

Jerusalem, Sept. 12.--Tens of thousands of right-wing
Israelis packed the streets of central Jerusalem on Sunday
night in the latest mass protest against Prime Minister Ariel
Sharon's plan to withdraw Jewish settlers from the Gaza
Strip.
The rally occurred just hours after Mr. Sharon said at a
cabinet meeting that growing incitement by right-wing
activists could lead to violence, or even civil war in
Israel.
``We have witnessed in the past few days a very grave
campaign of incitement, I would say, with calls that in
essence are aimed at inciting a civil war,'' Mr. Sharon told
his ministers in the first few minutes of the meeting, which
was filmed by television crews. ``I see this as very grave.''
The demonstrators, meanwhile, filled Zion Square in a rally
organized by settlers and their backers as part of their
efforts to derail the plan to pull out of Gaza, tentatively
set for next year.
``Sharon, what happened to you?'' read one banner,
referring to his decades of strong support for settlements.
``The government of Sharon is a government of destruction,''
said another held by the protesters, many of them young
settlers.
The prime minister has said he sees no future for Israelis
in Gaza, and is willing to leave the territory while trying
to strengthen Israel's hold on the much larger West Bank
settlements.
Both developments reflect the mounting tension in Israel as
Mr. Sharon prepares to proceed with the withdrawal plan,
which has the backing of most Israelis, polls show. But the
Gaza pullout faces strong opposition from the well-organized
settlers, in addition to segments of Mr. Sharon's own Likud
Party and some other traditional supporters.
In recent days, some right-wing settler activists have
warned that government efforts to remove the 8,000 settlers
from Gaza, which is home to 1.3 million Palestinians, could
lead to open conflict among Israelis. Mr. Sharon urged his
cabinet ministers to speak out against such threats, though a
number of ministers are opposed to the withdrawal.
Zevulon Orlev, the social welfare minister and a critic of
the Gaza pullout, said it was wrong of Mr. Sharon to blame
the settlers for the tense political atmosphere.

[[Page H8029]]

``How did we get to a process of decision making that some
say is tainted with illegitimacy?'' Mr. Orlev told Israel
radio. ``The prime minister and the cabinet must do some soul
searching.''
Despite several opinion surveys showing solid public
backing for a Gaza withdrawal, Likud Party members rejected
the plan in May. But the ballot was nonbinding, and Mr.
Sharon later secured a slim majority in his cabinet for the
pullout. In recent weeks, Israeli authorities have said
repeatedly that they fear an extremist could attack a
political leader or a security official.
In 1995, Prime Minister Yitzhak Rabin was shot by a Jewish
extremist opposed to his interim peace agreements with the
Palestinians, which included handing over some land that
Israel captured in 1967.
The Yesha Council, the main group representing settlers in
the West Bank and Gaza, said it would use only lawful means
to oppose the withdrawal. The group has organized several
large protests in recent months, including the one on Sunday.
``We believe the disengagement plan is harmful to Israel,
but we only support peaceful protests,'' said Josh Hasten, a
council spokesman. ``We are saddened by the prime minister's
comments, which seem to depict an entire group in an
unfavorable light.''
The Palestinian leadership supports an Israeli withdrawal
from Gaza but wants the pullout to be coordinated with the
Palestinians, a demand Mr. Sharon has refused.
The Palestinians, who are seeking a state based on the
lines that existed before the 1967 Arab-Israeli war, are also
demanding a withdrawal of all West Bank settlers. The settler
population has been growing at a rate of around 10,000
annually in recent years.
In another development on Sunday, a lawyer representing
Israel told the High Court of Justice in Jerusalem that the
state would re-examine parts of a West Bank separation
barrier that has been constructed near Qalqilya, a
Palestinian town, those present said.
The Association for Civil Rights in Israel filed the
petition on behalf of Palestinian villagers who have been cut
off from farmland and face other difficulties, said Yoav
Loeff, a spokesman for the group. The judge gave the state 60
days to respond, Mr. Loeff said.
It will be the first time the state will re-examine a
significant section of the barrier that has already been
built, he said.
Also on Sunday, Israel charged six Egyptian students with
plotting to kidnap and kill Israeli soldiers in an effort to
support the Palestinians. The six, who were charged in
Beersheba in southern Israel, had been arrested two weeks ago
near the desert border, armed with knives, Reuters reported.

