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  • Laws and Implementing Regulations

    • Saudi Central Bank Law

      No: M/36 Date(g): 26/11/2020 | Date(h): 11/4/1442Status: In-Force

      • Chapter 1: Definitions and General Provisions

        • Article 1

          In this Law, the following terms and phrases shall have the meanings assigned thereto:

          Bank: The Saudi Central Bank.

          Law: The Saudi Central Bank Law.

          Board: The board of directors of the Bank.

          Governor: The governor of the Bank.

          Financial Institution: Any natural or legal person subject to the supervision, oversight, and regulation of the Bank.

        • Article 2

          The Bank is a financially and administratively independent legal person which reports to the King. Its headquarters shall be in the city of Riyadh, and it may establish branches or cash centers within the Kingdom and open offices or appoint agents and correspondents abroad.

        • Article 3

          The objectives of the Bank are as follows: 
           
          1.Maintaining monetary stability.
          2.Supporting the stability of the financial sector and promoting trust therein.
          3.Supporting economic growth.

        • Article 4

          The Bank shall carry out its duties in accordance with the provisions of this Law, the regulations and policies issued by the Board, and best international standards and practices. To achieve its objectives, the Bank shall have all the necessary powers and carry out the following duties, powers, and competences: 
           
          1.Issuing and regulating currency, including minting, printing, issuing, circulating, withdrawing, canceling, managing, and protecting the national currency, and other related activities, without prejudice to the provisions of the Saudi Arabian Monetary Law.
          2.Overseeing and supervising financial institutions in accordance with relevant laws.
          3.Issuing regulations and directives related to financial institutions and their operations.
          4.Formulating and conducting a monetary policy, and regulating the foreign currency exchange market.
          5.Managing and investing foreign currency reserves.
          6.Acting as the government’s bank and adviser on monetary, banking, and financial affairs.
          7.Establishing, developing, and operating infrastructures of national payment, settlement, and clearing systems; issuing rules, directives, and licenses; and overseeing and supervising payment, settlement, and clearing systems within its jurisdiction.
          8.Establishing, developing, and operating financial technology platforms; issuing relevant rules, instructions and licenses; and overseeing and supervising such platforms.
          9.Issuing directives and developing procedures to protect consumers of financial institutions.
          10.Formulating and managing prudential policies and taking necessary actions and measures for financial institutions, as well as taking necessary measures and procedures to contribute in addressing economic and financial upheavals and crises, whether locally, regionally, or globally.
          11.Taking appropriate procedures and measures to prevent the commission of crimes associated with financial institutions.
          12.Representing and participating in regional and international organizations, authorities, forums, and conferences in which the Bank engages as a member, in accordance with legal procedures.
          13.Cooperating and exchanging expertise with other central banks and counterparts, regional and international organizations, and specialized consulting firms inside the Kingdom and abroad, within its jurisdiction.
          14.Developing and setting professional tests and requirements related to financial institutions and their operations.
          15.Conducting research and studies and publishing statistics related to its jurisdiction.
          16.Establishing subsidiary companies, contributing to the incorporation of companies, and partnering with companies that carry out activities related to the nature of its business, in accordance with legal procedures.
          17.Proposing draft laws related to financial institutions and the financial sector, proposing amendments to existing laws, and submitting the same for completion of legal procedures; drafting and proposing draft laws or amendments to existing laws that may impact monetary conditions or the stability of the financial sector shall be made in coordination with the Bank.
          18.Defining the terms and interpreting the provisions of this Law.

        • Article 5

          The Bank may charge fees for the licenses and approvals it issues, services it provides, and transactions it carries out, as well as fees to cover the cost of supervising financial institutions, in accordance with guidelines approved by the Board.

        • Article 6

          The Bank may not: 
           
          1.engage in commerce, participate in commercial businesses, or hold an interest in any commercial, industrial, or agricultural project, unless necessary to achieve its objectives;
          2.purchase or own real property, unless necessary for its operations or the diversification of its foreign investments;
          3.finance and extend loans to the government; and
          4.finance or extend loans to any natural or legal person; for the purpose of managing liquidity or dealing with crises, financial institutions shall be excluded from this provision pursuant to a decision by the Governor, in accordance with guidelines set by the Board.

        • Article 7

          The Bank’s assets, revenues, and properties shall have immunity; they may not be searched, blocked, seized, confiscated, or expropriated, and shall not be subject to any bankruptcy procedures.

      • Chapter 2: Management

        • A- Board of Directors

          No: M/36 Date(g): 26/11/2020 | Date(h): 11/4/1442Status: In-Force

          • Article 8

            1.The Bank shall have a board of directors composed of the following:
             a)The Governor, Chairman.
             b)Two Vice Governors, members.
             c)

            Five non-government employees, members.

            1 bis-If the Governor is unable to chair a Board meeting, he shall assign one of the Vice Governors to chair the meeting.

            2.Nomination of Board members referred to in paragraph 1(c) of this Article shall be made jointly by the Governor and the Minister of Finance; their appointment shall be pursuant to a royal order, and their membership shall be for a renewable term of seven years. If a member’s term expires without his membership being renewed or a replacement being appointed, he shall continue to serve as a Board member.
            3.The remuneration and benefits of Board members shall be determined pursuant to a royal order upon the recommendation of the Minister of Finance in coordination with the Governor.

          • Article 9

            Any of the Board members referred to in Article 8(1)(c) of this Law shall satisfy the following conditions: 
             
            1.Be a Saudi citizen.
            2.Be a qualified and an expert in matters related to the Bank’s activities.
            3.Have no criminal record related to crimes impinging on honor or integrity, unless such record has been expunged.
            4.Have never been declared bankrupt or insolvent, nor intentionally defaulted on paying his debts.
            5.Not hold any position or job with a public entity or a financial institution, nor serve as an auditor thereof.
            6.Not be an owner or agent of an external auditor’s office.

          • Article 10

            1.The Board shall supervise the Bank’s activities and shall be generally responsible for ensuring the soundness of its management and functioning, and shall, to this end and in accordance with the Bank’s objectives, have all the necessary powers. The Board may set the rules, regulations, and policies and issue the directives it deems necessary and appropriate for carrying out Bank activities in accordance with this Law; they shall include, but not be limited to, the following:
             a)Endorsing the Bank’s strategies and operational plans.
             b)Approving the Bank’s by-laws, as well as its administrative, financial, technical, monitoring, and human resources regulations.
             c)Approving the Bank’s organizational structure.
             d)Determining the Bank’s fiscal year.
             e)Endorsing the Bank’s general budget and closing accounts.
             f)Endorsing the appointment of one or more of the Bank’s external auditors and determining their fees.
             g)Establishing Bank branches or offices.
             h)Reviewing the Bank’s periodic reports.
            2.The Board may, in order to carry out its duties, form standing or interim committees from among its members or others and assign thereto any necessary powers and competences. The committee formation decision shall designate its chairman and members and shall determine its powers and remuneration. The committee may seek the assistance of any person it deems necessary to carry out its duties.
            3.The Board may delegate some of its powers to the Governor who may in turn, according to the guidelines and authority matrix endorsed by the Board, delegate said powers to whomever it deems fit from among Bank staff.

          • Article 11

            1.The Board shall convene every three months upon the call of its Chairman (1); it may also convene whenever necessary upon the call of its Chairman or at the request of at least three members.
            2.A Board meeting shall only be valid if attended by the majority of its members, provided the Chairman or Vice-Chairman (2) is present.
            3.Board decisions shall be passed by majority vote of attending members. In case of a tie, the chairman of the meeting shall have the casting vote. Voting may be carried out electronically.
            4.The Board may invite experts and specialists from among Bank staff or others to attend its meetings in a non-voting capacity to provide advice, data, or clarifications as requested by the Board.
            5.The Board shall appoint a secretary from among Bank staff, and shall determine his duties, remuneration, and term of appointment.
            6.Board decisions and meeting minutes shall be recorded and shall be signed by the chairman of the meeting, attending members, and the secretary.

            (1) The phrase (or his deputy) was deleted from Paragraph (1) of Article (11) pursuant to Clause (Third) of Council of Ministers Resolution No. 412 dated 7/28/1443 AH. 

            (2) The phrase (or Vice-Chairman) was added pursuant to Clause (Fourth) of Council of Ministers Resolution No. 412 dated 7/28/1443 AH

          • Article 12

            The Governor shall submit to the King a request to appoint a replacement Board member, in accordance with Article 8(2) of this Law, if a member: 
             
            1.dies;
            2.no longer satisfies the membership requirements stipulated under this Law;
            3.requests to be discharged;
            4.does not attend three consecutive meetings and does not provide an acceptable excuse to the Board or obtain the consent of the Chairman;
            5.becomes unable to perform his duties for any reason; or
            6.grossly breaches any of his duties, as determined by the Board.

        • B- The Governor, Vice-Governors, and Bank Staff

          No: M/36 Date(g): 26/11/2020 | Date(h): 11/4/1442Status: In-Force

          • Article 13

            The Bank shall have a full-time governor at the rank of Minister; his appointment and benefits shall be determined pursuant to a royal order. The Governor shall manage the Bank’s activities, implement its policies, and carry out its duties. He shall also carry out, in accordance with this Law, any other activities he deems necessary and appropriate, particularly the following: 
             
            1.Implementing Board decisions.
            2.Providing periodic reports to the Board regarding Bank operations, activities, and achievements.
            3.Providing recommendations to the Board regarding matters falling within its jurisdiction.
            4.Representing the Bank before the judiciary and in its relationship with others, and he may delegate such duty.
            5.Carrying out Bank duties and exercising its powers according to the guidelines and authority matrix endorsed by the Board.
            6.Proposing Bank strategies and operational plans.
            7.Concluding agreements and contracts.
            8.Appointing Bank staff, contracting with experts and consultants within the Kingdom or abroad, and determining their benefits, subject to Board endorsement.
            9.Establishing cash centers and appointing agents and correspondents.
             
            The Governor may delegate some of his powers to whomever he deems fit from among Bank staff. 
             

          • Article 14

            1.The Governor shall have two full-time Vice Governors to assist him in the discharge of his duties. The Board shall, upon a recommendation by the Governor, issue a decision specifying the powers, functions, and duties of each Vice Governor. The Vice Governors shall not participate in deliberations involving such decision nor vote thereon.
            2.The Vice Governors shall, upon the recommendation of the Governor, be appointed at grade ‘Excellent’; their benefits shall be determined pursuant to a royal order.
            3.The Governor shall, in his absence, assign one of the Vice Governors to serve as acting governor.

          • Article 15

            Bank staff may not be subject to any liability or claim due to carrying out their duties in accordance with this Law, except in cases of bad faith or gross breach.

        • C- Conflict of Interest

          No: M/36 Date(g): 26/11/2020 | Date(h): 11/4/1442Status: In-Force

          • Article 16

            1.A Board member shall disclose any direct or indirect conflict of interest, whether it exists prior to or during the performance of his duties. Said member may not vote on any matter involving a conflict of interest.
            2.Bank staff shall disclose any direct conflict of interest and shall not, in matters involving conflict of interest, be involved in the decision making process or related procedures nor express his opinion thereon.

      • Chapter 3: Monetary Policy

        • Article 17

          The Bank is solely responsible for formulating and implementing the monetary policy, and selecting its operational instruments and procedures.

      • Chapter 4: External Auditor

        • Article 18

          1.The Bank’s accounts shall be audited by an external auditor, or more, who must be technically qualified and have expertise in Bank activities. Said auditor shall directly report to the Board and submit his reports thereto.
          2.The external auditor’s duties shall be limited to auditing the Bank’s accounts and financial statements and may not interfere, in any manner, with Bank management or policies.
          3.The external auditor shall have the right to access the Bank’s books, records, and documents, and may request any data he deems necessary to carry out his duties. If the auditor is unable to gain access to such data, he shall report the same to the Board.

      • Chapter 5: Relationship with the Government and Foreign Entities

        • Article 19

          The Bank shall, on behalf of the Government and upon the request of the Minister of Finance or his designee, carry out the following: 
           
          1.Open, settle, and monitor current accounts and record government revenues.
          2.Maintain deposits and accounts.
          3.Supervise the issuance and payment of letters of credit domestically and internationally.

        • Article 20

          To achieve its objectives and carry out its duties, as required by the nature of its business, the Bank may: 
           
          1.enter into bilateral or multilateral agreements relating to monetary, regulatory, or oversight policies, in accordance with statutory procedures;
          2.conclude agreements with other central banks; similar foreign supervisory or oversight entities; or relevant international institutions, organizations, and councils, in accordance with statutory procedures;
          3.cooperate and coordinate with foreign counterparts for the purpose of exchanging information or carrying out supervisory and oversight visits related to financial institutions; and
          4.carry out monetary and financial operations and open accounts with other central banks and local, foreign, regional, and international monetary and financial institutions.

        • Article 21

          In its communications with similar foreign oversight and supervisory authorities and relevant international organizations, the Bank shall: 
           
          1.promote its relationship therewith by exchanging visits and holding meetings and work sessions; and
          2.keep abreast of reports and information issued thereby.

      • Chapter 6: Concluding Provisions

        • Article 22

          1.The Bank may conclude contracts and agreements in Arabic or other languages, as necessary.
          2.The Bank shall not, in carrying out its activities and procurements, be subject to the provisions of the Government Tenders and Procurement Law, and shall instead be subject to regulations and policies issued by the Board, provided that such regulations and policies are in line with the main objectives and principles of the Government Tenders and Procurement Law.
          3.Bank contracts and agreements shall be subject to policies approved by the Board. However, if the interest of the Bank so dictates, Bank contracts and agreements may stipulate that they be subject to foreign laws, in accordance with policies issued by the Board. In such case, said contracts and agreements may stipulate that they be subject to the jurisdiction of foreign courts or settle disputes through arbitration.

        • Article 23

          Board members, Bank staff, Bank agents, and external auditors shall not disclose any data or information relating to the affairs of the Bank or financial institutions, whether during or after the term of their employment.

        • Article 24

          Interfering, in any way, in the Bank’s activities and policies as well as its contracts and agreements, imposing oversight over the Bank, and auditing its accounts shall not be permitted.

        • Article 25

          The Bank shall submit to the King a report comprising the latest financial and economic developments in the Kingdom and the external auditors’ fiscal year-end report; a copy thereof shall be submitted to the Minister of Finance and shall be published at the appropriate time and in the appropriate manner.

        • Article 27

          This Law shall enter into force 90 days following the date of its publication in the Official Gazette.

    • Saudi Arabian Monetary Law

      No: M/6 Date(g): 31/12/1959 | Date(h): 01/07/1379Status: In-Force

      • Article 1

        The unit of the Saudi Currency shall be the Saudi Riyal. The Riyal shall be divided into 20 Saudi qirshes and each Saudi qirsh sub-divided into five halalas.

      • Article 2

        The value of the Saudi Riyal shall be equivalent to 0.197482 grams of fine gold. This value shall be known as "the parity rate". The parity rate shall not be amended except by a Royal Decree and in accordance with the provisions of international agreements to which Saudi Arabia is a party.

      • Article 4

        In accordance with the suggestion of the Saudi Central Bank and the approval of the Minister of Finance, and in observance of the provisions of these regulations, the Council of Ministers shall decide: 
         
        a.The denominations of paper currency and coins: -
         
        1.Which may be issued for circulation.
         
        2.Their shapes, designs, drawings, dimensions, contents, fineness, weights, size and all other specifications, quantities and costs;
         
        3.The place where the dies, plates and specimen signatures of those authorized to sign on bank notes are to be kept in safe custody;
         
        4.Safeguards against their counterfeiting,
         
        5.And the place and timing of printing or minting.
         
        b.Choice of banks in which the foreign currencies forming part of the currency cover (Kingdom's reserves) shall be deposited, provided that they must be first class banks.
         
        c.Investment by the Saudi Central Bank of the Kingdom's foreign exchange reserves in foreign bonds in accordance with the usual practice adopted by central banks.
         

      • Article 5

        The Saudi Central Bank, with the approval of the Minister of Finance and subject to the rules of these regulations, shall decide: 
         
        a.The denominations of paper notes and coins which should be changed or withdrawn from circulation for non–fulfillment of conditions which make them fit for circulation, the method of disposing them of and when they cease to be legal tender after a period of not less than one month if withdrawal is expedited in keeping with the public interest and in observance of paragraphs B and C of this Article.
         
        b.The conditions under which mutilated currency may be exchanged, subject to the condition that no payment shall be made for notes which have lost their features, or more than one-fifth* of their dimensions, or their two numbers or the two signatures affixed thereto in accordance with Article 8 of these regulations, and for coins which have lost their features or which are cut, filed, pierced, washed by chemical materials, marred or have been deshaped, unless it is definitely proved that whatever occurred to them was due to force majeure in which case the Courts have the right to judge indemnification for the loss when this is proved to them.
         
        *The word one-fifth was corrected to two-fifth by Royal Decree no 17 dated 16-9-1379 Ah. 
         
        c.The seizing and confiscation of counterfeit and bogus currency, method of disposal and preparation of a report thereof and sending a copy of it to the concerned authorities for legal prosecution.
         
        d.The announcement and necessary publicity concerning Saudi Currency in the official gazette and in any other suitable manner.
         

      • Article 6

        a.The Saudi Central Bank shall keep a full cover in gold and foreign currencies convertible into gold equal to the value of the currency it issues.
         
        b.The Saudi Central Bank shall, under no circumstances, issue currency without full cover to be kept in safe custody in the Kingdom; however, cover other than gold may be kept in deposit with first class banks abroad.
         
        c.The cover shall be valued in accordance with the rate fixed in Article 2 of these Regulations.
         
        d.On revaluation of the reserves any resultant increase shall be credited to the government and may be used for strengthening the currency and stabilizing its rate.
         

      • Article 7

        One Riyal notes, higher denomination notes and parts thereof issued by the Saudi Central Bank shall be legal tender and shall be fully accepted for the settlement of all debts and private and public obligations, but no one shall be obliged to accept sub-divisions of the Riyal for sums exceeding ten Riyals, except the Saudi Central Bank and its branches and agencies which shall, in the public interest, accept, either for payment to the treasury or for exchanging them with other denominations, any amounts of any denominations of the Saudi currency issued by it.

      • Article 8

        The notes shall be signed by the Minister of Finance and the Governor of the Saudi Central Bank.

      • Article 9

        The outstanding Saudi gold sovereigns shall be withdrawn from circulation and shall lose their legal tender status and their value as currency from the date of publication of these Regulations. Bearers of gold sovereigns may deliver them to the Saudi Central Bank within two months from the date of publication of this Decree against payment of 40 Saudi Riyals. After termination of the said period, the Saudi gold sovereigns shall become a commodity.

      • Article 10

        The Saudi Central Bank shall keep a register in which it shall enter details of coins and paper currency kept in its vaults, those issued and those withdrawn from circulation.

      • Article 11

        The Saudi Central Bank shall publish in the official gazette a statement of its affairs on a fortnightly basis, showing the quantity of issued notes and coins and the amount of their full cover in details, comparing, the position with a fortnight earlier. At the end of each year SAMA shall also publish in the official gazette a general statement authenticated by an approved public auditor, which shall include an annual report of the Central Bank's operations and position, balance sheet and profit and loss account in accordance with the practice adopted by central banks.

      • Article 12

        a.All the provisions of this Decree concerning paper money shall be applicable to pilgrim receipts until they are withdrawn form circulation.
         
        b.The Saudi Central Bank shall withdraw gradually the pilgrim receipts from circulation and replace them by their equivalent of the new currency after its issuance and within a period to be specified and announced by the Central Bank.
         

      • Article 13

        The Saudi Central Bank may with the consent of the Minister of Finance issue any necessary instructions in pursuance of the provisions of this Decree.

      • Article 14

        This Decree shall override all the previously issued regulations that are in contradiction with its provisions.

      • Article 15

        The Prime Minister and the Minister of Finance and National Economy shall put this Decree into effect and it shall come into force as from the date of its publication.

    • Banking Control Law

      No: M/5 Date(g): 11/6/1966 | Date(h): 21/02/1386Status: In-Force

      With the help of God Almighty,

      We, Faysal Ibn Abdul Aziz AI Saud

      King of the Kingdom of Saudi Arabia,

      In view of Article (19) of the Council of Ministers' Charter issued by Royal Decree No. (38) dated 22.10.1377H.

      And having reviewed Council of Ministers' Decision No.(179) dated 5.2.1386H,

      Ordain the following:

      First: Approving Banking Control Law in the Attached text.

      Second: The Deputy Premier and the Minister of Finance and National Economy shall execute our present Decree.

      Faysal Ibn Abdul Aziz AI Saud

      • Article 1

        The following terms, whenever mentioned in this Law, shall have the meanings specified in this Article: 
         
          a.Bank: any natural or juristic person practicing basically any of the banking business in the Kingdom.
         
          b.Banking Business: the business of receiving money on current or fixed deposit account, opening of current accounts, opening of letters of credit, issuance of letters of guarantee, payment and collection of cheques, payment orders, promissory notes and similar other papers of value, discounting of bills, bills of exchange and other commercial papers, foreign exchange transactions and other banking business.
         
          c.National bank: a bank the head office and branches of which are situated in the Kingdom.
         
          d.Foreign Bank: a bank whose head office is located outside the Kingdom, whilst the branches thereof are located inside the Kingdom.
         
          e.SAMA: the Saudi Central Bank*.
         
          f.Invested Capital: the capital assigned by a foreign bank for the capital use of its branches in the Kingdom.
         

        * The "Saudi Arabian Monetary Agency" was replaced By the "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.

      • Article 2

        No person, natural or juristic, unlicensed in accordance with the provisions of this Law, shall carry on basically any of the banking business. However, 
         
          a.Juristic persons licensed in accordance with another law or special decree to carry on banking business may practice such business within the limits of their intended purposes.
         
          b.Licensed moneychangers may practice basically exchange of currency in the form of notes and coins, but no other banking business.
         

      • Article 3

        All applications, for the grant of licenses to carry on banking business in the Kingdom, shall be addressed to SAMA which will study the applications after obtaining all the necessary information and submit its recommendations to the Minister of Finance and National Economy. The license for a National Bank shall stipulate the following: 
         
        1)It shall be a Saudi Joint Stock Company.
         
        2)The paid-up capital shall not be less than SAR 2.5 million and all subscriptions towards share capital shall be payable in cash.
         
        3)The founders and members of the board of directors shall be persons of good reputation.
         
        4)The memorandum and articles of association shall be approved by the Minister of Finance and National Economy. In the case of a Foreign Bank wishing to set up a branch or branches in the Kingdom, the grant of a license shall be subject to such conditions as the Council of Ministers may stipulate upon the recommendation of the Minister of Finance and National Economy. The license shall in all cases be issued by the Minister of Finance and National Economy after the approval of the Council of Ministers.
         

      • Article 4

        As an exception to the provisions of the previous Article, the licenses or authorizations previously issued to the persons carrying on banking business in the Kingdom and are effective at the time of promulgation of this Law shall continue to be recognized.

        SAMA may, however, request such documents and information from these persons, as it may deem necessary. SAMA with the approval of the Council of Ministers may call upon them to comply with all or any of the provisions of Article 3 of this Law within such period as it may fix.

      • Article 5

        Any person not authorized basically to carry on banking business in the Kingdom is not allowed to use the word "Bank", or its synonyms, or any similar term in any language on his papers or printed matter, or in his commercial address, or his name or in his advertisements.

      • Article 6

        The deposit liabilities of a bank shall not exceed fifteen times its reserves and paid-up or invested capital. If the deposit liabilities exceed this limit, the bank must within one month of the date of submission of the statement referred to in paragraph 1 of Article 15, either increase its capital and reserves to the prescribed limit or deposit fifty percent of the excess with SAMA.

      • Article 7

        Every bank shall maintain with SAMA at all times a statutory deposit of a sum not less than fifteen percent of its deposit liabilities. SAMA may, if it deems it to be in the public interest, vary the aforesaid percentage provided that it shall not be less than 10 percent nor more than 17.5 percent. SAMA may, however, exceed these two limits with the approval of the Minister of Finance and National Economy.

        In addition to the statutory deposit provided for in the previous paragraph, every bank shall maintain a liquidity reserve of not less than 15 percent of its deposit liabilities. Such reserve shall be in cash, gold or assets, which can be converted into cash within a period not exceeding 30 days. SAMA may, if deemed necessary, increase the aforesaid percentage up to twenty percent.

      • Article 8

        No bank shall grant a loan or extend a credit facility, or give a financial guarantee with respect to any natural or juristic person for amounts aggregating more than 25 percent of the Bank's reserves and paid-up or invested capital. SAMA may, in the public interest, and subject to such conditions as it may impose, increase this percentage up to 50 percent.

        The provisions of the above paragraph do not apply to transactions between banks or between head offices and their branches or between these branches.

      • Article 9

        No bank shall undertake the following transactions: 
         
        1)Granting a loan or extending credit facilities, or issuing a guarantee or incurring any other financial liability on the security of its own shares.
         
        2)Granting, without security, a loan or credit facilities, or issuing a guarantee or incurring any other financial liability in respect of:
         
          a.Member of its Board of Directors or its Auditors.
         
          b.Establishments not taking the form of joint-stock companies in which any member of its Board or Auditor is a partner or a manager or has a direct financial interest.
         
          c.Persons or establishments not taking the form of joint stock companies in cases where any of the Bank's directors or Auditors is a Guarantor.
         
        3)Granting, without security, a loan or a credit facility or giving a guarantee or incurring any other financial liability in favor of any of its officials or employees for amounts exceeding a four month salary of any such concerned person.
         
        Any member of a bank Board or auditor or manager who contravenes paras 2 and 3 of this Article, shall be considered as having resigned his position. 
         

      • Article 10

        No bank shall undertake any of the following activities: 
         
        1)To engage, whether for its own account or on a commission basis, in the wholesale or retail trade including the import or export trade.
         
        2)To have any direct interest, whether as a stock-holder, partner, owner, or otherwise, in any commercial, industrial, agricultural or other undertaking unless within the limits referred to in paragraph 4 of this Article, except when such interest results from the satisfaction of debts due to the bank, provided that all such interests shall be disposed of within a period of two years or within any such longer period as may be determined in consultation with SAMA.
         
        3)To purchase, without the approval of SAMA, stocks and shares of any bank conducting its business in the Kingdom.
         
        4)To own stocks of any other joint-stock company incorporated in the Kingdom, in excess of ten percent of the paid up capital of such a company provided that the nominal value of these shares shall not exceed twenty percent of the bank's paid-up capital and reserves; the above limits may, when necessary, be increased by SAMA.
         
        5)To acquire or lease real estate except in so far as may be necessary for the purpose of conducting its banking business, housing of its employees or for their recreation or in satisfaction of debts due to the Bank.
         
        In cases where a bank acquires real estate in satisfaction of debts due to it and such real estate is not necessary for the Bank's own banking business or housing of its employees or for their recreation, it shall liquidate such real estate within three years of its acquisition or within the period or periods approved by SAMA and under the conditions as it may determine where exceptional circumstances are justified. 
         
        If, prior to this Law becoming effective, a bank acquired real estate in a way contrary to the provisions of this paragraph, it shall gradually liquidate such real estate within seven years or within the period or periods approved by SAMA and under the conditions as it may determine where exceptional circumstances are justified. 
         
        As an exception to the provisions of paragraph 5 of this Article, the bank may, in special and justifiable circumstances and with the approval of SAMA, acquire real estate, the value of which shall not exceed 20 percent of its paid-up capital and reserves. 
         

      • Article 11

        Banks are precluded from undertaking any of the following operations except after obtaining a written approval from SAMA and according to the conditions it prescribes: 
         
          a.Altering the composition of their paid-up or invested capital.
         
          b.Entering into any scheme of amalgamation or participation in the business of another bank or another establishment carrying on banking business.
         
          c.Acquiring shares in a company established outside the Kingdom.
         
          d.Ceasing to carry on banking business. In such a case, SAMA must, before agreeing to this cessation, ascertain that the Bank has made necessary arrangements to safeguard the rights of the depositors.
         
          e.Opening branches or other offices in the Kingdom and also opening of branches or other offices by national banks outside the Kingdom. Before granting the written license provided for under this paragraph, SAMA should obtain the approval of the Minister of Finance and National Economy.
         

      • Article 12

        No person shall be a member of the Board of more than one bank. No person in the following cases shall be elected as a director or shall become a manager of any bank without prior written approval of SAMA: 
         
          a.If he occupied a similar position in a banking concern that was wound up, even if the liquidation had been made before the promulgation of this Law. Such approval shall not be given by SAMA until it becomes clear that the person concerned was not responsible for that liquidation.
         
          b.If he was removed from a similar post in any banking establishment, even if such removal was before the promulgation of this Law. The approval of SAMA shall in this case be based on acceptable reasons.
         
        Any member of a bank Board or manager of a bank, who is adjudicated bankrupt or convicted of a moral offense, shall be considered as having resigned his post. 
         

      • Article 13

        Every bank shall, before declaring distribution of any profits, transfer a sum equal to not less than 25 percent of its net profits, to the statutory reserve, until the amount of that reserve equals as a minimum of the paid-up capital.

        No bank shall pay dividends or remit any part of its profits abroad, until its capital expenditures including aggregate foundation expenditures and losses incurred have been completely written off.

        Any action taken to declare or pay dividends in contravention to the provisions of this Article shall be considered null and void.

      • Article 14

        Every bank shall annually appoint two auditors from amongst the approved list of auditors registered with the Ministry of Commerce and Industry. The Auditors shall submit a report on the Balance sheet and profit and loss account. This report shall include whether in the auditor's opinion the Bank's balance sheet duly and correctly represents its financial position and the extent of their satisfaction with any explanations or information they may have requested from the bank's managers or other staff.

        With regards to banks taking the form of a company, the report referred to in the above paragraph shall be read together with the annual report of the Bank management in the General Meeting, which must be held within the six months following the end of the bank's financial year. The bank management should send copies of these two reports to SAMA.

        The provisions of the first paragraph of this Article shall apply to foreign banks in respect of their branches operating in the Kingdom. They should send a copy of the Auditor's report to SAMA.

      • Article 15

        Every bank shall furnish SAMA by the end of the following month with a consolidated monthly statement of its financial position relating to the previous month, which shall be true and correct, and be in the form prescribed by SAMA. Every bank shall also furnish SAMA within six months of the close of its financial year with a copy of its annual balance sheet and profit and loss accounts certified by its auditors in the form prescribed by SAMA.

      • Article 16

        SAMA may, with the approval of the Minister of Finance and National economy, issue general rules to regulate the following matters: 
         
        1)The maximum limits of total loans that can be extended by a bank or banks.
         
        2)The prohibition or limitation of specified categories of loans or other transactions.
         
        3)Fixing the terms and conditions, which banks, should take into consideration when carrying out certain types of transactions for their customers.
         
        4)The cash margins to be obtained by banks against specified categories of credits or guarantees.
         
        5)The minimum ratio to be observed between the limits for loans and the collateral for such loans.
         
        6)Fixing the assets to be maintained by each bank within the Kingdom. Such assets should not fall below a certain percentage of the Bank's deposit liabilities, which shall be fixed by SAMA from time to time.
         
        SAMA may, from time to time, issue decisions concerning the following: 
         
          1)Definition of the term "deposit liabilities" referred to in this Law.
         
          2)Determination of bank holidays and bank business hours.
         

      • Article 17

        SAMA may, at any time, request any bank to supply it, within a time limit it will specify and in the manner it will prescribe, with any information that it deems necessary for ensuring the realization of the purposes of this Law.

      • Article 18

        SAMA may, with the approval of the "Minister of Finance and National Economy, conduct an inspection of the books and accounts of any bank, either by SAMA 's own staff or by outside auditors assigned by it. The examination of the bank's books and accounts should take place in the bank's premises. In such a case the bank staff must produce all the required books and records of accounts and other documents in their custody or within their authority and must furnish any information they have relating to the bank.

