Saudi Arabia Tightens Noose on Financial Criminals with New Anti-Financial Fraud and Deceit Law
In a significant move to combat financial crime, Saudi Arabia’s government has approved a new law that will take effect in September this year. The law, known as Cabinet Decision No. 534/1442, aims to enhance the kingdom’s ability to detect and prosecute fraud and deceit.
Definition of Fraud
According to the Saudi Arabian Central Bank, a 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, introducing stricter penalties for those found guilty of financial fraud.
Penalties for Financial Fraud
Under the new law, convicted fraudsters could face:
- Up to seven years in prison
- Fines of up to SAR 5 million (approximately USD 1.3 million)
Those who incite fraud could be sentenced to the same maximum penalties if the fraud results in loss, or up to half those penalties if no loss is incurred.
Harsher Penalties for Repeat Offenders and Organized Financial Criminals
The law also provides for harsher penalties for:
- Repeat offenders: up to 14 years in prison and fines of up to SAR 10 million (approximately USD 2.6 million)
- Organized financial criminals: up to 14 years in prison and fines of up to SAR 10 million (approximately USD 2.6 million)
Discretionary Exemptions
In a significant departure from previous laws, the new legislation grants courts discretion to grant exemptions to these penalties in certain circumstances. For example:
- Individuals who come forward and report the crime before any loss is incurred could be exempted from punishment.
Role in Achieving Saudi Arabia’s Vision 2030
The law is seen as an important step towards achieving Saudi Arabia’s Vision 2030, which aims to create a “thriving economy” and a “vibrant society” through:
- Transparency and accountability
- Effective governance
- Responsible enablement