Effectiveness in coordinating activities

The overall opinion of SAFIU staff regarding the effectiveness of SAFIU in coordinating activities related to the combat of money laundering and terrorism financing crimes with governmental and non-governmental is high (average of 4.41).

The analysis confirmed SAFIUs staff strong agreement regarding the exchange of money laundering and terrorism finance information with local government agencies (an average of 4.97). This requirement is in accordance with Article 11, 3(c) of the Saudi AML Law, which states that SAFIU has the authority to exchange and request information from the other authorities by taking required measures in combating terrorist financing and money laundering. The Information Exchange and Follow-up Division of SAFIU is entrusted with the responsibility of exchanging information with the local authorities. In recognising the importance of exchanging activities, China developed the AML Monitor and Analysis Centre (AMLMAC) to strengthen their FIU when working closely with government agencies.

SAFIU staff indicated their strong agreement in the effective coordination of AML units in SAMA, MOCI and MOJ (an average of 4.77). In facilitating the returns of STRs, SAFIU requests these units to provide additional information prior to issuing freezing notices. SAMA issues a listing of identified persons to financial institutions and upon detection, banks freeze the accounts and report outcomes to SAMA and SAFIU. In accordance with Article 1.8, Saudi AML Law only allows SAFIU to request the Prosecution Authority to freeze funds for a period of 20 days on the grounds of suspicion. In addition, Article 12.10 of Saudi AML Law is empowered to apply for the adoption of preventive seizures in compliance with the period specified upon request by the supervisory authorities. Within SAFIU, the Information Gathering and Analysis Division deals with the requests of freezing funds involved in money laundering and terrorism finance activities. Between 2005 and 2008, SAFIU requested SAR800,000 to be confiscated and seized SAR5.5 million money laundering cases. SAFIU also seized 28 cars, 34 mobile phones and 19 computers while SAR71,000 in terrorism finance was confiscated (MENAFATF, 2010).

In terms of SAFIU coordinating with authorities in investigating money laundering and terrorism finance crimes, the feedback from SAFIU staff suggests they perceived SAFIU to be highly effective in this area (an average of 4.69). This is in accordance with FATF Recommendation 31, Article 1 and 8.4.1 which requires FIUs to have effective mechanisms for enabling cooperation and coordination with domestic government and non-government agencies. SAFIU coordinates with the Prosecution Authority, which has the responsibility for prosecuting and referring certain criminal cases to external investigative authorities such as the General Directorate of Investigation and Public Security Directorate within MOI. To ensure proper coordination, the Prosecution Authority has 13 liaison officers in other agencies who, facilitate MOUs for operational cooperation. It also formed bilateral agreements and PCCML membership with non-MOI members such as SAMA and Saudi Customs. These investigative authorities have the responsibility to notify SAFIU and the Prosecution Authority about the developments of cases passed on to them. Between 2004 and 2008, SAFIU coordinated with investigation authorities by disseminating information on 495 cases for investigation purposes (MENAFATF, 2010). SAFIU also coordinated with other government bodies such as SAMA and Saudi Customs on 66 cases for investigative purposes. This finding is similar to the Russian FIU

(FFMS), which coordinates with the Central Bank and other federal bodies in fighting against money laundering.

SAFIU staff expressed their strong agreement with organising regular workshops (average of 4.43) and seminars (an average of 4.39) between SAFIU, government and non-government agencies. In conjunction with SAFIU, MOCI increases awareness of AML and CTF through seminars and conferences conducted in collaboration with the Saudi Chambers of Commerce and Industry. In conjunction with SAFIU, the MOJ has also taken steps clarify AML and CTF measures to legal service providers by conducting a series of annual conferences and seminars (MENAFATF, 2010). The Nepalese FIU conducted a series of workshops involving government and non- government organisations to familiarise them with the concepts of money laundering and terrorist financing crimes. FIUs organising such workshops increase the level of awareness regarding the seriousness of money laundering and terrorism financing crimes, and in turn, assist in developing relationships between organisations attending these workshops. FinCEN has also organised workshops with its allies from Bolivia, Turkey, Ukraine and China. Such programmes are aimed at providing training and technical support to the participating FIU and assisting them to gain operational status by streamlining processes in law enforcement capabilities, legal framework, financial regulatory systems and prosecution (GAO, 2006).

SAFIU staff also strongly agreed that SAFIU was highly effective in providing training programmes that combat money laundering and terrorism finance to government agencies (average of 4.35) and non-government organisations (average 4.12). In accordance with FATF Recommendation 30 Article 3, the Training Division of SAFIU conducts training programs related to money laundering and terrorism finance typologies, investigation and prosecution. As SAMA is the supervisory authority for monitoring and verifying the bank’s AML and CTF compliance, it has established a Banking Inspection Department, which specialises in investigating money laundering and terrorism finance crimes. This unit requests SAFIU to train the banking and non-banking companies on the issues and identification process of suspicious transactions. During 2004 to 2008, a total of 4215 bank staff members participated in internal and external training sessions. Similarly, a total 413 participants of non-banking institutions (securities, insurance and financing)

underwent training. Training of 19 Saudi Customs staff and 21 money laundering and terrorism finance training programmes for 339 judges was also provided. Further, SAFIU also trained 117 staff members of the Prosecution Authority on how to investigate money laundering and terrorism finance crimes (MENAFATF, 2010). By organising training programs, SAFIU is familiarising financial institutions with rules and regulations for combating money laundering and terrorism financing crimes. The implementations of such programmes are also evident in the UK, where SOCA liaises with government and financial bodies to provide training and education on combating money laundering. These training courses are conducted to develop a better understanding of the rules and regulations and expand to focus on the current techniques used by money launders. Such activities ensure compliance to the World Bank, which has mandated all staff in financial institutions to undergo training in AML and CTF topologies.

In summary, SAFIU is perceived to be highly effective in most of the areas related to coordinating activities with governmental and non-governmental institutions. SAFIU was seen as particularly effective in exchanging information related to money laundering and terrorism financing with government and non-government agencies. Interestingly, there were no shortcomings regarding SAFIU responsibilities in coordinating these activities with governmental and non-governmental institutions.

5.3.3. Discussion of qualitative results

Some of the SAFIU staff commented on the effectiveness of SAFIU when coordinating with governmental and non-governmental agencies, such as banks and other financial institutions. Their opinions suggested that SAFIU does not issue their annual reports regularly and during a specified time frame. Further, the respondents highlighted that reports would benefit by including additional statistics and models. Additional feedback also indicated that SAFIU should update and improve the current guidance manual provided to financial and non-financial institutions on methods and trends linked to money laundering and terrorism finance crimes.

Comments pertaining to the PCCML indicated that it is supporting SAFIUs role, but not to the desired level. Staff suggested that PCCML has expertise to provide additional indicators to financial and non-financial institutions, thereby enabling them

to distinguish terrorism financing and money laundering transactions better. Further, guidance on typologies would assist the capabilities of reporting entities in identifying suspicious and unusual transactions. Comments received were also related to financial and non-financial institutions lacking skills and knowledge on the requirements for combating money laundering and terrorism finance crimes. Though the number of training programmes and participants has both increased, courses delivered are intensive and can take between one to 20 days.

5.4. Q3 – What is the effectiveness of SAFIU in cooperating with