Saudi Arabia: Commercial Concealment Deadline Will Not be Extended

Saudi Gazette, 15 February 2022: The National Programme to Combat Commercial Concealment has announced the deadline to comply will not be extended.

The deadline is 16 February this year.

The compliance deadline was previously extended to 16 February 2022 on 23 August 2021.

Those who do not comply after this date will be jailed for up to five years and/or fined up to five million Riyals.

Illegal assets and funds of those involved in these offences will also be confiscated. Also reported in Al Riyadh on 14 February 2022. For full story, click here.

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Saudi Arabia: Banks Cannot Open Accounts for Entities Involved in Illegal Operations

Saudi Gazette, 6 February 2022: Saudi Arabia’s Central Bank has announced local banks in the Kingdom are banned from allowing accounts to be opened by entities which are involved in illegal operations.

The Bank has also instructed banks to notify customers about their accounts being frozen at least 30 days before they are frozen.

The changes are contained in updated Bank Account Rules which are mandatory and have to be enforced by Saudi banks from 2 February 2022.

Banks will be able to carry out outgoing remittance transactions and cheques sold by customers who are account holders.

Under the amendments, banks cannot open bank accounts for investment companies, investment funds, foreign financial institutions, including investment companies in the Gulf countries or their intermediaries who sell their products illegally in the Kingdom and collect money in Saudi Riyals and foreign currencies.

Saudi banks can also not facilitate these illegal businesses in any way.

However, there are exemptions for the categories of entities which the Saudi Capital Market Authority allows to invest in shares of Saudi joint stock companies.

All Saudi national banks will have to submit a statement at the end of March annually to the Bank in the correct form.

This statement will have to include an inventory of unclaimed accounts and abandoned accounts whose holders have been cut off from the bank.

The statement will have to comply with the nature and category of accounts and account numbers without mentioning personal information, as of the end of December of the previous year.

These unclaimed and abandoned accounts should be internally audited every two years and the report submitted to the audit committee.

The annual audit programme is not linked to any other periodic programmes related to the accounts.

Under the amendments, Saudi banks have the right to freeze the account once the validity of the official employment contract has expired or the requirement to update banking information has not been complied with.

The account can also be frozen where financial and personal information and addresses of account holders is not submitted.

In addition, banks are banned from enabling customers to personally carry out banking operations using the account after the validity of their ID has expired unless they have renewed or updated the Know Your Customer information.

There will be an exemption for all deposits. This will include incoming local and international transfers. Exemptions will also be given to accounts of Government employees whose salaries are received through the banks, but their accounts were frozen or they were unable to provide national identity cards because of any legal problems.

These employees will have 180 days from the date of the expiry of their IDs or from the last date for the update.

Banks must open accounts for any customers who make a request of this kind provided they submit all the required documents and meet the conditions for the account opening process.

The banks must agree to open the account without putting conditions to deposit any amounts at the time of opening the account. In the event of any amounts not being deposited within 90 days after opening the account, the banks must close the account.

However, there will be an exemption for the accounts of Government agencies. This has been approved by the Finance Ministry. The Ministry will determine the exemption period for amounts to be deposited.

The bank accounts of prisoners will be opened when they approach the banks accompanied by security guards affiliated with the General Administration of Prisons. The banks must obtain a letter from the prison administration in the city where the prison is located. It must be addressed to the bank branch mentioning the prisoner’s name, ID or iqama number and their intention to open the account.

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Saudi Arabia: Flag Law Amendments Approved

Saudi Gazette, 1 February 2022: Saudi Arabia’s Shoura Council has approved proposed amendments to the national flag, emblem and the national anthem law.

However, their contents will not change.

The proposed changes in the rules governing the green flag, which is emblazoned with a sword and inscribed with Islam’s creed, aim to define the proper uses of the state emblem more clearly.

They also aim to improve awareness about the importance of the flag and anthem and protect the flag from infringements or neglect.

The amendments also specify the penalties which will be imposed on violators.

In addition, they introduce a legislative provision for the protection of the national anthem.

There is a provision to determine the body authorised by law to control violations as well as the competent authority to issue rules over them too and the method of submitting grievances or appeal against verdicts.

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Saudi Arabia: Details of Implementing Regulations to Privatisation Law Announced

Saudi Gazette, 24 January 2022: Well-placed sources have given details of the Implementing Regulations to the Privatisation Law to local media.

Among other provisions, the minimum value of Public and Private Partnership or PPP projects is 200 million Riyals.

The minimum value for the PPP project will be calculated by the executive authority on the basis of the total expected nominal value during the project once the capital and operating expenditures have been estimated as well as the potential financial obligations on the Treasury and the financial revenues expected to be obtained by the Government.

The Regulations are aimed at organising the work of privatisation projects and clarifying the procedures and mechanism of the relevant workflows.

They include detailed provisions necessary to implement the Privatisation Law and the detailed governance framework regulating projects and tasks and responsibilities of various parties involved in privatisation projects as well.

In addition, they clarify the Law and list the principles of privatisation and project plan implementation priorities as well as public-private partnership methods.

The National Centre for Privatisation will be responsible for implementing privatisation initiatives and opportunities in 16 sectors. The aim is to provide the best services in line with the objectives of the Kingdom’s Vision 2030.

The executive authority can include more than one project of a similar nature to achieve the minimum stipulated project value in the Law. If the minimum is not achieved and the relevant body considers it is better to continue offering the project related to the infrastructure or public service, the rules and regulations will then apply to it.

Under the regulations, 10 working days will be given to complete the procedures from the date of announcing the list of persons who expressed their desire to compete in the privatisation project. The regulations are aimed at encouraging investors to increase their participation in the national economy.

