Saudi Arabia Takes Stand Against Financial Crime with New Anti-Fraud Law
Introduction
In a significant move to combat financial crime, the Saudi Arabian government has approved a new law aimed at preventing and punishing fraud and deceit. The law is set to come into force in September 2021 and is designed to protect individuals and businesses from financial losses caused by fraudulent activities.
Defining Financial Fraud
According to officials, the new law defines fraud as “any act involving deceit to obtain a direct or indirect financial benefit” which results in a loss for the deceived party. This broad definition ensures that all forms of financial deception are covered under the law.
Penalties for Financial Fraud
Under the provisions of Cabinet Decision No. 534/1442, those found guilty of committing financial fraud can face severe penalties, including imprisonment and hefty fines.
- Individuals: Up to seven years in prison and a fine of up to SAR 5 million (approximately USD 1.3 million)
- Repeat Offenders: Up to 14 years in prison and a fine of up to SAR 10 million (USD 2.6 million)
Targeting Organized Groups
The new law also targets organized groups of financial criminals, imposing harsher punishments on those who collaborate to commit fraud.
Exemptions for Reporting Crimes
However, courts have the discretion to grant exemptions to these penalties in cases where individuals report the crime before it results in a loss, or if their reporting leads to the arrest of all other parties involved.
Impact on Vision 2030
The approval of this new law is seen as a significant step towards achieving Vision 2030’s goals of creating a “thriving economy” and a “vibrant society.” By enhancing financial transparency and accountability, the Kingdom aims to create an attractive environment for local and foreign investment, driving economic growth and development.
By implementing this new anti-fraud law, Saudi Arabia takes a major step towards reducing financial crime and promoting a culture of integrity and transparency.