{time} 2320

Mr. Speaker, I ask you, can we, as a world, as the United States,
watch Israel and Palestine destroy each other increasingly day by day,
more and more; as we watch Arafat and his direction of terrorism, and
as we look at Israel on both sides, Israel and the Palestinians' loss
of life, which affects us in the United States, and it affects the Arab
nations, and it affects the world.
I believe the key to peace is one initiative that was supported by
the Crown Prince before the Arab League. It basically reports
resolutions 194, 242 and 338, which say, basically, that Israel should
turn back the occupied lands prior to 1967.
Now, this is coming from a strong supporter of Israel. I flew in
Israel in the 1970s. I flew Mirage there. I have many Israeli friends
and I have many Persian and Arab friends. But I believe that a strong,
free Israel, an Israel that is not attacked daily, an Israel that does
not have to kill its own neighbors to support itself is a much better
world. If we implement those resolutions supported by the United
Nations, supported by the Arab League, supported by the United States,
supported by NATO, which never made it into power, it never made it
into law, then we would have a much better Israel and a safer world.
Now, if Israel gave back the occupied territories, they would be
attacked. But in this resolution the Arab League says any act or group
or nation that attacks Israel, the Arab League will act to defend
Israel itself. Would they be attacked? Absolutely. If you are a
terrorist and there is peace, you are out of a job. You lose all the
power that you have, the money, the support, and the ego. And just like
in my home country of Ireland, you would have terrorists at will.
But just imagine, Mr. Speaker, if that happened and you had other
nations, four dimension, that would come to the aid of Israel and make
it stronger; and have within the borders itself and just outside the
borders, the Arab nations, supporting Israel. Can you imagine a vision
of world peace in the near future? I do not think we can the way it is
going, Mr. Speaker.
Eight thousand settlers, of course, within Gaza oppose this. The
majority, the majority of Israelis support this because they are tired
of their families being murdered. Palestinians are tired of their
families being killed and slaughtered on a daily basis. Most of the
majority of Palestinians and Israelis, I believe, want peace.
At one time, Mr. Speaker, I would have told you that Arafat has to
go, just like in former Yugoslavia Izetbegovic with the Muslims,
Tudjman with the Croatians, and Milosevic with the Serbs. They were too
long in the tooth. They had too much bloody history behind them. I do
not think there was ever any way for Yugoslavia to get itself out of
the pit it was in, and I do not believe with Arafat there is a way to
get out of that pit. At one time I thought Sharon had to go as well.
But as I spoke to the leadership in Saudi Arabia, they said, Duke,
maybe the Prime Minister is the only person that can make this happen.
Maybe he is the only person in Israel that can pull the Likud group
together, along with the settlers, and turn back the occupied lands. I
guess we will have to see, Mr. Speaker.
I want to talk now about the education system that has been changed
in Saudi Arabia, to the benefit of the United States and to the
citizens of Saudi Arabia itself, with the banks they have gone through.
I also want to talk about the oil system. All the way back to the
1940s, for 60 years, Saudi Arabia has supported the United States. Even
in the 1970s, with the Arab oil embargo, Saudi shipped the United
States oil during the Vietnam conflict to make sure our soldiers were
safe. When we went in to Desert Storm, Saudi Arabia allowed us to
operate out of their bases. During the current Afghan raids, Saudi
Arabia allowed us to use their bases. And against Iraq, the same.
Put yourself in the position of Saudi Arabia, though, and you have a
neighbor that is a wolf. If the United States fails in going into Iraq,
or we pull out now, early, and all of those terrorists and extremists
that want Iraq and Afghanistan and every state in the Middle East to
espouse the Muslim extremist doctrine, it also puts the Saudis at risk
as well.
So they do go slow sometimes; but I have to say that, with what they
have done in support of the United States in their education system, in
their banks, in information, and against terrorism, Mr. Speaker, we
have an ally there. And the system that we need to take a look at right
away, and which Colin Powell is working on, is the visa system itself.
Let me read just a few of these initiatives and actions taken by
Saudi Arabia to combat terrorism.
They have arrested more than 600 individuals in these past few weeks.
They have dismantled a number of al Qaeda cells. They have seized large
quantities of arms caches and explosives. They have extradited suspects
from other countries to be tried. They have established a joint task
force with the United States in which our own Permanent Select
Committee on Intelligence speaks with on a daily basis. There is
international coordination between MI-5, Interpol, the United States
and other nations. They have looked at the charitable organizations,
and they have one now that goes through a filtering system that is
audited by the U.S., by Australia, the British, and the Canadians. The
legal and regulatory actions to combat terrorism have stepped up 100-
fold, according to Colin Powell.
Mr. Speaker, I would like to submit for the Record these three books
that go on to talk about some of the things that Saudi Arabia has done.
Mr. Speaker, I have seen on this House floor resolutions. And,
frankly, quite often we here in this body think a simple nonbinding
resolution does not get beyond the walls, or maybe just into a couple
of households. But we had a resolution on this House floor, Mr.
Speaker, that most of us voted for but had no idea the impact it would
have. To Saudi Arabia and to the Saudi citizens it was a slap in the
face.

