Financial Crime World

Saudi Arabia Takes Stride Forward in Combating Financial Crime: New Law Approved

Approval of the New Law

The Saudi Arabian Cabinet approved a new law, known as the Law for Combating Financial Fraud and Breach of Trust, on 30 April 2021. The legislation, enacted under Cabinet Decision No. 534/1442, is aimed at deterring and penalizing fraudulent activities and breaches of trust. It is set to take effect in September 2021.

Financial Crimes and the New Law

Fraud, according to the Saudi Arabian Central Bank, is any act involving deceit to obtain a direct or indirect financial benefit by the perpetrator or by others with his help, causing a loss to the deceived party. In light of this definition, the new law introduces several provisions to address various aspects of financial crimes.

Penalties

  • Individuals convicted of committing fraud face a maximum penalty of imprisonment for seven years and a fine of up to SAR5 million (approx. US$1.3 million) (Article 1).
  • Those found guilty of inciting fraud may face the same imprisonment term and fines, up to half the maximum limit.
  • Attempts to commit fraud are punishable by up to half the maximum penalties.
  • Repeat offenders and organized financial criminals face double the maximum penalties, with a possible jail term of up to 14 years and a fine of up to SAR10 million (approx. US$2.6 million).

Exceptions

Courts retain the discretion to grant exceptions for individuals who come forward and report the crime before any loss or subsequently report it causing the arrest of all other culprits involved (Article 8).

Significance of the New Law

This new law represents a crucial step towards the transparency, accountability, effective governance, and responsible enablement expected under Saudi Arabia’s Vision 2030. By deterring financial crimes, it should facilitate the delivery of strategic objectives, including a thriving economy and a vibrant society, thereby creating an attractive environment for both local and foreign investments.

  • Criminal Law
  • Saudi Arabia

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Disclaimer

The information contained in this article is for general guidance only. For advice specifically tailored to your circumstances, consult a legal professional.

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