Financial Crime World

Unraveling the Legal Labyrinth of Financial Crime in Saudi Arabia

This article offers a comprehensive Q&A guide on financial crime in Saudi Arabia, providing valuable insights into various aspects of corporate fraud, bribery and corruption, insider dealing, market abuse, money laundering, terrorist financing, breaches of financial and trade sanctions, financial record keeping, due diligence, and more.

  • Corporate fraud: Dishonest or deceitful acts, including false accounting, false invoices, and fraudulent trading.

    Bullet points:

    • False accounting
    • False invoices
    • Fraudulent trading

  • Bribery and Corruption: Offering, promising, or giving a bribe; soliciting, accepting, or receiving a bribe.

    Bullet points:

    • Offering, promising, or giving bribes
    • Soliciting, accepting, or receiving bribes

  • Insider dealing and market abuse: Leveraging insider information to secure an unfair advantage in the market.

    Bullet points:

    • Insider trading
    • Market manipulation

  • Money laundering: Processing the proceeds of criminal activities in order to disguise their origin.

    Bullet points:

    • Disguising the origine of criminal proceeds

  • Terrorist financing: Supporting terrorist acts or organizations by providing funds.

    Bullet points:

    • Funding terrorist acts or organizations

  • Breaches of Financial and Trade Sanctions: Violating economic restrictions and embargoes imposed by international or national bodies.

    Bullet points:

    • Violations of financial or trade sanctions

  • Financial Record Keeping: Failing to maintain accurate financial records.

    Bullet points:

    • Inadequate accounting practices

  • Due Diligence: Failing to reasonably investigate before entering into a business relationship.

    Bullet points:

    • Neglecting pre-transaction background checks

Regulatory Authorities Handling the Investigation and Enforcement of Financial Crimes

  • Saudi Arabian Monetary Authority (SAMA): Combatting financial crime and maintaining economic integrity.
  • Capital Market Authority (CMA): Regulating financial markets, securities, and mutual funds.
  • Ministry of Investment: Encouraging private sector growth and implementing economic reforms.
  • Saudi Arabia General Investigation Agency (GIA): Dealing specifically with corruption and bribery cases.
  • Anti-Corruption Commission (ACC): Investigating and prosecuting acts of bribery and corruption.

Protections for Whistleblowers

Whistleblowers may enjoy legal protection, especially in cases of money laundering, terrorist financing, and other economic crimes. Saudi Arabia’s Money Laundering and Terrorist Financing Control Law and related regulations offer confidentiality and non-retaliation for individuals reporting such offenses.

Minimizing Companies’ Exposure to Corruption and Corporate Crime

  1. Implement robust policies and procedures for financial reporting, internal controls, and vendor management.
  2. Conduct comprehensive due diligence on potential business partners.
  3. Maintain accurate financial records.

Handling Settlement Negotiations with the Authorities

  1. Seek legal counsel from experienced advisors.
  2. Be transparent and cooperative during negotiations.
  • Anti-Bribery and Anti-Corruption Program: Implementation.
  • Cross-border cooperation: Improvement.
  • Adapting legislation to technological advancements.

Staying Informed and Prepared

  • Stay informed: Stay updated with legal news and regulatory updates.
  • Software and tools: Invest in specialized software and tools for detecting and preventing financial crimes.
  • Dedicated compliance team: Maintain a dedicated in-house compliance team.