A Financial Action Task Force (FATF) report criticizing Saudi Arabia’s anti-money laundering and terrorism finance measures puts the kingdom on the spot 17 years after the 9/11 attacks and casts a shadow over its diplomatic and economic boycott of Qatar on the grounds that the Gulf state supports militants.
In a nod to the kingdom, the international watchdog described as “understandable” the fact the kingdom’s “almost exclusive focus of authorities on domestic (terrorist financing) offences means the authorities are not prioritizing disruption of support for threats outside the kingdom.”
The 246-page report contrasted starkly with US President Donald J. Trump’s assessment expressed in his address to the United Nations general assembly. “Following my trip to Saudi Arabia last year, the Gulf countries opened a new centre to target terrorist financing. They are enforcing new sanctions. They are working with us to identify and track terrorist networks and taking more responsibility for fighting terrorism and extremism in their own region, Mr. Trump said.
Mr. Trump, by design or default, did not take into account the flow of substantial amounts of Saudi money to militants in the Pakistani province of Balochistan that borders on Iran. Mounting indications suggest that the Islamic republic’s detractors may be moving to stir unrest among Iran’s ethnic minorities in a bid to change the regime in Tehran.
The flow of funds leaves open the possibility that the kingdom’s laxity in cracking down on funds flowing to extremists beyond its frontiers may be deliberate.
To be sure, Saudi Arabia has been strengthening its anti-money laundering and terrorism finance regime ever since the 9/11 attacks on New York and Washington in which the perpetrators were primarily Saudi nationals and Al Qaeda attacks in the kingdom itself in 2003 and 2004.
Writing in Forbes, journalist Dominic Dudley noted that the FATF report may not have taken into account new anti-money laundering and terrorism finance-related laws adopted last year by Saudi Arabia. “The new laws were coming in just as the FATF was conducting its research for this report and it is too soon to judge how effective they have been,” Mr. Dudley said.
Even so, it was only with the ascendancy to the throne of King Salman in 2015 and the rise of his son, Crown Prince Mohammed bin Salman, that the kingdom began to review its more than four decades long global funding of intolerant, anti-pluralistic, supremacist, ant-Shiite and anti-Iranian ultra-conservative Sunni Muslim groups and institutions.
While financing has been severely curtailed and funding vehicles like the Muslim World League have been refashioned to propagate moderation and inter-faith dialogue, the kingdom, as in the case of Balochistan, continues to support ultra-conservatives where it serves its geopolitical goals.
In what apparently reflected frustration with the kingdom’s progress in countering money laundering and terrorism, FATF did not mince its words in its report. “Saudi Arabia is not effectively investigating and prosecuting individuals involved in larger scale or professional (money laundering] activity” and is “not effectively confiscating the proceeds of crime,” the report said.
FATF suggested that the problem was the kingdom’s implementation of anti-money laundering and terrorism finance measures rather than its legal infrastructure. “Saudi Arabia has a legal framework that provides it with an adequate basis to investigate and prosecute ML (money laundering) activities… Saudi Arabia is not effectively investigating and prosecuting individuals involved in larger scale or professional ML activity. Investigations are often reactive rather than proactive, and tend to be straightforward and single layered.,” the report said.
The report’s wording left the possibility open that poor implementation was the result of either a lack of political will or the fact that there is widespread criticism of Prince Mohammed’s reforms within the bureaucracy and the kingdom’s religious establishment despite a crackdown on any form of dissent.
That possibility gains currency given the fact that FATF acknowledges that “Saudi Arabia has demonstrated an ability to respond to the dynamic terrorism threat it faces in country. Saudi Arabian authorities have demonstrated that they have the training, experience and willingness to pursue TF (terrorism finance) investigations in conjunction with and alongside terrorism cases.”
The report noted that Saudi Arabia seldom convicted funders of political violence who were not directly involved in attacks. “This includes TF cases in relation to funds raised in the Saudi Arabia for support of individuals affiliated with terrorist entities outside the kingdom, particularly outside the Middle-East region, which remains a risk. Saudi Arabia’s overall strategy for fighting terrorist financing mainly focuses on using law enforcement measures to disrupt terrorist threats directed at the kingdom and its immediate vicinity,” the report said.
