Title: New Saudi Law Bolsters Fight Against Financial Crime with Tougher Penalties

Saudi Arabia is taking significant steps to enhance its anti-fraud efforts with the approval of a new law aimed at combating financial crime. The following outlines the key aspects of the new legislation.

Defining Fraud

The Saudi Arabian Central Bank (SAMA) has defined fraud as “any act involving deceit to acquire direct or indirect financial gains, causing damage to the victim." The new law, “Combating Financial Fraud and Deceit,” builds on this definition with more stringent provisions.

Penalties for Convicted Fraudsters

Article 1 of the law imposes penalties on convicted fraudsters, including imprisonment for up to 7 years and fines of up to SAR 5 million (approximately USD 1.3 million). Those who incite fraud face the same maximum penalties.

• Penalties for instances where fraud doesn’t occur on their territory could see penalties reduced to half the maximum (imprisonment for up to 42 months and a fine of up to SAR 2.5 million or ~USD 650,000).
• Attempted fraud offenses will bring up to half the maximum penalties (imprisonment for up to 42 months and a fine of up to SAR 2.5 million or ~USD 650,000).

Penalties for Reoffenders and Organized Groups

Reoffenders and organized groups of financial criminals face penalties up to double the maximum under Article 5. This includes imprisonment for up to 14 years and fines of up to SAR 10 million (~USD 2.6 million).

Exemptions

Exemptions to these penalties may be granted at the courts’ discretion, including instances where individuals report the crime before any loss occurs or when the reporting leads to the arrest of all other offenders involved post-loss.

The Importance of the New Law

This new legislation is a crucial component of the objectives outlined in Vision 2030, the national development plan, which includes “transparency and accountability,” “effective governance,” and “responsible enablement.” The tougher penalties are expected to help create an “attractive environment for local and foreign investment,” contributing to the strategic goals of a “thriving economy” and a “vibrant society.”

As part of its ongoing efforts to boost investor confidence and preserve the integrity of its financial system, Saudi Arabia continues to step up its fight against financial crime.