Saudi Arabia Tightens Financial Record Keeping Requirements for Reporting Institutions

New Resolution Mandates Annual Audited Certifications of Compliance

On August 18, the Saudi Arabian authorities released Ministerial Resolution No. 131, which requires all Reporting Financial Institutions to obtain annual audited certifications of compliance with Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS).

Key Requirements

• Classification Verification: Banks, investment firms, funds, and certain insurance companies must verify their classification as a Reporting Financial Institution.
• Implementation Confirmation: They must confirm the implementation of internal processes to ensure compliance with regulations.
• Sample Testing: A review process involves carrying out sample testing to ensure effective practical implementation in relation to reportable and non-reportable accounts.

Compliance Timeline

The deadline for filing the audit certificate is August 1 annually. FATCA and CRS certifications will be issued separately due to differences between the regulations.

Implications of Non-Compliance

Financial penalties will be imposed on institutions that fail to comply with the new requirements.

Reactions from Reporting Financial Institutions

This new requirement has been met with a mix of reactions from Reporting Financial Institutions in KSA. Some have expressed concerns about the added administrative burden, while others see it as an opportunity to review their existing processes and ensure they are meeting regulatory requirements.

Supporting Compliance

Deloitte’s dedicated FATCA and CRS team has supported leading regional and global financial institutions with their compliance requirements for over a decade.