The regulations go on to define the principles which should be observed when implementing projects. These are fairness, transparency, contract enforcement, planning and feasibility. There are also special controls for studying privatisation projects and preparing the project document in the relevant form to enable the Government to consider it.

There are controls and requirements associated with the offering as well, which ensure real competition and protect the public interest and integrity and fairness in the procedures for offering and awarding projects. There should be impartiality for all participants and no conflicts of interests.

There are provisions on procedures for transferring the ownership of assets, the mechanisms for offering, implementing and contracting them and the conditions and controls necessary to achieve this. Finally, there are provisions on governance. They cover the contract management phase, monitoring of project implementation and commitments by the private sector party in the contract. Public-private partnership contracts will last for 30 years or more.

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Saudi Arabia: Requirements for Selling Vacant Lands Off Plan Amended

Al Riyadh, 18 January 2022: The Programme for Selling or Renting Land Off Plan or Wafi has announced it has amended the requirements for the licences related to selling vacant land off plan.

The amendments limit the requirements for signing, i.e., adding notes to the margin of the land deed instead of offering a financial guarantee or a ratified cheque.

The General Secretary of the Committee for selling or renting off plan said the decision limits the requirement to sign the margin of the deeds as one of the guarantees offered by the developer instead of the financial guarantee of 20% of the cost of the project to speed up the process of developing the land.

This aims to make the procedures to obtain a licence more easily and encourage the owners of these lands to develop their lands as part of the continuous efforts to support the real estate demand and offer residential solutions in a sustainable way by introducing and amending supporting legislation.

The aim is also to increase the level of property ownership by Saudi families to 70% by 2030 to achieve the objectives of the housing programme.

For full story, click here.

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Saudi Arabia: Expectations for Saudi Fintech Sector

Arab News, 9 January 2022: Saudi Arabia saw a significant jump in venture capital investments in the financial technology sector, with 16 deals in the first eight months of 2021 totaling $157.2 million.

This compared with seven deals worth $7.8 million in 2020. 2021 also saw backing spread across a range of early-stage projects, with 46% at series A and B stages, 38% at the seed stage, and 15% at pre-see levels (where funding often comes from the founders, their family and supporters).

The payments sector remains the most attractive fintech area in Saudi, so far accounting for around 93% of total venture capital investments.

However, the median deal size in Saudi Arabia is $2.7 million compared to a global median deal size of $7.3 million.

The launch of Open Banking in Saudi Arabia in 2022, which allows firms to share consumer current account data once permission has been given, is also expected to speed up the pace of fintech development.

Experts expect this move will provide existing fintech investors with more opportunities, and will attract funds to the sector.

The Financial Sector Development Programme, launched in 2017 should also assist.

The plan includes developing the digital economy, and allowing financial intermediaries to support private sector growth by opening up the financial services industry to new players. It is also encouraging building of an advanced capital market in the Kingdom.

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Saudi Arabia: Anti-bribery Law Amended

Saudi Gazette, 7 December 2021: The Saudi Arabian authorities have approved amendments to the Kingdom’s Anti-bribery Law.

The first amendment sees the phrase every public employee replaced with every person.

Article 8(7) has been amended to read ‘Foreign public officials and employees of international institutions and organisations in connection with the conduct of international business’.

Finally, Article 15 has been amended to read ‘Judgment shall be issued in the case of a person, who has been proven guilty of the crime of bribery, to confiscate the money, advantage or benefit that involved in the crime whenever possible, or confiscate its value, as the case may be, and confiscate any proceeds from the money or advantage or benefit’.

The amendments were approved following a letter from the Oversight and Anti-Corruption Authority or Nazaha on proposed amendments to the Law. Also reported in Okaz on 7 December 2021. For full story, click here.

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Saudi Arabia: Residency Permits Now Being Issued and Renewed Quarterly

Saudi Gazette, 23 November 2021: The General Directorate of Passports or Jawazat has announced residency permits can now be issued and renewed quarterly.

The new service is being executed together with the Human Resources and Social Development Ministry and the Saudi Authority for Data and Artificial Intelligence.

It has been launched to implement a new Cabinet Decision which was issued to this effect.

Domestic workers and similar workers are exempt.

The residency permit will be renewed once the expatriate fee has been paid.

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Saudi Arabia: Landmark Insurance Product for Self-driving Vehicles Launched

Al-Eqtisadiya, 14 November 2021: Saudi Arabia’s Central Bank has announced it has launched a landmark insurance product for self-driving vehicles.

It is the first insurance product to cover self-driving vehicles and the associated risks.

It has been launched as part of efforts to support the insurance sector in developing and introducing new and innovative insurance products to achieve the objectives of the Financial Sector Development Programme.

It covers self-driving vehicles which can drive themselves from a starting point to a predetermined destination, using various technologies and sensors, including adaptive cruise control, active steering, anti-lock braking systems and GPS technology as well as laser technology, in places qualified and licensed by official authorities to use these types of vehicles.

For full story, click here.

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Saudi Arabia: Non-Saudis Can Invest in Real Estate Funds in Mecca and Medina

Arab News, 8 November 2021: Saudi Arabia’s Capital Market Authority has announced it will allow non-Saudis to invest in real estate funds in Mecca and Medina.

Financial market institutions can accept subscriptions of non-Saudis in these funds.

They invest in assets in these locations.

They can own real estate for their own residential purposes, once they have obtained a license from the Interior Ministry. Their foreign representatives will be able to own their official headquarters after obtaining a license from the Foreign Affairs Minister.

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