      • Article 19

        Any person who comes into possession of information during the performance of his duties in the implementation of this Law, shall not disclose such information or to make use of it in any manner.

      • Article 20

        SAMA shall periodically publish combined statements of the principal data contained in the returns mentioned in Article 15.

      • Article 21

        The Minister of Finance and National Economy, in exceptional circumstances, and with the prior approval of the Council of Ministers, may exempt any bank from any provision of this Law or from the regulations issued in execution thereof for a limited period and subject to such other conditions as may be laid down in each case.

      • Article 22

        If SAMA finds that a bank has failed to comply with the provisions of this Law, or with the provisions of any regulations issued under this Law, or if a Bank adopts a policy that might seriously affect its solvency or liquidity, it may, with the approval of the Minister of Finance and National Economy, take one or more of the following measures: 
         
          a.Appoint one or more advisers to advise the bank in the conduct of its business.
         
          b.Order the suspension or removal of any director or officer of the bank.
         
          c.Limit or suspend the granting of credits or the acceptance of deposits.
         
          d.Require the bank to take such other steps, as it may consider necessary.
         
        If SAMA finds that a bank persistently contravenes the provisions of this Law or the decisions or regulations made thereunder, it may call upon such a bank to submit its reasons for the contravention, accompanied by its proposals to rectify the position within a stated period. If SAMA is of the opinion that such proposals are not sufficient for their purpose or if the bank fails to implement an agreed or prescribed course of action within the stated period, the Minister of Finance and National Economy may, subject to the approval of the Council of Ministers, revoke the license of the said bank. 
         

      • Article 23

        1)Any person who contravenes the provisions of paragraph 1 of Article 2, Article 5 and items a, b and c of paragraph 1 of Article 11, Article 12 and Article 18, shall be liable to imprisonment for a term not exceeding two years and to a fine not exceeding SAR 5,000 for every day the offense continues or to either of these penalties.
         
        2)Any person who contravenes the provisions of Article 19 shall be liable to imprisonment for a term not exceeding two years and to a fine not exceeding SAR 20,000 or to either of these penalties.
         
        3)Any person who contravenes the provisions of Articles 8, 9 and 10 shall be liable to imprisonment for a term not exceeding six months and to a fine not exceeding SAR 10,000 or to either of these penalties.
         
        4)Any person who contravenes the provisions of articles 7, 14 and 15 shall be liable to a fine not exceeding SAR 500 for every day the contravention continues.
         
        5)Any person who contravenes any other provision of this Law or the regulations and decisions issued in execution thereof shall be liable to a fine not exceeding SAR 5,000.
         
        6)In the event that offenses punishable according to paragraphs 2,3 and 5 of this Article are committed by the same person for one purpose and provided that such offenses are inter-related as to object and timing, they are to be considered as one offense punishable by one penalty.
         
        7)In imposing the penalties contained in this Article it is to be observed that should an offense be punishable by more than one penalty, the offender shall be subjected to the severest.
         

      • Article 24

        The Chairman, the Managing Director, the members of the Board of Directors, head office Manager and Branch manager shall be responsible, each within his own jurisdiction, for any contravention of this Law or the decisions and rules issued for its execution.

      • Article 25

        The Minister of Finance and National Economy shall appoint a committee of three persons from outside SAMA and specify the conditions and measures to be observed in adjudging contraventions punishable under this Law at the request of SAMA.

      • Article 26

        The Deputy Premier and the Minister of Finance shall put this Law into effect and it shall come into force from the date of its publication.

    • Implementation Rules for Banking Control Law

      Circular to all banks operating in Saudi Arabia

      Director General of the Department of Banking Control

      Subject: Implementation Rules for Banking Control Law

      Based on the powers vested in the Minister of Finance and National Economy under the Banking Control Law issued by Royal Decree No. (M/5) dated 22/2/1386H, Ministerial Resolution No. (3/2149) dated 14/10/1406H was issued regarding the Implementation Rules for Banking Control Law. A copy is attached.

      The Resolution includes rules for implementing the following provisions of the Banking Control Law: Article (12) regrading appointment to boards of directors and senior positions in banks; Article (16) regarding the practice of banking activity in line with the monetary and credit policy and economic developments in the Kingdom; Article (17) regarding the organization and specification of the periodic data that must be provided to SAMA for supervisory and statistical purposes; Article (18) regarding banking inspections conducted by SAMA, the behavior of the bank staff, and compliance with the recommendations and instructions issued by SAMA as a result of the inspection procedures; and Article (22) regarding the procedures and penalties SAMA is authorized to apply under this Resolution in implementation of this Article and in light of the Ministerial Resolution No. (3/959) dated 26/4/1404H issued in implementation of Article (25) of the Banking Control Law regarding the contraventions punishable under the Law. SAMA stresses that banks should strictly adhere to the aforementioned Rules as well as other instructions issued regarding the implementation of the provisions of the Banking Control Law in order to ensure the soundness of the banking system, achieve the public interest, and avoid the penalties prescribed under the Law and the Ministerial Resolution attached.

      The Governor

      Hamad Alsayari

      Ministerial Resolution No. (3/2149) dated 14/10/1406H

      The Minister of Finance and National Economy;

      based on the powers vested in him;

      in accordance with Article (26) of the Banking Control Law issued by Royal Decree No. (M/5) dated 22/2/1386H;

      after having studied the Memorandum of the Governor of Saudi Central Bank* No. (M G M A/ 411) dated 13/6/1406H regarding the proposal of Draft Implementation Rules for the Banking Control Law;

      upon perusal of the Ministerial Resolution No. (3/920) dated 16/2/1402H regarding the rules regulating money changing business;

      and upon perusal of the Ministerial Resolution No. (3/959) dated 26/4/1404H regarding the rules for the formation of a committee as stipulated in Article (25) of the Banking Control Law for the resolution of the contraventions punishable under the Law;

      has decided the following:

      A) The Implementation Rules for Banking Control Law are approved subject to the following:

      I.In implementation of Article (16) of the Banking Control Law, banks shall:
             		  
       1.Comply with the rules set by SAMA regarding loan limits that the bank may offer.
             		 
       2.Comply with the rules set by SAMA regarding the types of loans to be granted and other transactions, such as, but not necessarily exclusive of:
             		 
        a)Informing SAMA, prior to undertaking or commitment, of any loan application submitted by a non-resident entity.
        b)Obtaining SAMA’s written prior approval before initiating any procedure for extending any loan to a non-resident entity.
        c)Obtaining SAMA’s written prior approval before inviting foreign banks to participate in any joint facilities in Saudi riyals.
        d)Obtaining SAMA’s written prior approval before participating in any joint facilities arranged in Saudi riyals outside the Kingdom, whether for resident or non-resident entities.
        e)Obtaining SAMA’s written prior approval before participating in any joint facilities arranged in foreign currencies for non-residents.
        f)Obtaining SAMA’s written prior approval before the acquisition of, or subscription for any securities in Saudi riyals abroad.
        g)Obtaining SAMA’s written prior approval before the acquisition of, or subscription for any securities in foreign currencies abroad, with the exception of bank ownership of treasury bills and negotiable certificates of deposit.
        h)Obtaining SAMA’s written prior approval before issuing or participating in the issuance of any securities inside or outside the Kingdom.
        i)Reporting to SAMA before introducing any new activities inside the Kingdom which may entail financial obligations on the bank.
       
       3.Non-contravention of any of the guidelines and rules set forth by SAMA for banks for carrying on certain types of transactions for their customers such as, but not necessarily exclusive of:
             		 
        a)Complying with the bank tariff rates.
        b)Informing government authorities of foreign guarantees issued by banks other than those included in the approved list reported to banks, and of breaches of any of the terms that should be complied with in such guarantees, in keeping with Circular No. (11/M/12407) dated 5/8/1396H of the Ministry of Finance and National Economy and any circulars that might be issued thereafter.
        c)Refraining from conducting, or mediating in conducting any transaction which might involve circumvention of the provisions of “The Banking Control Law” inside or outside the Kingdom.
        d)Refraining from implementing any scheme for soliciting deposits, with the exception of current accounts and fixed-term deposits, before reporting to SAMA.
        e)Refraining from conducting any banking business with persons unauthorized according to the applicable laws and rules, including money changers not authorized by SAMA in accordance with the Minister of Finance and National Economy Decision No. (3/920) dated 16/2/1402H.
       
       4.Comply with the rules of cash margins that must be held against certain types of letters of credit or guarantees issued by SAMA in accordance with the Law.
             		 
       5.Comply with the instructions on the minimum limit of collateral between the amount of loan and assets offered to secure it which should be observed by banks as prescribed by SAMA.
             		 
       6.Comply with the instructions issued by SAMA regarding the assets that must be held by banks inside the Kingdom and their ratio to deposit liabilities.
             		 
       7.Adhere to the instructions issued by SAMA regarding bank working hours and holidays.
             		 
       8.Adhere to the provisions of the Banking Control Law and its Implementation Rules and instructions, which prohibit banks from assisting or covering up for others who conduct banking or commercial activities they are not authorized to conduct, and those who violate the provisions of the Banking Control Law and its Implementation Rules. Therefore, bank employees shall not request or receive benefits to grant or recommend granting facilities from the bank.
             		 
      II.In implementation of Article (12) of the Banking Control Law, banks shall:
             		  
       1.Ensure that no person can be appointed as a member of the board of directors of more than one bank. Any person who is nominated as a member of the Board of Directors of any bank shall disclose his membership in the Board of any other bank.
             		 
       2.None of the following actions or practices shall be performed without prior written approval of SAMA:
             		 
        (1)Election of any person as a member of the Board of Directors of any bank if he had occupied a similar position in a banking concern which was liquidated, or if he had been previously removed from a similar position in any banking establishment, even if the liquidation had been made before coming into force of the “Banking Control Law” whether the banking concern was located inside or outside the Kingdom. Any person who is nominated as a member of the Board of Directors shall disclose such information.
       
        (2)Appointment of any person as a manager of a bank if he had occupied a similar position in any banking concern that was liquidated, or if had been previously removed from a similar position in any banking concern even if the liquidation or removal had occurred before coming into force of the “Banking Control Law” whether this banking concern was located inside or outside the Kingdom. Every person who is nominated, or applying for this position shall disclose such information.
       
       3.Submission of all particulars and information requested by SAMA about persons occupying or nominated to occupy leading positions in the bank.
             		 
      III.In implementation of Article (17) of the Banking Control Law, every bank shall observe the following:
             		  
       1.Provide SAMA with the following data as it deems fit and according to the instructions prescribed:
             		 
        (1)Data submitted on a monthly basis:
       
        (1.1)The bank’s balance sheet.
       
        (1.2)Banks with branches and banking units abroad shall also submit:
       
        -A consolidated statement of conditions of the bank, including its branches and units inside and outside the Kingdom.
       
        -A separate statement of conditions of each branch or unit abroad.
       
        (1.3)Statement of foreign liabilities and assets.
       
        (1.4)Statement of the bank’s purchases and sales of foreign exchange.
       
        (1.5)Statement of imports financing statistics.
       
        (2)Data submitted every three months:
       
        (2.1)Profit and loss account statement.
       
        (2.2)Banks having branches and banking units abroad shall also submit a profit and loss account statement for each branch or unit separately.
       
        (2.3)Statement of deposits of government departments and agencies.
       
        (2.4)Statement of the geographic breakdown of foreign assets.
       
        (2.5)Quarterly balance sheet statements of the bank and its operating activities, that should be published in daily newspapers four times during the financial year, (as per the rules regulating share trading transactions, before their publication).
       
        (3)Data submitted every six months:
       
        (3.1)Statement of bank credit classification according to economic sectors.
       
        (3.2)Statement of forward contracts.
       
        (3.3)Statement of loans granted to non-residents and foreign investments.
       
        (3.4)Statement of doubtful loans and advances.
       
        (4)Data submitted every 12 months:
       
        (4.1)The bank’s annual budget and final accounts.
       
        (4.2)The budget detailed report prepared by the bank auditors.
       
        (4.3)Annual report of the bank’s board of directors.
       
        -Banks with branches and units abroad must also submit the annual budget statement and final accounts for each branch or unit abroad and the auditors’ detailed report.
       
        (5)Any data related to the bank’s branches and units abroad in accordance with SAMA’s relevant instructions.
       
        (6)A copy of the minutes of each meeting of the general assembly of shareholders or meeting of partners within one month from the date of the meeting.
       
        (7)Any other data or information requested in the form and at the time determined by SAMA.
       
       2.Instruct the bank’s external auditors to directly provide SAMA with the data, clarifications, and any information it requests about the bank’s activity within their scope of responsibilities.
             		 
      IV.In implementation of Article (18) of the Banking Control Law, banks shall fully cooperate with SAMA’s inspection team when visiting the bank. To achieve this, the bank’s staff shall not exercise any of the following acts or practices:
             		 
       1.Refuse to give the inspection team access to the bank’s records and accounts and other documents that the team deems important to perform the inspection duty.
       
       2.Refuse to submit or deliberately hide the available information and clarifications requested by the inspection team.
       
       3.Refuse to inform the inspection team of the bank’s violations immediately after starting the inspection or deliberately hide such information.
       
       4.Violate the recommendations and instructions issued by the SAMA as a result of the inspection conducted by the inspection team.
       
      V.In implementation of Article (22) of the Banking Control Law, if SAMA obtains knowledge that a bank has violated the provisions of the Banking Control Law and its Implementation Rules, or has pursued a policy that might seriously affect its solvency or liquidity, SAMA may take one or more of the following measures:
             		 
       1.Imposing the penalties stipulated in Article (23) of the Banking Control Law.
       
       2.Suspending or dismissing the bank employee who deliberately provided false data, information or facts.
       
       3.Informing the bank about its violations and requiring it to take corrective measures within a period determined by SAMA.
       
       4.This can be done either in writing or by calling the bank’s board chairperson, the managing director, or the general manager in charge.
       
       5.In case of the bank’s non-compliance with SAMA’s instructions, SAMA may take some or all of the measures below.
       
       6.Informing the chairperson of the bank’s board of directors, through a representative from SAMA or by any other means, of the importance of convening a board meeting within a period determined by SAMA to review the bank’s violations and take the necessary corrective measures.
       
       7.The meeting shall be attended by one or more of SAMA representatives.
       
       8.Requiring the bank to take any corrective measures deemed necessary by SAMA.
       
       9.Assigning one or more advisors to assist the bank in managing its business.
       
       10.Appointing an observer to the bank’s board of directors for a period determined by SAMA. The observer shall have the right to participate in the discussions held during the board’s meetings and write down their opinion on the decisions taken by the board during these meetings.
       
       11.Taking any other measures SAMA deems necessary after obtaining the approval of the Minister of Finance and National Economy.
       
      B)This Resolution shall be communicated to all competent authorities to be implemented and shall come into effect as of the date of its issuance.
             		 
      The Minister of Finance and National Economy 
      Mohammed Aba AlKhail 

      * The "Saudi Arabian Monetary Agency" was replaced By the "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.

    • Finance Companies Control Law

      No: M/51 Date(g): 3/7/2012 | Date(h): 14/8/1433Status: In-Force

      • Chapter 1: General Provisions

        • Article 2

          This Law shall apply to finance companies licensed pursuant to its provisions.

        • Article 3

          Finance companies – licensed pursuant to this Law-shall engage in finance activities in a manner not conflicting with principles of Sharia as defined by Sharia committees, whose members are selected by these companies, without prejudice to the integrity of the financial system and equity of transactions.

        • Article 4

           1.No finance activities, as specified under this Law, may be engaged in without obtaining a license in accordance with the provisions of this Law and other applicable laws.
           
           2.An unlicensed person may not, by any means, indicate, explicitly or implicitly, the engagement in finance activities as specified under this Law. Neither may he use any other indicative terms or phrases in his documents, papers or advertisements.
           
           3.Notwithstanding paragraphs 1 and 2 of this Article, the Regulations shall regulate the natural or corporate person's finance of its products and services for clients in a manner that enables SAMA to exercise its monetary authority, protect the financial system, and ensure consumer protection.
           

      • Chapter 2: Licensing Provisions

        • Article 5

          This article has been amended in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G. Please refer to the Arabic version of this article to read the last updated version.
          First:The founders of a finance company or their representatives shall apply to SAMA for a license in accordance with the following conditions:
                     		 
           1.Submission of the organizational structure of the company, operation systems and an investment plan demonstrating its technical capability to engage in finance activities in accordance with the Regulations;
           
           2.The capital of the company shall not be less than the amount specified by SAMA, and not less than the amount specified under the Companies Law. The foreign share in the capital, if any, shall not exceed the percentage specified by SAMA;
           
           3.Each founding member of the company shall be legally competent and shall not:
           
            a.be in default of any obligation against his creditors;
                     		 
            b.be in breach of the provisions of the Capital Market Law and its Regulations, the Banking Control Law, the Cooperative Insurance Companies Control Law or finance laws;
                     		 
            c.have been declared bankrupt;
                     		 
            d.be convicted of any crime impinging on integrity, unless rehabilitated pursuant to laws or as specified under the Regulations.
                     		 
           4.The persons nominated to perform monitoring and executive duties in the company shall satisfy professional competence requirements, in addition to the following:
           
            a.possess theoretical and practical knowledge in finance;
                     		 
            b.not be in breach of the provisions of the Capital Market Law and its Regulations, or convicted of violating the Banking Control Law, the Cooperative Insurance Companies Control Law or finance laws;
                     		 
            c.have not been convicted of a crime impinging on integrity, unless rehabilitated pursuant to laws or as specified under the Regulations.
                     		 
           5.Satisfy any other condition stipulated by the Regulations for issuing the license.
           
          Second:SAMA shall, upon completion of the application, issue its decision of approval or reasoned rejection within a period not exceeding 60 days. In making its decision, it shall observe the competitiveness and integrity of the industry and quality of services.
                     		 
          Third:Upon approval, applications shall be referred to the Ministry of Commerce and Industry to complete company incorporation and registration in accordance with the provisions of the Companies Law.
                     		 
          Fourth:Upon completion of the incorporation of the company and issuance of the commercial registration, SAMA shall issue the license permitting the company to practice. The license term shall be five years.
                     		 
          Fifth:The Regulations shall specify the fees for issuing, renewing and amending the license.
                     		 

        • Article 6

          The finance company must commence its finance activities within a period not exceeding one year as from the date of obtaining the license. After commencing its activities, it shall not cease its activities for more than three successive months unless approved by SAMA. The Regulations shall specify necessary controls therefor.

        • Article 7

          SAMA may revoke the license if it finds that the finance company has provided false information to SAMA, or failed to disclose material information that should have been provided for licensing purposes as set forth in the Regulations.

        • Article 8

          The shares of founding shareholders may not be disposed of except with the approval of SAMA. Recipients of such shares shall satisfy the requirements and terms set out in Article 5(First) (3) of this Law.

        • Article 9

          The license shall be deemed expired upon appointment of a liquidator for the finance company or issuance of a bankruptcy ruling.

      • Chapter 3: Activities of Finance Companies

        • Article 10

           1.SAMA shall license a finance company to engage in one or more of the following activities:
           
            a.Real estate finance
                     		 
            b.Production asset finance
                     		 
            c.Small and medium enterprise finance
                     		 
            d.Finance lease
                     		 
            e.Credit card finance
                     		 
            f.Consumer finance
                     		 
            g.Microfinance
                     		 
            h.Any other finance activity approved by SAMA
                     		 
           A finance company may acquire assets in order to finance third parties’ acquisition of such assets.
                     		 
           2.SAMA shall license entities seeking to engage in activities supporting finance activity in a manner that achieves competition in providing such services. The Regulations shall specify the legal form of such entity and conditions to be satisfied.
           

        • Article 11

          This article has been amended in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G. Please refer to the Arabic version of this article to read the last updated version.
          A finance company may not: 
           
           1.Engage in activities other than finance activities.
           
           2.Acquire, directly or indirectly, other entities engaging in activities other than finance activities.
           
           3.Trade in currencies, gold, precious metals or securities.
           
           4.Trade in real estate.
           
           5.Engage in wholesale or retail trading.
           
           6.Accept call deposit.
           
           7.Accept time deposits or non-banking facilities or opening accounts of all types for its clients, unless licensed by SAMA. The company shall deposit with SAMA a percentage of the value of the deposits as specified by the Regulations.
           
           8.Obtain foreign short-term finance without obtaining the approval of SAMA as specified by the Regulations.
           

        • Article 12

          This article has been amended in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G. Please refer to the Arabic version of this article to read the last updated version.
           1.A finance company may not:
           
            a.extend any finance without collateral, and as an exception, the Regulations shall specify the rules for finance without collateral;
                     		 
            b.finance or offer facilities collateralized by its shares;
                     		 
            c.finance or offer facilities to an establishment or a company (other than joint stock companies listed in the Saudi Capital Market) if one of the members of the board of directors of the finance company or its external auditor is a partner or a director of the establishment or company receiving such finance;
                     		 
            d.finance or offer facilities to persons or entities if one of the members of the board of directors of the finance company or its external auditor is a guarantor for receiving such finance or facilities;
                     		 
            e.finance or offer facilities to any board member, director, spouses thereof or a relative to the second degree except upon collaterals specified by the Regulations;
                     		 
            f.finance or offer facilities or guarantee any financial obligation of any of its employees in excess of his aggregate salaries for the period specified by the Regulations;
                     		 
            g.acquire shares in another finance company without obtaining the approval of SAMA;
                     		 
            h.finance or offer facilities to a company or establishment in which the finance company owns, directly or indirectly, a percentage exceeding the percentage specified by the Regulations;
                     		 
            i.finance or offer facilities to a company or establishment which owns in the finance company, directly or indirectly, a percentage exceeding the percentage specified by the Regulations;
                     		 
           2.Without prejudice to public and private rights prescribed by law, any board member of a finance company or any external auditor who receives finance in breach of sub-clause 1(b), 1(c) or 1(d) of this Article shall be deemed dismissed as specified under the provisions of the Regulations.
           

        • Article 13

          The finance company shall allocate a provision for contingent operation losses in accordance with the criteria specified under the Regulations.

        • Article 14

          Without prejudice to provisions of Article 3 of this Law, the finance company, as specified in the Regulations and in proportion with its assets and financial position, may issue securities and sukuk in accordance with the provisions of the Capital Market Law and its regulations.

        • Article 15

          The finance company and its employees must maintain the confidentiality of their customers' information and transactions they are privy to during the company’s conduct of business, as specified by the Regulations.

      • Chapter 4: Management of Finance Companies

        • Article 16

          This article has been amended in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G. Please refer to the Arabic version of this article to read the last updated version.
          A finance company board member shall not: 
           
           1.be a board member in another finance company;
           
           2.combine the duty of monitoring finance companies or auditing their accounts with membership in board of directors in the same company;
           
           3.have been dismissed, as a disciplinary action, from a senior executive position in a finance institution;
           
           4.have been previously declared bankrupt.
           
           5.have been convicted of a crime impinging on integrity, unless rehabilitated in accordance with law or as specified under the Regulations.
           

        • Article 19

          This article has been amended in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G. Please refer to the Arabic version of this article to read the last updated version.

          An audit committee shall be formed in each finance company from non-executive board members. Committee duties, selection of its members, term of membership and work procedures shall be determined pursuant to a resolution by the general assembly of the finance company upon a proposal by the board of directors.

        • Article 20

          This article has been amended in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G. Please refer to the Arabic version of this article to read the last updated version.
          Upon concluding any finance contract falling within their powers, the chairman, board members and employees of the finance company shall disclose in writing the following: 
           
           1.Any relation with respect to the contract.
           
           2.Any relation to the contract of any relative up to the second degree.
           
           3.Any financial interest they have with any contract party.
           
          In case of non-disclosure, an aggrieved party may file a lawsuit before the competent court to invalidate the contract. 
           

      • Chapter 5: Supervision*

        * This title has been amended from "Supervising Finance Companies" to "Supervision", in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G.

        • Article 22

          The Regulations shall regulate the following: 
           
           1.The maximum limit of finance that may be offered by a finance company.
           
           2.Prohibiting or restricting finance companies from conducting certain credit transactions.
           
           3.The special conditions to be observed by a finance company in conducting certain credit activities.
           
           4.The minimum percentage of collateral proportions to be observed in certain contracts for finance amounts and assets presented as collateral thereof.
           
           5.The principles for disclosure of the criteria of the cost of finance and the method of calculation to enable consumers to compare prices.
           
           6.Controls necessary to ensure equity of transactions and protection of consumers’ rights.
           
           7.Principles of fair distribution of finance profit over maturity period.
           
           8.Collaterals for protecting payments made by borrowers and how the finance company disposes of the same.
           
           9.Debts collection by finance companies and provisions of licensing.
           
           10.Any other matters regulated by the Regulations in accordance with this Law.
           

        • Article 23

          The finance company must comply with the rules of capital adequacy ratio as specified by the Regulations.

        • Article 24

          The finance company shall diversify its business risks, and may not finance a single company or a group of companies with connected ownership in excess of the percentage specified by the Regulations.

        • Article 25

          Subject to prevailing laws, SAMA's approval must be obtained for the amendment of the capital of the finance company or amendment of its articles of association as well as merger and acquisition.

        • Article 26

          The finance company shall obtain SAMA's approval for opening or closing a branch, an agency or an office within the Kingdom or abroad.

        • Article 27

          The finance company shall appoint one or more licensed external auditor. SAMA may appoint another auditor at the expense of the finance company in the cases specified by the Regulations.

        • Article 28

          The finance company shall provide SAMA with any information requested. SAMA shall inspect the records and accounts of the finance company periodically. The finance company shall be deemed in violation of the provisions of this Law and its Regulations if it fails to provide information required for such inspection.

        • Article 29

          This article has been amended in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G. Please refer to the Arabic version of this article to read the last updated version.
          If a finance company commits violations relating to any professional irregularities or transactions exposing its shareholders or creditors to risk, or if its debts exceed its assets, SAMA shall, by written decision and in proportion to the violation, take one or more of the following measures: 
           
           1.Serve a warning.
           
           2.Require the finance company to submit an appropriate corrective action plan.
           
           3.Order the suspension of some of its operations or prevent distribution of dividends.
           
           4.Impose the fine set out in Article 34 of this Law, as the case may be.
           
           5.Order the temporary suspension or dismissal of the violator, if not a board member, according to the gravity of the violation.
           
           6.Temporary suspension of the chairman or a board member.
           
           7.Appoint one or more consultants at the expense of the finance company to provide advice on its conduct of business.
           
           8.Suspend the board of directors and appoint a manager at the expense of the finance company to run the company until the causes for suspension, as determined by SAMA, cease to exist.
           
          If SAMA deems that the violation calls for cancellation of the license or liquidation of the finance company, SAMA may initiate a suit before the competent court. SAMA, at its own discretion, may suspend the license until the suit is decided. 
           

        • Article 30

          Any aggrieved party may appeal the decisions of SAMA before the competent court within 60 days from the date of being aware of such decision.

      • Chapter 6: Violations and Disputes

        • Article 31

          The competent court shall resolve disputes arising from the implementation of the provisions of this Law and its Implementing Regulations, review violations of their provisions and impose the penalties provided for in this Law.

        • Article 32

          The Governor shall appoint qualified officers to perform the following: 
           
           1.Inspection and monitoring.
           
           2.Investigation of violations of the provisions of this Law.
           
           3.Public prosecution before the competent court.
           
          The Regulations shall specify the procedures regulating the enforcement of this Article in conformity with the nature of these tasks and in a manner not in conflict with the provisions of the Law of Criminal Procedure. 
           

        • Article 33

          The finance company shall disclose to its customers, prior to entering into contract, the discount in case of early repayment to bind parties upon agreement and when resorted to by virtue of a contract, law or a judicial ruling. The Regulations shall specify the criteria for discount in case of early repayment in an equitable manner.

      • Chapter 7: Penalties

        • Article 34

          SAMA shall impose a fine not exceeding two hundred and fifty thousand riyals (SAR 250.000) for violations set forth in Article 29 of this Law. If the violation persists, SAMA may impose a fine not exceeding ten thousand riyals (SAR 10.000) for each violation day.

        • Article 35

           1.A person who persists in defaulting the payment of his loan, shall be subject to a fine not exceeding double the interest agreed to for the defaulted payment. The fine shall be repeated with each repeated default. The fine shall be deposited into the account of the agency overseeing non-governmental organizations, to be allocated for support of public benefit societies.
           
           2.Without prejudice to the provisions of Article 34 of this Law, any person violating any of the provisions of this Law and its Regulation shall be subject, depending on the gravity of the violation, to a fine not exceeding two million riyals or 10% of the amount financing obtained by the violator, and imprisonment for a term not exceeding two years, or either penalty. Amounts resulting from said fines shall be deposited into the State treasury.*
           
           3.The Saudi Central Bank may provisionally attach the funds of persons who are proven to violate Article 4(1)(2) of this Law, without exceeding the prescribed amount and percentage in paragraph (2) of this Article. Such attachment shall be in force pending the competent authority decision on the violation in according to applicable statutory procedures.**
           
           4.The judgment may include a provision to issue its summary on the expense of the violator in a local newspaper or any other appropriate medium.**
           

           

           * This paragraph has been amended in accordance with the Royal Decree No. M/24 dated 15/3/1443H.

          ** This paragraph has been added in accordance with the Royal Decree No. M/24 dated 15/3/1443H.

      • Chapter 8: Concluding Provisions

        • Article 37

          Department of Zakat and Income Tax shall issue the criteria necessary for calculating Zakat for finance companies.

        • Article 38

          This Law shall supersede any contradicting provisions.

        • Article 39

          The Governor shall issue the Regulations within 90 days from date of issuance of this Law and shall come into effect upon the Law's entry into force.

        • Article 40

          This Law shall enter into force 90 days from its publication in the Official Gazette.

    • Implementing Regulation of the Finance Companies Control Law

      No: 2/MFC Date(g): 24/2/2013 | Date(h): 14/4/1434

      • Part One: Definitions and General Provisions

        • Article 1

          The following words and phrases, wherever they appear, in this Regulation shall have the corresponding meanings, unless the context otherwise indicates:

          Law: the Finance Companies Control Law.

          Finance Laws: the Real Estate Finance Law, the Finance Lease Law and the Law Finance Companies Control Law.

          Regulation: the Implementing Regulation of the Finance Companies Control Law.

          SAMA: Saudi Central Bank*.

          Governor: the Governor of Saudi Central Bank.

          Finance Company: a joint stock company licensed to carry out Finance activity.

          Borrower: a person receiving Finance.

          Consumer: a person to whom Finance Company’s services are directed.

          License: a license issued by SAMA to a company to carry out Finance activity.

          “Finance Activity” or “Finance Activities”: one or more types of Finance listed in Article 10 of the Law or any other Finance activities approved by SAMA pursuant to Article 10 of the Law.

          Finance: extending credit under contracts for the activities set out in the Law and the Regulation.

          Finance Agreement: a Finance Company extends credit for the activities set out in the Law and the Regulation.

          Installment: the Total Amount Payable by the Borrower distributed over the term of the Finance Agreement, minus non-recurring expenditures, expenses and costs such as fees, commissions and administrative services fees.

          Term Cost: the term cost to the Borrower under the Finance Agreement as a fixed annual or variable annual percentage applied to the Amount of Finance obtained by the Borrower.

          Total Cost of Finance: all the costs to be paid by the Borrower under a Finance Agreement other than the Amount of Finance, including Term Cost, fees, commissions, administrative services fees, insurance, and any charges required to obtain Finance excluding any expenses the Borrower can avoid such as costs or fees payable by the Borrower due to his breach of any of his obligations contained in the Finance Agreement.

