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US Official: Saudis Must do More to Curb Terror Financing

A Bush administration official is calling on Saudi Arabia to do more to crack down on terrorism financing. He made the comments before a Senate panel.

In testimony before the Senate Banking Committee, undersecretary for terrorism and financial intelligence at the Treasury Department, Stuart Levey, said the United States remains concerned that Saudi money is funding terrorism abroad.

"Undoubtedly some of that money is going to Iraq, and it is going to Southeast Asia, and it is going to any other place where there are terrorists," he said.

Levey said private Saudi donors are a significant source of terrorism financing, and he said the Riyadh government needs to do more to crackdown on them.

When asked by committee chairman Richard Shelby, an Alabama Republican, whether the Saudi government has the will do take such action, Levey responded that judging by Saudi officials' public comments, the government is serious about the issue.

But Shelby was not convinced, as exemplified in this exchange with Levey.

SHELBY: "Mr. Secretary, but isn't there honestly, candidly, here today a gap between the rhetoric of the officials in Saudi Arabia and the implementation of policy? Yes or no?"

LEVEY: "Well, [for now] I would rather say there is a 'lag', and we'll see if there is a 'gap.'"

Besides Saudi Arabia, the United States is working closely with a number of other countries, including Indonesia, Afghanistan, and Pakistan, to help them control the flow of money to terrorist organizations.

Undersecretary of State for economic, business and agricultural affairs, Anthony Wayne, called on Pakistan to enact an anti-money laundering law.

"Pakistan now has a proposed anti-money laundering law, which was drafted with U.S. assistance before the relevant parliamentary committees," said Mr. Wayne. "Unfortunately the lack of action on that law, which would set up a financial intelligence unit, has meant that we have been unable to accelerate some of our planned assistance."

On a more positive note, the Treasury Department's Stuart Levey reported progress in international efforts to curb North Korean money laundering.

"A number of responsible jurisdictions and financial institutions have taken steps to ensure that North Korean entities engaged in illicit conduct are not receiving financial services," he noted. "Our combined actions have been described as causing 'a ripple effect' around the world, constricting the flow of dirty cash into Kim Jong Il's regime."

The Banking Committee has held a number of hearings into efforts to crackdown on money laundering in recent years.