THE SAUDI FINANCIAL INTELLIGENCE UNIT I: STAB AT

C O N F I D E N T I A L SECTION 01 OF 05 RIYADH 008401

SIPDIS

SIPDIS

TREASURY PASS TO FINCEN.

E.O. 12958: DECL: 10/22/2016
TAGS: KTFN EFIN PTER ETTC SA
SUBJECT: THE SAUDI FINANCIAL INTELLIGENCE UNIT I: STAB AT
2007 EGMONT MEMBERSHIP

REF: RIYADH 9221

Classified By: Acting Deputy Chief of Mission Robert Silverman for reas
ons 1.4 (b),(d) and (g).


1. (U) Summary: From September 16-19, Ahmed Elbashari,
representative of the U.S. Department of the Treasury's
Financial Crimes Enforcement Network (FinCEN),and EconOff,
met with senior management of the Saudi Arabia Financial
Investigation Unit (SA FIU) to conduct a final on-site
assessment of the SA FIU for membership in the Egmont
financial intelligence units. Over the four-day visit, the
Saudis provided complete access to the SA FIU, the Bureau of
Investigation and Prosecution (BIP),the Saudi Arabian
Monetary Authority's (SAMA) bank compliance officers, the
Ministry of Interior's (MOI) Public Security Agency (PSA),
and the Mabahith (the Saudi's intelligence service). The SA
FIU leadership freely shared information and expressed
eagerness to join the Egmont Group in 2007. However, the SA
FIU is not yet a fully functioning financial
investigative/intelligence unit. End Summary.


2. (U) The USG delegation consisted of Ahmed Elbashari,
FinCEN MENA regional specialist. Also present was Embassy
EconOff. The following were Saudi Arabia's Government (SAG)
and private sector Saudi interlocutors for this assessment
mission:

--Dr. Saud Al-Mureishd, Director of the SA FIU;
--Khalid Al-Luhaidan, Deputy Director of the SA FIU;
--Naser Al-Omair, Head of the Department of Information
Exchange and Follow up of the SA FIU;
--Musfer Kahtani, Deputy head of the Department of
Information Exchange and Follow up of the SA FIU;
--Abdulatif Al-Herish, Chief of Financial Crimes Department
of the BIP;
--Colonel Khedher Al-Zahrani, Administration Director of
Criminal Research in Public Security of the PSA;
--Captain Ahmed Al-Luhaidan, Head of the Anti-money
Laundering Unit in the Drug Enforcement branch;
--Colonel Abdul-Kareem Al-Sbait, Head of the Interrogation
Department of the Mabahith;
--Colonel FNU LNU, Head of the Investigation Department of
the Mabahith;
--Colonel Fahad Abdulaziz Al-Maghlooth, General Supervisor of
the SA FIU and Chief of the Permanent Committee on
Counterterrorism at the MOI;
--Mohammed Al-Shayi, Director of Inspection Department of
SAMA; and
--Bank compliance officers from Al Rajhi Bank, The Saudi
British Bank, SAMBA Financial Services, and Al-Bilad Bank.


3. (C) The SA FIU's Deputy Director, Al-Luhaidan was absent
for all meetings at the SA FIU, however was present at the
Mabahith meeting. Al-Luhaidan is assisting the Mabahith's
newly created investigation department. End comment.

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SA FIU'S STAFFING
--------------


4. (U) The SA FIU currently has 111 employees. Of the 111
employees 94 are permanent personnel (from MOI),10 are
detailed from SAMA, and 7 are temporary or contract
personnel. The SA FIU characterizes them in the following
categories: 9 are tactical analysts, 13 are strategic
analysts, 11 are financial investigators, 5 are regulatory
specialists, 3 are legal specialists, 7 are computer
specialists, 3 are training specialists, 17 are
administration/support, 11 are management, and the remaining
32 are nominal support staff.


5. (C) Comment: Ascertaining a breakdown of the total
number of SA FIU employees was difficult because the SA FIU
double counted employees who fill multiple job roles. Almost
50% of the SA FIU's staff is support personnel with no
investigative function. End Comment.

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SA FIU'S ORGANIZATIONAL STRUCTURE
--------------


6. (U) The SA FIU provided an organizational structure

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outlining the various departments:

--The Director's Office to include, Director, Dr. Saud
Al-Mureishd, and 10 staff members;
--The Deputy Directors Office to include, Deputy Director,
Khalid Al-Luhaidan, and 5 staff members;
--The Department of Information and Studies, Headed by Mjr.
Abdullah Alqahtani, and 7 staff members;
--The Department of Financial & Administrative Affairs,
Headed by Cpt. Abdullaziz Alfaleh, and 17 staff members;
--Training Center, Headed by Mjr. Mohamed Zarban, and 1 staff
member;
--The Department of Reports, Headed by Mjr. Abdullah
Alsalouli, and 18 staff members;
--The Department of Information Exchange & Follow Up, Headed
by Mr. Naser Alomair, and 5 staff members; and
--The Department of Information Gathering & Analysis, Headed
by Mjr. Ahmed Alrbish, and 20 staff members.