          Amount of Finance: the ceiling or the total amounts made available to the Borrower under a Finance Agreement.

          Total Amount Payable by the Borrower: the Amount of Finance and the Total Cost of Finance.

          Annual Percentage Rate: the discount rate calculated in accordance with the provisions of Article 81 of this Regulation.

          Board: the board of directors of the Finance Company.

          Senior Management: the managing director, chief executive officer, general manager, their deputies, the chief financial officer and directors of major departments, in addition to the officers in charge of risk management, internal audit and compliance functions in the Finance company.

          Exposure: the value of an asset that is subject to any credit risks, such as default risk or downgrade risk.

          Large Exposure: the exposure of one Borrower by (5%) or more of the paid capital and reserves of the Finance Company.

          Qualifying Interest: (5%) or more of the shares or the voting rights related to shares in the Finance Company whether held directly or indirectly either by one person or by several persons acting in concert.

          * The "Saudi Arabian Monetary Agency" was replaced By the "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.

        • Article 2

          SAMA shall organize the Finance sector and supervise the business of the Finance Companies in accordance with the Law and the Regulation as the following:

           1.License to practice one or more of the Finance activities in accordance with the Finance laws and its regulations.
           2.Taking all actions necessary for maintaining the integrity and stability of the Finance sector and fairness of its transactions;
           3.Taking all actions necessary for encouraging legitimate and fair competition among Finance Companies;
           4.Issuing rules and instructions required to organize the Finance sector. 
           5.Taking all suitable means for the development of the Finance sector, Saudization, and enhancement of its employees’ efficiency through regulating the obligations of the Finance Companies in training of human resources, improving their skills and enriching the employees’ knowledge in Finance Industry.

      • Part Two: Finance Companies Licensing

        • Article 4

          No one is allowed to carry out any finance activity without obtaining a license from SAMA in accordance with the Law and the Regulation or other applicable laws.

          This Article has been amended in accordance with His Excellency the Governor's Decision No. 66/M SH T, dated 09/07/1439H.

        • Article 5

          The finance of a natural or a legal person regarding the goods of their institution or services to their consumers will be subject to the controls and instructions issued by SAMA.

          This Article has been amended in accordance with His Excellency the Governor's Decision No. 78/M SH T, dated 05/12/1440H.

        • Article 6

          The Finance Company shall not practice any activities, which it has not been licensed for under the Finance Laws and their regulations.

        • Article 7

          Founding shareholders of the Finance Company, or their representatives, shall apply to SAMA for a License. The application shall specify the activities for which a License is requested, and includes the following:

           1.Completed application form required by SAMA; 
           2.Draft articles of association and by-laws of the Finance Company; 
           3.Description of the organizational structure of the Finance Company showing all necessary departments and functions and their main tasks; 
           4.List of all founding shareholders setting out the number and percentage of shares that each founding shareholder will own; 
           5.Fit and proper requirements form for founding shareholders signed by each founding shareholder; 
           6.Fit and proper requirements form for Board members signed by each candidate for Board membership; 
           7.Feasibility study identifying target market, services to be provided, business model, and strategy of the Finance Company in addition to a five- year business plan sets out at least the following: 
            a.Finance Activities, for which a license is requested, products and a marketing plan;
            b.Credit granting policies and procedures;
            c.Estimated financial statements, projected annual revenue, expenses and financial margins and targeted growth rates, taking into account the requirements of capital adequacy and liquidity assessments of the SAMA;
            d.Projected start-up costs and funding thereof;
            e.Projected ongoing financing of operations;
            f.Branch offices to be established;
            g.Plan and programs of monitoring and managing risks and compliance;
            h.Recruitment and training plan, including the projected number of employees and percentage of Saudi nationals at each department and each organizational level, and the training and qualification programs for employees.
           8.An irrevocable bank guarantee issued in favour of SAMA by one of the local banks for an amount equivalent to the required minimum capital for the Finance Activity or Activities, requested to be licensed, in accordance with the model set by the SAMA. Such bank guarantee is renewable automatically until the required capital is paid up in full. This guarantee shall be released upon the request of the founding shareholders in the following cases: 
            a.Paying up the capital in cash.
            b.Withdrawing the license application.
            c.Refusing the license application by SAMA.
           9.Drafts of proposed agreements and contracts with third parties, including agreements and contracts with related parties and external service providers; and 
           10.Any other documents or information that SAMA may request. 

        • Article 8

          Subject to the provisions of the Companies Law, the minimum paid up capital of the Finance Company is as follows:

           1.For Finance Company carrying out real estate Finance Activity: (200,000,000) two hundred million Saudi riyals.
           2.For Finance Company carrying out one Finance Activity or more other than real estate Finance: (100,000,000) one hundred million Saudi riyals.
           3.For Finance Company carrying out only microfinance activity: (10,000,000) ten million Saudi riyals.
           4.For Finance Company carrying out only small and medium enterprise finance activity: (50,000,000) fifty million Saudi riyals.
           

          SAMA may stipulate higher or lower minimum capital based on the prevailing market conditions, or if, as deemed by SAMA, the proposed business model of the Finance Company, scope and nature of proposed activities, or their geographic reach so requires, taking into consideration the magnitude and the nature of risks associated with such activities. The capital must be paid up in full at the establishment of the Finance Company.

          This article has been amended in accordance with His Excellency the Governor's Decision No. (126/M SH T) dated 8/6/1444H.

        • Article 9

           1.Microfinance activity is limited to Financing the production activates of small business owners, crafts people and the like, provided that the finance amount shall not exceed the limit set by SAMA.*
           2.The licensed Finance Company practicing microfinance shall comply with SAMA requirements, permissions and rules regarding this Finance Activity.

          * This paragraph has been amended in accordance with His Excellency the Governor's Decision No. 85/M SH T dated 26/5/1441H.

        • Article 10

           1.Each founding shareholder must comply with the Sharia and legal competence requirements, and the fit and proper requirements stipulated by SAMA. In particular the following: 
            a.He must not have been convicted of a violation of any of the provisions of a criminal law, the Banking Control Law, the Capital Market Law, the Co-operative Insurance Companies Control Law or its regulations, the Finance Laws or its regulations, or any other laws or regulations inside or outside the Kingdom of Saudi Arabia;
            b.He must not have been declared bankruptcy or entered into a general settlement with any creditor;
            c.He must not have been sentenced of a breach of trust offence, unless rehabilitated and at least 10 years have passed since the last sanction for this crime has been completed and on the condition of obtaining a non-objecting letter from SAMA;
            d.Have not requested to withdraw license application to carry out Finance Activity in the last two years;
            e.He must not have a previous application to carry out Finance Activity refused by SAMA during the last five years; and
            f.He must have the sufficient financial solvency and shall not have breached any financial obligations towards his creditors nor there is an indication that he cannot continuously comply with his financial obligations towards his creditors.
           2.In case of a founding shareholder or an owner of the Qualifying Interest committing a prejudice to the Sharia or legal competence, or solvency stipulated by SAMA; SAMA may at any time band them from the right to vote on the decisions of the Finance Company or require receiving a written non-objection before practicing this right in order to preserve the integrity of the performance of the Finance Company, apply the principles of governance and protect the interests of stakeholders of the Finance Company. 
           3.A written non-objecting letter from SAMA is required prior to the acquisition of any shares in a Finance Company that is not publically traded in the Saudi Stock Exchange “Tadawul”, or the acquisition of a Qualifying Interest in a Finance Company that is publically traded in the Saudi Stock Exchange “Tadawul”, and the acquirer of such shares shall be subject to the provisions of this Article in both cases. 
           4.If the founding shareholder or that who intends to acquire shares in the Finance Company is an entity, the provisions of this Article shall apply on any who owns (5%) or more of the capital or of the right to vote in that entity. 

        • Article 11

          All Board members shall comply with the requirements of professional eligibility and fit and proper requirements stipulated by SAMA. In particular the following:

           1.He must not be a Board member in another Finance Company;
           2.He must not combine work in supervising Finance Companies or auditing their financials and membership in a Board of the Finance Company;
           3.He must not have been dismissed from an executive leadership function in financial facility as disciplinary measure;
           4.He must not have been convicted of a violation of any of the provisions of a criminal law, the Banking Control Law, the Capital Market Law, the Co-operative Insurance Companies Control Law or its regulations, the Finance Laws or its regulations, or any other laws or regulations inside or outside the Kingdom of Saudi Arabia;
           5.He must not have been previously declared bankruptcy, or entered into a general settlement with any creditor;
           6.He must not have been sentenced of a breach of trust offence, unless rehabilitated and at least 10 years have passed since the sanction for this crime has been completed and on condition that he receives a non-objecting letter from SAMA; and
           7.He must have the sufficient financial solvency and shall not have breached any financial obligations towards his creditors nor there is an indication that he cannot continuously comply with his financial obligations towards his creditors.

        • Article 12

          Any candidate for a Senior Management position in the Finance Company must comply with the requirements of professional eligibility and fit and proper requirements stipulated by SAMA. In particular the following:

           1.He must be permanently resident in the Kingdom of Saudi Arabia;
           2.He must be professionally qualified and must have at least five years of relevant experience. SAMA has the right to assess the candidate's completion of such period of experience.*
           3.He must not have been dismissed from a previous job as disciplinary measure;
           4.Not have been convicted of a violation of any of the provisions of a criminal law, the Banking Control Law, the Capital Market Law, the Cooperative Insurance Companies Control Law or its regulations, the Finance Laws or its regulations, or any other laws or regulations inside or outside the Kingdom of Saudi Arabia;
           5.He must not have been declared bankruptcy or entered into a general settlement with any creditor;
           6.He must not have been sentenced of a breach of any trust offence, unless rehabilitated and at least 10 years have passed since the sanction for this offence has been completed and on condition that he receives a non-objecting letter from SAMA; and
           7.He must have the sufficient financial solvency, and shall not have breached any financial obligations towards his creditors nor there is an indication that he cannot continuously comply with his financial obligations towards his creditors.

          * This paragraph has been amended in accordance with His Excellency the Governor's Decision No. 72/M SH T, dated 20/06/1440H.

        • Article 13

           1.The license application must comply with the requirements set out in the Law and this Regulation. The founding shareholders of the Finance Company must provide SAMA with any additional information or documents that SAMA may require within 30 days from the date of request;
           2.In case of failing to meet the 30 days period requirement specified in Paragraph 1 of this Article, SAMA may refuse the license application;
           3.SAMA will issue a written notice to the applicant after the completing all the requirements stipulated in the Law and the Regulation and
           4.Within (60) days from the day on which SAMA has accepted the license application as being complete, SAMA will either grant a preliminary approval or refuse to grant a License, giving its reasons in case of a refusal. The preliminary approval does not constitute a License or approval to practice the Finance Activity.

        • Article 14

          Founding shareholders must establish the Finance Company as a joint stock company within six months of the granting of the preliminary approval and provide SAMA with copies of the Finance Company’s commercial registration and by-laws, reflecting the licensed activities in accordance with the preliminary approval. The preliminary approval will expire after six months of the preliminary approval. Unless a non-objection letter has been obtained from SAMA to extend its duration for a maximum of six months.

        • Article 15

           1.Once the company has completed the establishment requirements and the applicants have provided proof indicating full payment of the capital, and any additional initial funding as set out in the business plan has been provided to the Finance Company and that the company has taken all necessary measures to start carrying out the planned Finance Activities, including the establishment of all necessary personnel, systems, equipment and functions, SAMA will grant the License.
           2.SAMA may take all necessary actions, such as on-site supervision, inspection, meeting their officials and viewing their systems, procedures and records, to verify that the requirements set out in Paragraph 1 of this Article have been met.

        • Article 16

          SAMA will determine in the License the Finance Activity or Activities for which it is granted. SAMA may restrict the License to certain geographic area or specific types of Borrowers or impose other conditions.

          This article has been respectively amended in accordance with His Excellency the Governor's Decision No. 72/M SH T, dated 20/06/1440H, and  His Excellency the Governor's Decision No. 113/M SH T dated 10/08/1443H.

        • Article 17

          The License shall be granted for a term of five years and may be renewed by SAMA based on a request by the Finance Company in accordance with the requirements of this Regulation. The renewal application must be submitted to SAMA at least six months prior to the expiry of the License in accordance with the model stipulated by SAMA, including the following:

           1.an updated strategy and five-year business plan that sets out at least the following: 
            A.A marketing plan taking into account existing and planned products;
            B.Credit policies and procedures;
            C.Projected financial statements, annual revenue and expenses, financial margins and targeted growth rates, against the performance of the Finance Company over the past five years, taking into account any modifications to the company’s strategy and business plan;
            D.Projected liquidity and capital adequacy ratios against the levels of liquidity and capital solvency ratios of the past five years, taking into account any modifications to the Company’s strategy and business plan;
            E.Projected ongoing Finance operations;
            F.Branch offices to be established;
            G.Report on risks suffered by the Finance Company through the past five years, and how to manage and deal with it, including the risks of non-compliance and cases of violation of laws, regulations, or, instructions and future plan and programs of the company to manage risks and compliance.
            H.Current number of employees and the percentage of Saudi nationals thereof at each department and each organizational level.
            I.Recruitment and training plan, including training and qualification programs for employees.
           2.The financial charges required for renewing the License; 
           3.Any other documents and information that SAMA may request. 

        • Article 18

          The Finance Company must not cease any of its activities for more than three consecutive months unless SAMA has granted its prior written approval, and without prejudice to the Company’s obligations towards its creditors, shareholders or the integrity of the financial system.

        • Article 19

          The Finance Company may apply for an amendment of the License for addition or deletion of some Finance Activities or amendment of any term or limitation thereof. Amendment application must be based on reasonable justifications and accompanied by any documents, information or studies required by SAMA.

        • Article 20

           1.SAMA may revoke the License upon the request of the Finance Company, taking into account the rights of the creditors and Borrowers and the integrity of the financial system.
           2.SAMA may revoke the License if the Finance Company has submitted false information or failed to disclose material information that should have been provided for licensing purposes.
           3.If the License is revoked, the Finance Company must be liquidated. SAMA may appoint a liquidator.

        • Article 21

          The Finance Company must cease its Finance Activities with immediate effect if the License is suspended according to Article 29 of the Law, and may not practice any of these activities unless a non-objection letter has been obtained from SAMA thereupon.

        • Article 22

           1.SAMA may charge the following: 
            a.(200,000) two hundred thousand Saudi riyals for issuing the License;
            b.(100,000) one hundred thousand Saudi riyals for renewing the License; and
            c.(50,000) fifty thousand Saudi riyals for amending the License.
           2.Notwithstanding the provision of Paragraph 1 of this Article, the financial fees for issuing the license to practice microfinance activity, renew it or amended it is (10.000) Ten Thousand Saudi Riyals. 

        • Article 23

          The Finance Company shall obtain from SAMA a non-objection letter prior to the launch of any financial products or amendment of any existing products directed to individuals or beneficiaries of microfinance.

          This article has been amended in accordance with His Excellency the Governor's Decision No. 72/M SH T, dated 20/06/1440H.

      • Part Three: Capital Adequacy and Liquidity

        • Article 24

          The Finance Company shall comply with the levels of capital adequacy and liquidity required in accordance with the rules, requirements and criteria stipulated by SAMA.

        • Article 25

          The Finance Company shall provide SAMA with precautionary data at specific times according to the models, controls and instructions determined by SAMA.

        • Article 26

          The Finance Company shall obtain a non-objecting letter from SAMA prior to the approval of any distribution of profits, any other distributions, the recommendation of it or announcing it, after making sure of the following:

           1.The distribution does not cause capital adequacy, or liquidity to drop below the required levels;
           2.The distributions of the fiscal year must not exceed the actual net profit for the previous fiscal year; and
           3.Any other conditions set by SAMA.

      • Part Four: Ownership and Assets

        • Article 27

           1.No acquisition of assets other than those necessary to manage its business shall be executed by the Finance Company unless it has obtained a non-objection letter from SAMA;
           2.The Finance Company may not execute any partial or total liquidation of its business or of the Finance Company itself without a non-objecting letter from SAMA.

      • Part Five : Corporate Governance

        • Article 28

          The Finance Company must comply with corporate governance rules determined by SAMA.

        • Article 29

          The Finance Company shall develop an internal corporate governance rules and implement a specific regulation for corporate governance and provide SAMA with a copy of the regulation after its approval by the Board. The corporate governance code shall at least address the following:

           1.The description of the organizational structure, including all departments and functions and their tasks and responsibilities;
           2.Independence and separation of duties;
           3.Roles of the Board, its committees, and the composition and duties of each.
           4.Remuneration and compensation policies;
           5.Conflict of interest controls;
           6.Integrity and transparency controls;
           7.Compliance with applicable laws and regulations;
           8.Methods for securing confidentiality of information;
           9.Fair dealing; and
           10.Protection of Company’s assets.

        • Article 30

          The Board must form specialized committees to expand the scope of work in the areas requiring special expertise, including at least an audit committee and a risk management and credit committee, and shall grant those committees the necessary powers to perform their work and monitor their performance.

      • Part Six: Internal Organizing

        • Article 31

          The Finance Company must establish appropriate written organizational policies, that includes work manuals and workflow procedures. Those policies must be kept up to date on a regular basis and they must be communicated to the concerned staff in a suitable and timely manner. The organizational policies must include rules for at least the following:

           1.The organizational and operational structure, decision making and responsibilities;
           2.Credit granting and operations;
           3.Financial management and accounting;
           4.Marketing and sales;
           5.Information technology and security;
           6.Customer service and collection;
           7.Identifying, assessing, treating, monitoring and disclosing risks;
           8.Internal supervision system;
           9.Internal audit;
           10.Committing to the related laws, regulations and instructions ;
           11.Assigning tasks to external service providers; and
           12.Salaries, bonuses and incentives, including the salaries of members of Senior Management and staff and their motivation and remuneration of the Board and its committees.

        • Article 32

          It is prohibited in the Finance Company to combine an executive function such as financing or hedging and oversight function such as internal auditing or accounting tasks. A separation of functions must be adopted in a manner that ensures the application of the generally accepted policies, procedures, and technical standards, to protect the Finance Company’s assets and funds, and avoid fraud and embezzlement.

        • Article 33

           1.The Finance Company’s technical facilities and related systems must be adequate according to industry standards for the Finance Company’s operational needs, the nature of its activities, and risk situation.
           2.Information technology systems and the related processes must be designed in a manner that ensures data integrity, availability, authenticity and confidentiality. Information technology systems and the related processes must be assessed on a regular basis in accordance to the general accepted technical standards and tested before they are used for the first time and after any changes have been made.
           3.The Finance Company must establish a business continuity plan for emergency cases that ensures an alternative solution to re-operate in an appropriate period of time.

        • Article 34

          All business documents, records and files must be kept in an orderly, transparent and safe manner by the Finance Company. They must be kept up to date and completed and retained for at least ten years from the date of termination of the client’s relationship.

        • Article 35

          The Finance Company must have sufficient and eligible staff regarding knowledge and experience in order to fulfill its operational needs, business activities and risks situation. The remuneration and incentives of staff must be fair and aligned with the Finance Company’s risk management strategy and must not create conflicting interests.

        • Article 36

           1.At least (50%) of all employees of the Finance Company must be Saudi nationals when the Finance Company starts operations. The (50%) minimum applies to all departments and organizational levels.
           2.The percentage of Saudi nationals of total human resources shall be annually increased by (5%) of all employees until (75%) has been reached. SAMA may determine the minimum required annual increase thereafter.
           3.Recruitment of non-Saudis in the Finance Company shall be limited to jobs that require expertise not available in the Saudi labor market. In all cases, the Finance Company must obtain a non-objection letter from SAMA before appointing any non-Saudi employee in supervision departments provided that the Company has proved the lack of Saudis for the vacant position.*

          * This paragraph has been amended in accordance with His Excellency the Governor's Decision No. 72/M SH T, dated 20/06/1440H.

      • Part Seven: Outsourcing

        • Article 37

           1.The Board must issue a written policy regulating outsourcing. It must be updated annually. This policy shall include in particular the following: 
            a.Terms of reference and responsibilities of the Board and Senior Management;
            b.Eligibility criteria for outsourcing provider;
            c.Risk identification criteria and risk hedging measures;
            d.Rules for the continuous monitoring and controlling of outsourced operations;
            e.Criteria to identify conflicts of interest, if any, rules and procedures which ensure safeguarding the interests of the Finance Company and not putting the interest of the other party over the company's interest; and
            f.Procedures to protect information and maintain confidentiality and privacy.
           2.SAMA, the Finance Company, and the external auditor must have the authority to obtain any information or documents related to the work of the outsourcing provider or be examined in the offices of the outsource provider. 
           3.The Finance Company must verify the outsourcing provider’s compliance with the applicable laws, regulations, and instructions. The Finance Company remains responsible in case of the outsourcing provider’s non-compliance with the applicable laws, regulations and instructions in any operations and tasks that are assigned to him. 
           4.The Finance Company must obtain a non-objecting letter from SAMA prior to any outsourcing arrangement that, in case of disruption or other default, may have an impact on the Finance Company’s activities, reputation or financial situation, or if the tasks assigned included transferring, processing or saving the data and information of the Borrowers. In this case, the outsourcing provider may not subcontract these tasks to another provider. 

      • Part Eight: Risk Management

        • Article 38

          The Finance Company must:

           1.Establish a clear written business strategy and a written risk management policy approved and updated annually by the Board. The risk management policy should take into account all relevant types of risks and how to deal with them, taking into consideration all business activities, including operations and tasks that have been outsourced. The risk management policy must include analysis for at least the following risks: 
            a.Credit risks;
            b.Market risks;
            c.Term Cost rate risks;
            d.Incompatibility of assets with liabilities risks;
            e.Exchange rate risks;
            f.Liquidity risks;
            g.Operational risk;
            h.Country risks;
            i.Legal risks;
            j.Reputation risks;
            k.Technology risks.
           2.Establish appropriate procedures to identify, assess, manage, monitor and communicate risks. These processes must be included in a comprehensive risk management framework that ensures the following: 
            a.Early and comprehensive identification of risks;
            b.Assessment of correlations between risks; and
            c.Immediate coordination with Senior Management, the Board, risk and credit management committee and the responsible staff, and where appropriate, the internal audit department.
           3.Establish a risk management function directly reporting to the risk and credit management committee. Risk and credit management committee must raise their views about risk management reporting to the Board. 

        • Article 39

          The Finance Company must prepare a quarterly risk report for discussion by the risk and credit management committee and the Board after review by Senior Management. The report must include as a minimum the following:

           1.A comprehensive overview of the risk development and performance of financial positions that incur market price risks, as well as any instances in which the limits have been exceeded;
           2.Changes to assumptions or parameters which form the basis of risk assessment procedures;
           3.The performance of the Finance portfolio by activity, risk class and size and collateral category;
           4.The extent of limits granted and external credit lines; Large Exposures as defined in Article 55 of this Regulation and other significant Exposures, such as default Finance, must be listed and commented on;
           5.Analysis of the conditions in which the Finance Company exceeded the limits and the reasons thereof, the scale and development of new business, and Finance Company’s risk provisioning; and
           6.Any major Finance decisions which deviate from the strategies or policies of the Finance Company.

        • Article 40

          The Finance Company must submit to SAMA the report referred to in Article (Thirty-Nine) of this Regulation, after being discussed and approved by credit and risk management committee and the Board, along with the decisions made in this regard.

      • Part Nine: Compliance

        • Article 41

          The Finance Company must comply with applicable laws, regulations and instructions. It must also take the necessary measures and procedures to avoid breaching its provisions.

        • Article 42

          The Finance Company must:

           1.Establish an independent department or a compliance function and assign a head of compliance reporting directly to the audit committee, and the audit committee must raise their views about compliance reports to the Board;
           2.Develop a written compliance policy approved by the Board, which sets out the rights, obligations and responsibilities of the compliance department, as well as compliance programs and related processes of the compliance function. The audit committee must ensure the implementation of the compliance policy, evaluate its effectiveness, update it and propose the necessary amendments to it on an annual basis; and
           3.Take the necessary procedures to ensure that the compliance policy referred to in Paragraph 2 of this Article is adhered to.

        • Article 43

           1.Based on the recommendation of the audit committee, a head of compliance shall be appointed by the Board, after obtaining a non-objecting letter from SAMA thereupon.
           2.The head of compliance acts independently, regarding his tasks and he may not practice any other administrative responsibilities.

        • Article 44

          The head of compliance must submit a compliance report to the audit committee and thereafter to the Board for review on quarterly basis at least. The compliance report must identify the main compliance-related risks facing the Finance Company, analyze existing processes and procedures and assess their viability and, suggest any amendments or changes thereto.

        • Article 45

          The compliance department must have staff and resources commensurate with the business model and size of the Finance Company. Compliance employees must report solely to the head of compliance.

        • Article 46

          The compliance department must ensure the Finance Company’s compliance with applicable laws, regulations and circulars. It has, without limitation, the following tasks:

           1.Identifying and dealing with all compliance risks and monitoring all relevant developments;
           2.Analyses new procedures, policies and operations. and suggesting the procedures to address relevant compliance risks;
           3.Following a risk-based compliance program and including its findings in the report referred to in Article 44 of this Regulation;
           4.Collecting compliance complaints and formulates written guidance for staff, where necessary;
           5.Drafting internal policies and procedures to combat financial crimes, such as money laundering and terrorism financing;
           6.Monitoring compliance with all applicable anti-money laundering and anti-terrorism financing laws, regulations, and rules;
           7.Promoting awareness of compliance issues and providing training for employees on compliance related matters through periodic programs; and
           8.Reporting any irregularities and/or violations promptly to SAMA and the Audit Committee.

        • Article 47

          The Finance Company must develop internal policies and procedures of anti-financial crimes, specifically money laundering and financing terrorism. Therefore, the standards of (Know Your Client) should be applied and taking the necessary actions to report to the financial investigation unit of any suspected activities or processes.

      • Part Ten: Internal Audit

        • Article 48

           1.The Finance Company must establish an internal audit department reporting directly to the audit committee. The internal audit department shall be independent in performing its duties, and its employees shall not be assigned any other responsibilities.
           2.The internal audit department manages and assesses the internal control system and to assure the extent to which the company and employees, comply with the applicable laws, regulations, circulars and Finance Company’s policies and procedures, whether outsourced or not. The internal audit department must have full and unlimited access to information and documents.

        • Article 49

          The internal audit department shall operate according to a comprehensive audit plan, approved by the audit committee and updated on an annual basis. Major activities and operations, including those related to risk management and compliance, must be audited annually.

        • Article 50

           1.The internal audit department must prepare and submit to audit committee a written report on its work at least quarterly. This report must include the scope of the audit, all findings and recommendations. It must also include the procedures taken by each department in respect of the findings and recommendations of the previous auditing and any related observations, especially if they have not been settled on time and the reasons for their unsettlement.
           2.The internal audit department must prepare and submit to the audit committee a written general report on all audits in a fiscal l year, compared with the approved plan and stating any gaps or deviation from the plan, if any. This report shall be submitted within the first quarter following the end of the relevant fiscal year.

        • Article 51

          The Financing Company shall maintain the working documents and audit reports that, show in a transparent manner the work carried out, as well as findings and recommendations and what has been accomplished regarding these recommendations.

      • Part Eleven: Finance Policies and Procedures

        • Chapter One: Finance Policies

          • Article 52

             1.The Finance Company shall define written Finance policies setting out rules and procedures for granting Finance, including but not limited to, classification of credit worthiness, procedures for dealing with, deteriorating credit rating and default Finance, types of accepted collaterals, methods for calculating their values, monitoring, administration and enforcement of collateral, and risk provisioning.
             2.All Finance policies and all amendments to policies must be approved by the Board and submitted to SAMA by the Finance Company.

        • Chapter Two: Exposure Limits

          • Article 53

            Exposure includes the value of all assets that subject to any credit risks, including but not limited to, Finance Agreements; securities; and advanced payments to other entities and clients; all commitments or other obligations to grant Finance or to make a payment or deliver assets to a third party with a right of recourse against a client or another third party, equity, participating interests and assets in respect of which the Finance Company is the lessor.

          • Article 54

             1.The aggregate finance amount offered by a Finance Company shall not exceed five times the capital and reserves for Finance Companies carrying out real estate finance activities and three times the capital and reserves for Finance Companies carrying out other finance activities, unless a non-objection letter from SAMA is obtained.
             2.SAMA may increase the limit on the aggregate finance amount offered by a Finance Company to the extent it deems appropriate, taking into account the financial position of the Finance Company, its performance and the market conditions.

            This article has been amended in accordance with His Excellency the Governor's Decision No. 72/M SH T, dated 20/06/1440H.

          • Article 55

             1.The aggregate of Large Exposures must not exceed the paid-up capital and reserves of the Finance Company unless the Finance Company has obtained a non-objecting letter from SAMA.
             2.The Finance Company may not incur an Exposure to a Borrower of (10%) or more of its paid up capital and reserves or an Exposure to a group of Borrowers where one of them has direct or indirect control over the other members of the group of (25%) or more of its paid up capital and reserves, unless it has obtained a non-objecting letter from SAMA thereupon.

          • Article 56

             1.Any of the following is a related party for the purposes of this Regulation: 
              a.Any member of the Board or its committee;
              b.Any member of Senior Management;
              c.Any person directly or indirectly holding or controlling (5%) or more of the capital or voting rights of the Finance Company, and any entity in which such person directly or indirectly holds or controls (5%) or more of the entity’s capital or voting rights;
              d.Any person directly or indirectly holds or controls (5%) or more of any class of securities that give their holders the right to a share of the profits or income of the Finance Company;
              e.Any entity in which the Finance Company directly or indirectly holds or controls (5%) or more of the shares or interests or voting rights; and
              f.Any ancestor or descendant up to the second degree, or spouse of any of the persons listed in the preceding Subparagraphs (a) through (d).
             2.In accordance with Article 12 of the Law, the Finance Company may incur an Exposure to a related party only on a commercial basis and after obtaining sufficient collateral so that the Finance may not exceed (60%) of the collateral, and if the Finance is more than (500,000) five hundred thousand riyals, there must be a consensus decision of the Board to do so. 
             3.The Finance Company may not incur an Exposure to a related party of (10%) or more of its paid-up capital and reserves without obtaining a non-objecting letter from SAMA. In all cases, the aggregate of all Exposures to related parties must not exceed (50%) of the paid-up capital and reserves of the Finance Company. 
             4.The Finance Company must not incur any Exposure to a related party that either directly or indirectly holds or controls (25%) or more of the shares, interests or voting rights in the Finance Company or in which the Finance Company holds or controls directly or indirectly (25%) or more of the shares, interests or voting rights. 
             5.The Finance Company must not incur an Exposure to any of its employees that is not a related party in excess of four months’ salary of such employee, except through Finance programs organized by the company for its employees, approved by the Board and after obtaining a non-objecting letter from SAMA. 
             6.Without prejudice to the public and private rights prescribed by laws, any Board member of the Finance Company or any external auditor who receives Finance in breach of any of sections (1/b), (1/c), or (1/d) of Article 12 of the Law, shall be deemed dismissed from the date of receiving the Finance, and the Finance Agreement in this case shall be deemed void. 

        • Chapter Three: Finance Procedures

          • Article 57

             1.The Finance Company must, upon the approval of the Consumer verify his credit record to confirm his solvency, repayment capacity and credit conduct. The confirmation of such must be documented in the Finance file.
             2.The Finance Company must, upon the approval of the Borrower, register his credit information at one or more of the companies licensed to collect credit information in accordance to the relevant laws, regulations and instructions. Such information shall be updated throughout the period for dealing with the Borrower.
             3.The Finance Company must decline the Finance request in case of the absence of obtaining an approval from the Consumer or Borrower, specified in paragraphs 1 and 2 of this Article.

