US embassy cable - 04STATE251768

S E C R E T STATE 251768 
 
E.O. 12958: DNG: CO 11/23/15 
TAGS: EFIN, PTER, PREL, KTFN, SA 
SUBJECT: JOINT EXAMINATION OF AL RAJHI BANK THROUGH THE 
JOINT TERRORIST FINANCING TASK FORCE 
 
REF: RIYADH 1503 
 
(U) Classified by NEA David Satterfield for reasons 1.4 
(b) and (d). 
 
1. (S) Summary and action request. This is an urgent 
action cable. Please pass the proposed terms of reference 
for the joint examination of the Al Rajhi Bank through the 
Joint Terrorist Financing Task Force to appropriate Saudi 
officials at the Saudi Arabian Monetary Agency, the 
Ministry of Finance, the Ministry of Interior, and the 
Joint Terrorist Finance Task Force. This same paper will 
be hand delivered in Washington to Adel al-Jubeir, the 
Foreign Affairs Advisor to Crown Prince Abdullah. End 
summary. 
 
2. (S - Releasable to KSA) 
 
BEGIN TEXT 
 
Introduction 
 
The cooperation between the U.S. and Saudi governments 
through the Joint Terrorist Financing Task Force (JTFTF), 
along with the assessment by the Financial Action Task 
Force (FATF) of the Saudi anti-money laundering and 
countering financing of terrorism (AML/CFT) regime, 
signals significant capabilities by the Saudi government 
to ensure that its financial institutions are not being 
used by extremists intent on supporting/committing acts of 
terrorism. While the Saudi government has provided 
assurances regarding measures it is putting in place to 
address terrorism, there remains a need for greater 
coordination with the Saudi Arabian Monetary Agency (SAMA) 
and use of AML/CFT authorities within the financial 
sector. For example, representatives of the U.S. and 
Kingdom of Saudi Arabia have discussed U.S. concerns that 
Al Rajhi Banking and Investment Corporation (Al Rajhi 
Bank) has been used by al Qaida and like-minded terrorist 
groups. The U.S. government has provided the Saudi 
government with information documenting specific instances 
of terrorists using Al Rajhi Bank, including information 
about specific accounts and transactions of interest. The 
U.S. and Saudi governments have agreed to work together to 
meet a mutual goal of ensuring that Al Rajhi Bank is doing 
everything possible to keep the taint of terrorists and 
their supporters out of the bank. This includes ensuring 
that the Al Rajhi Bank is fully equipped to monitor and 
note suspicious patterns and trends in account activity, 
so as to create a preventative system within the 
institution. 
 
Proposed Terms of Reference 
 
The U.S. Department of the Treasury (Treasury), together 
with an inter-agency bank examination team (examination 
team), will work with SAMA through the existing JTFTF, on 
terms of reference for conducting a joint examination of 
certain accounts at Al Rajhi Bank. The joint examination 
will include a review of both customer information 
relevant to the specified accounts and transactions (wire 
transfer, check payment, cash management, etc.) processed 
through those accounts. Additionally, the examination team 
will review anti-money laundering compliance files related 
to all of the accounts. This joint examination can be 
modeled on other such examinations conducted with foreign 
authorities when there have been perceived issues of 
mutual concern regarding the activities within a 
particular financial institution. 
 
The intent of such an on-site review and related 
examination is to work collectively with the Al Rajhi 
Bank, identifying patterns and problems, to ensure that 
all corrective measures are delineated and implemented to 
ensure the institution is not operating in a way that 
provides a safe haven for the financial transactions of 
terrorists and their supporters. The information reviewed 
and developed in the course of this joint examination 
would be used to help the bank formulate solutions, guide 
SAMA in its regulatory work, and provide the JTFTF with 
potential leads for further investigation. 
 
There is agreement to ensure that as much work as possible 
is completed before the examination team arrives in Saudi 
Arabia. This work in preparation for the joint examination 
would involve an off-site review of certain Al Rajhi Bank 
records. A list of the types of documents that will be 
requested is attached as Exhibit A. Upon receipt of the 
requested documents, the examination team will review them 
before beginning the examination. It is likely that this 
review of the requested documents will take several weeks, 
including the time necessary to translate all documents 
that are not maintained in English. 
 
After the examination team has reviewed the requested 
records, Treasury will work with SAMA through the JTFTF to 
establish a schedule for the on-site examination in Saudi 
Arabia. The on-site visit will include the opportunity to 
speak with Al Rajhi Bank personnel, including, but not 
limited to, the account relationship managers for the 
specified accounts. These meetings will enable the 
examination team to better understand the nature of these 
accounts, the transactions processed through them, and the 
account holders' backgrounds and banking activities. Once 
on-site, the examination team also will be able to request 
any additional documents, not already provided, relating 
to the specified accounts or to any relevant transactions. 
The small examination team would likely be comprised of 
approximately seven people, including representatives from 
the regulatory and law enforcement communities, and would 
be prepared to provide translators to facilitate the 
meetings as well as the additional document review. It is 
possible that the examination team will divide into subgroups, 
conducting simultaneous examinations on discrete 
issues, e.g., reviews of account information or systemic 
issues, in order to ensure greater efficiency and 
appropriate use of expertise. It is anticipated that the 
examination would take one to two weeks, but there is a 
need to be flexible in order to accommodate the amount of 
information and processes to be reviewed. It is 
understood that SAMA representatives will fully 
participate in all meetings with Al Rajhi Bank personnel 
and the review of all documents. 
 
3. (C) Exhibit A to Proposed Terms of Reference for Joint 
Examination of Al Rajhi Bank 
Documents to be provided to Juan C. Zarate, Assistant 
Secretary for Terrorist Financing and Financial Crimes, 
Department of the Treasury for review by the examination 
team in advance of on-site visit: 
 
A. A listing of all accounts of any kind, including DDA 
accounts, maintained by your institution for the 
individuals that will be specified. 
 
B. For each account listed, all documentation concerning 
the customer in the possession of the institution, 
including the complete account opening documentation, 
customer background information, client type (e.g. 
bank customer, commercial), country of residence, and 
risk rating. 
 
C. For each account listed, all account statements and a 
complete transcript of wire transfer data for the 
specified period. The following field headings are 
suggested for the wire transfer data: 
 
     -- Source 
     -- Transaction # Date 
     -- Debit Amount Credit Amount 
     -- Debit Party 
     -- Debit Account # 
     -- Debit Party Address 
     -- Credit Party 
     -- Credit Party Account # 
     -- Credit Party Address 
     -- Ordering Bank 
     -- Ordering Bank Address 
     -- Ordering Customer 
     -- Ordering Customer Address 
     -- Beneficiary 
     -- Beneficiary Address 
     -- Account With Address 
     -- Payment Detail Bank to Bank 
 
D. For each account listed, any reports, including any 
work papers and supporting documentation of anti- 
money laundering compliance or terrorist financing 
reviews related to the account. 
 
E. Action plans, if any, related to any reports 
concerning anti-money laundering compliance or 
terrorist financing described in paragraph 4. 
 
F. A list of all local laws relating to customers with 
which Al Rajhi Bank must comply, including a 
description of how businesses ensure compliance with 
such laws, and how Al Rajhi Bank verifies compliance 
by business areas. 
 
G. Any external audit reports, including any work papers 
and supporting documentation, rendered during the 
preceding three years, including audits of Compliance 
and AML/KYC. 
 
END TEXT 
 
POWELL 
NNNN