{time} 2330

Sometimes we learn slowly or are actually part of the problem, Mr.
Speaker but we cannot continue to do that. If I was Osama bin Laden and
I wanted to separate an ally from the United States, I would have done
exactly the

[[Page H8030]]

same thing that he did. Because he is not just after the United States;
he is after the Saudi Government itself. After all, they were the ones
that kicked him out. Crown Prince Abdullah's peace plan, which many
Israelis found hopeful. Why? Because it was introduced in a time of
immense ill will between Arabs and Israelis, because Saudi Arabia was
viewed as the least likely to ever agree to diplomatic relations with
Israel. But instead we have a Crown Prince that is a visionary. He, in
my opinion, is like President Sadat was to Egypt. The Crown Prince
should be praised and applauded, not castigated for his efforts, which
is consistent with the U.S. position and with United Nations
resolutions, in particular resolution 194, 242 and 338.

to cast aside a friend

I had dinner with a Saudi businessman this summer and one of the
first things he said to me was how very sorry the world and
particularly Saudi Arabia were about the murderous events of September
11th. I can tell you that our grief was his grief. If possible, he felt
as deeply about this crime and tragedy as we do. And he was extremely
worried about derailment of the partnership and alliance that Saudi
Arabia and the United States have enjoyed for the past 60 years, for
the betterment of the free world.
There has been a firestorm of criticism against Saudi Arabia in the
months since 9/11 and the relationship between the United States and
the Saudis has been condemned and vilified. I told him that I believe
Saudi Arabia remains a valuable ally. We have our differences, but any
alliance will have its ups and downs over six decades.
What are the issues raised by the critics?
First, the detractors say that Saudi Arabia is an incubator of
terrorism, simply because 15 of the 19 hijackers on 9/11 were Saudi
citizens.
You may have a gang of tens, hundreds or even thousands of men in any
single country, but that gang does not necessarily represent the
mainstream.
Moreover, Osama bin Laden was targeting Saudi Arabia not just the
United States, and more specifically, he was targeting the relationship
between the two countries by using Saudi Arabians as hijackers on 9/11.
After all, we know he could have used a dozen different nationalities.
Bin Laden wants to bring down the Saudi regime, which condemned and
expelled him years ago. He hates the Saudi government and classifies
Saudi Arabia as non-Islamic, and he is particularly keen on
exterminating the religious authorities inside the Kingdom. This is a
similar goal as Saudi Arabia's American critics, who in fact are doing
Bin Laden's work for him in a more efficient manner.
Second, the disparagers say that Saudi Arabia is an incubator of
terrorism because its school system systematically teaches their kids
to hate America and Western values. I am not an expert on the Saudi
educational system, but I can tell you that this allegation is
nonsense. For years, English language has been taught and Western
gadgets used in schools starting at age 12 and soon the study of
english will start at age 9 . . . Kingdom-wide. This would be a very
very strange way to promote the so-called anti-Westernism. So would the
fact that the government sends thousands of students to study in the
U.S. and Europe on full scholarships. In 2001 there were more than
5,000 in the U.S. alone and even more sent privately. This shows how
ridiculous it is to allege that the Saudi government is determined to
teach their kids to hate America.
Furthermore, the Saudi educational system has to be taken within the
context of deeply rooted cultural and religious values cherished by
around 1.4 billion Muslims around the world. But those values should be
construed as being anti-Western or anti-American. Nor should we for a
moment consider that every human being living on this globe should
