[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.

                             Copyright Law

       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.

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