Q3 – What is the effectiveness of SAFIU in cooperating with

The overall opinion of international cooperation between SAFIU and FIUs in other countries is 4.20, indicating a high rate of international cooperation. This supports the third objective of the study and discusses the results as analysed through the 10 survey questions asked.

The feedback from SAFIU staff indicated their strong agreement with the exchange of information between SAFIU and FIUs in other countries through the Egmont Group (an average of 4.93). Recommendation 26 Article 9 of FATF states that every FIU should apply for the Egmont Group membership and SAFIU complied with this recommendation by joining in 2009. This is supported by FATF Recommendation 26 Article 10, which states that countries should have regard to the Egmont Group’s principles and statement of purpose, and their FIU should exchange information with other Egmont members. By becoming a member, SAFIU has been able to sign MOUs with fellow Egmont members such as Canada, Germany, UK, USA and Australia thereby facilitating prompt exchange of information. This collaborative approach has also been undertaken by JAFIO who have established collaborations through the Egmont Group with Britain and Belgium.

Within SAFIU, the Information Exchange and Follow-up Division is in charge of exchanging information with the Egmont Group. By utilising the Egmont Secure Web (ESW), SAFIU communicates through the secure network that exchanges money laundering and terrorism finance information with partner FIUs. Using the Egmont Secure Web, SAFIU not only retrieves analytical information, it also acquires updated laws and regulations on money laundering via the network. SAFIU received 80

information requests and requested 54 for investigations related to cases in 2010 (MOI, 2010). Requests received during the same year were significantly lower than Germany, which received 837 requests from foreign FIUs and requested information on 207 cases (Germany, 2010). Additionally, SAFIU staff indicated their agreement about the availability of qualified interpreters in SAFIU to facilitate communication with FIUs in other countries (an average of 4.45). Incoming and outgoing requests through ESW are translated to English as the medium of communication for Saudi agencies is Arabic. SAFIU ensures employees involved in this translation process have a bachelor’s degree in English as a minimum, and outlines this requisite when advertising for prospective employees. This approach is similar to AUSTRAC, who utilises translators’ accredited by NAATI to counter money laundering crimes. As such, the use of the translators assists in the combating of money laundering and terrorism finance through enhanced communication, coordination and cooperation between FIUs.

SAFIU staff also indicated a strong agreement with the notion that the Saudi AML Law has incorporated clear regulations for international cooperation (average of 4.88). Articles 11 and 22 of the Saudi AML Law gives SAFIU the authority to exchange information with other foreign FIUs based on a valid agreement of reciprocity. SAFIU has shared its information with other FIUs from the USA, Japan, Korea, UK and Germany and the European Union. In 2009, SAFIU processed 10 incoming requests and 43 outgoing requests, while it increased to 80 and 54 respectively in 2010. Further, the KSA since 2004 has signed treaties, multilateral agreements and conventions to facilitate international cooperation of money laundering and terrorism.

Feedback from SAFIU staff also indicated a strong agreement of SAFIU having a database for individuals suspected of international money laundering and terrorism financing crimes (average of 4.57). A special database, known as the Law Enforcement Database, is maintained by MOI and holds information of wanted criminals. In Europe a centralised database promotes better integration and cooperation between various databases. Referred to as the European Union (EU) Database, it was established in Oct 2005 and contains information in standard format, allowing all the member countries to access for prosecutions and joint investigations (Stefanou, 2010).

Other areas that were investigated include the regular participation of SAFIU staff in international money laundering and terrorism finance seminars and conferences. Based on the feedback, SAFIU is perceived to be effective in this area (average of 4.47). In 2005, the capital city of Riyadh hosted the Counter Terrorism International Conference, emphasising the causes of terrorism and validating the link between terrorism financing and money laundering. The conference enabled the 60 participating nations to share experiences, practices and patterns of money laundering and terrorism finance. This year, SAFIU participated in the 13th MENAFATF Plenary in Kuwait, and organised the third MENAFAF Annual Compliance and AML seminar (MENAFATF, 2011). Internationally, the Caribbean FATF (CFATF) has organised seminars jointly with the South American FATF (GAFISUD) and the USA to analyse weaknesses in AML and CTF for the global community by sharing their expertise and knowledge. Participation of SAFIU staff in international seminars and conferences increases their awareness and assists staff in networking and gaining access to latest methods utilised.

