Saudi investments in US said safe despite JASTA
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.