FATF’s criticism is embarrassing for a country that ever since the 9/11 attacks has been attempting to shed its image of having fuelled militancy, position itself as a leader in the struggle against militancy and extremism, and project itself as a 21st century knowledge hub by liberalizing its strict social and cultural norms, including the recent lifting of the ban on women’s driving.
It is also awkward because the report puts Saudi Arabia in the position of the pot calling the kettle black when it comes to the 15-month-old Saudi-United Arab Emirates-led boycott of Qatar because it allegedly funds and supports militancy. Saudi Arabia’s failure to garner widespread international support for its boycott or force Qatar to concede heightens the awkwardness.
That is even more the case given that Saudi Arabia together with the UAE, Bahrain and Egypt is demanding among other things that Qatar “consent to monthly compliance audits in the first year after agreeing to the demands, followed by quarterly audits in the second year, and annual audits in the following 10 years” – something the kingdom would be unlikely to accept if hypothetically asked in the wake of the FATF report to submit to a similar regime.
The drone attacks on Saudi Arabia’s oil wells
In the early morning of Saturday, September 14 last, at 3.31 and 3.42 a.m., the Yemeni Houthi Shiite rebels supported by the Iranian “Revolutionary Guards” – the right eye of Imam Qomeini, as they are called in Iran – launched about ten drones against the largest Saudi oil extraction area owned by ARAMCO.
Allegedly the operation was launched from Iraq. Both Abqaiq, the largest stabilization facility in the world, as well as the Buqaiq facility in the extraction field, and finally Kurais, about 60 kilometres from Abqaiq, were hit with drones.
It is the largest oil disruption ever, considering all those caused by wars or other reasons.
The Shiite attacks have immediately reduced Saudi production by about five million barrels per day, i.e. about half of the Saudi Kingdom’s daily output.
With the drone attacks, the world has lost 6% of its oil output.
The Saudi authorities have said that, as early as September 17, everything has been under control.
The first geopolitical deduction that can be made is that the current attacks, much more virulent than those already occurred last May, open a second front of Arabia’s war against Iraq, which, in any case, would severely strain the Saudi armed forces, already absorbed by the war in Yemen- albeit with meagre results.
Moreover this could open a new strategic area, in which the USA could be forced to help Saudi Arabia and Israel could be forced to later project its power not only onto its northern and southern borders, but also onto eastern Syria and Iraq – and permanently so, unlike what currently happens.
Certainly, all this regards above all Iran that, however, could not afford a hybrid and conventional war with Saudi Arabia and its traditional regional allies.
Moreover, the Shiite Houthi’s attack on the Saudi oil facilities was conceived and probably planned by the Head of the Pasdaran, Qassem Soleimani.
Hence the Houthi operation has run parallel with the action directly organized by the Pasdaran on September 15 last, i.e. the seizure of a ship – the name of which is still unknown -carrying a fuel cargo of over 250,000 litres.
All this happened in the Strait of Hormuz, near the island of Tunb, in Iranian waters.
A full option strategy to show Iran’s new regional strategic status.
According to Iranian sources, the rationale underlying the naval operation of the Iranian Revolutionary Guards concerns the substantial oil smuggling to and fro the United Arab Emirates.
Tout se tient.
Iran, on the one hand, while assessing the war burden for Saudi Arabia in Yemen, wants to open other fronts of the conflict, thus also extending Israel’s defence chain. Hence Iran pursues the overstretch of its traditional opponents.
Another possible assessment of the drone operation carried out by the Houthis and Iran is that it could be an Iranian response to the actions undertaken by French President Macron who has recently tried to organize a side meeting, at the UN General Assembly, between US President Trump and Iranian President Rouhani.
Ali Khamenei, the Rahbar and, hence, Iran’s Supreme Leader, was, however, clearly opposed to a new Iran-US diplomatic relationship, and his Revolutionary Guards have immediately understood the issue.
Moreover, the very recent drone attacks on the two Saudi facilities are not even the first and only ones. As mentioned above, on May 15 last, two Saudi pumping stations – placed on the East-West pipeline that reaches up to the Yanbu oil terminal were attacked with two drones probably launched from Iraq.
