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FATF rejects Saudi membership, citing lack of action against illicit funding

1 October 2018 14:40

Saudi Arabia has failed to get full membership in the Financial Action Task Force (FATF), a global body aimed at fighting illicit money flows and terror financing.

The FATF announced Sunday that the kingdom had failed to meet the required standards on fighting money laundering and terror financing.

The 37-member inter-governmental body’s decision deals a blow to Riyadh’s plans to repair its image as a supporter of extremist, Wahhabi-inspired groups in a bid to lure in foreign investors and complete an ambitious plan to overhaul its oil-based economy.

The kingdom was rejected after undergoing what the FATF calls as the “mutual evaluation” procedure.

The evaluation found that Saudi Arabia had a low or moderate level of effectiveness for 7 of the 11 criteria it was assessed on for countering money laundering and terror financing, the Reuters reported, citing a FATF spokeswoman.

“This means that Saudi Arabia will not be granted membership status at this point,” the spokeswoman said. “Nevertheless, since the mutual evaluation is close to being satisfactory, the membership process therefore continues.”

She noted that Saudi Arabia would not be granted full membership until it adequately addresses the deficiencies identified by the organization.

The Saudi regime has been running an aggressive crackdown on the country’s senior officials as part of Crown Prince Mohammed bin Salman’s purported campaign to address graft and abuse of power.

Critics say the plan is a cover for the young heir apparent’s crackdown on dissent and his impulse to eliminate anyone deemed a threat to his ambitions.

Last week, Riyadh amended its anti-corruption law to remove a 60-day statute of limitations for probing such corruption claims against current or former ministers.

Saudi security forces have so far taken dozens of Saudi princes and businessmen into custody on bin Salman’s orders.

Riyadh may pocket over $100bn in ‘graft’ settlements

Saudi Arabia is likely to pocket over $100 billion in monetary settlements with princes and businessmen detained as part of a royal purge, a report says.

Some of the detainees have effectively bought their freedom after reaching financial settlements with the government. Riyadh says it has bagged over $100 billion through such deals.

According to the mutual evaluation report, Saudi banks had filed reports about suspicious transactions involving over 200 individuals.

However, the FATF concluded that Saudi Arabia was not effectively investigating and prosecuting individuals involved in larger scale money laundering and such investigations remained “too low” in number.

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