Saudi Arabia Introduces Stricter Laws to Combat Embezzlement and Financial Crime

Enhancing Efforts to Combat Financial Crime

In a significant move to combat financial crime, Saudi Arabia has approved a new law aimed at tackling embezzlement and fraud in the country. The Cabinet Decision No. 534/1442 is set to come into effect in September this year, introducing tougher penalties for those found guilty of financial crimes.

Definition of Fraud

According to the Saudi Arabian Central Bank (SAMA), fraud is defined as “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”. The new law builds on this definition and introduces several significant provisions aimed at combating financial fraud and breach of trust.

Penalties for Financial Crimes

Under the new law, convicted fraudsters can face:

• Up to seven years in jail
• Fines of up to SAR5 million (approximately US$1.3 million)
• Those found guilty of inciting fraud can also be punished with similar penalties
• Those who attempt to commit fraud may receive up to half the maximum penalties

Harsher Penalties for Reoffenders and Organized Criminals

Importantly, reoffenders and groups of organized financial criminals will face even harsher penalties, including:

• Up to double the maximum penalties
• Jail terms of up to 14 years
• Fines of up to SAR10 million (approximately US$2.6 million)

Exemptions from Penalties

The law also allows courts to grant exemptions from these penalties in certain circumstances, such as:

• Where individuals come forward and report the crime before any loss is suffered
• Where reporting the crime leads to the arrest of all other parties involved

Impact on Financial Sector and Economy

Experts say that this new law is a significant step towards achieving transparency and accountability in Saudi Arabia’s financial sector and will help create an attractive environment for local and foreign investment. The law is also expected to contribute to the country’s Vision 2030, which aims to transform the Kingdom into a thriving economy and vibrant society.

Call to Action

The introduction of these stricter laws comes as part of efforts by Saudi authorities to crack down on embezzlement and financial crime in the country. With tougher penalties now in place, businesses and individuals are being urged to take note of their responsibilities and obligations under the new law to ensure compliance and avoid legal action.