Hence Iran has an efficient and stable network in Iraq to launch attacks on the Saudi territory and its surrounding areas, not necessarily with drones only.
With its satellite photos, Israel has shown that the Al Quds Force, the elite of the Pasdaran, is building an Iranian military station in Albukamal, on the Syrian-Iraqi border-and probably these operations indicate that the base is already finished.
It is supposedly a base for at least 3,500 soldiers, with means that should be used above all for the “hybrid war”, but not only for it.
Once again Israel has become a target for Iran, from the new bases in Northern Iraq. The United States, however, does not want to be entangled and bogged down into a new “long war” in the Middle East, even though it will help Saudi Arabia (and, obviously, Israel) from afar, while Saudi Arabia has explicitly stated that the Iranian drones are very hard to track.
At economic level, however, the Saudi oil crisis has the same magnitude as the oil crisis following the Yom Kippur war.
This crisis, however, is really such only because Saudi Arabia has proved to be fragile, not only in terms of mere oil quantity, which has been immediately reintroduced into the daily balance, using the Saudi huge reserves.
Nevertheless they will run short and nobody really knows what the reserves of the Saudi wells are, which are reportedly still very large. However, there are those who have doubts in this regard, since it is the best kept Saudi State secret.
This has been the worst attack ever on the “oil bank”, as analysts call the Saudi Kingdom.
Hence the attack is a real game change rand it is currently hard to predict all its effects, even for technical experts and strategic analysts.
It much depends on Mohammed bin Salman’s moves, as well as on the US real engagement in the region, and finally on Israel’s future military policy.
According to some organizations that study oil markets, the Iranian and Houthi operation is at least as severe as the invasion of Kuwait – which also “sucked” Iraqi oil- or as the 1979 Iranian Shiite revolution itself.
President Trump has already authorized the release of US strategic reserves (SPR), where necessary, “to keep the markets well supplied”.
As early as September 16, however, Saudi ARAMCO has been expected to recover at least a third of its production, with a maximum of two or three million barrels of Saudi oil that will go back to the markets within two-five days, while additional 2.7 million barrels will arrive on the market later, considering the nature and specificity of the Abqaiq facility.
It is a huge facility located in a Saudi area where the presence of Shiite Islam is far from negligible, i.e. about 15-20%, mainly in the eastern zones and among the workers operating in the wells and facilities.
This is another political sign-halfway between religion and class struggle – not to be neglected.
When the markets opened, on the Monday following the attacks, the oil barrel price increased by 20%, with a peak of 71.6 USD per barrel.
However, what are the Iranian assets in the current war launched against the great Wahhabi and Sunni power, namely Saudi Arabia – a war which is a proxy one only from a formal viewpoint?
They are manifold and remarkable.
There are over 45 Iranian military airports. The maritime positions currently held by the Revolutionary Guards are over 16, all located on the coasts and islands of the Persian Gulf.
The missile stations in Iran and Iraq have several carriers capable of reaching a range of 2,500 kilometres.
Iran’s area denial and access denial capabilities are much greater than those of any country in the region.
Iran has a significant submarine fleet, both in the Persian Gulf and in the Indian Ocean, as well as a large fleet of very fast motorboats and patrol boats.
At military level, Iran is not afraid of its obvious tactical superiority nor of the first or second-level reactions of its opponents.
Cyberattacks are another Iranian “excellence” while, only recently, Saudi ARAMCO has been updated in terms of protection from cyberattacks- albeit we are still at less relevant levels than Iran’s.
It is no by mere coincidence that the Saudi oil company has already suffered cyberattacks, with the Shamoon virus in 2018. Moreover, due to their geographical location, also the Saudi ports and infrastructure are scarcely protected from missile or air attacks.
But also from sea bombings, especially on the ports of Ras Tanura and Ras Juaymah, located in the Persian Gulf, and of Yanbu, in the Red Sea, which are hard to protect.
So far, however, the Saudi critical infrastructure has been defended only from Qaedist attacks, not from a real military operation, possibly with the Houthi conventional or hybrid war protection.
Not to mention the desalination plants, which process 70% of all the drinking water distributed in Saudi homes, in addition to electricity grids, which are based on the production of energy using over two thirds of the abundant oil supplies. They are surely targets of the drone attacks, as well as cyberattacks or conventional operations.