          • Article 58

             1.The Finance Company shall administrate levels for granting Finance shall be determined based on the type and Amount of Finance, including defining Finance types that require the approval of more than one person and the decision for acceptance or refusal of the Finance shall be subject to the powers granted for each administrative level. 
             2.The Finance Company must obtain a non-objecting letter from SAMA before extending any of the following: 
              a.Finance to a foreign Borrower that is not a resident in the Kingdom.
              b.Finance in a currency other than the Saudi riyal.

          • Article 59

             1.The Finance Company must follow a scientific method and a written, transparent and clear standards and procedures to asses credit worthiness of the applicant for the Finance and his ability to repay, according to the best practices in this field, and the Board must approve these standards and procedures and review them at least once every two years, and updating them if necessary. The Finance Company must apply these procedures before granting Finance and it shall be documented in the Finance file.
             2.Risks related to an Exposure must be evaluated and classified before the Finance decision is made. The risk classification must be reviewed at least annually.
             3.The Finance Company must define procedures for the early detection of risks to signal out Finance that show signs of increased risk and develop quantitative and qualitative indicators for the early identification of risks.

          • Article 60

             1.In accordance with the policy and procedures of risk management, approved by the Finance’s Company Board, the Finance must be by collaterals
             2.All collateral must be enforceable and capable of valuation in order to be acceptable. Personal guarantees must be evaluated based on the net assets and/or net earning of the guarantor.*
             3.The value and legal validity of collateral must be assessed prior to the granting of the Finance.
             4.If the value of the collateral is dependent to a substantial degree on the financial situation of a third party or fluctuations and conditions of the market, the collateral must be evaluated on a regular basis, and the procedures stated in the agreement to strengthen those collateral shall be taken when its value decreases. The counterparty risk of the third party must be reviewed as appropriate.
             5.Decisions of the collateral and reserve risks must be made by the control function.

            * This paragraph has been amended in accordance with His Excellency the Governor's Decision No. 72/M SH T, dated 20/06/1440H.

          • Article 61

            In exception to the provisions of Article 60 of this Regulation, the Finance Company may grant Finance without a collateral, if the following applies:

             1.The total Amount of Finance received by the Borrower, without collateral does not exceed (100,000) one hundred thousand Saudi riyal based on the data of the Borrower’s credit record.
             2.The Borrower has no history of un-settled debt, conflict or a standing credit lawsuit, insolvency, bankruptcy or liquidation through the past ten years, or checks without balance by him through the past five years, based on the data of the Borrower’s credit record.
             3.The Borrower must not be a related party.

          • Article 62

            The Finance Company must make provisions for contingent losses and risks in accordance with International Financial Reporting Standards. SAMA may require that the Finance Company to make an additional provision or more for contingent losses and risks.

          • Article 63

             1.The Finance Company must define cases in which an Exposure requires special Observation; these Exposures shall be reviewed on an ongoing basis to determine whether further actions may be required. There must be clear rules determining when a Finance must be transferred to personnel specializing in restructuring, scheduling or winding up.
             2.The Finance Company must define criteria for assets value reduction, provisioning Standards including country risks provisioning, taking into account of the International Financial Reporting Standards, and ensure that these are applied consistently.

      • Part Twelve: Account and Deposits

        • Article 65

          The Finance Company must not accept term deposits or non-banking credit facilities or similar or open any type of accounts to its clients unless a non-objecting letter from SAMA is obtained.

      • Part Thirteen: Trading Securities

        • Article 66

          Without prejudice to Paragraph 3 of Article 11 of the Law, the Finance Company shall not own securities such as stocks, bonds, SUKUK and derivatives except in the following cases:

           1.As part of a Finance transaction where the purpose of the transaction is to grant Finance to the Borrower;
           2.To invest cash in hand, through local commercial banks deposits or through debt instruments that are approved by SAMA;
           3.To hedge an existing Term Cost risk Exposure; and
           4.To hedge an existing currency risk Exposure.

      • Part Fourteen: Refinancing

        • Article 67

           1.In accordance with the provisions of Article 14 of the Law, the Finance Company may issue securities only after obtaining a non-objecting letter from SAMA.
           2.The Finance Company may not dispose finance assets or rights arising therefrom in any form except in accordance with the rules issued by SAMA in this regard.*
           3.The Finance Company must comply with the rules and instructions issued by SAMA in this regard.

          * This paragraph has been amended in accordance with His Excellency the Governor's Decision No. 72/M SH T, dated 20/06/1440H.

        • Article 68

          The Finance Company may not be financed by a foreign lender or in a currency other than Saudi Riyal unless a non-objecting letter from SAMA is obtained.

      • Part Fifteen: Structural Changes

        • Article 69

          The Finance Company must obtain a non-objecting letter from SAMA before appointing persons in the following functions and tasks:

            a.Membership of the Board and its committees.
            b.Managing director, chief executive officer, general manager, their designees, financial manager and directors of the key departments, or their designees.
            c.Managers of control functions, such as internal audit, risk management and compliance, or their designees.

        • Article 70

          The Finance Company must immediately notify SAMA of:

           1.Any retirement of any member of the Senior Management or revocation of such authorization;
           2.Losses exceeding (15%) of the paid-up capital of the Finance Company;

      • Part Sixteen: Accounts

        • Article 71

          The Finance Company must apply international accounting standards in the preparation of their accounts and financial statements.

        • Article 72

           1.The Finance Company must provide SAMA with its audited annual financial statements, auditor’s report, and the Boards report at least five business days before its publishing date.
           2.The Finance Company must provide SAMA with its quarterly financial statements and auditor’s report at least five business days before its publishing date.

        • Article 73

          Without prejudice to the requirements of other laws, the Finance Company must establish a website on the World Wide Web (the Internet) and publish its annual financial statements and reports including the following:

           1.Statement of financial postions;
           2.Income statement;
           3.Cash flows statement; and
           4.Boards report.

      • Part Seventeen: Audit and Inspection

        • Article 74

           1.The Finance Company must obtain a prior non-objecting letter from SAMA before appointing an external auditor. SAMA has the right to require the Finance Company to appoint another auditor if the size and nature of the company’s operation so requires. 
           2.SAMA may require the Finance Company to replace its external auditor or may appoint another external auditor at the expense of the Finance Company in any of the following cases: 
            a.When necessary due to the size or the nature of the business;
            b.The external auditor has committed a breach of professional obligations;
            c.There is a reason to believe that the external auditor has a conflict of interest; or
            d.When necessary for the protection of the Finance sector or governance considerations and the protection of shareholder’s interest.
           3.The external auditor must report to SAMA immediately all facts of which he obtains knowledge in the course of an audit and which: 
            a.Might justify the reservation in the audit report or refrain from expressing opinion;
            b.Jeopardize the existence of the Finance Company;
            c.Seriously impair the Finance Company’s development, or
            d.Indicate that the managers have breached any laws, regulations, instructions applicable in the Kingdom of Saudi Arabia or the by-laws of the Finance Company.
            e.Terminate the agreement before it ends with the reasons thereupon.
           4.SAMA may require the external auditor to explain his report or to reveal other facts that may have come to his attention during the audit which indicates any violation of the laws, the regulations, the instructions or the by-laws of the Finance Company. 

        • Article 75

          1.The Finance Company, its Board members, and employees must provide all information and documentation concerning the Finance Company, its business, its shareholders, and its personnel, that SAMA may request at any time.

          2. SAMA has the right to inspect the records and accounts of the Finance Company, through SAMA’s personnel or by auditors appointed by SAMA, provided that the inspection shall be at the Finance Company’s premises.

          3.The Finance Company and its employees shall facilitate the task of whom SAMA appoints for inspection and cooperate with them particularly as follows:
            a.Provide the inspector with the Finance Company’s records, accounts, and documents that he deems necessary to perform his task;
            b.Provide information and explanations as required by the inspector.
            c.Disclose any violations or irregularities in the Finance Company’s operations to the inspector at the beginning of his mission.
            d.Adhere to the recommendations and instructions given by SAMA to the Finance Company to address the uncovered observations through the inspection’s rounds.
          4. The Finance Company and any of its employees may not hide or attempt to hide any information or irregularities or fail to provide any clarifications requested by the appointed inspector or neglect to provide him with requested information and documents on time.
          5. SAMA’s employees in charge of the supervision, control, and inspection shall not be vulnerable to any claims as a result of performing their duties.

        • Article 76

           1.Every violation of the provisions of the Law and the Regulation or the non-compliance to any of the rules or circulars issued by SAMA is a violation related to the professional irregularity referred to in Article 29 of the Law; 
           2.every violation that endanger the shareholders of the Finance Company or their creditors as referred to in Article 29 of the Law, is as follows: 
            A.There is a material adverse change in the business, or in the financial or legal or administrative situation of the Finance Company that might endangers its existence or its ability to pay its debts as they fall due;
            B.The Finance Company incurs a loss amounting to one-half of its paid- up capital;
            C.The Finance Company incurs a loss amounting to more than (10%) of its paid-up capital in each of at least four consecutive fiscal years; or

        • Article 77

          The Finance Company must reimburse all costs of a third party appointed by SAMA as a consequence of procedures taken under this Part.

      • Part Eighteen: Consumer Protection in Finance Services

        • Article 78

          Finance Agreements must be drawn up on paper or electronically between the Finance Company and the Borrower and each contracting party must receive a copy of the Finance Agreement. The Finance Agreement must include at least the following data and information:

           1.Names of the parties of Finance Agreement, No of ID or Iqama or Borrower’s CR, as the case may be, their official addresses, means of contact including mobile numbers and e-mails, if available.
           2.Type of Finance;
           3.Term of the Finance Agreement;
           4.Amount of Finance;
           5.Conditions to drawdown the Amount of Finance if available;
           6.The description of price determination formula in Finance Agreements with variable Term Cost in order to enable the consumer to understand the Term Cost, and distribute the cost on the fulfillment period;
           7.Term Cost, the conditions governing the application of the Term Cost and any index or reference rate applicable to the initially agreed Term Cost, as well as the periods, conditions and procedures for changing the Term Cost;
           8.Annual Percentage Rate;
           9.Total Amount Payable by the Borrower, calculated at the time of concluding the Finance Agreement; the assumptions used in order to calculate that amount must be mentioned;
           10.The amount of Installments payable by the Borrower and their number and duration, and the method of distributing them on the remaining amounts, in case of fixed Term Cost. Three examples of Installments amount in consideration to the preliminary Term Cost and two higher and lower costs in case of variable Term Cost.
           11.Fees, commissions and costs of administrative services;
           12.Periods of fees payments or money that needs to be repaid without the payment of the Amount of Finance and the conditions of the payment;
           13.Implications of the delayed Installments payment;
           14.Documentation fees, if necessary,
           15.Necessary guaranty and insurance;
           16.Account number for depositing Finance Installments and the name of the bank.
           17.Right of withdrawal procedures, if available, and its conditions and the financial obligations of its practice;
           18.The procedures of early repayment and indemnity procedures for the Finance Company, if applicable, and the method for determining such indemnity;
           19.Procedures for dealing with collaterals in case of decreasing, if available,
           20.Procedure to be followed in exercising the right of termination of the Finance Agreement;
           21.The Borrower’s permission to insert his information in the credit record;
           22.Any data or information stipulated by SAMA.

        • Article 79

          The Finance Agreement shall bear on its forefront a summary containing the basic information of the Finance product and the main provisions of the Finance Agreement in a clear language for the Borrower, in accordance with the model determined by SAMA and documenting the receipt of this summary by the Borrower in the Finance file.

        • Article 80

          If permitted by Finance Agreement, the Finance Company must inform the Borrower in writing of any change in the Term Cost before the change enters into force in the duration of no less than two months, if the Finance Agreement allows such change. Company must also inform the Borrower, via the official addresses agreed upon on the Finance Agreement, of the amount of Installments to be paid under the new Term Cost and the details concerning the number of Installments or their duration if changed.

        • Article 81

           1.The Annual Percentage Rate is the discount rate at which the present value of all Installments and other payments that are due on the Borrower, representing the Total Amount Payable by the Borrower, equals the present value of the payments of the Amount of Finance available to the Borrower, calculated on the date on which the Amount of Finance or the date the first payment is available to the Borrower,. Calculated by the following equation:
          m is the last payment of the Amount of Finance to be received by the Borrower. d is the payment to be received by the Borrower from the Amount of Finance. Cd is the payment value of (d) to be received by the Borrower from the Amount of Finance.
          Sd the period between the date on which the Amount of Finance or the first payment is available to the Borrower and the date of payment (d), calculated in years and parts of the year, and so that this period of first payment received by the Borrower from the Amount of Finance is zero (s1=0) n is the last payment payable by the Borrower.
          p is the payment payable by the Borrower.
          Bp is the payment value (p) payable by the Borrower.
          Tp the period between the date on which the Amount of Finance or the first payment is available to the Borrower and the date of the payment (p) to be received from the Borrower, calculated in years and parts of the year.
          X is the Annual Percentage Rate.
           
           2.For the purpose of calculating the Annual Percentage Rate, the periods between the date on which the Amount of Finance or the first payment is available to the Borrower and the date of every payment received or payable by the borrower shall be calculated on the basis of (12) months or (365) days a year.
           3.For the purpose of calculating the Annual Percentage Rate, the Total Amount Payable by the Borrower must be specified including fees, commissions and costs that cannot be avoid by the Borrower, with the elimination of costs or fees payable by the Borrower due to his breach to any of his obligations contained in the Finance Agreement.
           4.It is a must to calculate the Annual Percentage Rate, assuming validity of Finance Agreement for the agreed period of time and both parties commitment to their obligations according to the conditions contained in the Finance Agreement.
           5.In accordance with Paragraph 10 of Article 78 of this Regulation, in the case of Finance Agreement containing clauses allowing variations in the Term Cost and fees contained in the Annual Percentage Rate which cannot be calculated, the Annual Percentage Rate must be calculated on the assumption that the Term Cost and other charges remain fixed in relation to the initial Term Cost and remain applicable until the end of the Finance Agreement.
           6.The Annual Percentage Rate must be calculated and expressed in percentage points as a decimal fraction, with the fractional portion rounded to two digits and the basic half point or more rounded to full point.

        • Article 82

          The Finance Company must use the declining balance method in distributing the Term Cost on the maturity period, whereas the Term Cost is distributed proportionally between Installments on the basis of the balance value of the remaining Amount of Finance at the beginning of the Installment maturity period, and including it in the Finance Agreement.

        • Article 83

          All fees, commissions and administrative services charges to be recovered from the Borrower by the Finance Company shall not exceed the equivalent of (1%) of the Amount of Finance or (5,000) Five thousand Saudi riyals whichever is less,

        • Article 84

           1.The Borrower may accelerate the payment of the rest of the Amount of Finance, at any time, and he may not pay the Term Cost of the remaining period. The Finance Company may be compensated for the following: 
            a.The cost of re-investment, but not exceeding the Term Cost for the following three months of payments, calculated on the basis of the declining balance; and
            b.Payments from the Finance Company to a third party due to the Finance Agreement of expenses stipulated therein, if they are irrecoverable expenses, for the remaining term of the Finance Agreement.
           2.An exception to the provisions of Paragraph 1 of this Article, the real estate Finance Agreement may stipulate a period of time which early payment is prohibited, provided that it does not exceed two years from the date of concluding the real estate Finance Agreement. 

        • Article 85

           1.In the event of the Finance Company assigns its rights to a third party or the Finance Agreement itself, to a third party or issuance of securities against the rights arising out of the Finance Agreement, the Borrower is entitled to use against the assignee any defense available to him against the original Finance Company.
           2.The Finance Company shall receive a non-objecting letter from SAMA, before assigning the services related to the Finance to another party.

        • Article 86

           1.The Finance Company shall indicate in all product advertisements: its name, logo, any identifying representation and contact details. 
           2.The advertisement shall disclose, in a manner that is clear to the Consumer, the name and Annual Percentage Rate of the advertised product and shall not include other rates of the Term Cost. 
           3.The Finance Company may not do any of the following: 
            a.Provide an advertisement that includes a false offer, statement, or a false claim expressed in terms that would directly or indirectly deceive or mislead the Consumer.
            b.Provide an advertisement that includes the unlawful use of a logo, a distinctive mark, or a counterfeit mark.
           4.SAMA may oblige any Finance Company that does not abide by the provisions of this Article to withdraw the advertisement within one working day of SAMA’s notice. 

        • Article 87

          The Finance Company shall establish a function and designate staff to address complaints, and put in place clear procedures for receiving, documenting, studying, and responding to Borrowers’ complaints within a period not exceeding (10) business days from the date of receiving the complaint. All necessary details of Borrowers’ complaints and actions taken thereon shall be entered in a complaints registry.

        • Article 88

           1.The Finance Company and its employees shall maintain the confidentiality Of clients’ data and transactions, and may not disclose or expose them to other parties, except in accordance with the related laws and instructions.
           2.The Finance Company employees are prohibited from disclosing any information about the Company’s clients and transactions obtained through their work, even after leaving the Finance Company. It is also prohibited to hold any of this information after resigning.
           3.The Finance Company shall take all necessary measures to ensure confidentiality of the clients’ information and transactions.

      • Part Nineteen: Finance Support Activities

        • Article 89

          No one other than licensed Finance Companies shall carry out a Finance support activity or more, such as marketing Finance products or collecting the debts of the Finance Company, except after obtaining a license in accordance with the rules issued by SAMA in this regard.

      • Part Twenty: Control, Investigation and Prosecution Procedures

        • Article 91

           1.The provisions of this part shall apply to violations and cases of public rights arising out of implementation of the Law and the Regulation.
           2.Criminal Procedures, the Bureau of Investigation and Public Prosecution and the general rules applicable in the Kingdom of Saudi Arabia.

        • Article 92

          SAMA’s employee that is in charge of control, investigation and prosecution procedures shall:

           1.Be a Saudi national;
           2.Be of a good conduct;
           3.Have not been sentenced of a breach of trust offence or a crime involving moral turpitude, unless rehabilitated.
           4.Hold a bachelor degree;
           5.Have passed the professional examination approved by SAMA .

        • Article 93

           1.Control, investigation and prosecution personnel shall receive notices, collect information, and control necessary evidences for investigation and point accusation.
           2.Control, investigation and prosecution personnel may seek assistance from criminal investigation employee if necessary.
           3.Control, investigation and prosecution personnel may benefit from specialists either as individuals or companies when conducting their survey, examination, seizing materials connected with violations. The duty of such individuals and companies shall be confined to showing places and materials that requires search and capturing during investigation
           4.The Governor shall issue the rules, procedures and permissions for the work of the staff of control, investigation and prosecution.

        • Article 94

          The control, investigation and prosecution staff, law enforcement personnel, experts and specialists assisting them shall not disclose the confidential information, which they come across in the course of their work even after quitting the service.

        • Article 95

          Criminal lawsuit shall be referred to the Committee for Settlement of Finance Violations and Disputes by the Governor or his deputy.

        • Article 96

          SAMA shall refer crimes and violations that are not within its jurisdiction to the body concerned with investigation and prosecution.

        • Article 97

          SAMA may exempt Finance Companies from some of the provisions in this Regulation without prejudice to the provisions of the Law and as required by the conditions of the sector.

          This Article has been added pursuant to His Excellency the Governor's Decision No. 66/M SH T, dated 09/07/1439H.

        • Article 98

          Compliance with Articles (78, 79, 81, 82, 83 and 84) of the Implementing Regulation of the Finance Companies Control Law is optional when dealing with small, medium and large enterprises.

          This article has been added pursuant to His Excellency the Governor's Decision No. 72/M SH T, dated 20/06/1440H.

        • Article 99

          Companies and establishments engaging in finance activities in the Kingdom of Saudi Arabia prior to the Law’s entry into force must provide SAMA, within the first nine months of the period prescribed in Article (36) of the Law, with their plan to correct their situation according to the Law or a plan to exit the market.

        • Article 100

          A committee, or more, will be formed by a decision of the Governor to be responsible for presenting the proposals and recommendations necessary to develop the finance sector.

        • Article 101

          The necessary rules and instructions for the implementation of regulatory and supervisory requirements of the finance sector shall be issued by a decision of the Governor.

        • Article 102

          This Regulation comes into effect as of the date of its publication on the official gazette.

    • Real Estate Finance Law

      No: M/50 Date(g): 3/7/2012 | Date(h): 14/8/1433Status: In-Force

      • Introductory Chapter: Definitions

        • Article 1

          The following terms and phrases – wherever mentioned in this Law – shall have the meanings assigned thereto unless the context requires otherwise:

          Law: Real Estate Finance Law.

          Regulation: Implementing Regulation of this Law.

          Minister: Minister of Finance.

          SAMA: Saudi Central Bank*.

          Ministry: Ministry of Housing.

          Real Estate Finance Contract: A deferred payment contract extended to a borrower to own a dwelling.

          Borrower: A natural person who obtains real estate finance.

          Real Estate Finance Entities: Commercial banks and finance companies licensed to engage in real estate finance activities.

          Consumer: Any person targeted by real estate finance services.

          Subsidy-Eligible Individual: A Saudi natural person with income not exceeding the limit proposed by the Minister from time to time and approved by the Council of Ministers.

          Housing Societies: Charitable organizations and institutions licensed under applicable laws to provide housing to persons unable to afford it.

          Primary Market: Real estate finance contracts entered into between the borrower and the real estate finance entities.

          Secondary Market: Trading of finance entity's rights arising from primary market contracts.

          * The Saudi Arabian Monetary Agency was replaced by the name of Saudi Central Bank in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.

           

      • Chapter 1: Supervision and Licensing

        • Article 2

          SAMA shall regulate the real estate finance sector, including the following: 
           
          1.Notwithstanding Article 10(5) of the Banking Control Law, allow banks to engage in real estate finance activities through the ownership of dwellings for finance purposes, in accordance with this Law and its Regulation.
           
          2.License real estate finance companies in accordance with this Law and the Finance Companies Control Law.
           
          3.License a joint stock company (or more) for real estate refinance according to market needs. The Public Investment Fund may become a co-owner of such company. SAMA shall approve nominations for board membership. Licensed finance entities may also become co-owners of such company. A portion of the shares of the company shall be offered to the public in accordance with the Capital Market Law.
           
          4.License cooperative insurance companies to cover real estate finance risks in accordance with the Cooperative Insurance Companies Control Law.
           
          5.Issue real estate finance standards and procedures, review real estate finance contract templates issued by the real estate finance entities and ensure their compliance with such standards and procedures for the required protection to consumers and borrowers.
           
          6.Publish data related to the real estate finance market and sponsor development of real estate finance technologies, including technologies to facilitate the flow of data between primary and secondary markets.
           
          7.Determine the principles for the disclosure of finance cost and method of its calculation to enable consumers to compare prices.
           

        • Article 3

          Real estate finance entities shall engage in real estate finance activities in a manner not conflicting with Sharia principles, based on decisions made by Sharia committees referred to in Article 3 of the Finance Companies Control Law and without prejudice to the integrity and equity of the financial system.

        • Article 4

          The Ministry of Commerce and Industry, the Ministry of Justice and the Ministry shall regularly publish, each within their jurisdiction, information related to the real estate market in accordance with market needs and as determined by the Regulation.

        • Article 5

          Real estate registration agencies (courts and notaries public) must enable licensed real estate finance entities to access their real estate records in accordance with the Regulation as agreed upon with the Ministry of Justice.

        • Article 6

          Real estate finance entities and real estate re-finance companies may insure against real estate finance risks through cooperative insurance in accordance with the provisions of the Regulation.

        • Article 7

          The borrower shall have a credit record with one of the service providers licensed pursuant to the Credit Information Law in which his credit history throughout the finance period shall be noted. The Regulation and SAMA’s instructions shall specify the minimum retention period of the borrower's record and data therein during the finance period.

      • Chapter 2: Government Subsidy

        • Article 8

          The Real Estate Development Fund shall allocate a portion of its approved budget as guarantees and aid to subsidize real estate finance for the subsidy-eligible individuals and housing societies, as specified by the Regulation.

        • Article 9

          The Government shall guarantee the fulfillment of the financial obligations resulting from the guarantees of the Real Estate Development Fund to subsidize real estate finance within the approved budget allocations of the Fund.

        • Article 10

          Upon a proposal by the Minister, tax incentives for investment in real estate securities may be granted pursuant to a resolution by the Council of Ministers.

      • Chapter 3: Secondary Market of Real Estate Finance

        • Article 11

          Without prejudice to the provisions of Article 3 of this Law, real estate finance entities may refinance through: 
           
          1.real estate refinance companies, in accordance with the provisions of the Law and the Regulation; or
           
          2.securities, in accordance with the provisions of the Capital Market Law.
           

        • Article 12

          Mortgage transfer procedures in the secondary market of real estate finance shall be exempted from registration fees stipulated in the Real Estate Registration Law.

      • Chapter 4: Jurisdictions

        • Article 13

          The competent court shall settle disputes arising from real estate finance contracts and impose the penalty stipulated in paragraph 1 of Article 35 of the Finance Companies Control Law on any borrower who persists on being in default.

        • Article 14

          SAMA shall draft the Regulation of this Law which shall be issued pursuant to a decision by the Minister within 90 days from the date of issuance of the Law. The Regulation shall become effective upon the Law's entry into force.

        • Article 15

          This Law shall come into force 90 days from its date of publication in the Official Gazette.

    • Implementing Regulation of the Real Estate Finance Law

      No: 1229 Date(g): 20/2/2013 | Date(h): 10/4/1434Status: In-Force

      This Implementing Regulation has been amended in accordance with His Excellency the Minister of Finance's Decision No. (1144) dated 02/06/1443H.

      • Chapter One Definitions and General Provisions

        • Article 1

          The following terms and phrases - wherever they appear in this regulation- shall have the meanings assigned there to, unless the context requires otherwise:

          Law: Real Estate Finance Law.

          Regulation: Implementing Regulation of the Real Estate Finance Law.

          SAMA: Saudi Central Bank*.

          PIF: Public Investment Fund.

          Governor: Governor of SAMA.

          Real Estate Finance: Extending credit to a borrower for the purpose of owning a dwelling.

          Real Estate Finance Contract: A deferred payment contract extended to a borrower to own a dwelling.

          Real Estate Finance Contractual Rights: cash flows, mortgages, collaterals and other rights arising under a Real Estate Finance Contract.

          Transfer of Rights: transfer of a right to recover a debt or execute upon a mortgaged real estate, or any other right arising from a real estate finance contract.

          Sector: Real Estate Finance sector.

          Real Estate Finance Company: a joint stock company licensed to engage in real estate refinance activity.

          Real Estate Finance Entity: Commercial banks and Real Estate Finance companies licensed to engage in Real Estate Finance activity.

          Real Estate Refinance Company: a joint stock company licensed to engage in real estate refinance activities.

          Originator: a Real Estate Finance entity originating a Real Estate Finance Contract

          Borrower: a natural person who obtains Real Estate Finance.

          Consumer: any person targeted by real estate finance services.

          Housing Subsidy: a financial or credit subsidy provided by the government, housing societies, or the like to make housing affordable.

          Real Estate Housing Finance Subsidized Product: a product subsidized by a housing subsidy provider through a real estate finance entity.

          Secondary Market: trading of the rights of real estate finance entities resulting from primary market contracts.

          * The "Saudi Arabian Monetary Agency" was replaced By the "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.

        • Article 2

          SAMA shall, pursuant to Article 2 of the Law, regulate the real estate finance sector. For this purpose, SAMA may:

          1.License real estate finance companies to engage in real estate finance activities in accordance with the provisions of the Law, Finance Companies Control Law and their regulations;
           
          2.Take necessary measures for maintaining the integrity and stability of the sector and fairness of transactions;
           
          3.Take necessary measures for promoting fair and effective competition between real estate finance entities;
           
          4.Issue rules and instructions to regulate the sector; and
           
          5.Take proper means for the development of the sector, Saudization, and raising the employees' competency through regulating the obligations of the real estate finance entities regarding the training of human resources, improving their skills and developing their knowledge.
           

        • Article 3

          A real estate finance entity shall not engage in any activity not licensed by SAMA, including real estate investment, marketing, development and valuation. It may own dwellings for the purpose of financing borrowers, provided that the ownership is a condition for the validity of real estate finance contract and does not create non-finance earnings.

        • Article 4

          1.Insurance against Real Estate Finance risks shall be in accordance with the Cooperative Insurance Companies Control Law and its Implementing Regulation and the instructions issued by SAMA.
           
          2.A real estate finance entity shall disclose, in its annual report, the risks that can be hedged by insurance and manner of dealing with such risks.
           

        • Article 5

          Pursuant to the provision of Article 4 of the Law, the Ministry of Commerce and Industry, the Ministry of Justice and the Ministry of Housing shall compile data relating to real estate market activity and periodically publish such data on their websites including data on sale, lease and mortgage of real estate.

        • Article 6

          Pursuant to the provision of Article 5 of the Law, bodies entrusted with registration of real estate ownership (courts, notaries public and real estate registration and documentation departments) shall grant real estate finance entities access to information recorded in real estate registers in accordance with the following procedures:

          1.The real estate finance entity shall submit an application – in a written or electronic form – requesting access to the information.
                     		 
          2.The real estate finance entity shall attach a copy of the real estate finance license to access the information.
                     		 
          3.The body entrusted with the registration of real estate ownership shall, as the case may be, issue a certificate in the form prepared by the Ministry of Justice that includes the following:
                     		 
           aThe name of real estate owner at the time of submitting the application;
           
           bValidity and integrity of the real estate title deed based on its records or its invalidity – as the case may be – and rights related thereto.
           
           cThe certificate shall be valid for a period not exceeding 30 days from the date of its issuance.
           
          4.The bodies entrusted with the registration of real estate ownership shall provide the required information to the real estate finance entity within a period not exceeding five working days from the date of receipt of the application.
                     		 

        • Article 7

          A real estate finance entity may refinance real estate in accordance with Article 11 of the Law through the following:

          1.Real estate refinance companies licensed by SAMA.
           
          2.Issuance of securities in accordance with the provisions of the Capital Market Law after obtaining a no objection letter from SAMA.
           

      • Chapter Two Real Estate Finance Contract

        • Article 8

          1.A real estate finance entity shall comply with the requirements stipulated in the Law, this Regulation, other related laws and regulations as well as rules and instructions issued by SAMA relating to real estate finance. Real estate finance contracts and products shall comply with the Law and relevant laws, regulations, rules and instructions.
           
          2.SAMA may draft standard real estate finance contracts and real estate finance entities shall comply with such standard contracts unless otherwise provided for.
           
          3.The real estate finance entity shall obtain a no objection letter from SAMA for its real estate finance products before offering such products.
           

