While there is a more than fifty percent chance that the bill allowing US citizens to sue Saudi Arabia for al-Qaeda-relating damages will be passed into law, it may not be as simple for Saudi Arabia to liquidate its US-based assets.
The US Senate has passed legislation that would allow families of 9/11 victims to sue Saudi Arabia's government for damages. The Saudis, who deny responsibility for the 2001 attacks said they might sell up to $750 billion in U.S. securities and other American assets in retaliation.
While there is a more than fifty percent chance that the bill allowing US citizens to sue Saudi Arabia for al-Qaeda-relating damages will be passed into law, it may not be as simple for Saudi Arabia to liquidate its US-based assets, as Ryadh has promised, Mustafa El-Labbad, director of Al Sharq Centre for Regional and Strategic Studies in Cairo, told valdaiclub.com.
“It is highly questionable that Saudi Arabia can take this step, since ‘petrodollars’ are one of the main pillars of dollar hegemony in current global affairs,” El-Labbad said.
El-Labbad noted that besides the obvious difficulties to get the American money out, such a decision could alter the whole state of the Saudi-American relationship as it was for the past seven decades, threatening the national security of Saudi Arabia.
“That would mean the end of the historical ‘Oil for Security’ bargain between USA and Saudi Arabia achieved in 1945 by former US president Franklin Roosevelt and King Abdul-Aziz Al Saud, the founder of the kingdom. Saudi Arabia has no other alternative to American umbrella for its national survival. The connection between oil exploration, oil marketing, oil pricing in dollars, ‘petrodollars’, and Saudi national security are all bound in an organic relationship,” El-Labbad said.
He added that the sum in question may be much bigger than estimated by the US authorities. “There is misunderstanding about the real sum to begin with. Saudi authorities estimated their assets in USA with $750 billion, whereas US authorities estimate Saudi Arabia’s assets (treasury bonds) with only $116.8 billion. That could mean that Saudi Arabia may have bought more treasury bonds from other foreign countries. It could bear also a hidden threat,” El-Labbad said.
Whether such a challenge can set a dangerous precedent to the principle of sovereign immunity worldwide, El-Labbad quoted Saudi Foreign Minister Adel Al Jubair, who said that “The US Congress is stripping the principle of sovereign immunities which would turn the world for international law into the law of the jungle.”
“I think he is right in that regard,” El-Labbad concluded.