Another factor not to be neglected regards one of the mainstays of Mohammed bin Salman’ strategy, namely the sale of Saudi ARAMCO.
Clearly the attacks significantly reduce the stock market value of the company, and it just so happened that, in the last days before the attack of last Saturday, the sale procedure had recorded a strong acceleration.
Mohammed bin Salman has set the cost of the ARAMCO operation at 2 trillion dollars.
Hence, considering the infrastructure weakness shown by Saudi Arabia, it will be very unlikely for investors to run to buy the company and carry out transactions on the Stock Exchange.
It is also easy to understand that Iran’s and its proxies’ operation against Saudi Arabia is such as to place Iran in a vantage position in a future new negotiation on the nuclear issue.
It should be recalled that the war in Yemen started in 2015 when Saudi Arabia entered that country to free some areas, including the capital Sana’a, from the insurgents.
Later Saudi Arabia established a friendly government, led by Abu Mansur Hadi.
Saudi Arabia, however, was not able to hold its positions and reach its strategic objectives.
In fact, holding Yemen means to completely control the Persian Gulf and the areas pertaining to it.
Saudi Arabia has kept only Aden and Al Mokha, as well as few other areas, while the border between Arabia and Yemen is still a land of conflict and clashes, in a tribal zone, on the Saudi side of the border line, which has always been scarcely favourable to the Al Saud family and to the Wahabi tradition of Islam.
Nevertheless, not the whole Ansar Allah, the Houthi Shiite movement, is strictly dependent on Iran.
Hence the war in Yemen is a huge cost for Saudi Arabia, while it is negligible for Iran.
We should also consider the support provided to the rebels in the South by Abu Dhabi, the other Emirates and Oman, a country that has always had its own specific policy vis-à-vis Iran.
It should also be recalled that Saudi Arabia was directly hit by drones on December 4, 2017.
However, only a part of the Yemeni tribes are currently loyal to Hadi’s central government and they have often had to enter the Saudi territory, while the other tribes, including the Sunni ones, have supported the tribal-national autonomy proposed by the Houthis.
As already mentioned above, however, ultimately not even Iran will be able to control Ansar Allah completely.
Other effects of the oil crisis will be seen in India, whose economic take-off relies solely on Middle East oil, with 18% of its annual consumption resulting from Saudi oil alone.
Other Asian countries shall change their main supplier, but also the United States – despite its shale oil production -has so far imported 400,000 barrels per day in 2019 alone.
The situation is not bad at all for Russia which, for years, has been setting oil prices similar to OPEC’s. The same holds true for Kuwait and the Emirates, but the possible expansion of production could currently reach a million barrels per day, which are not enough to cover the Saudi shortfall.
Reverting to Yemen, it should also be recalled that the local war is the result of the US-sponsored “Arab spring”.
Hence, it is however unlikely that the attacks on oil wells and facilities (and we should consider that they are not far from the Yemeni border) provide the opportunity for a combined Saudi, US and Israeli attack on Iranian military positions in Iraq or in the Persian Gulf.
From a disadvantaged position, Iran has managed to create its own strategic level playing field with regional and international players, which is the real new fact of the drone attack on the Saudi oil facilities that took place last Saturday.
Iran: New details of shooting Global Hawk disclosed
Deputy of Operations of Iran’s Passive Defense Organization Amir Khoshghalb, in an interview with Mehr news agency, released the details of downing US Northrop Grumman RQ-4 Global Hawk spy drone by IRGC.
“We were precisely observing the US drone’s activity even from the beginning moments of its flight,” he said, “We knew its route and it was under full supervision of Iran Defense Organization.”
“The drone was moving towards Iran, breaching international regulations i.e. taking that route it was making a threat to Iran,” the Iranian official said.
“It had even turned off its identification system,” he added.
“We needed to take a tactical measure, accordingly,” he said.
“Our tactical measure has various aspects; first we issued a radio warning,” Khshghalb described, “In some cases, the warning is stronger and will lead into a strong tactical measure such as shooting.”
“On its route, which was longer than three hours, the drone, which was under our full surveillance, was seeking something,” he reiterated.