        • Article 9

          Subject to the provisions of the Implementing Regulation of Finance Companies Control Law, a written or electronic contract shall be drafted between the real estate finance entity and the borrower, and shall include, at least, the following:

          1.Names of the parties of the real estate finance contract, number of national identity or Iqama (residence permit) of the borrower, their official addresses and contact information including mobile number and electronic mail address, if available;
           
          2.Real estate broker, if any;
           
          3.Term of real estate finance contract;
           
          4.Total amount of real estate finance;
           
          5.Term cost, conditions governing its application, any index or reference rate applicable to the initially agreed upon term cost, as well as duration, conditions and procedures for changing the term cost;
           
          6.Annual percentage rate, calculated in accordance with the provisions of the Implementing Regulation of the Finance Companies Control Law;
           
          7.Total amount payable by the borrower calculated at the time of concluding the real estate finance contract; stating the assumptions used to calculate such amount;
           
          8.Amount of installments payable by the borrower, number and due dates of installments, and manner of distribution of the remaining amount if the term cost is fixed. In case of variable term cost, three examples of installment amount shall be set, taking into account the initial term cost as well as higher and lower term cost;
           
          9.Due dates for payment of fees or amounts other than the finance amount and conditions for such payment;
           
          10.Implications of late payments;
           
          11.Attestation fees, if applicable;
           
          12.Collateral and necessary insurance;
           
          13.Procedures for exercising the right of withdrawal, its conditions and the financial obligations resulting therefrom;
           
          14.Procedures of early repayment, and procedures for compensating the real estate finance entity, if applicable, and manner of determining such compensation;
           
          15.Procedure for exercising the right to terminate the real estate finance contract;
           
          16.Data of the dwelling subject of the real estate finance contract, including the city, district, street, number, type, total land area, constructed area, number of rooms, date of construction and number of title deed;
           
          17.The real estate finance entity's acknowledgement of its verification of the validity of the real estate ownership and the absence of any encumbrances as well as stating its condition;
           
          18.The borrower's acknowledgement of his inspection and acceptance of the real estate, without affecting the responsibility of the real estate finance entity for the verification of the real estate integrity;
           
          19.Bank name and account number for depositing real estate finance installments;
           
          20.Warranty period provided by the real estate developer or contractor of the building and the names of the design consultant and construction consultant as well as their license numbers;
           
          21.Registration number and date of owners association as well as place of registration for a portioned real estate;
           
          22.Time and manner of inspection conducted by the real estate finance entity for the verification of the real estate integrity at least once every three years;
           
          23.The borrower's consent to include the borrower’s information in the credit record;
           
          24.In variable term cost real estate finance contracts, a description of the formula that determines the rate shall be included in a way that enables the consumer to understand the term cost and distribution of the cost over the repayment period; and
           
          25.Any other information or data stipulated by SAMA.
           

        • Article 10

          The real estate finance contract preamble shall include a summary covering the basic information of the finance product and the main provisions of the finance contract in a language clear to the borrower, in accordance with the form stipulated by SAMA. The borrower's receipt of such summary shall be documented in the finance file.

        • Article 11

          The real estate finance entity shall not extend credit on any form of finance exceeding 70 percent of the value of the dwelling subject of the real estate finance contract. SAMA may change such percentage according to prevailing market conditions.

        • Article 12

          The real estate finance entity shall verify the validity of the dwelling title deed subject of the real estate finance contract to ensure the absence of any in rem rights affecting the rights of the real estate finance entity and include an attestation by the competent authority to this effect in the finance file.

        • Article 13

          1.Upon obtaining the consumer’s consent, the real estate finance entity shall review the consumer’s credit record to verify the consumer’s solvency, ability to repay and credit behaviour, and document such verification in the finance file.
           
          2.Upon obtaining borrower's consent, the real estate finance entity shall record the borrower's credit information with one or more companies licensed to collect credit information, pursuant to the provisions of Article 15 of this Regulation and other applicable laws. Such information shall be updated throughout the duration of the relationship with the borrower.
           
          3.The real estate finance entity shall reject the finance application in the absence of the consents specified in paragraphs 1 and 2 of this Article.
           

        • Article 14

          Without prejudice to applicable laws, the credit record of the borrower shall include his personal information including his name, national identification number, place of residence, occupation, marital status, academic qualifications, monthly income, number of dependents and any other information stipulated by SAMA.

        • Article 15

          The real finance contract shall stipulate the right of the real estate finance entity to transfer its rights to third parties on the secondary market without the consent of the borrower, including the right of mortgage and other guarantees.

      • Chapter Three Real Estate Refinance Company

        • Article 16

          1.SAMA shall license one or more companies to engage in real estate refinance activity in accordance with the Law, this Regulation, the Finance Companies Control Law and its Implementing Regulation, provided that:
                     		 
           a.The license be restricted to real estate refinance activities.
           
           b.The capital of the real estate refinance company be not less than five billion riyals.
           
          2.The real estate refinance company shall be subject to the supervision of SAMA in accordance with the Law, this Regulation, the Finance Companies Control Law and its Implementing Regulation and instructions issued by SAMA.
                     		 

        • Article 17

          1.PIF or any entity wholly owned by it shall, upon the initial approval of SAMA, incorporate a joint stock company to be named "The Saudi Real Estate Refinance Company" for real estate refinancing.
           
          2.Upon establishment, the Saudi Real Estate Refinance Company may, after obtaining a no objection letter from SAMA, offer its shares to investors.
           
          3.Upon satisfying legal and supervisory requirements and the approval of SAMA, real estate finance entities may acquire shares of the Saudi Real Estate Refinance Company at fair market value provided that their aggregate shareholding does not exceed 30 percent of the total shares of the Saudi Real Estate Refinance Company. Said acquisition shall be on the date SAMA determines the real estate finance market is stable, and upon the passage of at least five years from the incorporation of the Real Estate Refinance Company.
           
          4.Upon satisfying the conditions set out in paragraph 3 of this Article and obtaining a no objection letter from SAMA, the Saudi Real Estate Refinance Company may offer a portion of its shares to the public, in accordance with the provisions of the Capital Market Law and its Regulation.
           
          5.The shares of PIF or the founding entity of the Saudi Real Estate Refinance Company, fully owned by PIF, shall not, at any time, be less than 51 percent.
           

        • Article 18

          The Real Estate Refinance Company aims to facilitate the trading of real estate finance contracts and the flow of funds thereto in order to:

           a.Provide stability and growth in the secondary market for real estate finance;
                     		 
           b.Provide liquidity to the secondary market and provide better means to real estate finance entities to finance dwelling ownership for borrowers;
                     		 
           c.Increase the liquidity of real estate finance investments and ensure proper distribution of investment capital allocated for real estate finance among different regions and categories; and
                     		 
           d.Become an intermediary between the sector and domestic and foreign finance sources.
                     		 

        • Article 19

          1.To achieve its objectives, the Real Estate Refinance Company may:
           
           a.Acquire, hold and manage any kind of finance obligations or rights related to financed residential real estate;
           
           b.Issue securities in accordance with the provisions of the Capital Market Law upon obtaining a no objection letter from SAMA;
           
           c.Carry out, upon SAMA's approval, any other transactions that serve, complement or support the transactions mandated by its law.
           
          2.The Real Estate Refinance Company may impose charges for its services to cover its costs and expenses and make fair profits in a way that ensures its financial independence. SAMA shall monitor the pricing of the services offered by the Real Estate Refinance Company and may restrict said pricing.
           

        • Article 20

          1.The real estate assets and the rights derived therefrom may be assigned to the Real Estate Refinance Company in refinancing transactions without the prior consent of the borrower, debtor or guarantor:
           
          2.If the Real Estate Refinance Company has paid the agreed upon amount in full to a transferring real estate finance entity, such transfer shall not be revoked or otherwise rescinded in the event of the bankruptcy of the transferring real estate finance entity. The transferred rights shall not be deemed part of the transferor's assets.
           

        • Article 21

          The Real Estate Refinance Company may distribute annual profits pursuant to a decision by its board of directors, upon obtaining a no objection letter from SAMA.

        • Article 22

          1.The Real Estate Refinance Company shall ensure that the volume of its sale and purchase transactions, the prices it pays and its charges do not encourage excessive use of its facilities.
           
          2.The Real Estate Refinance Company shall avert excessive use of its facilities that could adversely affect the prices in the real estate market.
           

        • Article 23

          The Real Estate Refinance Company shall not:

          1.Provide financing to a real estate finance entity using real estate finance contractual rights as collateral before such rights have been transferred to the real estate refinance company as collaterals;
           
          2.Provide real estate finance to borrowers; and
           
          3.Ease real estate finance conditions with the objective of affecting housing prices in a way that is contrary to best practices of credit and risk management.
           

        • Article 24

          The board of directors of the Real Estate Refinance Company shall determine policies and procedures of the Company concerning real estate refinance transactions. Such policies and procedures shall become effective upon obtaining a no objection letter from SAMA.

        • Article 25

          The Real Estate Refinance Company shall prepare and publish annual and quarterly reports on its financial standing, operations, potential risks and management thereof and provide SAMA with such reports. The reports shall include the financial statements compiled in accordance with international accounting standards.

        • Article 26

          The Real Estate Refinance Company shall establish an electronic infrastructure for exchange of information and data with SAMA and real estate finance entities.

        • Article 27

          No natural or corporate person may use the name “The Saudi Real Estate Refinance Company” or any similar name or reference thereto.

      • Chapter Four Real Estate Housing Finance Subsidized Product

        • Article 28

          When subsidizing real estate housing finance product through a real estate finance entity, the subsidy provider shall provide a description for each product to ensure compliance with credit policies, risk management and transaction integrity. Such description shall include the following:

          1.Eligibility criteria;
           
          2.Subsidy amount;
           
          3.Means of finance; and
           
          4.Any other information specified by SAMA according to product type.
           

        • Article 29

          1.The real estate finance entity shall adhere to all credit rules as stipulated by SAMA in dealing with subsidized real estate housing finance products; and
           
          2.The real estate finance entity shall obtain a no objection letter from SAMA prior to providing such product to persons eligible to subsidy, in accordance with the provisions stipulated by SAMA.
           

        • Article 30

          The real estate finance entity shall not offer real estate housing finance subsidized products except pursuant to a resolution by its board of directors.

        • Article 31

          This Regulation shall come into force on the date of its publication in the Official Gazette.

    • Finance Lease Law

      No: M/48 Date(g): 3/7/2012 | Date(h): 14/8/1433

      • Introductory Chapter Definitions

        • Article 1

          The following terms and phrases – wherever mentioned in this Law – shall have the meanings assigned thereto unless the context requires otherwise:

          Law: Finance Lease Law.

          Regulations: Implementing Regulations of this Law.

          SAMA: Saudi Central Bank*.

          Governor: Governor of Saudi Central Bank.

          Contract: Finance lease contract.

          Lessor: A joint stock company licensed to offer finance lease.

          Lessee: A person holding the right to use the leased asset under a contract.

          Producer: Producer of the leased asset.

          Supplier: Supplier of the leased asset.

          Leased asset: Any asset that can be leased whether real estates, movables, rights, services and intangible rights such as intellectual property rights.

          Basic maintenance: The maintenance indispensable to the original asset as per norm.

          Operational maintenance: The maintenance needed for the continuation of the asset's benefit as per norm.

          Contract register: A register for finance lease contracts concluded or executed in the Kingdom, sales contracts resulting from finance lease and any amendments thereto in accordance with the provisions of this Law.

          * The Saudi Arabian Monetary Agency was replaced by the name of "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.

           

      • Chapter One Finance Lease Contract

        • Article 2

          1.The finance lease contract is a contract under which the lessor leases fixed or movable assets, rights, services or intangible rights in the lessor’s capacity as owner or owner of proceeds thereof, or a person able to own or produce such assets, provided that the lessor has obtained such assets for the purpose of leasing them, as a business, to a third party, as specified by Regulations.
           
          2.Without prejudice to provisions governing Real Estate Ownership by Non-Saudis, ownership of leased assets may be conveyed to the lessee pursuant to the provisions of the contract either by stipulating that ownership conveyance is conditional on paying the dues of the contract, paying such dues plus a certain amount, promising to sell for a nominal price, paying the price agreed upon in the contract, paying the value of the leased asset at the time of concluding the sale contract, or by way of gift.
           

        • Article 3

          A written or electronic contract shall be concluded between the lessor and the lessee and shall include information relating to contracting parties, leased asset and its condition, lease amount, payment terms as well as contract terms and conditions. The contract and any amendments thereto shall be registered in the contract register in accordance with the provisions of this Law.

        • Article 4

          Prior to concluding the contract, the lessee may determine the specifications of the asset to be leased with the supplier, producer or contractor. The lessee shall be liable for any consequences resulting from determining asset specifications.

          If such specifications were determined with the approval of the lessor, such specifications shall be binding to the lessor only within the limits of such approval.

        • Article 5

          If the lessor authorizes the lessee in writing to directly receive the leased asset from the supplier, producer or contractor as per the conditions and specifications set out in the contract, such receipt shall be by virtue of a record establishing the conditions of the leased asset. The lessee shall be responsible vis-à-vis the lessor for any information about the leased asset stated in said record. If the supplier, producer or contractor refuses to sign the record, the lessee may refuse receipt of such asset.

        • Article 6

          1.The lessee shall make the agreed lease payments on dates set in the contract regardless to whether the lessee benefits from the leased asset, unless the failure to benefit is caused by the lessor.
           
          2.A condition to advance the maturity dates of future lease payments to be made by the lessee in case of default is permissible, provided such payments do not exceed the number of defaulted payments.
           
          3.Part of the lease payments may be advanced, and the advance lease payments shall be refunded in case of failure to deliver the leased asset or benefit therefrom for a reason not attributed to the lessee.
           

        • Article 7

          1.The lessee shall use the leased asset for the agreed purposes within the ordinary use and shall be responsible for performing the operational maintenance at his own expense according to prevailing technical practices. The basic maintenance shall be performed by the lessor unless agreed to be performed by the lessee. In such case, the basic maintenance shall be limited to wear and tear rather than inherent defect or fault in the leased asset.
           
          2.The lessee shall promptly notify the lessor at his address of any occurrence that prevents whole or partial use of the leased asset, in accordance with the Regulations.
           

        • Article 8

          The lessee may not make any alterations or modifications to the leased asset without a written consent by the lessor. Such consent shall determine the nature and scope of such alterations or modifications and the party responsible for the cost.

        • Article 9

          1.The lessee shall not be liable for loss of the leased asset unless caused by deliberate act or negligence on his part. If such loss is due to deliberate act or negligence on the part of the lessee, he shall be liable to pay the value of the leased asset at the time of loss save for what is covered by insurance.
           
          2.The lessor shall be liable for the consequences of loss if caused by the lessor or by force majeure.
           
          3.The lessor shall be responsible to obtain cooperative insurance on the leased asset and shall not require it from the lessee.
           

        • Article 10

          Tradable securities may be issued against the lessor’s rights in accordance with regulations and rules issued by the Capital Market Authority.

        • Article 11

          The lessee may assign the contract to another lessee upon the lessor's approval. The Regulations shall stipulate provisions governing such assignment.

        • Article 12

          1.The lessor may affix any information to the leased moveable asset to protect it, including the lessor’s name and the contract registration number in the contract register.
           
          2.The lessor, or designee, may inspect the leased asset to ascertain the continuity of possession by the lessee and examine its condition, provided this is not harmful to the lessee as provided for in the Regulations and the contract.
           

        • Article 13

          1.If the possession, operation or management of the asset subject of the contract requires obtaining a license, the lessee may apply to the competent authority to obtain such license based on the registered contract in accordance with the provisions of this Law. The license may be issued in the name of the lessor with an indication that the leased asset is in the possession of the lessee under the contract. This shall be specified in the Regulations.
           
          2.Unless agreed otherwise, the lessee shall bear all statutory fees for obtaining the license and renewal thereof.
           

        • Article 14

          The lessee shall be liable for damages resulting from use of the leased asset.

        • Article 15

          If the lessor sells the leased asset to a third party, ownership of said asset shall be transferred encumbered by the contract.

        • Article 16

          The lessee may not accord rights against ownership of the asset nor pledge it to a third party without the written approval of the lessor.

        • Article 17

          If the leased asset is a moveable asset, it shall remain as such even if it turns into a fixed asset or is attached to a real estate.

      • Chapter Two Contract Register

        • Article 18

          1.Without prejudice to the provisions of the Companies Law, a joint stock company or more shall be incorporated pursuant to a license from SAMA to register contracts. Such joint stock company shall undertake the following;
           
           a-Prepare a register for contracts without prejudice to the provisions of the Real Estate Registration Law;
           
           b-Register contracts which include information on the leased assets and related rights;
           
           c-Disclose contract records to the licensed finance entities upon the written approval of the lessor.
           
          2.Participation in the incorporation and ownership of the contract registration company provided for in Paragraph 1 of this Article shall be restricted to companies licensed to offer finance leasing. SAMA shall regulate increase of the capital of the contract registration company– by new licensed companies joining in the ownership of said company– and distribution of profits subject to Companies Law and Capital Market Law and its Regulations.
           
          3.The Regulations shall regulate procedures for entry into the register of the contract registration company, the title deed of personal properties, other information required for registration, amendment and cancellation procedures, right of disclosure to third parties, retention period, registration information uniformity, exchange and access as well as fees for services offered.
           

        • Article 19

          1-Without prejudice to the provisions governing acquisition of real estates, ownership of the leased assets by the lessor vis-à-vis third parties shall be established by contract registration in accordance with this Law and its Regulations.
           
          2-In the event of securitization, the lessor shall take measures for endorsement in the contract register in accordance with rules and measures set out in the Regulations.
           
          3-Amendments made to the contract, whether to terms or parties thereto, may be invoked against third parties only from the date of endorsement of such amendments in the register.
           

        • Article 20

          Subject to Article 9 of this Law, the lessee shall hand over the leased asset– in the condition agreed upon in the contract – to the lessor upon contract termination, revocation or expiration, unless the lessee opts for ownership of the leased asset subject of the contract.

        • Article 21

          The lessor may stipulate the right to revoke the contract and repossess the leased asset if the lessee defaults in making the due payments in accordance with the Regulations in a manner ensuring fairness between the parties to the contract.

        • Article 22

          1.The contract shall terminate upon total loss of the leased asset.
           
          2.In case of a partial loss of the leased asset that undermines use thereof, and the lessor fails to restore the leased asset to its earlier condition or replace it with a similar asset acceptable to the lessee, the lessee may terminate the contract or agree with the lessor to continue with the contract and amend the rent value in proportion to such loss. In case of contract continuity without change, no payment shall be required for the repair period unless the lessor compensates the lessee during such period with another asset equal to the leased asset.
           
          3.If the lessee is prevented from the full use of the leased asset by an act of a competent authority for a reason not attributed to the lessee, the contract shall terminate and no rent shall be payable as of the date of such prevention.
           
          4.The Regulations shall, upon termination of the contract during the terms of the lease, set the criteria determining the entitlements of each party in an equitable manner according to Sharia principles, taking into account any due insurance compensation.
           

        • Article 23

          The lessee may, in case of bankruptcy declaration of the lessor or liquidation of the business thereof, continue implementing the contract as per its terms or return the leased asset with the approval of the receiver or the liquidator.

      • Chapter Three Violations and Disputes

        • Article 24

          The competent court shall resolve disputes arising from application of the provisions of this Law and its Regulations and shall impose penalties provided for in this Law.

        • Article 25

          1.In case of failure to hand over the fixed leased assets in any of the events specified in this Law, the lessor may request the competent court to issue a ruling to this effect. The court shall decide on such request within a maximum period of 30 days from the date of filing the request.
           
          2.Pursuant to the provisions of this Law, the lessor may repossess movable assets from the lessee in the events where such right of repossession is stipulated in the contract between the two parties. Repossession shall be overseen by specialized firms licensed by the Ministry of Justice in accordance with the Enforcement Law.
           

        • Article 26

          Without prejudice to any severer penalties provided for in another law, any person who conceals the information affixed to the leased asset, alters the marks of the leased asset or the specifications thereof as recorded in the relevant registry, or sells or pledges the leased asset without the written consent of the lessor shall be penalized, depending on the gravity of the violation, with a fine not exceeding one-fourth the value of the leased asset, or imprisonment for a period not exceeding three months, or both.

      • Chapter Four Concluding Provisions

        • Article 28

          This Law shall enter into force after 90 days from the date of publication in the Official Gazette.

    • Implementing Regulation of the Finance Lease Law

      No: 1/MSHT Date(g): 24/2/2013 | Date(h): 14/4/1434Status: In-Force

      • Part One Definitions and General Provisions

        • Article One

          Pursuant to Article 1 of the Law, the following words and phrases, wherever they appear in this Regulation shall have the corresponding meanings, unless the context otherwise indicates:

          Law: the Finance Lease Law.

          Regulation: the Implementing Regulation of the Finance Lease Law.

          SAMA: the Saudi Central Bank*.

          Contract: the finance lease contract.

          Lessor: a joint stock company licensed to carry out finance lease including commercial banks.

          Lessee: a person who owns the benefit of the Leased Asset under the Contract.

          Leased Asset: any leasable property, moveable, benefits, services and intangible rights such as intellectual property rights.

          Contracts Register: a register for recording finance lease contracts concluded or implemented in the Kingdom of Saudi Arabia, sales contracts ensuing from finance lease, and any amendments thereto in accordance with the provisions of the Law.

          Contracts Registration Company: the joint stock company in charge of the registration of the finance lease contracts.

          Securitization: Issuance of securities against Lessor’s rights.

          * The "Saudi Arabian Monetary Agency" was replaced By the "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.

        • Article Two

          In compliance with Article 2 of the Law, the Finance Companies Control Law, and other applicable laws, the finance lease activity shall be a professional activity upon fulfilment of the following:

          1.Acquiring of Leased Asset by the Lessor shall be for the purpose of leasing it to others under a finance lease.
          2.The aggregate amount of credit granted annually exceeds the amount determined by SAMA.

      • Part Two The Contract

        • Article Three

          The Lessee, upon a written consent of the Lessor, may assign the Contract to another Lessee. The Lessor, within not more than ten (10) business days of the assignment date, shall attest his consent at the Contracts Register. Refusal to give consent by Lessor shall be reasoned.

        • Article Four

          The Lessor may assign his rights under the Contract without the consent of the Lessee, unless the Contract stipulates otherwise. Under all circumstances, the following shall be fulfilled in the event of assignment:

          1.
                     		The assignment shall not cause detriment to the Lessee.
           
          2.
                     		The assignment becomes effective on the date of its registration in the Contracts Register.
           
          3.
                     		The assignment does not relieve the Lessor from its obligations under the Contract.
           
          4.
                     		If the assignment results in change in the recipient of the lease payments, it shall be enforceable towards the Lessee only from the date of notifying the Lessee of the change.
           

        • Article Five

          If the Leased Asset needs to be examined by the Lessor, the examination method, time and the examination date shall be set out in the Contract or in one of the schedules thereto, provided that this will not cause any detriment to the Lessee or fetter the quiet enjoyment of the Leased Asset.

        • Article Six

          1.
                     		The Lessee shall forthwith notify the Lessor in writing or by an electronic message, of any events in respect of the Leased Asset that entirely or partially fetter quiet enjoyment thereof, using the contact details set out in the Contract and in accordance with applicable notification rules.
           
          2.
                     		In the event the Lessor has not removed what totally or partially prevents benefiting of the Leased Asset within the period prescribed in the Contract, the Lessee may take the appropriate measures for the protection of the Leased Asset and the full quiet enjoyment thereof at the Lessor’s expense and deduct the costs of such measures from subsequent lease payments.
           

        • Article Seven

          1.
                     		In case of issuance of securities, against the Lessor’s rights, in accordance with regulations and rules issued by the Capital Market Authority, the Lessor remains obliged to forthwith disclose to SAMA any technical, commercial, legal, or other risks in relation to the Contract, the underlying leased asset, or the Securitization against the Lessor’s rights as a whole.
           
          2.
                     		The Lessor remains obliged to ensure compliance with all related supervisory requirements.
           

        • Article Eight

          In circumstances where the license should be obtained prior to concluding the Contract, the Lessor or its representative, shall obtain the license referred to in Article 13 of the Law. In such case, the license shall include the name of the Lessee holding the Leased Asset.

        • Article Nine

          1.
                     		In case the Lessee has the right of ownership or the promise of it, the Contract shall include a payment schedule determining the principal lease value of the asset and the value of the right of ownership separately. The installment for any period of the Contract Term shall not be less than the lease value of the asset for such period.
           
          2.
                     		Without prejudice to the provision of Clause 1 of Article 9, in case of termination or expiry of the Contract during the lease term upon mutual consent of the parties or pursuant to the provisions of the Contract or Law, the Lessee may recover the right of ownership value for the period paid.
           
          3.
                     		Lessor may have the insurance indemnity, if any.
           

        • Article Ten

          1.
                     		SAMA may establish standards for finance lease contracts that ensure the integrity of the finance system, fairness of transactions, and achieve the objectives of the Law and its Regulations.
           
          2.
                     		SAMA may adopt standard finance lease contracts that take into account the rights of the related parties.
           
          3.
                     		To ensure fairness of the conditions of the Finance Lease products intended for individuals or beneficiaries of microfinance, the Lessor, prior to launching these products, shall obtain a non-objection letter from SAMA.*
           

          * This paragraph has been amended in accordance with His Excellency the Governor's Decision No. 93/M SH T dated 18/10/1441H.

        • Article Eleven

          If a Lessee selects to own the Leased Asset under the Contract, at any time, he may practice the right of early ownership of the Leased Asset by concluding a separate annex to the Contract upon payment of the remaining installments, , and without incurring the term cost for the remaining period of the Contract. The Lessor shall be entitled to compensation for the following:

          1.
                     		Cost associated with reinvestment not exceeding the term cost for the three months following the early ownership.
           
          2.
                     		Any cost required to be paid under Contract to a third party by the Lessor if such cost cannot be recovered; and that shall be for the remaining period of the Contract.
           

          With exception to the aforementioned, a period for prohibition of transfer of ownership may be provided for in the Contract, if the subject of Contract is real estate and such condition results in deduction in term cost. Prohibition period shall not exceed two years from the date of Contract.

      • Part Three Contracts Register

        • Article Twelve

          1.
                     		After obtaining the consent of SAMA, Lessors shall establish a joint stock company, or more, for the purpose of registering finance lease contracts in accordance with the most advanced means and the best practices, enabling secure access to the data in the Contracts Register according to the provisions of the Law and this Regulation.
           
          2.
                     		Subject to the requirements under the Companies Law, the capital of the Contracts Registration Company shall be determined by SAMA. SAMA may require the founders to provide a study setting out the capital requirements of the company.
           
          3.
                     		Subject to the Companies Law and the Capital Market Law and their regulations, the ownership of the shares of the Contracts Registration Company shall be divided between the Lessors as determined by SAMA. Shares of Lessors who lose their licenses shall be divided between existing Lessors based on the fair share value of shares at the time of every adjustment. The capital of the Contract Registration Company may be increased or decreased, upon a written approval of SAMA.
           
          4.
                     		Entry and withdrawal of partners shall be only with a non-objection letter from SAMA.
           
          5.
                     		Appointment of the Chairman and members of the Board of Directors, senior executives, the head of the Contracts Register, and registrars shall be upon a prior non-objection letter from SAMA, and they may be released from their posts in case of substantial breach of their legal or professional duties by a justified decision by SAMA.
           

        • Article Thirteen

          The Contracts Registration Company shall distribute its dividends in accordance with the Companies Law after obtaining a written non-objection letter from SAMA.

        • Article Fourteen

          The fees for the services of the Contracts Registration Company shall be determined by a resolution issued by SAMA based on a proposal by the Company based on a detailed technical study showing the economic and commercial bases for determining such fees.

        • Article Fifteen

          1.
                     		The Contracts Registration Company shall prepare a Contracts Register in accordance with the Law and this Regulation.
                     		 
          2.
                     		The Lessor shall register the Contract and any amendments thereto at the Contracts Register within (10) business days from the date of concluding the contract or the amendment thereof. All transactions affecting the contractual rights of the Lessor and the Lessee shall also be registered.
                     		 
          3.
                     		The Contracts Registration Company serves to:
                     		 

                     		(a)
                     		Register contracts and amendments thereto.
           

                     		(b)
                     		Register the transfer of the rights of finance lease contracts through securitization transactions.
           

                     		(c)
                     		Disclose Contracts Register data to licensed finance bodies, upon a written consent of the Lessor.
           

                     		(d)
                     		Register ownership contracts resulting from the finance lease contracts upon certification of ownership transfer – if the least asset is a real estate – at the bodies entrusted with real estate registration (courts and notary publics).
           
          4.
                     		SAMA shall issue a resolution determining the powers of the head of the Contracts Register and the registrars.
                     		 

        • Article Sixteen

          The head and a registrar of the Contracts Register shall satisfy the following requirements:

          1.
                     		Be a Saudi national.
           
          2.
                     		Have not been convicted of a crime that breaches trust.
           
          3.
                     		Have not been terminated from any prior service by a court ruling or a final disciplinary decision, unless being rehabilitated in accordance to the applicable laws.
           

        • Article Seventeen

          The contracts registrar shall carry out the assigned duties at the workplace, except in cases where the head of the Contracts Register permits the contracts registrar to perform his duties at the Lessor’s location and at the Lessor’s expense.

          This Article has been amended in accordance with His Excellency the Governor's Decision No. 93/M SH T dated 18/10/1441H.

        • Article Eighteen

          All documents and representations issued by a contracts registrar shall be in Arabic language. A document written in a language other than Arabic may be attested, after being translated by an accredited translator; the original document and the translation, in such case, shall be attested together.

        • Article Nineteen

          The Contracts Registration Company shall keep all Contract Registers necessary for the recording of transactions and classify them as determined by SAMA.

        • Article Twenty

          Electronic means may be utilized and relied upon in registering Contracts. SAMA may determine any other procedures or means for Contracts registration.

        • Article Twenty-One

          The head of the Contracts Register shall be in charge of the registration works on the Register. Application for registration and any amendment thereto shall be submitted to the head of the Contracts Register, who shall refer such to one of the registrars for processing. Registration shall be processed in accordance with the Law and this Regulation. If a registrar refuses to execute, document, or to certify a document, the concerned parties may file a complaint to the Contracts Registration Company, and then to SAMA. In case of refusal, they may revert to a competent court.

        • Article Twenty-Two

          1.
                     		For the purposes of this Regulation, the following documents shall be deemed proof of ownership of the Leased Asset:
                     		 

                     		(a)
                     		Real estate title deed.
           

                     		(b)
                     		Asset ownership document.
           

                     		(c)
                     		Customs card.
           

                     		(d)
                     		Intellectual property registration certificate.
           

                     		(e)
                     		Purchase invoice.
           
          2.
                     		Further documents may be approved as proof of ownership and other requirements may be imposed by SAMA.
                     		 

        • Article Twenty-Three

          To evidence registration of the ownership document, the contracts registrar shall record the registration number and affix the stamp on the original ownership document and the Contract. In case of the documents that cannot be stamped, such as real estate title deeds, the registrar shall take the appropriate procedures.

        • Article Twenty-Four

          The following information shall be included in the Contracts Register:

          1.
                     		Details of all Contracting parties and their attorneys-in-fact, and their official addresses, including the full name of the Lessee, personal data, name of the Lessor, contact and license details;
           
          2.
                     		Detailed description of the Leased Asset, including its name, serial number, production date and country of origin, as applicable and details of asset title deed;
           
          3.
                     		Information about the insurance coverage of the Leased Asset, if any;
           
          4.
                     		Contract term;
           
          5.
                     		Lease payment, its method of calculation, and the method of repayment;
           
          6.
                     		Written consent of the parties for disclosure of Contracts Register information;
           
          7.
                     		Ownership and possession of the Leased Asset provisions.
           

        • Article Twenty-Five

          1.
                     		The head of Contracts Register shall issue an official certificate evidencing the contents of the Contracts Register, known as the Registered Finance Lease Contract.
           
          2.
                     		The enforcement document extract of the registered Finance Lease Contract serves as an enforcement document pursuant to Clause 8 of Article 9 of the Enforcement Law and requires adherence thereto.*
           

          * This paragraph has been amended in accordance with His Excellency the Governor's Decision No. 93/M SH T dated 18/10/1441H.

        • Article Twenty-Six

          Upon securitization of the rights arising out of the Contract, the Lessor shall record the number of the approval of the Capital Market Authority on the securitization transaction at the Contracts Register. A copy of the approval shall be kept as a reference for the notary public remarks.

        • Article Twenty-Seven

          The Contracts Register, including all information therein, is the property of SAMA.

        • Article Twenty-Eight

          If SAMA licenses more than one company to register contracts, such companies shall take the necessary measures, under the supervision of SAMA, to ensure unity of information, exchange of information, protection and maintenance of the Contracts Register information.

