Senate Permanent Investigations Subcommittee Reports HSBC Supplied Al Qaeda-connected Bank $1 billion
July 19, 2012 • 1:28PM

One of the most explosive aspects of the Senate report on HSBC is the section in the report on "Al Rajhi Bank: Disregarding links to Terrorist financing." What the committee documents is that for more than 25 years HSBC provided banking services to Al Rajhi Bank even after evidence emerged that the bank, including one of its founders who was an early finanical benefactor of al Qaeda, was funding terrorist operations. In 2005, when the bank was indicted, the HSBC Group Compliance recommended that HSBC affiliates should sever ties, but some HSBC affiliates disregarded the reocmmendation, while others terminated their relationships but protested and urged HSBC to reverse its decison. Four months later HSBC Group Compliance reversed itself and announced that all HSBC affiiates could do business with the bank. On Dec. 1, 2006, HBUS AML Compliance agreed to allow HBUS to reinstate the relationship and resume supplying U.S. dollars to Al Rajhi. This was after Al Rajhi had threatened to pull all of its business from HSBC if the U.S. banknotes business were not restored.

In 2003 a report by the U.S. CIA entitled, "Al Rajhi Bank: Conduit for Extremist Finance," found that "senior al-Rajhi family members have long supported Islamic extremists and probably know that terrorists use their bank."

In 2002 the name of Sulaiman bin Abdul Azis Al Rajhi, one of Al Rajhi Bank's key founders and most senior offials, appeared on an internal al Qaeda list of financial benefactors. This document was discussed in the 9-11 Commission's report, so HSBC was clearly on notice about both the al Qaeda list and its inclusion of Sulaiman bin Abdul Aziz Al Rajhi. The CIA report also says: "Islamic extremists have used Al-Rajhi Banking & Investment Corporation since at least the mid-1990s as a conduit for terrorist transactions, probably because they find the bank's vast network and adherence to Islamic principles both convenient and ideologically sound."

Al Rajhi Bank is also linked to two other banks, Bank al Taqwa and Akida Bank Private Ltd. The U.S. Treasury Department has stated: "The Al Taqwa group has long acted as finanical advisers to al Qaeda, with offices in Switzerland, Lichenstein, Italy and the Caribbean." Sulaiman bin Abdul Aziz Al Rajhi was "on the board of directors of Akida Bank in the Bahamas." Al Rajhi Bank also provides accounts to specific clients linked to terrorism including the al-Haramain Islamic Foundation and the International Islamic Relief Organization. IIRO has been linked to Al Qaeda and other terrorist groups. Sulaiman bin Abdul Aziz Al Rajhi is alleged to have been an officer of IIRO. The largest nonprofit venture in the Al Rajhi group, SAAR Foundation, was named after him.

Al Rajhi Bank gained notoriety as well for providing banking services to several of the hijackers in the 9-11 terrorist attack, including Abdulaziz al Omari, who was aboard American Airlines Flight 11.

HSBC provided Al Rajhi Bank with U.S. banknotes for over 25 years. In addition to the London Branch, HBUS headquarters in New York opened a banknotes account for Rajhi Bank in January 2001, just before 9/11.

In January 2005, a little more than three years after the 9/11 terrorist attack on the U.S., HBUS decided to end its relationship with Al Rajhi Bank. Nearly two years later, in December 2006, the relationship was reactivated and continued for another four years.

Once the account was formally reestablished on December 4, 2006, Al Rajhi Bank purchased nearly $1 billion in U.S. dollars from HBUS from 2007 to 2010 while selling back less than $10 million.