Further, SAFIU was perceived as being highly effective in the use of secured communication techniques when exchanging information with FIUs in other countries (average of 4.41). This exchange of information can be accomplished either through Interpol, or the Egmont Group of FIUs. Through ESW and Interpol’s I-24/7 global communications network, sharing sensitive and confidential information is conducted through secure chains and restrictive access granted only to a few personnel that have the appropriate clearance levels. KSA coordinates with partner Interpol bureaus around the globe, and receives requests that have a turnaround time of approximately 30 days (Interpol, 2011).

The responses from SAFIU staff indicate their agreement with the exchange of information between SAFIU and FIUs before joining Egmont Group (an average of 4.15). Prior to becoming an Egmont Group member, the Permanent AML Committee dictated that all incoming requests from other countries be channelled either through Interpol or formal diplomatic channels. The MOI executed all international treaties and supervised communications with security of counterpart nations via Interpol. SAFIU exchanged information with Egypt, Senegal, UAE and Bahrain through

Interpol prior to gaining access to the EWS. Incoming and outgoing requests through Interpol during 2005 to 2009 was 62 and 16 respectively (MENAFATF, 2010).

In relation to SAMA exchanging information with their foreign counterparts through SAFIU, SAFIU staff members were neutral on this notion (average of 3.39), indicating a shortcoming of FATF Recommendation 40 Article 2, which states that there should be effective and clear channels or mechanisms that facilitate information exchange directly with their foreign counterparts. As these mechanisms are accomplished through bilateral agreements, MOUs and Interpol, SAFIU staff also strongly felt that there were no safeguards and legal controls to ensure supervisory bodies, such as SAMA and CMA, utilise this information in a lawful manner. SAMA exchanges and cooperates with other central banks through its membership with the IMF, Arab Monetary Fund, World Bank and GCC. If information exchange occurs through SAFIU, then Article 22 of Saudi AML Law, which details of the legal obligations of information exchange by reciprocity, is applicable.

Staff responses were also collected when responding to organising regular visits by SAFIU staff to FIUs in other countries to gain an understanding of effective policies applied in these countries. Most SAFIU staff were either neutral or disagreed with this notion (average of 3.39), suggesting that the number of visits made by SAFIU staff to FIUs in other countries was insufficient. SAFIU for example received a four person team from FinCEN in the first quarter of 2006 for an on-site assessment, while in 2010, SAFIU organised staff visits to FIUs in the USA and Australia and received FIU staff from Germany, Japan, Canada, UK, Senegal and Korea (MENAFATF, 2010). These types of visits provide an opportunity to the participating FIUs to assess their performances and gain practical knowledge in order to further develop their individual performances. AUSTRAC has similarly implemented the Australia- Indonesia project for cooperation, where visits occur to assess performance and gain knowledge (Sathye & Patel 2007).

In conducting regular meetings between SAFIU staff and staff members of FIUs in other countries, the feedback from SAFIU staff indicated that the majority were neutral, while the rest disagreed (average of 3.39). As such, the results indicate a lack of regular meetings as desired between SAFIU staff and staff of investigation units in

other countries. While this is not an international standard, FAFT publications highlight that conducting regular meetings and conducting on-site visits provide an opportunity to discuss the effectiveness of policies. Such meetings also highlight the prospects of accessing the AML criteria of the visiting country, compare it to the host country to provide an opportunity of understanding emerging trends and improve their AML framework.

In summary, SAFIU was generally perceived to be effective when cooperating internationally with other FIUs. SAFIU was deemed as highly effective in exchanging information with FIUs in other countries, in tracking money laundering and terrorism financing and in maintaining an international database for suspects. A number of areas however identified SAFIU as being less effective specifically in relation to programmes through which knowledge and experiences can be exchanged mutually between SAFIU and foreign FIUs.

5.4.1. Discussion of qualitative results

A number of SAFIU staff provided comments on the effectiveness of international cooperation between SAFIU and foreign FIUs. They believed that SAFIU is exchanging information with non-Egmont Group members exists, but not to the required extent. As a member of the Egmont Group, FIUs indicate the time limits and request for prompt resolutions by marking the request with urgency codes. Global networks, such as ESW, FIU.Net, SWIFT and IMoLIN have been established to facilitate information exchange. SAFIU, being an Egmont Group member, has to adopt the Best Practices and Principles Manual, the Practices Exchange Manual, which provides guidance on the process of sharing information whilst considering privacy and confidentiality aspects (GAO 2006).

The respondents also felt that at times, there are no regular and continuous visits between SAFIU and investigation units in other countries to familiarising themselves with the updated trends and policies. Further, some SAFIU employees stated that additional training programmes should be organised with foreign agencies in order to gain expertise in the field of terrorism financing and money laundering on the global front.

5.5. Q4 – What suggestions can be provided to SAFIU to enable them to