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JASTA Adds Tension to U.S.-Saudi Relations

Last month the press paid much attention to comments made by Saudi Foreign Minister to U.S. lawmakers in which he stated that Riyadh would be forced to take action if legislation passed to rescind the kingdom of its sovereign immunity from lawsuits. The threat came about due to the introduction of the Justice Against Sponsors of Terrorism Act (JASTA), an effort ongoing since 2012, in the U.S. Senate where it passed unanimously earlier this month. If enacted into law, JASTA would allow civil suits against foreign states and officials for damages arising from acts of international terrorism on American soil and nationals.

The bill seeks to amend the 1976 Foreign Sovereign Immunities Act which grants protection to foreign states in U.S. courts. JASTA would allow families of 9/11 victims to sue the Saudi government, effectively freezing Saudi-held assets, for the kingdom’s alleged support of the 2001 attacks. Officials in Riyadh have thoroughly denied any involvement and the 9/11 Commission stated that “no evidence that the Saudi government as an institution or senior Saudi officials individually funded the organization.”

Speaking with reporters in Geneva, Foreign Minister Adel al-Jubeir softened his statement that the kingdom would sell off $750 billion in American assets. He asserted that he simply warned Secretary of State John Kerry that investor confidence would decline if the law were to pass.

When asked about the law affecting Saudi investment policies al-Jubeir rebuked, “What has happened is that people are saying we threatened. We said that a law like this is going to cause investor confidence to shrink. And so not just for Saudi Arabia, but for everybody. We don’t use monetary policy and we don’t use energy policy and we don’t use economic policy for political purposes. When we invest we invest as investors. When we sell oil we sell oil as traders.”

The Obama administration has spoken out against JASTA, arguing that the legislation’s passage would put American citizens and corporations, in addition to the U.S. government, at risk of legal action by other countries in response. “[The bill would] expose the United States of America to lawsuits and take away our sovereign immunity and create a terrible precedent,” Secretary Kerry told a Senate panel in February. The bill’s sponsors insist, however, that it is written in such a way to lower the likelihood that other nations would take their own legal action in response.

Although Saudi leaders claim that they have no intentions of carrying out al-Jubeir’s previous threat, it is important to ask how the legislation’s passage could impact U.S.-Saudi relations.

Al-Jubeir’s substantial concern is not that Saudi Arabia would be found or held responsible for 9/11, but that the courts could freeze the kingdom’s assets as the case proceeds. In order to move those assets out of reach of American courts and away from the risk of being frozen, the Saudi-held assets would have to be transferred out of U.S. dollars. However, any movement of dollars around the world is still regulated under U.S. jurisdiction. According to Forbes contributor Tim Worstall, if the Saudi government did go through with selling the assets, it would be noticeable but not a huge problem as $750 billion would only be 1 percent or less of total U.S. assets. So although the U.S. might not be too pleased if all those assets were sold or transferred into another currency, its larger scale impact would probably be minimal.

Ever since President Roosevelt shook hands with King Abdulaziz in 1945 aboard the U.S.S. Murphy, Washington and Riyadh have maintained a strong alliance which has served as the cornerstone in the Middle East’s geopolitical order. Yet Saudi Arabia—both royals and subjects—have had relationships with extremist groups, which along with a host of other issues have fueled tension in the relationship. The fact that 15 out of 19 of the 9-11 hijackers were Saudi nationals has triggered substantial animosity toward the kingdom on the part of the American public. Indeed, these sentiments have prompted much support for JASTA in the United States. Saudi’s chief concern, however, is regional rival Iran: the United States’ handling of the Iran-backed Syrian regime and the Iranian nuclear deal are much larger threats to the kingdom in Riyadh’s eyes.

“When push comes to shove, this relationship is unshakable,” al-Jubeir told The Washington Post in March 2015. However, it is worth asking how the outcome of the U.S. presidential election may impact relations between Washington and Riyadh. Indeed, relations are likely to maintain the status quo with Hillary Clinton at the helm, as she appears committed to continuing many of the Obama administration’s approaches to U.S. foreign policy in the Middle East. Analysts have noted Saudi Arabia’s large contributions to the Clinton Foundation and the Riyadh leadership’s extensive experience working with Clinton in her capacities as First Lady, U.S. Senator, and Secretary of State.

On the other hand, push might just turn into shove with a President Trump as there has been strong displeasure towards his comments about banning Muslim entry into the United States to prevent terrorism and charging Saudi Arabia for American defense. “They’re not paying us a fair price. We’re losing our shirt,” he said. Some members of the royal family have also expressed their opposition to Trump. Prince Alwaleed bin Talal called Trump a “disgrace to all America” and Prince Turki bin Faisal urged Americans to “make the right choice.”

With the election of a new President in November, it will only be a matter of time before seeing if the Foreign Minister’s words hold true. Linked to JASTA is the upcoming release of the 28 redacted pages from the 9/11 Commission Report. These pages are likely to contain additional ammunition for supporters of JASTA. The content will be subjected to utmost scrutiny and may raise serious questions about Saudi Arabia’s relationship with terrorist financing networks and the implications for King Salman and the leadership today.

Overall, regardless of JASTA and the hype surrounding the legislation, which threatens to put Saudi Arabia under a legal microscope, the U.S. and Saudi Arabia’s relationship is likely to be defined by a host of sensitive and complicated issues in which the leadership in Washington and Riyadh have a more difficult time seeing eye to eye.