follow our way of life. Being the home of the holiest shrines of Islam,
Saudi Arabia has a responsibility that deserves a better understanding.
Aside from that, the Saudi educational system, just as elsewhere in the
world, is subject to revisions on an on-going basis and has recently
witnessed some changes as declared by Prince Saud Al-Faisal, the
Foreign Minister.
Third, those criticizing the Kingdom say that it is an exporter of
terrorism through its support of religious schools and mosques abroad.
How hypocritical. It is very convenient for them to forget that the
U.S. government eagerly encouraged the Saudis to donate schools and
mosques in Pakistan to provide infrastructure for the fight against the
Soviet Union in Afghanistan; and that the U.S. government was
enthusiastic about the Saudi funded schools throughout the Muslim world
in order to stem the tide of Ayatollah Khomeini's export of radicalism.
As for controls over these contributions, it is obvious that mistakes
were made. But there is plenty of blame for both parties, and the
Secretary of the Treasury O'Neil has applauded the Saudi efforts to
establish effective control.
There are a lot of American critics who seem to think that they can
run Saudi society better than the Saudis. Let me say that if the
concern is the anti-Israeli sentiment in the media or if the desire is
more Saudi involvement in an action against Iraq, you will be sorely
disappointed if either the press or the political process is thrown
open. The Royal Family has balanced openness; progress and
modernization on one hand with a deeply conservative, tribal and
religious population on the other. Pressure from Washington will work
against the progressive elements. They need to proceed at a sustainable
pace . . . with our good-will and encouragement but not with our
arrogant, condescending dictates. Much needs to be done and the leading
Saudi reformers are the ones to do it.
On the other hand, if there is really a feeling amongst us that anger
against us, rather than hate--to be precise, is sweeping the region,
including Saudi Arabia where it is possibly the least pronounced, is it
not worth our while to find out why? Many voices in the region at the
official and public levels cite biased and heavy-handed American
foreign policy, which is no secret. Let us address the situation, I
emphasize, on the basis of an objective examination of our long-term
and strategic interests.
Extremism is by and large a cause/effect phenomenon and the cause
could be anywhere from religious, political, economic, societal factors
and grievances to a combination of one or more of these elements. It
cannot be attributed solely to an educational system. Why don't we try
to scratch deeper than the surface. I think we do have the magnanimity
to conduct a soul-searching exercise to determine how and where our
policies might have gone awry; this could be a highly beneficial
exercise.
Let me say that the Royal Family has worked very very hard to
modernize their country and to do so in a way that accommodates the
United States. Radical Islam is a product of the rejection of
modernization and this is why Osama bin Laden and his cohorts want to
destroy the Royal Family. I do not think we should be in the business
of promoting Bin Laden's agenda for any reason, much less to the direct
and immediate detriment of ourselves and our friends. In fact, because
Saudi Arabia is at the center of Islam and Arab World, never in our
history have we been in greater need for their alliance.
Since we have touched upon the subject of modernization, let's ask
the question: has the Saudi government used its oil wealthy wisely
towards that end?
The government has proven time and time again to be an effective
instrument of progress in such a conservative society. In fact, one
could make a strong case that the most effective method of
modernization in such a strongly tribal, nomadic and deeply
conservative culture was the one that evolved in Saudi Arabia.