7. (C) Comment: There appears to be a significant
discrepancy between the staff numbers provided on the Egmont
questionnaire and the staff numbers on the organizational
chart. EconOff believes the number of staff provided on the
organizational chart (83) more accurately reflects actual
staff at the SA FIU. Also, when touring the building during
the normal working hours the SA FIU did not seem to have 111
employees. Of the employees present, most appeared to be
support staff not engaged in substantive financial
intelligence work. End comment.

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SA FIU'S INVESTIGATION RESULTS
--------------


8. (U) In accordance with Egmont's requirements (as
requested by the membership questionnaire) the SA FIU
provided the following statistics regarding investigation and
prosecution results. From September to December 2005, the SA
FIU received 142 disclosures (suspicious transaction reports
(STRs); opened 98 cases; passed 6 cases to an independent
agency, BIP, for investigation; closed 1 case. The SA FIU
referred 21 cases to the BIP for prosecution. Of these, 4
cases resulted in convictions; 4 cases resulted in the
seizure of assets; and in 4 cases the assets were permanently
confiscated.


9. (U) From January 2006 to now the SA FIU received 238
disclosures (STRs); opened 207 cases; passed 3 cases to the
BIP for investigation; and closed 3 cases. The BIP
prosecuted 23 cases, with 14 cases resulting in convictions.
In 4 cases BIP temporarily seized assets; and in 14 cases BIP
permanently confiscated assets. (Note: The SA FIU explained
their inconsistent statistics by noting the BIP prosecuted
financial crimes cases prior to the inception of the SA FIU.
Of the nine cases passed on for investigation to the BIP
since 2005, none have gone to prosecution, but SA FIU is now
actively involved in the financial and criminal analysis of
those cases.


10. (SBU) The SA FIU also provided statistical information
on its information sharing with other FIUs. In 2006, Senegal
and Syria requested information related to a financial crimes
case. In 2006, the SA FIU requested information from
Bahrain's FIU. The SA FIU initiated its own investigation
based on the information provided from Bahrain's FIU. The SA
FIU has yet to provide or seek information from any
international organization.


11. (C) Comment: The Joint Terrorism Finance Task Force
(JTFTF) worked with the SA FIU to request information from
the Bahrain FIU. Specifically, the information requested
related to an ongoing U.S. Treasury investigation of a Saudi
charity illegally opening bank accounts in Bahrain without
properly registering the organization. End Comment.

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SA FIU BUDGETING
--------------


12. (U) The SA FIU has a separate budget allocation from
the MOI. The SA FIU's budget allocation provides daily
operating expenses; however the employee salaries come from
the main MOI budget. The SA FIU prepares a budget request to

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the MOI who in turn requests the allocation from the Ministry
of Finance.


13. (C) The SA FIU Director has the authority to approve
expenses up to SAR 20,000 (USD $5333),or otherwise it must
go to a committee for approval. In 2006, the SA FIU's budget
was SAR 4.5 million for utilities, infrastructure and
training, and SAR 20 million for technical software.

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SA FIU INFORMATION TECHNOLOGY & SECURITY
--------------


14. (U) The SA FIU runs on seventy-four computers with four
servers, connected to a law enforcement database and the SA
FIU Microsoft Access database. Currently the SA FIU's
computer network and servers are being upgraded with the
assistance of the National Communication Center (NCC) to meet
international standards and Egmont requirements.


15. (C) The SA FIU's computer networks are protected by a
secure system which requires a login and six digit,
alpha/numeric, password (the SA FIU and MOI networks share
applications, forms, and human resources). The computer user
is assigned a specific computer to which their login and
password are linked to allow for security tracking of
accessed information. The computers have a disabled
thumbdrive/disk drive, and only the IT department can
transfer information from the secure to non-secure system.


16. (C) Comment: The SA FIU's system is not routinely
audited or checked for misuse by employees. The IT
department does not believe their system is hackable by
outsiders because the systems is not connected to the
internet. However, the Director's computer is linked to the
internet, and would provide a point of access to the network.
Also, the area where the NIC databases are located is not
secure. End Comment.


17. (C) The SA FIU does not have the capacity to securely
store documents at this time. There are no file rooms or
file cabinets. Rather, each department head has an
electronic safe in their office where documents are stored.
In the future, the SA FIU will have a secure document storage
room. Regarding foreign FIUs information, the SA FIU will
safeguard information and follow that FIUs distribution
policy.


18. (C) Comment: Physical security standards were lacking
during the SA FIU tour. There were no apparent standard
safeguards (e.g., no file cabinets with locks, no deadbolts
on the offices or security codes, no industrial or
sophisticated shredders). Video cameras were being installed
as we arrived. Department heads have electronic safes in
their offices, but those that are commonly available at a
hardware store. The only shredder in view was in the
Director's office, and that too could have been purchased at
a hardware store. In the future, the SA FIU plans to move to
a biometric system. For now, the SA FIU personnel go through
a one month security surveillance screening by the Mabahith
prior to coming on board. End comment.

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THE SA FIU'S WORK FLOW
--------------


19. (U) The SA FIU's Reporting Division receives STRs via
in person, mail, fax, or through a toll free phone line. The
department runs twenty-four hours a day and has four shifts
changing every six-hours. During one eight-hour shift, an
average of seven-ten STRs are processed. When the STR
arrives, it is logged into a book and entered into the SA FIU
database.