        • Article Twenty-Nine

          Records shall be kept in the Contracts Register for a period of no less than ten years after the date of expiration of all obligations under the Contract.

        • Article Thirty

          Subject to the Law and this Regulation, the Minister of Justice and the Governor shall issue a resolution stipulating procedures for registration in the register, details required for registration, and provisions and procedures for access to the Contracts Register by third parties.

        • Article Thirty-One

          The Finance Lease Contract, in the event of extending credit for owning residence by a natural person, shall be governed by the provisions of the Law and the Real Estate Finance Law and their Regulations.

        • Article Thirty-Two

          This Regulation shall come into force on the date of its publication in the official gazette.

    • Law of Payments and Payment Services

      No: M/26 Date(g): 28/10/2021 | Date(h): 22/3/1443Status: In-Force

      • Article 1

        In this Law, the following words and phrases shall have the meanings assigned thereto, unless the context requires otherwise:

        Law: Law of Payments and Payment Services.

        SAMA: The Saudi Central Bank.

        Board: SAMA’s Board of Directors.

        Regulations: The implementing regulations and any other regulations issued by SAMA in accordance with this Law.

        Person: Any natural or legal person.

        Payment Systems: A set of instruments, procedures, and rules for processing and settling payment orders and clearing transactions related thereto within the Kingdom or abroad.

        Payment Services: Services related to the execution, transfer, or processing of payment transactions and payment instruments; management of transfer transactions and e-money payments through payment platforms or instruments; payment wallets in the form of electronic accounts or records; provision of payment information and account services; and other related services specified in the regulations.

        Payment Order: An order or set of instructions made by a member with regard to a money transfer request, as a cash claim in the form of a book entry, to the order of a beneficiary who is a member of any payment system, to be deposited in the beneficiary’s account; this shall include orders or instructions relating to the transfer or withdrawal of amounts to or from an account.

        Member: Any person who has a payment account through which he can make payment orders or who is a beneficiary thereof.

        Client: Any person who receives payment services or uses payment systems.

        Consumer: The ultimate beneficiary of a payment service.

        Funds: Banknotes or coins of any currency that are physically or electronically kept, and of any other type of currency specified in the regulations.

        Systemically Important Payment System (SIPS): Any payment system classified by SAMA as important pursuant to certain criteria set thereby based on the volume, value, and nature of transactions carried out through such system and its connection with settlement and clearing systems within the Kingdom and abroad.

        Guarantee: Cash, or any asset that may be converted into cash, that is provided pursuant to a lien or any other similar agreement to guarantee the rights and liabilities that may arise for the benefit of members under SIPS.

        Clearing Arrangements: Arrangements made between transacting parties to calculate net liabilities, in accordance with the relevant rules of payment systems.

        Default Management Arrangements: Clearing arrangements or any other arrangements relating to settlement of financial positions resulting from transactions associated with payment systems and services for the purpose of reducing or mitigating risks that may arise in the event that a payment system member, or payment service provider, is actually or potentially incapable of paying his due liabilities, including enforcement or transfer of guarantees.

        Settlement Finality: The point at which a payment order is deemed to be duly completed in a payment system, in accordance with the rules of said system, and is deemed binding and enforceable and may not be reversed, revoked, or modified by its issuing member or his agent, in accordance with SIPS rules.

        Final Payment Order: A payment order that is subject to a settlement finality, in accordance with SIPS rules.

      • Article 2

        This Law aims to: 
         
        1-enhance the integrity and efficiency of the infrastructures of payment systems and services in the Kingdom;
         
        2-enhance the protection of users of payment systems and services; and
         
        3-promote innovation and competition in payment system operations and services in the Kingdom.
         

      • Article 3

        This Law shall apply to payment systems and their operators and to payment services and their providers.

      • Article 4

        A person may not operate a payment system or provide payment services in the Kingdom unless licensed by SAMA.

      • Article 5

        SAMA shall, for the application of this Law, determine the cases and criteria according to which a person residing abroad is deemed a payment system operator or payment service provider within the Kingdom.

      • Article 6

        Final payment orders, settlement transactions, clearing arrangements, and default management and guarantee arrangements shall be deemed binding and enforceable and may not be modified, reversed, or revoked.

      • Article 7

        SAMA shall regulate, supervise, and oversee payment systems and their operators, as well as payment services and their providers, in accordance with the provisions of this Law and its regulations. It may in particular undertake the following: 
         
        1-Determining the terms and conditions for issuing licenses, and the legal structure of payment system operators and payment service providers.
         
        2-Determining the capital and solvency requirements for payment system operators and payment service providers.
         
        3-Issuing, renewing, and revoking licenses of payment systems and their operators as well as payment services and their providers.
         
        4-Approving and regulating the products and services provided by payment system operators and payment service providers.
         
        5-Setting outsourcing rules for the operation of payment systems or provision of payment services.
         
        6-Setting classifications and requirements for payment systems based on their importance, including classifying any payment system as a SIPS.
         
        7-Setting frameworks and rules for interlinked payment systems within the Kingdom and abroad.
         
        8-Setting procedures and measures necessary for protecting the funds and data of clients, consumers, and members in relation to payment systems and services, and taking necessary action to protect their rights.
         
        9-Setting the plans and measures that persons subject to this Law must follow to restore and improve their financial positions in the event of any substantial disruption thereto, or to enable said persons to terminate their business activities in a timely and orderly manner, including liquidation, subject to applicable laws.
         
        10-Determining license issuance and renewal fees.
         
        11-Setting governance and internal control guidelines for payment system operators and payment service providers.
         
        12-Setting rules that payment system operators must observe when issuing rules for their transactions and membership.
         
        13-Setting adequacy and competency standards for the employees of payment system operators and payment service providers, including senior officers.
         

      • Article 8

        Payment system operators and payment service providers shall, subject to the regulations, observe the following: 
         
        1-Providing access to systems and services based on appropriate and fair commercial principles.
         
        2-Segregating funds transferred therethrough for the benefit of members, clients, and consumers from their own funds.
         
        3-Protecting the confidentiality of information and data of members, clients, and consumers.
         

      • Article 9

        An operator of a payment system that is classified as a SIPS shall, from the date of being notified of such classification, operate in accordance with SIPS-related rules established thereby, subject to the regulations.

      • Article 10

        The SIPS-related rules shall include the following: 
         
        1-The point at which a payment order made by a member becomes final, and the point at which such order becomes subject to settlement finality, including cases in which a payment order is executed via multiple systems.
         
        2-The rules setting the procedures necessary for ensuring the protection, validity, and enforceability of clearing arrangements in the event of default of a SIPS operator or member.
         
        3-The rules concerning enforcement of guarantees by a SIPS operator or member.
         
        4-The rules that permit a SIPS to manage a member’s default, which shall include, but not be limited to, cases in which a member is deemed in financial or operational default, as well as measures that a SIPS operator may take in the event of a member’s default.
         

      • Article 11

        A SIPS member shall comply with the following: 
         
        1-Disclosing to SAMA and to the payment system operator any SIPS of which he is a member upon the filing or initiation of any bankruptcy or judicial depository procedures against him, pursuant to the Bankruptcy Law.
         
        2-Notifying the SIPS operator of the filing or initiation of any bankruptcy or judicial depository procedures, pursuant to the Bankruptcy Law, against any other member of the same system upon his knowledge thereof, in accordance with the regulations.
         

      • Article 12

        1-Without prejudice to any harsher penalty stipulated in any other law, any person who violates this Law or its regulations shall be punished by one or more of the following penalties:
         
        A.A warning notice.
         
        B.Temporary license suspension.
         
        C.A fine not exceeding 25 million riyals.
         
        D.License revocation.
         
        2-The Board shall, pursuant to a decision issued thereby, issue a table classifying violations and prescribing penalties within the limits stipulated in paragraph (1) of this Article, taking into account the nature and gravity of the violation as well as aggravating and mitigating circumstances.
         
        3-SAMA shall have the jurisdiction to consider violations of this Law and its regulations and to impose penalties as prescribed in the table referred to in paragraph (2) of this Article.
         
        4-An interested party may appeal SAMA’s decisions within 60 days from the date of notification thereof.
         
        5-A judicial decision issued by a competent judicial authority or a penalty decision issued by SAMA, as the case may be, may provide for the publication of the ruling at the violator’s expense in a local newspaper published in his area of residence or the area in which he practices his business, or in any other appropriate medium, as per the type, gravity, and impact of the violation, provided that the publication is made after the decision issued by the competent judicial authority becomes final or the decision issued by SAMA becomes unappealable due to the lapse of the statutory period for appeal or to being upheld by the competent judicial authority.
         
        6-Imposition of a penalty on a legal person shall not exempt the natural person, whether a board member, director, or any other officer employed by said legal person, from liability and due penalty if it is established that the violation or offense was committed with his consent or due to his negligence or omission.
         

      • Article 13

        Disputes arising between the parties of a payment system and payment service providers shall, prior to being referred to a competent judicial authority, be subject to amicable settlement procedures as specified in the regulations, provided that the settlement period does not exceed 30 days from the date of filing thereof, unless the parties to the dispute agree in writing to extend said period.

      • Article 14

        Subject to Article 13, a competent judicial authority shall decide on disputes arising between the parties of a payment system and payment service providers, as well as on grievances filed by interested parties against decisions issued by SAMA.

      • Article 15

        1-Inspectors appointed pursuant to a decision by SAMA’s Governor shall be in charge of overseeing and inspecting as well as detecting and reporting violations of this Law and its regulations. The inspectors may access records, receive complaints, question the employees of the persons subject to this Law, and obtain necessary information. To this end, they shall be deemed preliminary investigation officers.
         
        2-Inspectors shall not be prevented from carrying out the duties set out in this Article; persons subject to inspection shall cooperate with the inspectors and facilitate the performance of their duties.
         

      • Article 16

        SAMA may, if necessary for the application of this Law, disclose to a third party any information relating to any person subject to this Law.

      • Article 17

        SAMA may, in accordance with the regulations, exempt any person or persons from certain license requirements to promote innovation and development in the operation of payment systems and the provision of payment services in the Kingdom, taking into account transparency and fairness, without prejudice to the objectives of this Law.

      • Article 18

        The regulations shall be issued pursuant to a Board decision.

      • Article 19

        This Law shall repeal any provisions conflicting therewith.

      • Article 20

        This Law shall be published in the Official Gazette and shall enter into force 180 days following the date of its publication.

    • Implementing Regulations of Payments and Payment Services Law

      No: 000044093096 Date(g): 13/6/2023 | Date(h): 24/11/1444Status: In-Force

      Based on the powers granted to SAMA under the Law of Payments and Payment Services issued by Royal Decree No. (M/26) dated 22/03/1443H, and stemming from SAMA 's supervisory and regulatory role in shaping the strategic directions of the payments sector in the Kingdom, we inform you of the issuance of the Implementing Regulations of the Law of Payments and Payment Services on 24/11/1444H corresponding to 13/06/2023G, as per the attached version. The regulatory framework for payment service providers issued by SAMA on 05/06/1441H corresponding to 30/01/2020G is hereby repealed and replaced by the Implementing Regulations effective from the date of issuance.

      SAMA emphasizes the obligation of payment service providers and payment system operators subject to the Law and Regulations to comply with all provisions contained in the Implementing Regulations. Additionally, SAMA stresses the importance of submitting a plan outlining corrective actions to ensure compliance with the provisions of the Law and Regulations within no more than six months from the effective date of the Regulations.

      • Part 1: General Provisions

        • Article 1

           (1)The terms and phrases referenced in the Implementing Regulation shall have the meanings prescribed to them in the Law of Payment and Payment Services unless the context requires otherwise.
           
           (2)For the purpose of applying the provisions of this Implementing Regulation, the following terms and phrases, wherever mentioned herein, shall have the meanings assigned thereto unless the context requires otherwise.
           

          Law: Law of Payments and Payment Services, promulgated by Royal Decree No. (M/26) dated 22/03/1443 H.
           

          Implementing Regulation: The Implementing Regulation of the Law.
           

          Governor: Governor of the Central Bank.
           

          SAR: Saudi Arabian Riyal.
           

          PFMI: The “Principles for financial market infrastructures” issued by CPMIIOSCO on April 2012 (and any publications or amendment thereof).
           

          Controller: a Person who, either jointly or severally, can influence the actions or decisions of the Licensee or the holding company that owns the Licensee under any of the following cases:
           

           (A)Holds 10% or more of the shares in either the Licensee or a Holding Company of that Licensee;
           
           (B)Is entitled to exercise, or controls the exercise of, 10% or more of the voting rights in either the Licensee or a Holding Company of that Licensee; or
                     		  
           (C)Is able to exercise significant influence over the management of the Licensee as a result of holding shares of the Licensee or the holding company of the Licensee or being able to exercise voting rights connected to these shares, or having a currently exercisable right to acquire such shares or voting rights.
                     		  

           

          Holding Company: Notwithstanding the relevant provision of the Companies Law, a joint-stock, a simplified joint-stock, or a limited liability company that controls another joint-stock, simplified joint-stock, or limited liability company (that is referred to as its subsidiary) by owning more than half of the capital of such companies or by controlling the formation of their boards of directors.
           

          Complaint: Expression of consumer or client dissatisfaction or objections, submitted to a Licensee through the available channels.
           

          License: The license that is given by SAMA to operate a Payment System or to provide Payment Services in accordance with the provisions of the Law and the Implementing Regulation, including activities that are specified in the License.
           

          Applicant: A legal person -or who is acting on his behalf- that has applied for licensing.
           

          Licensee: a Payment System Operator or Payment Service Provider licensed under the provision of the Law and the Implementing Regulation and the like.
           

          Licensed Bank: A bank licensed to carry on banking business pursuant to the Banking Control Law, promulgated by Royal Decree No. (M/5) dated 22/02/1386 H.
           

          Payment Service Provider: Any of the following entities:
           

           (A)An entity licensed as a major PI, a major EMI, or a micro EMI.
           
           (B)An entity licensed as a micro PI.
           

          Relevant Payment Services: Any Payment Services that are activities specified in Article 6 of the Implementing Regulation.
           

          Agent: a Person that acts on behalf of a Payment Service Provider in the provision of Relevant Payment Services.
           

          Payment service user: Any person who makes use of, or receives, one or more Relevant Payment Services in the capacity of Payer, Payee or both; or any Person who makes use of the Relevant Payment Services of a Payment Account Information Service Provider.
           

          Payment System Operator: The legal person licensed as an operator of one or more Payment Systems by SAMA.
           

          Non-Systemically Important Payment System: a Payment System not designated by SAMA as a Systemically Important Payment System.
           

          National Payment system: a Payment System owned or operated by SAMA directly or indirectly.
           

          Service Provider Related to Payment System: The service provider that forms part of the payments system operating arrangements.
           

          Payer: a Person who holds a Payment Account and allows a Payment Services Order from that Payment Account, or where there is no Payment Account, a person who gives a Payment Services Order.
           

          Payee: a Person who is the intended recipient of Funds which have been the subject of a Payment Transaction.
           

          Payment Account: : An account held in the name of one or more Payment Service Users which is used for the execution of Payment Transactions.
           

          Money Remittance: An operation where Funds are received from a Payer, without any Payment Accounts being created in the name of the Payer or the Payee, for the purpose of transferring a corresponding amount to a Payee or to a Payment Service Provider or a Person licensed under the Rules Regulating Money Changing Business acting on behalf of the Payee or to an entity with an equivalent license, or such Funds are received on behalf of and made available to the Payee.
           

          Credit Transfer: An operation that results in crediting the Payment Account of a Payee with a Payment Transaction (or a series of Payment Transactions) which is carried out in accordance with the instruction given by the Payer through his Payment Account with the Payment Service Provider.
           

          Direct Debit: An operation that results in debiting the Payer’s Payment Account following a Payment Transaction that is initiated by the Payee on the basis of the consent given by the Payer to the Payee’s Payment Service Provider or to the Payer’s own Payment Service Provider.
           

          Payment Aggregation Service: Operations provided by a Payment Service Provider of facilitating payment on a pooled basis and do not require a relationship with a Payment Service Provider that provides the Payment Service of Payee Acquiring.
           

          Payment Transaction: The depositing, transferring or withdrawing of Funds initiated by the Payer or on his behalf or by the Payee.
           

          Payment Transaction Aquiring:  The Payment Service provided by a Payment Service Provider to a Payee to accept and process a Payment Transaction, which results in a credit transfer to the Payee.
           

          Payment Account Information Service: A service to provide consolidated information about one or more Payment Accounts (in the original format or subject to processing), held by the Payment Service User with one or more Payment Account Service Providers, with enabling the Payment Service User to modify and present account information in alternative ways, which is shared through the electronic channels or otherwise with Payment Service User or any other Person’s instructions and Consent.
           

          Payment Initiation Service: A service (as an on-line tool or otherwise) to initiate a Payment Services Order at the request of a Payment Service User in connection with his Payment Account with the Payment Account Service Provider on the basis of Consent provided by that Payment Service User.
           

          Payments Account Service Provider: a Payment Account Service Provider, including the licensed bank, which provides and maintains a Payment Account for the Payment Service User.
           

          Payments Instrument: Any tools or procedures provided by the Payment Service Provider to the Payment Service User, which is used to initiate Payment Services Orders through the online channels or otherwise.
           

          Card-Based Payments: The Payment Instrument provided by the Payment Service Provider through a card used to initiate a Payment Transaction from a Payment Account held with another Payment Service Provider.
           

          Closed Loop Account: The monetary value stored on a Payment Instrument and is issued by a one-off issuer, which cannot be redeemed in cash or to any other account, which can only be used to acquire goods or services within a limited network of service providers that have direct commercial agreements with the issuer and are in the same corporate group or are otherwise affiliated by the same commercial name or trademark.
           

          Restricted Loop Account: The monetary value stored on a Payment Instrument, which cannot be redeemed in cash or transferred to any other account and can only be used to acquire goods or services within a clearly defined area, goods or services within a limited network of service providers which have direct commercial agreements with the issuer.
           

          Limited Network Service: Payment Transactions made using a Closed Loop Account or a Restricted Loop Account.
           

          Payment services Order: Any instructions by a Payment Service User acting as Payer or Payee to its Payment Service Provider, requesting the execution of a Payment Transaction.
           

          One-off Payment Contract: A contract for a one-off Payment Transaction not made under a Framework Contract.
           

          Framework Contract: A contract for Relevant Payment Services which is intended to govern the subsequent execution of individual and successive Payment Transactions.
           

          Electronic Money: Electronically (including magnetically) stored monetary value as represented by a claim on the issuer, which is issued on receipt of Funds for the purpose of making Payment Transactions and accepted by a Person other than the issuer as means of payment (excluding virtual assets).
           

          Electronic Money Institution or “EMI”: an entity that is licensed to issue Electronic Money.
           

          Electronic Money Distributor: a Person that distributes or sells Electronic Money or redeems Electronic Money on behalf of an EMI but does not provide any Payment Service (including the issuance of Electronic Money) or act as an Agent of the EMI.
           

          Safeguarded Funds: Means safeguarded funds according to the following cases:
           

           (a)For Payment Institutions, Funds received from, or for the benefit of, a Payment Service User for the execution of Payment Transactions, or Funds received from another Payment Service Provider for the execution of Payment Transactions on behalf of a Payment Service User; and
           
           (b)For Electronic Money Institutions (and Electronic Money Distributors), Funds received in exchange for Electronic Money that has been or is to be issued and does not include deposits held at banks.
           

          Cash-Out Transaction: The redemption and withdrawal of Electronic Money at par value.
           

          Total Average Outstanding Electronic Money: The arithmetic means of the total amount of financial liabilities related to Electronic Money issued by the EMI at the end of each calendar day over the last twelve calendar months.
           

          Total Outstanding Electronic Money: The total value of Electronic Money issued by an EMI, calculated on the first day of each calendar month and applied for that calendar month.
           

          Payment Institution or “PI”: a Payment Service Provider licensed to provide one or more Relevant Payment Services, except for the issuing of Electronic Money.
           

          Accounting Records: Underlying documents and information (stored electronically or otherwise) used to prepare, verify and audit financial statements.
           

          Average Monthly Payment Transaction Value: The rolling monthly average over any period of twelve calendar months preceding the date of calculation of the total amount of Payment Transactions executed by the Payment Service Provider, including Payment Transactions executed by its Agents, and does not include the issuance or redemption of Electronic Money.
           

          Authentication: A procedure (that may be subject to further SAMA’s regulations, rules, circulars, controls or instructions, including those related to cyber security) which allows a Payment Service Provider to verify the identity of a Payment Service User or the validity of the use of a specific Payment Instrument, and “Authenticated” shall be interpreted accordingly.
           

          Consent: The authorization by an Authenticated Payer of a Payment Transaction, recorded in accordance with Article 38 of the Implementing Regulation.
           

          Personalized Security Credentials: Personalized features provided by a Payment Service Provider to a Payment Service User, which can be used for the purposes of Authentication.
           

          Fit and Proper Requirements: The rules, instructions and requirements issued by SAMA and all amendments thereto which includes the standards of competence and propriety for Senior Positions of Payment System Operators and Payment Service Providers.
           

          Senior Positions: The functions, roles and responsibilities entrusted to those positions who take strategic decisions or manage the Licensee’s business processes, including the board of directors and senior management, according to the positions specified in the Requirements for Appointments to Senior Positions.
           

          Fit and Proper Form: The form issued by SAMA in accordance with the requirements for appointments to senior positions.
           

          Operating Rules: The operating rules of a registered payment system.
           

          Outsourcing Rules: The regulations, rules, circulars, principles and instructions related to third-party outsourcing, issued by SAMA, with the aim of regulating the provisions of assigning activity to a third party.
           

          Unique Identifier Number: The account number of the Payment Service User.
           

          Unauthorized Payment Transactions: The payment transactions that are initiated by a non-user of Payment Services without the authority to initiate them.
           

        • Article 2

          The objectives of the Implementing Regulation are:
           

           

          (1)

          		Enacting the framework and regulatory requirements of payment service operators and providers in the Kingdom, particularly in determining the relevant licensing, supervision and oversight procedures and requirements.
           
           (2)Ensuring the presence of the necessary mechanisms to manage the risk of Payment Systems and Payment Services, which may affect the payment sector and monetary and financial settlement; and
           
           (3)Contributing to the enhancement of transparency and fair competition with the aim of supporting the effective and efficient functioning of payment systems and monetary and financial settlement.
           
           (4)Incentivizing and developing the payment systems and services sector by SAMA.
           

        • Article 3

           (1)SAMA shall carry out its duties and authorities set out in the Law and all relevant regulations and policies, taking into consideration best international standards and practices.
           
           (2)SAMA shall carry out the supervision and oversight functions on Relevant Payment Services, in particular, the following:
           
             (a)Licensing entities to engage in one or more Relevant Payment Services in accordance with the Law and the Implementing Regulation;
           
             (b)Issuing regulations, rules, instructions, and circulars relating to the provision of Relevant Payment Services and its amendments;
           
             (c)Ensuring the compliance of Payment Service Providers with the Implementing Regulation and all related regulations, rules, instructions, and circulars issued by SAMA;
           
             (d)Ensuring and supervising the licensed Payment Service Providers and the Senior Positions adherence to the highest standards of corporate governance;
           
             (e)Taking enforcement or remedial action in respect of contraventions of the provisions of the Law, the Implementing Regulation and all related regulations, rules, instructions, and circulars issued by SAMA;
           
             (f)Dealing with Complaints and mechanisms for resolving them;
             (g)Creating and maintaining a public register of Payment Service Providers; and.
           
             (h)Suspending or revoking licenses of Payment Service Providers in accordance with the powers of SAMA pursuant to the Law.
           
           (3)SAMA shall carry out the supervision and oversight functions on Payment Systems, in particular, the following 
           
             (a)Licensing the entities to operate Payment Systems in accordance with the Law and the Implementing Regulation;
           
             (b)Designating Payment Systems according to the Criteria of Systemically Important Payment System;
           
             (c)Issuing regulations, rules, instructions, and circulars relating to the operation of Payment Systems taking into consideration the PFMI;
           
             (d)Ensuring and monitoring the compliance of Payment System Operators with the Law, Implementing Regulation, and related regulations, rules, instructions and circulars issued by SAMA;
           
             (e)Carrying out the specific authorities in relation to Payment Systems, including but not limited to ensuring the execution of Settlement Finality and bankruptcy of Payment Systems and their Members;
           
             (f)Ensuring and overseeing the Payment System Operators and the Senior Positions adherence to high standards of corporate governance;
           
             (g)Taking enforcement or remedial action in respect of contraventions of the provisions of the Law,  the Implementing Regulation and related regulations, rules, instructions and circulars issued by SAMA;
           
             (h)Dealing with Complaints and mechanisms for resolving them;
           
             (i)Maintaining a public register of Payment System Operators; and
           
             (j)Suspending or revoking licenses of Payment System Operators in accordance with the powers of SAMA pursuant to the Law.
           

        • Article 4

           (1)The Implementing Regulation apply to all Persons that carry out Relevant Payment Services in the Kingdom if any of the following apply:
                     		 
              (a)Provides Relevant Payment Services from an establishment located in the Kingdom;
                     		 
              (b)Holds itself out by any means as providing a Payment Service in the Kingdom;
                     		 
              (c)Invites or induces a Person located in the Kingdom to enter into, or offer to enter into, an agreement in relation to a Payment Service;
           
              (d)Markets or otherwise promotes any Payment Service to one or more Persons in the Kingdom; or
                     		 
              (e)Appoints another Person operating from an establishment located in the Kingdom where such appointee:
                     		 
            (i)Has a mandate to provide a Payment Service in the Kingdom on behalf of the appointer;
                     		 
            (ii)Accustomed to act in accordance with the instructions of that appointer; and
                     		 
            (iii)Provides a Payment Service on the appointer’s behalf or invites or induces a Person in the Kingdom to enter into, or offer to enter into, an agreement in relation to a Payment Service.
           
           (2)The Implementing Regulation apply to all Persons that carry out Payment System operating -whether the Payment Systems Operator is established in the Kingdom or abroad or whether the Payment System is operated in the Kingdom or abroad - if any of the following apply:
           
              (a)The Payment System operating rules specified rules and conditions for enabling Credit Transfers relating to Payment Transactions initiated by Payers or Payees residing in the Kingdom; or
           
              (b)The Payment System provides services for the handling and settling of Payment Orders to Members residing in or operating in the Kingdom.
           

      • Part 2: Licensing

        • Article 5

          SAMA may approve or reject a licensing application as a Relevant Payment Service Provider or Payment System Operator, taking into account the following:

          (1)Whether the activities and services are consistent with the objectives of the Law and the Implementing Regulation;
           
          (2)Whether the activities and services are consistent with the consumer protection and competition objectives set out in the Law and the Implementing Regulation;
           
          (3)The economic value resulting from providing the activities in the Kingdom and the impact of these activities on financial stability in the Kingdom;
           
          (4)SAMA assessment of the Applicant’s ability to satisfy the requirements of the Law and the Implementing Regulation; and
           
          (5)Whether there are factors that might hinder SAMA’s ability to oversee the applicant effectively.
           

        • Article 6

          SAMA licenses the payments service provider to practice one or more of the following services when conducted as a business or as usual:
           

           (1)Services enabling Funds to be deposited on a Payment Account as well as all the operations required for operating a Payment Account;
           
           (2)Services enabling cash withdrawals from a Payment Account as well as all the operations required for operating a Payment Account;
           
           (3)Execution of Payment Transactions, including Credit Transfers on a Payment Account with the user’s Payment Service Provider or with another Payment Service Provider, which include the following:
           
             (a)Execution of Direct Debits, including one-off direct debits;
           
             (b)Execution of Payment Transactions through a payment card or a similar digital device; and
           
             (c)Execution of Credit Transfers, including standing orders.
           
           (4)Execution of Payment Transactions where the Funds are covered by a credit line for a Payment Service User:
           
             (a)Execution of Direct Debits, including one-off direct debits;
           
             (b)Execution of Payment Transactions through a payment card or a similar device; and
           
             (c)Execution of Credit Transfers, including standing orders.
           
           (5)Issuing of Payment Instruments;
           
           (6)Payee transactions Acquiring;
           
           (7)Payment Aggregation Services;
           
           (8)Issuing Electronic Money (by opening e-wallets or otherwise);
           
           (9)Payment Initiation Services; and
           
           (10)Payment Account Information Services.
           
           (11)Payment Account Service.
           
           (12)Any other service that SAMA may decide to consider as a payment service.
           

        • Article 7

          Subject to other related laws, the following services do not constitute Payment
          Services:

           (1)Payment that is made exclusively in cash directly from the Payer to the Payee, without any intermediary intervention.
           
           (2)The payment that is made from the Payer to the Payee through a commercial agent authorized via an agreement to negotiate or conclude the sale or purchase of goods or services on behalf of any person.
           
           (3)Professional physical transport of banknotes and coins, including their collection, processing and delivery.
           
           (4)The payment that is consisting of the non-professional cash collection and delivery within the framework of a non-profit or charitable activity.
           
           (5)Services where cash is provided by a person to another as part of a Payment Transaction following an explicit request by the Payment Service User just before the execution of the Payment Transaction through a payment for the purchase of goods or services.
           
           (6)Currency exchange operations carried out independently and outside the scope of payment services.
           
           (7)The payment that is based on cheques, traveller’s cheques, and paperbased vouchers.
           
           (8)Payment that is related to securities asset servicing, including dividends, income or other distributions, or redemption or sale, or by investment institutions, credit institutions, collective investment institutions or asset management companies that provide investment services and any other entities allowed to have the custody of financial instruments.
           
           (9)Services provided by technical service providers, For example, technical services.
           
           (10)Services based on specific Payment Instruments that can be used only in a Limited Network.
           
           (11)Payment Transactions by a provider of electronic communications networks, in addition to electronic communications services for a subscriber to the network or services for any of the following:
           
             (a)For the purchase of digital content and voice-based services, regardless of the device used for the purchase or consumption of the digital content and charged to the unrelated bill; or
           
             (b)Services performed through electronic means and included in the relevant receipt as part of a charitable activity or ticket purchase.
           
           (12)Payment Transactions carried out among Payment Service Providers, their Agents or branches for their own accounts.
           
           (13)Payment Transactions and related services between a Holding Company and its subsidiary or between subsidiaries of the same parent company, including Payment Transactions and services that is made through Payment Services Provider belongs to the same parent group.
           
           (14)Withdrawal services offered by means of ATM by providers acting on behalf of one or more card issuers, which are not a party to the Framwork Contract with the Payment Service User withdrawing money from a payment account, on condition that those providers do not conduct other Relevant Payment Services as referred to in Article 6.
           
           (15)Banking business regulated pursuant to the Banking Control Law, and the activities of finance companies regulated pursuant to the Finance Companies Control Law.
           
           (16)Money exchange business regulated pursuant to the Rules Regulating Money Changing Business, where Funds are not held on a Payment Account.
           
           (17)Money Remittance.

        • Article 8

          A person who seeks to get a license of Payment Services Provider, or his representative, shall apply to SAMA for a License and provide the following:
           

           (1)An application form as may be required by SAMA;
           
           (2)A detailed specification of each of the services set out in Article 6 for which a License is requested;
           
           (3)A draft of articles of incorporation and articles of association of the Applicant, or the authenticated copies if the Applicant is incorporated outside the kingdom, subject to the related laws in the Kingdom;
           
           (4)A description of the organizational structure of the Applicant showing all department units and their main functions and tasks and the details of the Senior Positions roles;
           
           (5)A list of all controllers, which sets out the number and percentage of ownership that each controller will own; with submitting the Fit and Proper Form for controllers signed by each controller, as determined by the Requirements for Appointments to Senior Positions, issued by SAMA for all financial sectors.
           
