Buying and selling foreign currencies is a key activity that requires a license from SAMA. Currency exchange is one of the primary functions of money exchange business. Therefore, every money exchange center (Category A and Category B) must provide this service to customers. When engaging in the activity of buying and selling cash currencies (currency exchange), whether with related or transient clients, whether individuals or legal entities (individuals or companies), the following conditions must be met:

3-1-1) Natural Persons and Legal Entities (Non-Financial Institutions):

1. For currency exchange transactions with natural persons where the amount is less than (5,000) SAR or its equivalent, it is sufficient to view the customer's ID to ensure its validity and effectiveness. A receipt must be issued containing the name of the exchanger, the exchange rate, the amount in local and foreign currencies, and the date and time of the transaction. The transaction must be recorded and saved in the records.
2. For currency exchange transactions with foreign clients (from 5,000 to 50,000 SAR or its equivalent), a copy of the ID must be taken and the data recorded in the automated system. A receipt must be issued containing the name of the exchanger, the exchange rate, the amount in local and foreign currencies, and the date and time of the transaction. The transaction must be recorded and saved in the records. For foreign visitors and pilgrims with temporary visas/residences, passport information must be reviewed, and a copy including the entry stamp and visa number must be obtained and verified against the original by the employee. The money exchange center must keep the passport number as a reference for transactions in the automated system.
3. For currency exchange transactions with Saudi citizens (from 5,000 to 100,000 SAR or its equivalent), a copy of the ID must be taken and the data recorded in the automated system. A receipt must be issued containing the name of the exchanger, the exchange rate, the amount in local and foreign currencies, and the date and time of the transaction. The transaction must be recorded and saved in the records. GCC citizens are treated as Saudi citizens and identified through their passports or national ID cards issued by their country.
4. For currency exchange transactions with high-income clients (citizens more than 100,000 SAR or its equivalent, and foreigners more than 50,000 SAR or its equivalent), this must be done through a membership, ensuring the client's income aligns with their profession and activity, and implementing the Know Your Customer (KYC) principle and Customer Due Diligence (CDD) procedures as mentioned in paragraphs (2-5 and 2-6). A copy of the ID must be taken and the client's data recorded in the automated system. A receipt must be issued containing the name of the exchanger, the exchange rate, the amount in local and foreign currencies, and the date and time of the transaction. The transaction must be recorded and saved in the client’s record.
5. Exchange transactions for legal entities are allowed without financial limits through a membership, applying the Know Your Customer principle and enhanced due diligence, in compliance with the requirements of establishing a membership. A receipt must be issued containing all relevant information about the client, transactions must be recorded in the records, and the following procedures must be observed:

6. Establishing a membership for recurring clients performing currency exchange and linking their transactions to membership records originally associated with the ID number, ensuring that currency exchange transactions are only conducted through membership.
7. The nature of the client's activities and transactions must align with the size, purpose, and type of financial transactions conducted, ensuring that transactions correspond to the client’s activity and annual income limits.
8. In cases of repeated currency exchange transactions without a clear purpose or convincing justification, or for high-risk entities or politically exposed persons (PEPs) such as senior officials and diplomats, the exchange office should enhance due diligence, evaluate the relationship with the client, and consider restricting or terminating the relationship or reporting to the Financial Intelligence Unit if necessary.
9. Ensure that the information provided by the client is used only for authorized purposes, maintaining banking secrecy and preventing its use for any other purposes.
10. Verify the names of members against lists of individuals and entities whose assets should be blocked, refused, or frozen based on supervisory instructions and international decisions, such as UN Security Council resolutions (1373 and 1267), paying attention to warning data from international organizations, including the Financial Action Task Force (FATF). Information can be obtained from the FATF website (http://www.fatf-gafi.org/topics/high/riskandnon-cooperativejurisdictions). Also, monitor sanctions lists from other countries and groups and take necessary actions accordingly.
11. Monitor all transactions to detect abnormal activity patterns lacking a clear economic or legal purpose, examining the background and purpose of such transactions as thoroughly as possible, and document the findings in writing. Precautionary measures should be taken when dealing with clients to avoid falling into fraud.
12. Report any transactions where there are reasonable grounds to suspect a connection with criminal or illegal activities to the relevant security authorities (Financial Intelligence Unit for money laundering or terrorism financing suspicions; local police for other crimes such as embezzlement, counterfeiting, forgery, fraud, etc.).
13. Purchasing traveler's cheques falls under the activity of buying cash currencies and is subject to all instructions and requirements related to cash currency purchases.
14. Direct natural persons wishing to exchange currency in amounts exceeding the allowed financial limits to local banks.
15. Implement an awareness program for clients, especially during vacation and travel seasons, and advise them that some countries have restrictions on importing their currencies. Ensure clients verify such restrictions before purchasing local currencies for those countries to avoid facing any legal issues.

3-1-2) Financial Institutions:

When engaging in buying and selling cash currencies with a financial institution (money exchange center or bank), whether local or foreign, the following conditions must be met:

1. Deal only with entities licensed locally by SAMA. For foreign financial institutions, ensure they are licensed by the relevant regulatory and supervisory bodies in their respective countries authorized to buy and sell cash.
2. Document all cash sales or purchases and transferable financial instruments, and record them in the exchanger’s records.
3. Provide SAMA (Bank Supervision Department) with a monthly statement including all cash sales or purchases and transferable financial instruments conducted with financial institutions (banks and money exchange centers) both domestic and international, using the provided form (Appendix 1).
4. Complete the purchase or sale agreement for cash transactions and transferable financial instruments through usual banking procedures before proceeding with the transfer.
5. Agree in advance on purchase or sale prices and specify the relevant party in the banking transaction (purchase or sale of cash) with the other party to complete the transaction, avoiding bargaining or bidding on cash in domestic and foreign markets.
6. Local money exchange centers are responsible for verifying the authenticity of cash and transferable financial instruments they buy and sell and the legality of their source and uses. Foreign entities dealt with must share this responsibility.
7. Inspect cash and transferable payment instruments similar to cash, such as cheques including traveler’s cheques, and ensure they are free from counterfeiting or forgery.