20. (U) The SA FIU's Department of Information Gathering
and Analysis consists of a security analysis section and a
financial analysis section. Staffed by experienced MOI
officers, the departments collect relevant documents for the
investigation.


21. (C) The Staff focuses on the suspect's financial and
commercial background (e.g., criminal record, family
history). To obtain relevant information, they use the top

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secret National Intelligence Center's (NIC) database that has

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information on all persons in Saudi Arabia, whether Saudi or
non-Saudi. Information in the NIC is derived from
approximately ninety different databases throughout the
Kingdom. The investigators search NIC records for travel
indicators (e.g., travel to Afghanistan),and do
cross-analysis with information provided from SAMA. If there
are grounds for suspicion the case will be transferred for
law enforcement investigation to the PSA for a money a
laundering crime or the Mabahith for a terrorism finance
crime.


22. (U) If the Department of Information Gathering and
Analysis finds grounds for suspicion based on the PSA and
Mabahith findings, the case report is referred to a Three
Person Committee, consisting of the Director, Legal Advisor
and the Director of the Information Gathering and Analysis
Department. The committee decides if the case is transferred
to the BIP for formal investigation and possible prosecution.



23. (C) Comment: During the discussion of the work flow,
it was unclear what role the SA FIU plays. While the SA FIU
collects the information from the various entities (e.g.,
banks, non-financial institutions) and gives it to the MOI
law enforcement and BIP for prosecution, the SA FIU does not
carry out much investigation or analysis, which is reflected
in its current staffing level of analytical personnel. The SA
FIU's low number of analytical staff would appear to indicate
they currently play a facilitation role, rather than a lead
investigator role at this time. End comment.

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SA FIU'S RELATIONSHIP WITH THE MOI, BIP AND SAMA:
IN FACT, CAN THIS WORK?
-------------- --------------


24. (U) The SA FIU has well established relationships with
the MOI and the BIP. The SA FIU is primarily comprised of
MOI personnel, and the two work hand in hand. The BIP and
the SA FIU closely communicate openly about their financial
crime investigations.


25. (SBU) The SA FIU and SAMA's relationship is a work in
progress with SAMA controlling all aspects of financial
institution information. The SA FIU works through SAMA to
obtain routine bank information or customer information from
non-reporting banks.


26. (C) Comment. The SA FIU's poor relationship with SAMA
was clearly demonstrated at SAMA's lack of cooperation in
arranging independent meetings with bank compliance officers
as requested. HRH Prince Mohammed bin Naif's liaison with
the SA FIU, Colonel Fahad Al-Maglooth, explained the power
struggle between SAMA and the SA FIU. SAMA wanted the SA FIU
to be under their leadership rather than the MOI. SAMA's
bitterness in not acquiring the SA FIU became apparent when
bank compliance officers and SAMA officials would not answer
questions that are readily available to the public (e.g., the
number of customers one has at their bank). End comment.


27. (C) Comment. EconOff asked Colonel Al-Maglooth what
type of training assistance is needed at the SA FIU? Colonel
Al-Maglooth responded by asking for SAR analysis training.
This indicates the current level of expertise and training of
the SA FIU in their ability to analyze and investigate
financial crimes. Also, Colonel Al-Maglooth stated, HRH
Prince Mohammed bin Naif, is working closely with the SA FIU
and SAMA to develop a better and more efficient working
relationship. End comment.

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SA FIU'S AUTHORITY TO OBTAIN INFORMATION
FROM OTHER SAG AUTHORITIES FOR A FOREIGN COUNTERPART
-------------- --------------


28. (U) Article 14 of the Anti-Money Laundering Law
empowers the SA FIU to obtain information from other SAG
authorities for use by foreign FIUs. If the SA FIU receives
a request from a foreign FIU for information contained in the
SA FIU database, the SA FIU will share that information; all
other information the SA FIU can request from other SAG
entities.

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29. (C) SAMA stated that in order to provide information to
the SA FIU it will need formal agreements with foreign FIUs.
In a separate meeting, the SA FIU was asked whether SAMA has
to provide financial information to the SA FIU when
requested. The SA FIU Director responded that SAMA must
provide the information when asked.


30. (C) Comment: SAMA's statement leaves the impression
they can delay the information sharing process by not
releasing information. If the SA FIU becomes part of Egmont,
SAMA could delay information sharing with other FIUs. End
comment.

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COMMENT
--------------


31. (C) The SA FIU visit showed a young agency trying to
establish itself and protect its newly granted turf. It has
accomplished a lot in terms of infrastructure, establishing
regulations, and relationship building with most SAG
entities. However, the SA FIU is not yet a fully functioning
financial investigative/intelligence unit. The SA FIU in
reality is an information warehouse that passes on the
investigative and analytical work to the MOI or the BIP. The
SA FIU is not yet the financial intelligence and
investigative powerhouse it needs to be. While it has the
legal regulatory power to do so, it will take more time for
it to stand on its own two feet.
OBERWETTER