           (6)The Fit and Proper Form for Senior Positions, as determined by the Requirements for Appointments to Senior Positions, issued by SAMA for all financial sectors.
           
           (7)A feasibility study shows the target segment, the services to be provided, the proposed business model, and the strategy of the Applicant and signed by the Applicant.
           
           (8)A three-year business plan that sets out at least the following:
           
             (a)A detailed description of the activities for which a License is requested, products and a marketing plan;
           
             (b)Estimated financial data, projected annual revenue, expenses, financial margins and targeted growth rates, taking into account the requirements of capital adequacy and liquidity assessments of SAMA;
           
             (c)Projected establishment costs and funding thereof;
           
             (d)Projected ongoing financing of operations;
           
             (e)Expansion Plan and branch offices to be established in the Kingdom – if any -; 
           
             (f)Plan and programs for monitoring and managing risks and ensuing the effective management of the compliance function;
           
             (g)Recruitment and training plan, including the projected number of employees and the percentage of non-Saudi nationals, in accordance with the related requirement, in each department and each organizational level, and the qualification programs for employees; and
           
             (h)Information on other commercial and investment activities beyond the scope of the Law and the Implementing Regulation that the applicant will conduct directly or under its control or direction (including through a subsidiary); and
           
           (9)Relevant draft policies and procedures demonstrating the ability to comply with the requirements set forth under the Law and the Implementing Regulation and any other instructions from SAMA;
           
           (10)An irrevocable bank guarantee issued in favour of SAMA by one of the Licensed Banks in the Kingdom for an amount equivalent to the required minimum capital for the licensed activity or activities for which the Applicant requests to be licensed, in accordance with the model set by SAMA. Such bank guarantee must be renewable automatically until the required capital is paid up in full in accordance with the Implementing Regulation. This guarantee shall be released upon the following cases:
           
             (a)Paying up the capital in full in accordance with the Implementing Regulation. SAMA may require full or partial continuation of the bank guarantee, and may require as additional prudential requirements providing a bank guarantee for a post-licensing stage as it deems appropriate;
           
             (b)Withdrawing the License application; and
           
             (c)Refusal of the License application by SAMA.
           
           (11)Drafts of proposed material agreements and contracts with third parties, including material agreements and contracts with related parties and external service providers; and
           
           (12)The Applicant’s business continuity and recovery plans and its wind-down plan, showing how the Applicant will manage liquidity, operational and wind-down risk; if the Applicant is proposing to become a Major PI or Major EMI.
           
           (13)Any other documents or information that SAMA may request.
           

        • Article 9

          A person who seeks to get a license of Payment System Operator, or his representative, shall apply to SAMA for a License and provide the following:
           

           (1)An application form as may be required by SAMA;
           
           (2)A draft of articles of incorporation and articles of association of the Applicant, or the authenticated copies if the Applicant is incorporated outside the kingdom, subject to the related laws in the Kingdom. A description of the organizational structure of the Applicant showing all departments units and functions and their main tasks;
           
           (3)A description of the organizational structure of the Applicant showing all department units and their main functions and tasks.
           
           (4)A list of all controllers, which sets out the number and percentage of ownership that each controller will own; with submitting the Fit and Proper Form for controllers signed by each controller, as determined by the Requirements for Appointments to Senior Positions, issued by SAMA for all financial sectors.
           
           (5)Fit and Proper Form for Senior Positions, as determined by the Fit and Proper Requirements, issued by SAMA for all financial sectors.
           
           (6)The Operating Rules;
           
           (7)A description of its systems and controls and a copy of its recovery and wind-down plans where required under Paragraph (1) (f) of Article 105, and an initial self-assessment for the purposes of Article 106 of the Implementing Regulation.
           
           (8)A detailed programme of operations (including relevant policies, procedures and a description of systems and controls) that demonstrates the ability to satisfy (on an on-going basis) the REQUIREMENTS SET FORTH under the Law and the Implementing Regulation in a format agreeable to SAMA;
           
           (9)An irrevocable bank guarantee issued in favour of SAMA by one of the Licensed Banks in the Kingdom for an amount equivalent to the required minimum capital for the licensed activity or activities for which the Applicant requests to be licensed, in accordance with the model set by SAMA. Such a bank guarantee is renewable automatically until the required capital is paid up in full. This guarantee shall be released in the following cases:
           
             (a)Paying up the capital in full in accordance with the Implementing Regulation. SAMA may require full or partial continuation of the bank guarantee, and may require as additional prudential requirements providing a bank guarantee for a post-licensing stage as it deems appropriate;
           
             (b)Withdrawing the License application; and
           
             (c)Refusal of the License application by SAMA.
           
           (10)Drafts of proposed material agreements and contracts with third parties, including material agreements and contracts with related parties and external service providers; and .
           (11)Any other documents or information that SAMA may request.

        • Article 10

          National Payment Systems and their operators are considered licensed in accordance with the Governor's decision in this regard.
           

        • Article 11

          (1)SAMA shall inform the Applicant in writing that the application reception has been accepted, upon examining and confirming that all supporting documents are correct and complete, provided that the Applicant has submitted all information and documentation necessary to satisfy the requirements stipulated in Article 8 and Article 9 of the Implementing Regulations.
           
          (2)The Applicant must provide SAMA with any additional information or documents that it requests within thirty calendar days from the date of request unless otherwise indicated by SAMA. SAMA may reject the License application where an Applicant does not provide such documents and information to the satisfaction of SAMA within that period.
           
          (3)SAMA may take such measures as it deems necessary to assess the extent to which the Applicant meets the requirements for licensing.
           
          (4)SAMA shall notify Applicant in writing of its decision in relation to a License application within ninety calendar days from the date on which it notifies the Applicant that the License application is complete in accordance with Paragraph (1) of this Article.
           
          (5)If there is a delay beyond this period of ninety calendar days referred to in Paragraph (4) of this Article, SAMA will notify the Applicant of the adjusted timeline for assessing their application.
           

        • Article 12

          (1)Upon issuance of the approval of a License application, SAMA may impose limitations on the services or activities for which the Applicant has requested a License.
           
          (2)SAMA may include a License application, such requirements as it deems appropriate. Such a requirement may be imposed so as to require the Applicant, or a Person within the Applicant’s group, to take a specified action or to refrain from taking a specified action.
           

        • Article 13

          (1)SAMA may refuse the licensing application when the data, information or documents provided by the Applicant do not satisfy the requirements stipulated in Article 8 and Article 9 of the Implementing Regulation or when the additional requirements have not been met within the specified period provided that the refusal must be justified.
           
          (2)The Applicant may submit a request to reconsider the rejected application if a period of twelve months has passed from the date of rejection or any shorter period specified by SAMA.
           

        • Article 14

          (1)Applicants must establish the Licensee as a joint stock company if the applicant is either a major PI, a major EMI, or a micro EMI.
           
          (2)In the case of an Applicant applying for a License as a Micro PI, it should be either as a joint stock company or as a simplified joint-stock or as a limited liability company.
           
          (3)Applicants must complete the establishment within one hundred and eighty days of granting the in-principle approval and provide SAMA with copies of the Licensee’s commercial registration and article of association, reflecting the licensed activities in accordance with the in-principle* approval.
           

          * initial.

        • Article 15

          (1)Upon receipt of an application submitted to SAMA by the Applicant as set forth in Article 11, SAMA may issue an in-principle approval to the applicant when it is proven to SAMA that an Applicant is able to meet the relevant License requirements. The Applicant must ensure the satisfaction of the relevant License requirements and conditions within a period of no more than one year. SAMA may, in its sole discretion, extend the preliminary approval duration for an additional 180 calendar days as a maximum.
           
          (2)In addition to the requirement set forth in Article 14 of the Implementing Regulation, SAMA will outline in its in-principle approval all outstanding requirements that must be addressed by the Applicant in order for SAMA to be satisfied with any licensing conditions and concerns raised therein, subject to the duration set forth in Paragraph (1) of this Article.
           
          (3)The Applicant is required to address the outstanding requirements outlined in the in-principle approval before the in-principle approval expires further to Paragraph (1) of this Article.
           
          (4)The in-principle approval does not grant the Applicant the right to carry out any service or activity for which a License is required from SAMA under the Law.
           

        • Article 16

           

           (1)Upon licensing, SAMA will enter the Licensee information into an online registry accessible to the public through the means determined by SAMA.
           
           (2)A Licensee’s information entered in the register must include the following:
           
             (a)The category of License determined for that Licensee;
           
             (b)The services and activities for which it is licensed; and
           
             (c)Any restrictions imposed by SAMA on the License.
           

        • Article 17

           (1)A License for a Payment Service Provider shall be granted for a term of five years as a maximum.
           
           (2)A License for a Payment System Operator shall be granted for a term deemed appropriate (in a case-by-case basis) in the sole determination of SAMA.
           
           (3)A License may be renewed by SAMA based on a request by the Licensee, for a similar period or another period in the sole determination of SAMA, after fulfilling the requirements stipulated in the Implementing Regulation.
           
           (4)The renewal application must be submitted to SAMA at least six months prior to the expiry of the License period or the renewed period in accordance with the application determined by SAMA.
           
           (5)The renewal application of a Payment System Operator must be accompanied by a program of operations in a format agreeable to SAMA.
           
           (6)The Payment Service Provider must submit a three-year business plan in addition to the following:
           
             (a)A marketing plan taking into account existing and planned products;
           
             (b)Relevant policies and procedures
           
             (c)Projected financial statements, annual revenue and expenses, financial margins and targeted growth rates against the performance of the Payment Service Provider over the past three years, taking into account any modifications to its’ strategy and business plan;
           
             (d)Projected liquidity and capital adequacy ratios against the levels of liquidity and capital solvency ratios of the past three years, taking into account any modifications to its’ strategy and business plan;
           
             (e)The estimated ongoing finance of operations;
           
             (f)Branch offices to be established (if applicable);
           
             (g)Report on risk incidents sustained by the Payment Service Provider through the past three years and how the Payment Service Provider dealt with such risk incidents, including incidents of non-compliance with applicable laws, regulations, and decisions; and future plans and programs to manage risk and the compliance function;
           
             (h)Current number of employees and the percentage of Saudi nationals thereof in accordance with the related laws and instructions at each department and each organizational level;
           
             (i)Recruitment and training plan, including training and qualification programs for employees; and
           
             (j)Any other documents and information that SAMA may request.
           
           (7)The fees required for renewing the License must be paid in full at the time of the submission of the renewal application.
           

        • Article 18

          The Licensee must not cease any of its services or activities totally or partially unless SAMA has granted its prior written approval and without prejudice to the Licensee’s obligations towards its Clients, creditors, shareholders, Members (as applicable) or the integrity and the stability of the financial sector.
           

        • Article 19

           (1)The Licensee shall receive a non-objection letter from SAMA prior to engaging or participating in establishing any entities or any additional commercial or investment activities or commencing the practice of any of these activities.
           
           (2)SAMA may make it a condition of a License to require the Licensee or Applicant to create a separate legal entity for such business that is beyond the scope of the Law and the Implementing Regulation if such business could:
           
             (a)Impact the Licensee’s financial soundness;
           
             (b)Impact the ability of SAMA to supervise the Licensee;
           
             (c)Impact the Licensee’s ability to comply with the laws, regulations and decisions applicable to it; or
           
             (d)Impact the Licensee in any other way as deemed by SAMA.
           

          • Article 20

            The Licensee may apply for an amendment of the License for the addition or deletion of some activities or services or amendment of any term or limitation thereof. An amendment application must be based on reasonable justifications and supported by studies, documents and information and accompanied by any documents, information or studies required by SAMA.
             

          • Article 21

             (1)Without prejudice to SAMA’s other powers under applicable laws, regulations and decisions, SAMA may revoke or suspend a License granted to a Licensee in any one or more of the following circumstances:
             
               (a)A Payment Service Provider has not provided any payment services in the Kingdom for a period of at least six consecutive months;
             
               (b)A Payment System has not processed any Payments Orders in the Kingdom for a period of at least twelve consecutive months;
             
               (c)A Licensee notifies SAMA that it intends to cease carrying on the Relevant Payment Services or Payment System operations;
             
               (d)A Licensee no longer meets or failed to meet the requirements of the License;
             
               (e)A Licensee fails to inform SAMA, in accordance with the provision of Article 39 of the Implementing Regulation, of a change in circumstances that SAMA deems to be materially relevant to its compliance with the requirements of the Implementing Regulation;
             
               (f)A Licensee has committed a material breach of a provision of the Law and the Implementing Regulation;
             
               (g)A Licensee constitutes a threat to the stability of or trust in a Payment System as per assessment by SAMA; or
             
               (h)SAMA deems that revocation is otherwise desirable in order to protect the interests of Payment Service users or Members or for market protection or the financial stability in the Kingdom.
             
             (2)Subject to Paragraph (4) of this Article, before suspending or revoking a License, SAMA will notify the Licensee of the reason for the suspension or revocation and allow it thirty calendar days from the date of dispatch of the notification to appeal the decision, the appeal does not affect the validity of the suspension or revocation decision unless SAMA decides otherwise.
             
             (3)SAMA may take the necessary measures and decisions to close or liquidate the licensed entity upon revocation of its license.
             
             (4)Where SAMA decides to suspend a License, it may prescribe a certain period for the suspension or notify the Licensee that the suspension will continue until the licensee is able to demonstrate compliance with the licensing conditions and the Implementing Regulation provisions or completion of actions prescribed by SAMA.
             

          • Article 22

             (1)A Licensee may apply to SAMA for cancellation of its License as prescribed by SAMA taking into consideration the impact on the sector’s integrity and financial stability in the Kingdom.
             
             (2)A License cancellation Applicant must provide SAMA with the following:
             
               (a)The reasons for the request to cancel its License;
             
               (b)The impact resulting from its cessation of carrying out providing Relevant Payment Services or operating a Payment System;
             
               (c)The projected date on which it will cease to carry on providing Relevant Payment Services or operating a Payment System; and
             
               (d)The evidence of discharging, or its ability to discharge, all obligations owed to its Clients.
             

          • Article 23

             (1)Upon approval of the application and prior to the issuance of the License, the Applicant shall pay SAMA the License issuance fee pursuant to Article 7 of the Law, which corresponds with the type of License being applied for, as follows:
             
               (a)Twenty thousand Saudi Riyals (SAR 20,000) for a Micro PI License;
             
               (b)Fifty thousand Saudi Riyals (SAR 50,000) for a Major PI License;
             
               (c)Twenty thousand Saudi Riyals (SAR 20,000) for a Micro EMI License;
             
               (d)Fifty thousand Saudi Riyals (SAR 50,000) for a Major EMI License;
             
               (e)Twenty thousand Saudi Riyals (SAR 20,000) for a Payment Initiation Services License; and
             
               (f)Twenty thousand Saudi Riyals (SAR 20,000) for a Payment Account Information Services License.
             
             (2)In the event of an amendment of a License further to Article 20 of the Implementing Regulation, a Licensee will be subject to re-evaluation and the License issuance date will be amended in such circumstances.
             
             (3)SAMA may review and adjust the fees mentioned in Paragraph (1) of this as it deems appropriate.
             
             (4)SAMA determines License issuance and renewal fees applicable to Payment System Operators on a discretionary basis, commensurate with the size as well as the nature of and complexity of the Payment System Operator and the complexity of relevant operations.
             

      • Part 3: Agents and Electronic Money Distributors

        • Article 24

           (1)A Payment Service Provider must obtain a non-objection letter from SAMA before it appoints an Agent for the provision of any Payment Service and submit a business plan in a form satisfactory to SAMA; the Application must include at least the following:
           
             (a)The anticipated number and location of the Agents;
           
             (b)The data of Persons that are intended to be appointed as Agents, as well as evidence that such Persons have obtained all necessary registrations, licenses and permissions from SAMA and other competent authorities in order to carry out their activities;
           
             (c)The policies, procedures, systems and controls that the Payment Service Provider will use to select and supervise the Agent;
           
             (d)The activities relating to the provision of Relevant Payment Services that are to be carried out by the Agents; and
           
             (e)Such other information, data or documents as SAMA may request.
           
           (2)SAMA’s non-objection to the appointment of an Agent shall be deemed cancelled if the approved Agent does not commence its activities within a nine-month period from the date of issuing SAMA’s non-objection. SAMA may extend this period if it deems appropriate.
           
           (3)SAMA may revoke its non-objection to the appointment of an Agent where an Agent or the Payment Service Provider that appointed it has contravened the provisions of the Implementing Regulation or other applicable laws, regulations or decisions.
           
           (4)The Payment Service Provider must ensure the compliance of the Agent when acting on its behalf according to the following:
           
             (a)May distribute or redeem Electronic Money on behalf of an EMI into an Electronic Money account but may not issue Electronic Money on behalf of an EMI;
           
             (b)Must ensure that it does not contravene any provision of the Outsourcing Rules; and
           
             (c)Must only carry out activities for which it is duly licensed in accordance with applicable laws and regulations.
           

        • Article 25

           (1)An Electronic Money Institution that wishes to appoint an Electronic Money Distributor must comply with the following:
           
             (a)At least thirty calendar days before that Electronic Money Distributor commences work under its appointment, submit a business plan to SAMA describing the following:
           
               i.The anticipated number and location of the Electronic Money Distributors;
           
               ii.The data of Persons that are intended to be appointed as Electronic Money Distributors, as well as evidence that such Persons have obtained all necessary registrations, licenses and permissions from SAMA and other competent authorities in order to carry out their activities;
           
               iii.The policies, procedures, systems and controls that the Payment Service Provider will use to select and oversee the Electronic Money Distributors;
           
               iv.The activities relating to the provision of Relevant Payment Services that are to be carried out by the Electronic Money Distributors; and
           
               v.Such other information, data or documents as SAMA may request;
           
             (b)Within ten calendar days of entering into a contractual agreement to appoint an Electronic Money Distributor, notify SAMA of such entry, with the right of SAMA to refuse within this period.
           
           (2)The Payment Service Provider must ensure the compliance of the Electronic Money Distributor according to the following:
           
             (a)Is prohibited from issuing the electronic money but may distribute Electronic Money on behalf of an EMI into an Electronic Money account or redeem Electronic Money;
           
             (b)Must ensure that it does not contravene any provision of the Outsourcing Rules.
           
             (c)Must only carry out activities for which it is duly licensed in accordance with applicable laws and regulations.
           

        • Article 26

           (1)Notwithstanding the Payment Service Provider’s responsibilities towards its Agents and Electronic Money Distributors specified in Paragraph (2) below, SAMA may supervise an Agent or Electronic Money Distributor directly or take any enforcement or remedial action in accordance with its powers where it deems it necessary. For such purposes only, Agents and Electronic Money Distributors are considered Payment Service Providers.
           
           (2)A Payment Service Provider that appoints an Agent or an Electronic Money Distributor must comply with the following:
           
            (a)Must take all necessary steps to ensure that the Agent and Electronic Money Distributor are acting in compliance and must be responsible for all acts and omissions of the Agent and Electronic Money Distributor (including the compliance with the obligations to safeguard Safeguarded Funds according to the provisions of Part 7 of the Implementing Regulation;
           
            (b)Must put in place policies, procedures and systems and controls necessary to meet its obligations, including but not limited to the following:
           
             (i)The occupants of Senior Positions at Agent and Electronic Money Distributor are fit and proper to carry out the activities for which they have been appointed (taking into account the Fit and Proper Requirements);
           
             (ii)The powers to oversee activities relating to the provision of Relevant Payment Services that are carried out by an Agent or Electronic Money Distributor;
           
             (iii)Disclosure to Payment Services users of its relationship with the Agent or Electronic Money Distributor;
           
             (iv)Risks associated with the use of Agents and Electronic Money Distributors are addressed and documented;
           
             (v)Personnel of Agents and Electronic Money Distributors receive appropriate training in order to ensure that they carry out their activities competently and in compliance with the Implementing Regulation and other relevant laws, regulations and decisions; and
           
             (vi)Procedures to remove any Agent or Electronic Money Distributor that has contravened a requirement of the Law and the Implementing Regulation and other relevant laws, regulations, decisions and instructions.
           
            (c)Payment service provider must submit an annual report to SAMA regarding the Agents and Electronic Money Distributor, their activities and tasks, their performance evaluation, accidents and problems, and the mechanism for addressing them, according to the form determined by SAMA.
           

      • Part 4: Licensee Obligations

        • Chapter 1: Outsourcing Rules and Auditing and Risk Management

          • Article 27

             1.A Licensee must comply with the Outsourcing Rules in a manner sufficient to ensure compliance with its obligations under Part 4 of the Implementing Regulation.
             
             2.A Licensee must obtain a non-objection letter from SAMA in the event of its intention to enter into a contract with another Person under which that other Person will carry out material functions relating to its provision of Relevant Payment Services or operation of a Payment System.
             
             3.

            Where a Licensee intends to outsource material functions, the Licensee shall consider the following:
             

            (a)The outsourcing is not undertaken in such a way as to impair or adversely affect:
             
             (i)The quality of the licensee’s internal controls (including over the outsourced services);
             
             (ii)The powers of SAMA to monitor the licensee’s compliance with the Law and the Implementing Regulation and the licensing requirements.
             
             (iii)The relationship and obligations of the Licensee towards its Payment Service Users or Members.
             
             (iv)Compliance with the conditions which the licensee must observe in order to be licensed; and
             
             (v)Adherence to the conditions of the License.
             
            (b)Outsourcing of functions shall not lead to delegating the Licensee's responsibilities to comply with the Implementing Regulation by the Senior Positions;
             
               
             4.

            For the purposes of the Paragraph (3) of this Article, functions are considered material if a defect or failure in its performance would materially impair any of the following :
             

            (a)Compliance with the licensee with the Law and the Implementing Regulation or any of the License requirements;
             
            (b)The financial performance of the licensee.
             
            (c)The soundness or business continuity of the Relevant Payment Services or the Payment System.
             
             5.The licensee must notify SAMA of any change in outsourced functions or the Persons to which functions are outsourced.
             
             6.Where a Licensee outsources functions, it remains liable to its Clients and to SAMA.
             

          • Article 28

             1.A Licensee must have risk management, compliance policies and business continuity, procedures, systems and controls that are comprehensive and proportionate to the nature, scale and complexity of the provided activities and services by the Licensee, and the policies, procedures, systems and controls must take into account the types of activities performed by the Licensee, the nature, scale and complexity of its business model, any operational challenges and the degree of risk associated with its operations.
             
             2.A Licensee must ensure that its risk management and compliance policies, and business continuity, procedures, systems and controls are kept up-to-date and must review them at least once per year, submitting copies when there are any material updates to SAMA. SAMA may request additional information or changes to be made.
             
             3.

            A licensee’s risk management and compliance systems and controls must include the following:
             

            (a)Effective procedures for identifying, managing, monitoring and reporting any risks to which the entity may be exposed;
             
            (b)Adequate internal control mechanisms, including sound administrative, risk management and accounting procedures;
             
            (c)Appropriate mechanisms for the verification of compliance with all relevant requirements under the Law and the Implementing Regulation, as well as all other relevant applicable laws, regulations, instructions and circulars and decisions.
             
            (d)Policies and procedures to detect and respond to fraud incidents; and
             
            (e)Policies and procedures to inform SAMA and the competent authorities of fraud incidents.
             
             4.

            Subject to Paragraph (3) above, a Licensee’s risk management and compliance systems and controls must include the following:
             

            (a)The establishment of a risk management function, internal audit function and compliance function, with the heads of such functions being provided with sufficient independence and resources to carry out their duties; and
             
            (b)The establishment of an integrated control framework between the internal audit, risk management, and compliance functions, and external audits.
             

          • Article 29

            The Licensee must have sufficient and eligible staff that have the appropriate knowledge and experience in order to fulfill the operational needs of the Licensee. The remuneration and incentives of staff must be fair and aligned with the Licensee’s risk management strategy, taking into account the principles of sound governance, non-conflict of interests and the principles of customer protection; and the Licensee must comply with laws, regulations and decisions applicable in the Kingdom in relation to non-Saudi employee percentage.
             

          • Article 30

            A Licensee must have corporate governance rules, systems and controls that are commensurate with the nature, scale and complexity of its business and structure, designed to address matters that include but are not limited to its organizational structure, independence and separation of duties, roles of the company management and board members and its committees – including the appointment of the managers and members and their duties, remuneration and compensation policies, conflict of interest controls, integrity and transparency controls, compliance with applicable laws, regulations and decisions, confidentiality and protection of company assets. In so doing, the Licensee must meet the applicable standards and principles as promulgated by SAMA and competent authorities in this regard.
             

          • Article 31

            The Licensee must establish an internal audit department unit reporting directly to the audit committee (or its equivalent) of its board or the company directors. The internal audit department shall be independent in performing its duties, and its employees shall not be assigned any other responsibilities in accordance with the following:
             

             (1)The internal audit unit assesses the internal policies and controls and will ensure the extent to which the Licensee and its employees comply with the applicable laws, regulations and decisions, and Licensee’s policies and procedures, including outsourced functions. The internal audit unit must have unfettered access to information and documents as necessary.
             
             (2)The internal audit unit shall operate according to a comprehensive audit plan approved by the audit committee of its board, which shall include major activities and operations, including those related to risk management and compliance, and must be updated on an annual basis.
             
             (3)The internal audit unit must prepare and submit to the audit committee a written report on its work every three months. This report must include the scope of the audit, all findings and recommendations. It must also include the procedures taken by each department in respect of the findings and recommendations of the previous audit, especially if they have not been settled on time and the reasons for their unsettlement, and any other related observations.
             
             (4)The internal audit unit must prepare and submit to the audit committee of its board a report on all of its audits in each fiscal year, compared with the approved audit plan and stating any gaps or deviations from the audit plan, if any. This report shall be submitted within the first quarter following the end of every fiscal year.
             
             (5)The Licensee shall maintain the working documents and approved audit reports that show in a transparent manner the work carried out, as well as the approved findings and recommendations and what has been accomplished regarding these recommendations.
             

          • Article 32

             (1)A Licensee must appoint an external auditor (and must receive a non-objection letter from SAMA prior to doing so) to conduct an external audit. The appointed auditor must be subject to rotation on a five-year basis.
             
             (2)The external auditor must be approved by the competent authorities in the Kingdom and must have no conflict of interest in acting for the Licensee.
             
             (3)

            A Licensee must ensure that its terms of appointment with an auditor require that the auditor, at a minimum:
             

            (a)Carries out, for the year in respect of which the auditor is appointed, an audit of the financial statements or consolidated financial statements of the Licensee prepared in accordance with the financial and accounting standards and practices approved for use in the Kingdom;
             
            (b)Carries out an audit of the transactions in relation to the regulated services (separately from any audit carried out on activities not related to regulated services); and
             
            (c)Submits a report of the audit to SAMA in such form as may be prescribed by SAMA and within such timeframe as SAMA may allow (including separate accounting information in respect of regulated activities) In accordance with the provisions of the Implementing regulation.
             
             4.

            SAMA may make further requests of the auditor, including but not limited to the following:
             

            (a)To submit any additional information in relation to the audit;
             
            (b)To enlarge or extend the scope of the audit of the Licensee’s business; and
             
            (c)To carry out any other examination that it requests in relation to the audit.
             
             (5)If SAMA is not satisfied with the performance of the auditor, SAMA may direct the Licensee to remove the auditor and appoint another auditor at the Licensee’s expense.
             
             (6)The auditor’s reports prepared in accordance with this Article must be attached to the balance sheet and the profit and loss account, the financial statements or the consolidated financial statements of the Licensee, which must submit copies of these reports to SAMA in such form and time as may be prescribed by SAMA.
             
             (7)

            A Licensee must ensure that its terms of appointment with an auditor require that, if the auditor believes that any of the following matters have occurred, the auditor must immediately report such matter to SAMA:
             

            (a)There has been a contravention of any provision of the Law and the Implementing Regulation or other applicable laws, regulations, decisions and instructions;
             
            (b)A criminal offense involving fraud or dishonesty has been committed;
             
            (c)Losses have been incurred that have led to the capital requirements set out in the Implementing Regulation not being satisfied;
             
            (d)There is any irregularity that has or may have a material effect on the accounts of the Licensee, including any irregularity that had caused a major disruption to the provision of any type of regulated service to the Clients of the Licensee; and
             
            (e)The auditor is unable to confirm that the assets of the licensee exceed the liabilities of the Licensee or satisfy another test of solvency applicable in the Kingdom.
             
             (8)

            A report made under Paragraph (7) of this Article must not be considered a breach of any restriction upon the disclosure imposed by any applicable laws, regulations or contractual terms. The auditor and its employees are not liable for any loss arising from the disclosure or any act or omission in consequence of the disclosure, provided that the auditor or its employees disclose in good faith to SAMA the following:
             

            (a)The knowledge or suspicion of any of the matters mentioned in Paragraph (8) of this Article; and
             
            (b)Any information or other matter on which that knowledge or suspicion is based.
             
             (9)Except as may be necessary for compliance with the Implementing Regulation or relevant laws, regulations, or decisions, a Licensee must instruct the external auditor appointed in accordance with this Article not to disclose any information that comes to its knowledge in the course of performing its duties to any Person other than the Licensee or SAMA.
             
             (10)

            If a Licensee or any of its employees intentionally commits the following (or conspires with any other Person to do any such act), then they shall in contravention of the Implementing Regulation:
             

            (a)Prevent, delay or obstruct the carrying out of an audit
             
            (b)Destroy, conceal or replace any property, records or documents relating to the business of a licensee; or
             
            (c)Sends out of the Kingdom any record, document or asset of any description belonging to or in the possession of or under the control of the Licensee.
             

          • Article 33

            A Licensee must comply with the Implementing Regulation and decisions related to business continuity management issued by SAMA, taking into account the types of activities performed, as well as the nature, scale and complexity of their business model.
             

          • Article 34

            A Licensee must comply with the Implementing Regulation and decisions related to cyber security requirements issued by SAMA and other applicable regulations of competent authorities in the Kingdom.

          • Article 35

            A Licensee must comply with the Implementing Regulation, rules, decisions and  circulars on data and technology governance requirements in relation to  information technology systems issued by SAMA, in addition to any other  applicable laws, regulations or relevant decisions issued by competent  authorities in the Kingdom and a Licensee must adhere to the relevant approved  technical standards of the Payment System of which they are Members or that  would otherwise apply to them, and any other technical standards relevant for  the execution of Payment Transactions (including the Payment Card Industry – Data Security Standards as may be applicable and amended).

          • Article 36

             (1)The Licensee must comply with the laws, regulations, resolutions and instructions issued in relation to the Anti-Money Laundering, Counter-terrorism Crimes and Financing and the internal policies issued in this regard.
             
             (2)The Licensee must adopt a risk-based approach in developing its Anti-money laundering and counter-terrorist financing internal policies and procedures to ensure that measures used to mitigate the risks of money laundering and terrorist financing are commensurate to the risks identified.
             

          • Article 37

             (1)A Licensee must comply with the applicable laws in relation to data protection in the Kingdom, as well as with any other regulations, resolutions, instructions and circulars issued by SAMA.
             
             (2)A Licensee must protect Client Data and maintain their confidentiality, including when it is held by a third party or an Agent of the Licensee. The personal information of Clients may be accessed and used by personnel authorized by the Licensee only to comply with regulatory requirement applicable in the Kingdom, including in relation to suspicion of money laundering reporting, fraud and financial crime reporting.
             
             (3)

            Subject to applicable laws, a Licensee must not disclose Client Data except where the following:
             

            (a)In compliance with SAMA requirements or under the request of other competent authorities from SAMA inside and outside the Kingdom.
             
            (b)The disclosure is made with the prior specified written consent of the Client.
             
