Saudi investments in US said safe despite JASTA

Sunday 20/11/2016
Governor of Saudi Arabian Monetary Agency Ahmed Alkholifey

LONDON - Saudi Arabia has softened its rhetoric regarding in­vesting in the United States by the government, its citi­zens and businesses. The governor of the kingdom’s central bank, known as the Saudi Arabian Monetary Agency (SAMA), desig­nated US investments as safe and reaffirmed Saudi Arabia’s commit­ment to the Saudi riyal-US dollar peg.

During a news conference after submitting his annual report to Saudi King Salman bin Abdelaziz Al Saud, SAMA Governor Ahmed Alk­holifey was asked about the possi­ble effects of a Trump presidency on the Justice Against Sponsors of Terrorism Act (JASTA), which al­lows families of the victims of the September 11th, 2001, terrorist at­tacks to sue Saudi officials for dam­ages.

“We do not have concerns over Saudi investments in the USA,” Alk­holifey said.

The SAMA governor said Saudi investments in the United States enjoy “sovereign immunity” and that the kingdom was not worried about JASTA.

Al Eqtisadiya daily reported the governor’s statement ends specula­tion about the kingdom’s plans to change its investment policy in the United States after Donald Trump’s victory in the US presidential elec­tion or the passing of JASTA by the US Congress.

Alkholifey said there was no “in­tent to change the riyal’s exchange rate compared to the US dollar or to change the dollar peg” and said the Saudis would allow more foreign banks to operate in the kingdom as long as they are a “benefit to the economy”.

Riyadh had issued a warning in April that it would sell off hun­dreds of billions of dollars’ worth of US assets if JASTA became law. Still, Congress in October overrode US President Barack Obama’s veto of JASTA, making it the law of the United States.

“What (Congress is) doing is stripping the principle of sovereign immunities, which would turn the world for international law into the law of the jungle,” said Saudi For­eign Minister Adel al-Jubeir at the time.

There is a strong belief in Wash­ington the veto override was po­litically motivated as members of Congress did not want to be seen to be voting against the families of the victims of 9/11 so close to the elec­tion in November.

Besides JASTA, relations between Riyadh and Washington deterio­rated during the Obama adminis­tration, mainly over the US nuclear deal with Iran and the failure to agree on an endgame to the war in Syria.

In late October, US Treasury Sec­retary Jacob Lew, while on a visit to the kingdom, said JASTA had “seri­ous implications” on common US-Gulf interests.

Lew, who met with finance min­isters of Gulf Cooperation Council members during the trip, said JAS­TA “would enact broad changes in long-standing international law re­garding sovereign immunity that, if applied globally, could have serious implications for our shared inter­ests”.

Lew emphasised the United States’ commitment to holding in­dividuals responsible when they commit horrendous acts but with­out “undermining important inter­national legal principles”.

“I assume that the kingdom is now aware more than any time before that the law will surely be amended or revoked by the US leg­islative body,” Salman al-Ansari, founder of the Saudi-American Public Relation Affairs Committee, told CNN.

Ansari said he does not believe the kingdom would pull its invest­ments from the United States.

“Saudis know that America re­mains its most valuable and time-honoured partner, even in the face of economic and political turmoil,” he said.