Let me not leave you with the impression that I believe the Saudi
government and Royal family are perfect--no government system is for
that matter. As far as we are concerned the Saudi regime has a long way
to develop. but Americans being a true ally of Saudi Arabia for decades
can and should help them to evolve.
Over the past 30 years alone, the Saudi government has invested $1.2
trillion and transformed a desert into a modern, viable nation. Before
the discovery of oil in 1932, Saudi Arabia's meager income came from
the annual pilgrimage. Now its GDP ranks 30th out of 186 nations. The
Saudis also understand the necessity for a diverse economy. They have
built two large industrial cities, numerous industrial parks, loaned
about $10 billion for new businesses and have more than 2,500 new
factories, giving preference always to U.S. companies.
Simultaneously, they have invested in their people by building
thousands of schools, 8 universities, over 300 hospitals and 100,000
miles of paved roads.
They have not squandered their opportunities, but this is not to say
that they do not have problems. In 60 years they have transformed
themselves from a nomadic society to one which is 85 percent urban.
Unemployment among the young emerged because of a mismatch between
skills and jobs. The government understands the problem and is
expanding technical and vocational training on one hand and replacing
foreign workers with Saudis on the other. They are very conscious of
the problem and, as allies, we should urge the Administration to help
them through its various organs.
And they have not neglected their self-defense. Hand-in-glove with
the U.S. military and defense contractors, Saudi Arabia has build its
military forces. Yet there are those that devalue our partnership by
stating that Saudi Arabia does not cooperate with the United States
militarily.
Ridiculous.

[[Page H8031]]

In the 1980s, Saudi Arabia's donations to the Afghan Mujahideen were
matched dollar for dollar by the U.S. government in our joint drive
against communism.
In the 1980s, Washington and Riyadh cooperated very closely to stop
military aggression by Iran.
Even at oil embargo times Saudi Arabia fuel supplies to the U.S.
armed forces never stopped.
In 1990, the U.S. government received complete Saudi cooperation in
the war against Iraq.
After Desert Storm and up until today, there has been crucial Saudi
support in maintaining the southern ``no-fly'' zone in Iraq.
During our most recent campaign in Afghanistan, the Saudis provided
access to the command and control facility at the Prince Sultan Air
Base. This is an excellent record of alliance.
When the nay-sayers criticize Saudi Arabia for not supporting a war
against Iraq because the Kingdom wants to use the U.N. sanctions and
diplomatic solutions to bring Saddam to heel and because it has not
been shown any link between Saddam and 9/11, how is this different from
the position of Brent Scowcroft and Dick Armey or Germany and an array
of others, inside and outside the U.S.A.? Believe me, no one in the
Saudi government will shed a tear at Saddam's demise, but Iraq is their
neighbour and the Saudis are justifiably cautious when asked to commit
to such schemes which will devastate an innocent Iraqi populace.
Not only in Saudi Arabia but in the whole world, sentiments run high
against U.S. military action against Iraq; people are wary that it will
wreak havoc and destruction on an already beleaguered people. On the
other hand, if possession of weapons of mass destruction is the motive
for such a war you cannot detract people in that part of the world from
also pointing fingers elsewhere. And we have to recognize that.

