Anti-illicit funding body rejects Saudi membership

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 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 at a time when it is striving to bolster its international reputation in order to encourage foreign investors to participate in its huge transformation plan and improve financial ties for its banks.

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, 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 government has taken steps to beef up its efforts to tackle graft and abuse of power, including last week amending an anti-corruption law to remove a 60-day statute of limitations for investigating allegations against current or former ministers.

Authorities also detained dozens of senior officials last November on Crown Prince Mohammed bin Salman’s orders, accusing them of crimes including money laundering although not of terror financing.

Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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