“May be we could take initial measures much earlier but we let the drone do its job and end its route,” he said, “We repeatedly issued warnings when the drone was on its way moving towards us asking it to act upon international regulations but it ignored all of them.”
On June 20, In June, Iran’s IRGC downed a US Northrop Grumman RQ-4 Global Hawk spy drone after it had violated Iranian airspace. Despite the US claims that the drone had been flying over international waters, Iran said it had retrieved sections of the drone in its own territorial waters where it was shot down.
The intruding drone was shot by Iran’s homegrown air defense missile system “Khordad-3rd”.
US President Donald Trump said afterward that he aborted a military strike to retaliate against Iran’s downing of the US drone because it could have killed 150 people, and signaled he was open to talks with Tehran.
Chief of General Staff of Iranian Armed Force, Major General Mohammad Hossein Bagheri, said on Wednesday that the US was on the verge of attacking Iran but called off the plans after Iran downed the intruding drone.
“The US was to take a practical measure [military strike] against us but in the name of a high number of probable victims, it overturned the decision,” he said, adding, “The main reason, however, was Iran’s deterrence power.”
These are the result of the Iranian thought and the commands of the Revolution Leader, he said, noting that despite all problems, Iran enjoys great capabilities in the defense sector and the Iranian nation will not let eruption of another war.
From our partner MNA
Rethinking Cyber warfare: Strategic Implications for United States and China
“Every age had its own kind of war, its own limiting conditions, and its own peculiar preconceptions.”Carl von Clausewitz
Internet has transformed the front lines of war. Modern conflicts are now waged online in cyberspace. World Wide Web (WWW) has eradicated all physical borders and defences, without which weak and powerful states are all prone to attacks. Concurring to this pretext, a number of countries have formally recognized cyber as the new domain of warfare in their strategy papers and documents. United States and China are the master players in this realm having military units active, with sophisticated state of art capabilities dedicated to cyber strikes. The consequences are dire, for the sole superpower, and for the rising economic giant which is projected to take over the former by 2025.
The dynamic nature of cyber warfare has caused frustration in the inner circles of Washington and Beijing. Both the public and the private sector have been targeted. The former to get hands on state secrets and latter for intellectual property rights. According to an estimate by US Cyber Command (USCYBERCOM), it has cost the American economy $338 billion, an amount closer to the entire Gross Domestic Product (GDP) of Pakistan. China on the other hand leads the Asia-Pacific region in cyber losses which incurs the country an annual estimated loss of $60 billion.
Next Generation Warfare
There is a surge seen in cyber attacks against the US. The Central Intelligence Agency (CIA), Federal Bureau of Investigation (FBI) and National Security Agency (NSA) at multiple times have came under attack. This is followed by Silicon Valley tech giants, such as Netflix, Twitter and Spotify who on numerous occasions have been taken down by cyber attackers. It is very difficult to trace the identity and origin of the attack, as various techniques like changing Internet Protocol (IP) cannot only hide identity of attacker but misattribute it to other nations. Cyber security analysts working in their private capacity have collected evidence that seems indicate China as the alleged perpetrator of recent waves of cyber-attacks.
However, cyber pundits have openly stated that they cannot guarantee with a hundred percent accuracy that the evidence collected in wake of cyber-attacks is authentic and not planted by perpetrators to seem to look genuine. In cyberspace. An attack could be from anywhere around the globe. It could be from friends and foes alike, anyone can attack and make it look like an attack came from China or other adversary. In the past, cyberattackers from France bypassed into secured servers stealing classified information relating to American products and designs. Added to that, it is an expensive and difficult task to analyze these attacks. To know that you have been attacked or infiltrated is itself a big achievement. Considering that, it take days or even months to find that your security has been compromised. It took seven months for security analyst to find the Stuxnet virus that was hiding itself into a legitimate Siemens software responsible for controlling centrifuges at nuclear power plants around the world. According to an estimate starting rates for analyzing and identifying cyber attacks start from $650 dollars per hour, which often end up towards an uncertain conclusions.
