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FM AMEMBASSY RIYADH
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INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 RIYADH 000369 
 
SIPDIS 
 
SIPDIS 
 
NSC PASS TO MALVESTI AND KIFAYAT 
 
E.O. 12958: DECL: 02/10/2017 
TAGS: PREL PTER EFIN KTFN CVIS GCC SA
SUBJECT: APHSCT TOWNSEND'S FEBRUARY 6 MEETING WITH SAUDI 
FINANCE MINISTER AL ASSAF 
 
Classified By: Ambassador James C. Oberwetter for reasons 1.5 (b) and ( 
d). 
 
¶1. (C) Summary: On February 6 in Jeddah, Saudi Finance 
Minister Ibrahim Al Assaf told Assistant to the President for 
Homeland Security and Counterterrorism Frances Fragos 
Townsend that the SAG would implement the Royal Decree 
requiring individuals carrying those funds in excess of 
$16,000 to declare funds upon exit or entry.  But he did not 
have a date or plan for implementation.  Minister Al Assaf 
said that implementation of the Royal Decree would have to be 
preceded by a public education campaign (given the Saudi 
custom of carrying cash when traveling) and by building bank 
offices at airport and border gates, so cash can be deposited 
upon departure or arrival. He confirmed strong cooperation 
with the U.S. and promised to follow-up directly with the 
head of the Customs service and Ambassador Oberwetter. End 
Summary. 
 
¶2.  (C)  In their first meeting, which took place in the 
Jeddah office of the Finance Ministry on February 6, Minister 
Al Assaf greeted APHSCT Townsend and mentioned that he had 
met with Deputy Secretary of the Treasury Kimmitt in Davos 
the previous week.  When Townsend shared that she would 
travel to the Shaybah oil field in the Empty Quarter during 
her visit, Minister Al Assaf said Saudi Arabia is planning to 
build a highway through the Empty Quarter to the Omani port 
of Sallalah, which would give Saudi Arabia a direct 
commercial outlet to the Indian Ocean, bypassing the UAE 
ports on the lower Gulf. 
 
Who's in Charge 
--------------- 
 
¶3.  (C) APHSCT Townsend asked about the implementation of the 
King's decree that would require individuals carrying cash in 
excess of $16,000 to declare funds to Saudi customs officials 
upon entering/exiting the Kingdom.  Al Assaf said that he had 
previously discussed this issue with Treasury Under Secretary 
Levey, and added that SAG Customs is the lead agency, not 
Mubahith.  APHSCT Townsend said that this arrangement made 
sense, comparing it to the U.S. system.  APHSCT Townsend 
noted that U/S Levey has the lead on this issue from a law 
enforcement perspective.  While this requires Treasury to 
cooperate with investigators, it is ultimately the best 
arrangement. (Note: SAG Customs has the legal authority to 
enforce the cash declaration law but has not thus far.) 
 
Implementation of Entry/Exit Regulations 
---------------------------------------- 
 
¶4.  (C) APHSCT Townsend pointed out that it had been over a 
year since the King announced the new legislation, and 
emphasized the importance of stopping illicit cash flow, 
particularly to destinations like Iraq.  The U.S. has 
provided training to Saudi customs officials and is prepared 
to offer further training, she added.  But she asked if the 
Minister had a timeline for implementing the King's decree, 
and whether implementation would be phased in starting at 
certain airport and border gates, or done simultaneously at 
all entry/exit points.  Progress is taking place, insisted Al 
Assaf, and Saudi Customs is moving towards an implementation 
phase beginning with the airports.  Entry/exit booths are 
being built in the civil aviation terminals of airports, as 
well as in the land ports of entry, he said.  Banks were 
provided training and infrastructure enhanced to encourage 
travelers to deposit money.  The entry and exit forms were 
drafted, with the assistance of the U.S.  The date for actual 
implementation is uncertain, according to Al Assaf, and also 
requires Customs to coordinate with the MOI, he said.  But he 
undertook to report back to the Ambassador once he has talked 
with technical people. 
 
Public Information Campaign is Key 
---------------------------------- 
 
¶5.  (C) Townsend said she assumed that significant education 
was needed because the requirements are so new.  Al Assaf 
agreed and said that the Saudi Customs will conduct an 
extensive public information campaign before the 
implementation date.  When APHSCT Townsend asked how long 
this would last, he was uncertain but said that it would be 
long enough to prepare both the people and the facilities. 
 
¶6.  (C) Al Assaf stressed that controlling the entry and exit 
of funds has been a priority for the Saudi Central Bank 
(SAMA) long before September 11, noting that it is also in 
the best interest of the Kingdom.  APHSCT Townsend 
acknowledged this point and added that the issue goes to the 
 
RIYADH 00000369  002 OF 002 
 
 
heart of the integrity of the financial system.  It is 
difficult to regulate financial flows if the infrastructure 
is not in place for easy access to bank transfers and ATM 
machines, he said, which is the case in many of the 
neighboring countries where Saudis go on travel.   In 
addition, he described the Saudi custom of carrying cash when 
going on vacation.  This needed to be changed, and people 
need to be encouraged to rely on the banking sector instead 
of carrying cash.  He added that it is a question of 
education and said that they were working hard to achieve 
progress.  Al Assaf confirmed cooperation with the U.S. and 
promised to consult with the U.S. delegation during the 
upcoming Spring Meetings of the Work Bank and IMF in 
Washington. 
 
¶7.  (C) Comment:  Embassy will follow up with the Finance 
Ministry and has requested meeting with the Director General 
of Saudi Customs.  End Comment. 
 
¶8.  (U) APSCT Townsend has cleared this cable. 
OBERWETTER