Furthermore, it is asserted that we cannot trust Saudi Arabia to be a
supplier of our energy needs. This is absolutely absurd. Saudi Arabia's
policy for the past 25 years has been not to use oil as a political
weapon. Saudi policy makers maintain stable prices and stable supplies
of oil throughout the world. They have often sold their oil at a $4
discount below world market price to ensure affordable oil is available
to the free world. Most oil exporters produce as much as they can.
However, for many years Saudi Arabia has played the role of swing
producer, increasing or decreasing production in order to avoid spikes
in the pricing. Most notably Saudi Arabia continued this policy even
though it could use the extra income due to the expense of the Gulf War
in 1990-1991 which cost them over $60 billion. I am not saying the
Saudis are angels sacrificing their interests for the sake of consumer
countries, but I am saying that their energy interests match ours and
have done so for 60 years. To throw the overboard for some pie-in-the-
sky Russian supply scheme is lunacy.
Moreover, there are those who claim that Saudi Arabia is a stumbling
block to peace between Israel and Palestine. They assert that Saudi
Arabia fuels terrorist organizations in the Occupied Territories. As to
the last assertion, the Saudis adamantly deny this. They say that their
government's aid to Palestinians is humanitarian . . . clothes, food,
medicine and shelter . . . and assertions to the contrary have never
been proven. In fact, I believe that their attitude toward peace is
demonstrated by Crown Prince Abdullah's Peace Plan, which many Israelis
found very hopeful. Why? Because it was introduced in a time of immense
ill-will between Arabs and Israel; because Saudi Arabia was always
viewed as the least likely to ever agree to diplomatic relations with
Israel; and because the whole Arab World has agreed to the plan. The
Crown Prince should be praised and applauded, not castigated, for his
effort which is consistent with the U.S. position and U.N. resolutions,
particularly Resolution No. 194, 242 and 338.
Let us swap positions with the Saudis and explore how they, both at
the official and populace level, see us. And for that purpose, let us
take the Palestine question--the most inflammatory in the region--as a
yardstick to gauge how our positions diverge or converge. The Saudis
cannot ignore that we side with Israel across the board, providing it
with political and military cover to the detriment of the Palestinians.
Is it not true that we vetoed over 70 U.S. resolutions favouring
Palestinians, thereby insulating Israel from international consensus
and even censure?
On the ground, and as a daily routine, Israeli tanks roll into
Palestinian territories. There, the Arabs see the Israeli army,
strongest in the region, devastatingly using a U.S. supplied
sophisticated arsenal against Palestinians, sparing no houses, farmland
or civilian lives; lives of civilians who are only seeking their right
to self-determination in line with the will of the international
community.
How can the Arab on the street reconcile himself with this? Even the
closest of our friends are dismayed and embarrassed at our
deteriorating credibility. Under such pressure, the most moderate
regime will only have to identify with its people's sentiments and
legitimate concerns; hence the disappointment with U.S. policies.
Historically speaking, we must not forget that Saudi Arabia has all
along been accused by Arab radicals as being the most moderate Arab
country and the staunchest friend of the West. In so far as the Arab-
Israeli relationship is concerned, what Saudi Arabia is obviously after
is a lasting and just peace, not a lopsided or one-sided one, based on
U.N. resolutions. This has been unequivocally highlighted in the plan
I've just referred to and has been a standing policy line for Saudi
Arabia.

Despite all pressures, Saudis say, they went out of their way to
maintain their moderate posture. But, have they been immune from
Israeli provocations? Unfortunately not. Among other things, Israel has
been making provocative air sorties over the Saudi air bases and I
personally know how humiliating this must be.
Having said that, do we, as lawmakers, accept to fall for the paradox
of calling Saudi Arabia a ``stumbling block'' to peace?
For the sake of our ally and friend Israel and our unwavering
commitment to its security and longevity, I urge our Administration
together with the U.N. and our allies in Europe to work diligently to
impose peace in line with U.N. resolutions--this will inevitably make
the world a safer place for us, for our Israeli friends and for the
rest of humanity.
Finally, let us look at this purely from a selfish perspective. The
Saudis have more crude oil than anyone else; 25 percent of the world
oil reserve, a commodity by all accounts that is going to be the main
source of energy for the next two decades at least. They have a proven
track record of handling this resource wisely. Crude oil is strategic.
Let's cooperate with them.
From a security and policy view point the question that occurs to me
here is how many friends do we have in the region with a historically
rooted and abiding relationship as is the case with Saudi Arabia?
Let me conclude by saying that Saudi Arabia is not the enemy. In the
recent words of our President, ``Saudi Arabia is our eternal friend''.
But if we continue to assail, insult and threaten them, we will
jeopardize the relationship.
And make no mistake, those that denounce the partnership know very
well that their
denunciations can be self-fulfilling. What
folly . . . . to cast aside a proven friend for someone else's
purposes.

____________________