Philippe Goldstein author of Babel Zero argues that attacking against a wrong adversary would be catastrophic. A troublesome scenario, where attacks in cyberspace can be met with conventional and even nuclear culminating a “Cyber Armageddon”. It is this reason that states have taken cyber warfare seriously and synonymous to national security. China has incorporated cyber command structure within its armed forces, under the“Three Warfare strategy.”
Cybersecurity analysts have called minuet “cyber bullets” as ‘Cyber weapons of Mass Destruction.’ All one needs is ‘bad timings, bad decision making and some bad luck!’ and you can end up having a World War III which was 24/7 nightmare of Cold War veterans. The world is not immune from such attacks. Anyone having an access to any computing device, from iPods to digital smart watches, having right technical skills can cause a national security crisis. This is well depicted in John Badham’s film, WarGames where a young hacker unknowingly sets a US military supercomputer to launch nuclear weapons on the former Soviet Union. Few years back, an attack on FBI’s website resulted in leaking of classified data caused alarm bells in Washington. Later it was found out the perpetrator was a 15 year old school boy from Glasgow, Scotland.
The way forward for states remains cumbersome in the absence of legal framework from the United Nations (UN). Further complications arise when the attack is orchestrated by a non-state actor or private individual from a particular state. Recent debates among the North Atlantic Treaty Organization (NATO) members have arisen in the wake of alleged Russian sponsored cyber activities against Europe and America whether the collective defence measures under Article 5 would apply to a cyber-attack.
Cyber security is a relatively new introduction in war studies. The US Department of Defence (DOD) recognized cyber warfare, as the fifth domain of warfare following land, sea, air and outer space. There are around 30 countries that have dedicated cyber military units, whereas more than 140 countries have or are in developing stages to acquire cyber weapons. Cyber is the means by which countries irrespective of their financial standing can acquire to further states objectives. US and China are considered advanced states in cyber realm, having cyber military technology and capabilities that are rarely matched by other contenders. Therefore, studying their way of cyber dealings, strategies and policy making would allow other countries such as Pakistan to better able to understand the dynamics and nature of this new type of warfare. India has tasked the Defence Cyber Agency (DCA), presently headed by a two-star Admiral which reports directly to Chairman of the Chiefs of Staff Committee (CCSC). DCA is presently undertaking to prepare a Cyber warfare doctrine for India. The repercussions of the developments are critical for Pakistan, which require a comprehensive safety and information guideline to be prepared for the masses.
The drone attacks on Saudi Arabia’s oil wells
In the early morning of Saturday, September 14 last, at 3.31 and 3.42 a.m., the Yemeni Houthi Shiite rebels supported...
My best friend is my psychiatrist
I’ll leave the pain for tomorrow. Won’t even think about it until tomorrow. That is, if tomorrow ever comes. So,...
If we want sustainable development, we have to work together
The Sustainable Development Goals (SDGs) is our plan for the future. It aims to transform our world and to improve...
Abrogation of Article 370 and Pakistan’s Pathetic Response
Pakistan, which is a party to Kashmir dispute could not make significant move after the Indian decision to scrap Article...
Iceland’s slowdown underlines the need to fix structural issues
Sound macroeconomic policies and favourable external conditions have enabled Iceland’s economy to emerge stronger from a decade of post-crisis management....
Foreign Affairs of the Absurd: The Strange Case of Abkhazia 2019
While very few Americans (and Western Europeans for that matter) would be hard pressed to successfully locate the Republic of...
How to turn the page on WW II in Asia
In the run-up to the 74th anniversary of the end of World War II in the Pacific Russia and Japan...
Defense3 days ago
Infectious Diseases and National Security: Who will frame National Health Security Policy of Pakistan?
Defense2 days ago
Russia does not exclude nuclear war in Europe
Russia1 day ago
Eurasia’s Great Game: India, Japan and Europe play to Putin’s needs
South Asia8 hours ago
Abrogation of Article 370 and Pakistan’s Pathetic Response
Reports3 days ago
East Asian and Northern European countries are world leaders on idea creation and intensity
Americas2 days ago
Politics as Reflection: Even in an Election Year, Real Change Must Come From “Below”
South Asia2 days ago
Pakistan’s peace-loving gestures are considered its weakness, unfortunately
Middle East2 days ago
New intrigue over nuclear deal