             (4)A Licensee must put in place and maintain adequate policies, procedures and controls, as well as employee awareness training, to protect Client data from any information security risks.
             
             (5)A Licensee must put in place data protection controls in accordance with what is issued by SAMA and other competent authorities in the Kingdom in this regard.
             

          • Article 38

             (1)A Licensee must make and keep records of transactions, data and information relating to compliance with requirements of Part 4 of the Implementing Regulation, in a form where such records would enable SAMA to supervise such compliance effectively.
             
             (2)

            The records which SAMA requires Licensees to keep and include:
             

            (a)Financial information (including financial statements, bank statements, and Client accounts) and Accounting Records, including (but not limited to): cheques, records of electronic Fund transfers (including as relevant, bank statements), invoices, contracts, general and subsidiary ledgers, journal entries and adjustments to the financial statements that are not reflected in journal entries; and Worksheets and spreadsheets supporting cost allocations, computations, reconciliations and disclosures.
             
            (b)Reports relating to the activities performed by the Licensee, the volume of business and Relevant Payment Services (including the volume and value of Payment Transactions);
             
            (c)Minutes of the board or the company directors and related business decisions;
             
            (d)Information on any security or material operational incidents that are (when viewed in isolation or jointly with other incidents) not immaterial;
             
            (e)Records of Consents given to Payment Transactions;
             
            (f)Records of security logs, including authentication logs;
             
            (g)Details of changes required to be submitted in accordance with Article 121 of the Implementing Regulations.
             
            (h)Reports on risk management (including in relation to incidents of fraud that must be disclosed);
             
            (i)Reports on data protection and privacy measures taken;
             
            (j)Complaints from Payment Service users, including any remedial action taken;
             
            (k)Reports of any errors, delays, refunds or other matters dealt with;
             
            (l)Reports on compliance with the requirements of protecting safeguarded funds ;
             
            (m)Any information related to know-your-customer requirements, Client due diligence and sanctions screening in accordance with the laws, regulations and instructions of Anti-Money Laundering and Counter-Terrorism Crimes and Financing;
             
            (n)Reports on compliance with the Implementing Regulation or other applicable laws, regulations, decisions, instructions and circulars.
             
            (o)Material legal documentation, including employment contracts, auditor appointment contracts, agreements relating to business continuity and outsourcing agreements, as well as corporate governance documentation.
             
             (3)A Licensee must maintain such records and keep them for at least ten years from the date on which the relevant record was created. SAMA, however, may (at its discretion) amend the Licensee’s retention period of records as deemed appropriate.
             
             (4)

            A Licensee must put in place and maintain policies, procedures, systems and controls that regulate the electronic storage of documents and records, satisfying the following minimum requirements:
             

            (a)Creating and storing records and documents on highly reliable, secure storage media;
             
            (b)Clearly indexing and categorizing records and any related documents in a manner that enables further use or reference;
             
            (c)Providing a reliable and secure system for granting and organizing access privileges for electronic and physical systems, ensuring that there is no unauthorized access to electronically or physically held data;
             
            (d)Creating and maintaining a backup policy providing the utmost level of protection and the ability to retrieve backup copies in case of the loss of the original copy of any kind and testing the backup copies periodically;
             
            (e)Using digital certification and electronic encryption;
             
            (f)Storing the records and related documents in the same format in which it was created or received, without any additions, omissions or modifications;
             
            (g)Logging all actions made in relation to a record; and
             
            (h)Ensuring that personnel with authorization to access electronic and physical records, documents and data maintain their confidentiality during and after the period of their employment or work at the Payment Service Provider.
             
             (5)The Licensee must conduct regular reviews, at least on an annual basis, to ensure compliance with the provisions of this Article.
             

        • Chapter 2: Structural Changes

          • Article 39

             (1)Before making any of the changes set out in Paragraph (2) of this Article, a Licensee must obtain a non-objection letter from SAMA and provide reasons for making such changes with details of the proposed date on which each change is suggested to come into effect.
             
             (2)

            The changes include the following:

            (a)The changes to the details of the Licensee, including but not limited to the following:
             
             (i)Legal name (as shown on the public register); and trading name;
             
             (ii)Principal place of business;
             
             (iii)Address of the registered office in the Kingdom;
             
             (iv)Opening and closer of branches.
             
             (v)The contact details of the member of the Senior Positions that is the primary contact for communications with SAMA;
             
             (vi)Its website; and
             
             (vii)Details of any commercial registrations of its subsidiaries -where applicable -.
             
            (b)The changes to the operation, management or financing of the Licensee’s business, including but not limited to:
             
             (i)Any proposed restructuring, reorganization or business expansion, with a detailed explanation of any foreseeable that might result from changes to the Licensee’s risk profile;
             
             (ii)Any action that would result in a material change to the Licensee’s financial resources; and
             
             (iii)Changes to material outsourcing arrangements or material new agreements with service providers for outsourcing;
             
            (c)Changes to the policy documenting the methods adopted for Safeguarded Funds;
             
            (d)Changes to the natural persons making up the Senior Positions of a Licensee or changes affecting the fitness and propriety of any Controller or member of Senior Management;
             
            (e)Changes to policy for setting transaction or other limits required by Article 70 of the Implementing Regulations.
             
            (f)Changes to its commercial activities beyond the scope of the Implementing Regulation;
             
            (g)Any other changes that SAMA specifies.
             
             (3)The Licensee must obtain prior written approval from SAMA in the event that it wishes to go public with its shares or part thereof.
             

             

          • Article 40

             (1)

            A Licensee must keep a register in respect of each of its Controllers and update it within forty days of becoming aware of any changes. Accordingly, Controllers shall provide the Licensee with all necessary information to be included in the register, which includes (as a minimum) the following particulars:
             

            (a)Full name;
             
            (b)Current residential address;
             
            (c)Date and place of birth;
             
            (d)Nationality; and
             
            (e)Copy of current government identity document.
             
             (2)A Licensee shall send to SAMA an annual report identifying its Controllers in the mechanism and format set by SAMA.
             
             (3)A Licensee shall notify SAMA as soon as possible after it becomes aware of any significant changes in the conduct or circumstances of existing Controllers that may impact the fitness and propriety of a Controller or the ability of the Licensee to conduct its business properly.
             

          • Article 41

             (1)A Licensee that is incorporated in the Kingdom must obtain prior written approval from SAMA in the event that any Person wishes to become a Controller or to increase their level of control.
             
             (2)Upon receiving a request under the above Paragraph of this Article, SAMA may approve or reject the request to add the Controller or increase the level of control or impose any conditions on the Licensee or Controller.
             
             (3)Where SAMA proposes to approve a proposed Controller or an increase in the level of control in the Licensee, it shall do so in writing within ninety calendar days of the receipt of a completed application;
             
             (4)TAn approval, including a conditional approval granted by SAMA pursuant to this Article, is valid for a period of six months from the date of the approval unless an extension is granted by SAMA in writing.
             
             (5) A Person who has been approved by SAMA as a Controller must comply with the relevant conditions of approval. A Licensee shall not enable the Person who has been notified by SAMA as unacceptable to proceed with the proposed acquisition of control of the Licensee.
             
             (6) In the case of the Licensee being a branch of an entity that is incorporated outside the Kingdom, a written notification to SAMA must be submitted by a Controller or a Person proposing to become a Controller of that Licensee or proposing to exceed the level of control.
             
             (7) A Controller who proposes to stop being a Controller or who proposes to decrease their level of control must notify SAMA before taking any action that results to decrease their level of control.
             

             

        • Chapter 3: Licensing Requirements for Payment Service Providers

          • Article 42

             (1) 

            A Payment Service Provider is considered a Micro PI if the following conditions are met:
             

            (a)Carries on one or more Relevant Payment Services, except issuing Electronic Money;
             
            (b)Does not provide Relevant Payment Services cross-border to Persons outside the Kingdom;
             
            (c)Does not exceed the Average Monthly Payment Transaction Value of ten million SAR.
             
             (2)A Payment Service Provider is considered a Major PI in the event that one or more Relevant Payment Services are implemented, except for the issuance of Electronic Money, and the average value of monthly payments exceeds ten million SAR.
             

          • Article 43

             (1)

            An EMI is considered a Micro EMI if the following conditions are met:
             

            (a)Ensures that its Total Average Outstanding Electronic Money does not exceed ten million SAR;
             
            (b)Does not exceed an Average Monthly Payment Transaction Value of ten million SAR;
             
            (c)Does not permit any Payment Service User to hold more than twenty thousand SAR of Electronic Money in aggregate across all accounts held by that Payment Service User, subject to Paragraph (3) of this Article;
             
            (d)Does not permit any Payment Service User to execute Payment Transactions of more than twenty thousand SAR per calendar month in aggregate, including Cash-Out Transactions (but excluding those made in the event of the closure of an Electronic Money account), subject to Paragraph (3) of this Article.
             
             (2) An EMI is considered a Major EMI in the event that it exceeds any of the limits stipulated in the above Paragraph of this Article.
             
             (3)

            A Micro EMI must comply, in the cases prescribed below, with the following:
             

            (a) A Micro EMI that has yet to start issuing Electronic Money, or has been issuing Electronic Money for fewer than twelve calendar months, must ensure that its projected Total Average Outstanding Electronic Money for its initial twelve-month period of operations does not exceed ten million SAR; and
             
            (b) A Micro EMI that has yet to commence the provision of Relevant Payment Services, or has been providing Relevant Payment Services for fewer than twelve calendar months, must ensure that its projected Average Monthly Payment Transaction Value does not exceed ten million SAR.
             
             (4) SAMA may increase one or more of the limits set out in Paragraph (1) of this Article if the Micro EMI submits an application that includes adequate causes and is committed to having sufficient systems and controls to monitor those limits, taking into account the power of SAMA to restrict its approval until additional conditions as deems appropriate are met.
             
             (5) 

            A Major EMI must comply with the following:

            (a) Not permit any Payment Service User to hold Electronic Money of more than one hundred thousand SAR in aggregate across all accounts held by that Payment Service User; and
             
            (b) Not permit any Payment Service User to execute Payment Transactions of more than one hundred thousand SAR (per calendar month in aggregate, including Cash-Out Transactions (but excluding those made in the event of the closure of an Electronic Money account).
             
             (6)SAMA may increase one or more of the limits set out in Paragraph (5) of this Article if the Major EMI submits an application that includes adequate causes and is committed to having sufficient systems and controls to monitor those limits, taking into account the power of SAMA to restrict its approval until additional conditions as deems appropriate are met.
             

          • Article 44

             (1)

            An Applicant must provide evidence satisfactory to SAMA that it meets the initial capital requirement for licensing as follows:
             

            (a)Provide evidence of possession of at least one million SAR in paid-up equity for a Micro PI License.
             
            (b) Provide evidence of possession of at least three million SAR in paid-up equity for a Major PI License.
             
            (c) Provide evidence of possession of at least two million SAR in paid-up equity for a Micro EMI License.
             
            (d) Provide evidence of possession of at least ten million SAR in paid-up equity for a Major EMI License.
             
            (e) Provide evidence of possession of at least one million SAR in paid-up equity for a Payment Initiation Service License independently or with a Payment Account Information Services License.
             
            (f) Provide evidence of possession of at least five hundred thousand SAR in paid-up equity for a Payment Account Information Services License.
             
             (2) An Applicant for a License to act as a Payment System Operator must comply with such initial capital requirements as determined by SAMA that are commensurate with the projected size, as well as the nature, scale and complexity of the proposed Payment System or Systems proposed to be operated by it.
             

          • Article 45

             (1)As an on-going capital requirement, Licensees must maintain regulatory capital as set out in this Article.
             
             (2)A Micro PI and Micro EMI must maintain an amount equal to the initial capital requirement stated in Article 44 of the Implementing Regulations.
             
             (3) 

            A Major PI must maintain an amount equal to the higher of:
             

            (a) The initial capital requirement stated in Article 44 of the Implementing Regulations.
             
            (b) 1% of the Major PI’s Average Monthly Payment Transaction Value.
             
             (4)

            A Major EMI must maintain an amount equal to the higher of:
             

            (a)The initial capital requirement stated in Article 44 of the Implementing Regulations.
             
            (b) 2% of the Total Average Outstanding Electronic Money.
             
             (5) 

            A Payment Service Provider must provide evidence of its compliance with its on-going capital requirements by providing the following:
             

            (a)A certified copy of a license issued by the competent licensing authority in the Kingdom showing its paid-up capital;
             
            (b)Audited financial statements by a certified public accountant in the Kingdom;
             
            (c)Any other method deemed acceptable by SAMA.
             
             (6)A Payment Service Provider must comply with the relevant accounting standards applicable in the Kingdom, as determined by SAMA in this regard.
             

          • Article 46

             

             (1)Payment Account Information Services Provider or Payment Initiation Services Provider must hold professional indemnity insurance or a comparable guarantee.
             
             (2) 

            The professional indemnity insurance must cover potential liability to Payment Account Service Providers and Payment Service Users, resulting from - unless there is a specific value indicated by SAMA :
             

            (a) In respect of its Payment Account Information Services, unauthorized or fraudulent access to, or use of, Payment Account information;
             
            (b)In respect of its Payment Initiation Services, Unauthorized Payment Transactions and non-execution or defective or late execution of transactions and associated liability for charges and interest and right of recourse.
             

        • Chapter 4: Scope of Application on the Licensees

          • Article 47

            SAMA has the power to exempt Payment Services Providers from the application of any of the provisions of Part 4 according to the criteria it sets and in a manner that does not conflict with the objectives of the Law and the Implementing Regulation.
             

          • Article 48

             

             (1)A Licensed Bank that provides Relevant Payment Services is exempted from the requirement to apply for a License under the Implementing Regulation.
             
             (2)SAMA shall specify the provisions of the Implementing Regulation that a licensed bank must comply with when providing Relevant Payment Services, in accordance with its nature and in a manner that achieves the objectives of the Law and the Implementing Regulations.
             

          • Article 49

             

            (1)Subject to the remainder of this Article, the provider of a Limited Network Service must register with SAMA as a provider of a Limited Network Service in the manner designated by SAMA.
             
            (2)A registered Provider of a Limited Network Service-with SAMA- must notify SAMA immediately if its execution of transactions within the context of a Limited Network Service exceeds (or will likely be expected to exceed) the aggregate value of five million SAR in any period of twelve consecutive calendar months, or the value of two million SAR in any month in that twelve-month period.
             
            (3) The notification to SAMA must include a description of Limited Network Service provider services and its reasons for categorizing the relevant transactions as a Limited Network Service.
             
            (4) Notifications and information provided to SAMA under Paragraph (2) of this Article must be given within such time and in such form as SAMA may direct after the end of the relevant month or period of twelve months.
             
            (5) A Person to which this Article applies may be required by SAMA to apply for a License.
             

      • Part 5: Consumer Protection and Financial Inclusion

        • Chapter 1: Consumer Protection

          • Article 50

            A Payment Service Provider must comply with all consumer protection principles and requirements issued by SAMA.

             

          • Article 51

            SAMA shall determine the provisions of the Implementing Regulation that a Payment Service Provider may agree with a Payment Service user not to apply when providing services to a consumer who’s a legal person in a commercial or professional context.

        • Chapter 2: Financial Inclusion

          • Article 52

            (1)Payment Service Providers shall uphold the principles of financial inclusion issued by SAMA when providing Relevant Payment Services.
             
            (2)Payment System Operators shall ensure that their Payment Systems are made available to Members on a fair, open and transparent basis.
             
            (3)Notwithstanding the Law and other applicable laws and in order to achieve the principle of fairness and empowerment, SAMA may require the Operator of a Systemically Important Payment System to enable an applicant to become a Member in relation to that Systemically Important Payment System or require a Direct Member in a Systemically Important Payment System to permit an Applicant with indirect membership.
             

             

             

             

      • Part 6: Relevant Payment Services

        • Chapter 1: Contract Requirements and Information Providing

          • Article 53

             

             (1)

            A Payment Service Provider – when providing relevant Payment Services under a Framework Contract- must provide to each of its Payment Service Users services with the Framework Contract before the execution of the Payment Services, or immediately afterward where the service is provided at the Payment Service User’s request through a means of distance communication and it is not possible to provide the information beforehand, and such agreement must (at minimum) include the following information:
             

            (a) The schedule of fees, charges, commissions and currency, including conversion rates and withdrawal charges,
             
            (b)The legal name, registered address and relevant contact details for the Payment Service Provider;
             
            (c) The provisions and procedures for giving consent to the initiation of a Payment Services Order or execution of a Payment Transaction and for the withdrawal of consent;
             
            (d)The means of communication between the Payment Service Provider and the Payment Service User;
             
            (e) How and within what period of time the Payment Service User is to notify the Payment Service Provider of any unauthorized or incorrectly initiated or executed Payment Transactions and the Payment Service Provider’s liability for such Transactions;
             
            (f) Information relating to how terms and conditions can be amended, the duration of the contract and the rights of the parties to terminate a Framework Contract;
             
            (g)The maximum time in which Payment Transactions will be executed; and
             
            (h) Any other necessary information to meet the Consumer Protection Requirements and Principles in accordance with Article 50.
             
             (2)A Payment Service Provider should provide a copy of the Framework Contract to the Payment Service User on request through the term of the contractual relationship.
             

          • Article 54

            (1)A Payment Service Provider must include in the Framework Contract the right of the Payment Service User to terminate the Framework Contract, without imposing any penalties, within a period of not less than ten working days.
             
            (2)The Payment Service Provider can start the provision of Relevant Payment Services during the cooling-off period, provided the Payment Service User agrees and compliance with all the relevant requirements verification has been completed. Accordingly, the Payment Service User’s right to terminate the Framework Contract during that period shall not be affected.
             
            (3)If the Payment Service User terminates a Framework Contract during the cooling-off period, the Payment Service User will be entitled to a full refund of any previously paid fees that are not yet attributable to a Payment Service provided to them.
             

             

             

          • Article 55

            The Payment Service Provider must notify the Payer -when initiating an individual Payment Transaction under a Framework Contract- of the maximum execution time and the fees and charges payable by the Payer in respect of the Payment Transaction.

          • Article 56

            The Payment Service Provider must provide the Payer with the information of the payment transactions executed under a Framework Contract at least once per month free of charge. Such information shall include the following:
             

            (a)A reference enabling the Payer to identify their Payment Transactions and information relating to the Payee;
             
            (b) The amounts of their Payment Transactions in the currency in which the Payer’s Payment Account is debited or in the currency used for the Payment Services Order;
             
            (c)The amount of any charges for the Payment Transaction and a breakdown of the amounts of such charges, by the Payer;
             
            (d)The exchange rates used in the Payment Transactions by the Payment Service Provider and the amount of the Payment Transaction after that currency conversion; and
             
            (e)The debit value date or the date of receipt of the Payment Services Order.
             

          • Article 57

            The Payment Service Provider must provide the Payee with the information of the payment transactions executed under a Framework Contract at least once per month free of charge. Such information shall include the following:
             

            (a) A reference enabling the Payee to identify the Payment Transaction and the Payer, and any information transferred with the Payment Transaction;
             
            (b)The amount of the Payment Transaction in the currency in which the Payee’s payment account is credited;
             
            (c) The amount of any charges for the Payment Transaction and a breakdown of the amounts of such charges by the Payee;
             
            (d) The exchange rate used in the Payment Transaction by the Payment Service Provider to the Payee, and the amount of the Payment Transaction before that currency conversion; and
             
            (e)The credit value date. 

          • Article 58

            (1)A Payment Service User may terminate a Framework Contract at any time unless the parties have agreed on a notice period for termination. Such notice period must not exceed thirty calendar days.
             
            (2) A Payment Service Provider cannot amend the terms of a Framework Contract, including fees and charges, unless the requirements for amending the terms are specified in the Framework Contract.
             
            (3) A Payment Service Provider may change fees that are linked to floating rates, such as exchange rates, without notice to the Payment Service User, provided that this is stipulated in the Framework Contract and based on a reference rate agreed upon and available to the Payment Service User.
             
            (4) A Payment Service Provider must notify its Payment Service Users of any changes to the terms of a Framework Contract at least thirty days before making such changes and give Payment Service Users the right to terminate the Framework Contract during this notice period at no cost unless a termination fee is agreed upon in the Framework Contract.
             

          • Article 59

            The Payment Service Provider must, immediately after receipt of the Payment Services Order under the One-off Payment Contract, provide to the Payer the following information:
             

            (a)A reference enabling the Payer to identify the Payment Transaction and information relating to the Payee;
             
            (b)The amount of the Payment Transaction in the currency used in the Payment Services Order;
             
            (c) A breakdown of the charges payable by the Payment Service User for the service;
             
            (d)The actual rate used in the Payment Transaction- where an exchange rate is used in the Payment Transaction -and the amount of the Payment Transaction after that currency conversion; and
             
            (e) The date on which the Payment Services Order was received.
             

          • Article 60

            The Payment Service Provider must, upon providing the relevant Payment Services under the One-off Payment Contract, provide the Payment Services User with the following information:
             

            (a) The information or Unique Identifier (as the method of expressing Consent) that has to be provided by the Payment Service User in order for a Payment Services Order to be properly initiated or executed;
             
            (b) The maximum time in which the Payment Service will be executed;
             
            (c) A breakdown of the fees payable by the Payment Service User for the service; and
             
            (d)The actual or reference exchange rate that will be used in the Payment Transaction.
             

          • Article 61

            The Payment Service Provider must, immediately after the execution of the Payment Transaction under the One-off Payment Contract, provide the Payee with the following information:
             

            (a)A reference enabling the Payee to identify the Payment Transaction and the Payer and any information transferred with the Payment Transaction;
             
            (b) The amount of the Payment Transaction in the currency in which the Funds are at the Payee’s disposal;
             
            (c) A breakdown of any fees for the Payment Transaction payable by the Payee; and
             
            (d) The exchange rate used in the Payment Transaction by the Payee’s Payment Service Provider, and the amount of the Payment Transaction before that currency conversion; and
             
            (e) The credit value date.
             

          • Article 62

            Notwithstanding any provisions in this Part, any information provided by the Payment Service Provider to the Payment Service User must take into account the following:
             

            (a)Provide the information in an easily accessible manner, whether that may include the use of digital channels, emails or SMS or any other durable medium;
             
            (b) Provide the information in a written form or another durable form;
             
            (c) Provide the information in easily understandable language and in a clear and comprehensible form; and
             
            (d) Provide the information in Arabic or in any other language agreed upon by the parties.
             
            (e)Any additional methods The Framework Contract may prescribe whereby information is provided.
             

          • Article 63

            (1)A Payment Service Provider may not charge for providing information that is required to be provided under the provision of this Part.
             
            (2)The Payment Service Provider and the Payment Service User may agree on fees for any information which is provided at the request of the Payment Service User, provided that any fees charged correspond to the actual costs of the payment service provider, where such information is additional to the information required in accordance with the provisions of this Part, or to be provided more frequently than is specified or transmitted by means of communication other than those specified in the Framework Contract.
             

          • Article 64

            A Payment Service Provider must ensure that Payment Transactions are executed in the currency agreed upon between the parties. Where a currency conversion service is offered at an automatic teller machine or at the point of sale or by the Payee, all fees must be disclosed to the payer as well as the exchange rate to be used for converting the Payment Transaction before executing the Payment Transactions.

          • Article 65

            (1)The Payment Service Provider must inform the Payment Service User of any required fees for the use of a particular Payment Instrument before the initiation of the Payment Transaction.
             
            (2)A Payment Service Provider must not oblige a Payment Service User to pay any fees if he was not informed of the full amount of the fees in accordance with the provisions of the relevant Article.
             

            • Article 66

              (1)If a Payment Service Provider is not able to execute a Payment Services Order in a timely fashion, it must inform the Payment Service User immediately of the time by which it expects to have executed such an order.
               
              (2) In the event of any planned down-time of a Payment Service, a Payment Service Provider must inform each of its Payment Service Users at least five business days in advance.
               

            • Article 67

              A Payment Service Provider is obliged to ensure that the contracts are balanced in the rights and obligations and are not unfair to the Payment Service User. Such obligation shall not affect the validity of any other provisions in the contract.

            • Article 68

               

               (1)A Payment Service Provider must ensure that any advertising or promotional or marketing material for its Relevant Payment Services is clear and not misleading and must also be made available in the Arabic language. All text and numbers stated in such material should be clearly visible and understandable, with a legible font size used for all text, including footnotes.
               
               (2) 

              A Payment Service Provider must take into account the following when presenting any advertising or promotional or marketing material relating to a Relevant Payment Service:
               

              (a)Promotional, Advertising, or marketing materials must include the name of the relevant Payment Service Provider;
               
              (b) Promotional, Advertising, or marketing materials must be accurate and not emphasize the benefits of a particular product/service without also presenting any relevant risks;
               
              (c) Comparative advertising must compare the relevant products or services of other Payment Service providers on a fair and equivalent basis;
               
              (d)Information on fees, costs, or savings should be accurate and identical;
               
              (e)Information on fees, costs or savings should be clear and not misleading;
               
               (3) A Payment Service Provider must ensure that advertising and promotional or marketing material is designed and presented so that any Payment Service User can reasonably be expected to understand that it is an advertisement and that the availability of the product or service may require the Payment Service User to meet certain criteria.
               
               (4) A Payment Service Provider must maintain a formal compliance process for reviewing and approving advertising and promotional or marketing material.
               
               (5)A Payment Service Provider must not send promotional material to any natural person under the age of eighteen years where such material presents an unsuitable risk to such Payment Service Users.
               
               (6) SAMA may order the withdrawal of any advertising or promotional or marketing materials by the Payment Services that do not meet the minimum requirement of this Implementing Regulation or do not comply with the provisions of the Law.
               

               

               

               

        • Chapter 2: Issuance and Redemption of Electronic Money

          • Article 69

             (1)A contract for services provided by an EMI must be consistent with the requirements for EMIs as set forth in this Article.
             
             (2)An EMI must issue Electronic Money at par value on receipt of Funds.
             
             (3)

            An EMI may not:
             

            (a) Grant interest related to the length of time the Electronic Money is held by the EMI;
             
            (b) Provide any other benefit related to the length of time during which the Electronic Money is held by the EMI;
             
            (c) Offer an overdraft facility to a Payment Service User (but an EMI may partner with a Licensed Bank or other appropriately licensed entity, approved by SAMA, for such Licensed Bank or approved entity to offer an overdraft facility, provided the EMI has obtained the prior approval of SAMA; or
             
            (d) Use any Safeguarded Funds for any other purposes than in accordance with the Implementing Regulation, including lending.
             
             (4) At the request of the Payment Service User, an EMI must redeem the Funds’ value of the Electronic Money held at any time and at par value.
             
             (5) An EMI must ensure that the contract between it and a Payment Service User prominently and clearly states the conditions of redemption, including any fees relating to redemption.
             
             (6) Any fees for redemption must be proportionate and commensurate with the actual costs incurred by the EMI.
             
             (7)Upon termination of the contract between a Payment Service User and an EMI, the EMI must redeem the total remaining Funds’ value of the Electronic Money held by the Payment Service User. In cases where the redemption fees exceed the remaining balance of Electronic Money, such that the proceeds of any redemption would be nil, the EMI may cease to safeguard the relevant Safeguarded Funds.
             
             (8) An EMI must show the holder of the Electronic Money how the balance has been used up by any redemption fee.
             

             

        • Chapter 3: Provision of Relevant Payment Services

          • Article 70

             (1)A Payment Service Provider must have a policy for setting risk-based Payment Service User transaction limits and limits on its Total Outstanding Electronic Money.
             
             (2)A Payment Service Provider shall, prior to making any changes to the policy referred to in the Paragraph above, obtain a non-objection letter from SAMA in accordance with Article 39 of the Regulations of the Implementing Regulation and, if required by SAMA, provide details of the updated policy.
             
             (3)SAMA may direct a Payment Service Provider to set Payment Service User transaction limits at levels specified by SAMA, and that’s in case -for example- where specific regulatory criteria related to risk management and governance are not complied with to the satisfaction of SAMA.
             

          • Article 71

             (1)

            A Payment Service Provider issuing a Payment Instrument must:
             

            (a)Ensure that the Personalized Security Credentials are not accessible to Persons other than the Payment Service User to whom the Payment Instrument has been issued;
             
            (b) Ensure that appropriate means are available at all times to enable the Payment Service User to notify the Payment Service Provider of the loss, theft, or unauthorized use of a Payment instrument or exploitation and prevent any use of the Payment Instrument once notification has been made.
             
             (2)A Payment Service User should take all reasonable steps to keep safe Personalized Security Credentials relating to a Payment Instrument or a Payment Account Information Service and notify the Payment Service Provider in the agreed manner in The Framework Contract, and without undue delay on becoming aware of the loss, theft, exploitation or unauthorized use of the Payment Instrument.
             

          • Article 72

            (1)A Payment Service Provider must not execute a Payment Transaction unless it has received a Payment Services Order.
             
            (2) If received within the business hours specified by the Payment Service Provider, a Payment Services Order is considered received on that business day. If a Payment Services Order is not received within such business hours, it is considered received at the beginning of the next business day.
             
            (3) The execution of the Payment Services Order may be scheduled to be executed at a future date or time agreed between the Payer and the Payment Service Provider (or on the date on which the Payer has put Funds at the disposal of the Payment Service Provider).
             

          • Article 73

            (1)A Payment Service Provider may refuse a Payment Services Order or suspend a Payment Account only if:
             
             (a)The conditions for accepting or executing Payment Services Orders that set out in a contract between the Payment Service User and the Payment Service Provider have not been met;
             
             (b) The Payment Service Provider has grounds to suspect that the Payment Transaction to which the Payment Services Order relates is fraudulent or poses a money-laundering or terrorism-financing risk; or
             
             (c)The Payment Transaction to which the Payment Services Order relates would breach any of the Payment Service Provider’s obligations under applicable Laws, regulations and decisions.
             
            (2) When a Payment Services Order is refused, the Payment Service Provider must notify the Payment Service User in a timely manner of the refusal and provide objectively justifiable reasons for the refusal, as well as details on how to rectify the problem, and the refused payment service must resume once the grounds for refusal have been resolved or terminated.
             
            (3)A Payment Service User may not be charged for a refused transaction, except where such charge is stipulated in its contract with the Payment Service Provider.
             

          • Article 74

            (1)A Payment Service User may not revoke a Payment Services Order after it has been received by the Payer’s Payment Service Provider.
             
            (2)The Payer may not revoke the Payment Services Order after giving Consent to the Payment Initiation Service Provider to initiate the Payment Transaction or giving Consent to execute the Payment Transaction to the Payee.
             
            (3)In the case of a Direct Debit, the Payer may not revoke the Payment Services Order after the end of the business day preceding the day agreed upon for debiting the Funds.
             
            (4)The Payment Service User may not revoke a Payment Services Order after the end of the business day preceding the agreed day to execute the order.
             
            (5)The Payment Services Order cannot be revoked after the expiry of the revocation period mentioned in this Article unless it’s agreed between the Payment Service User and the Payment Service Provider to revoke the order; or in the case of a Payment Transaction initiated by or through the Payee, including in the case of a Direct Debit, also agreed with the Payee.
             
            (6)A Payment Service User may not be charged for a revoked Payment Services Order unless the charge is stipulated in its contract with the relevant Payment Service Provider.
             

          • Article 75

            (1)The Payment Service Provider of the Payer and the Payment Service Provider of the Payee must ensure that the full amount of the Payment Transaction is transferred to the Payee In accordance with the provisions of this Article.
             
            (2)The Payment Service Provider must clearly communicate to the Payer any fees or charges, and it must be shown in the transaction history, taking into account the service agreements signed with the payer.
             
            (3) Where the Payee and its Payment Service Provider have agreed upon a fee or charge, the amount may be deducted from the amount transferred before crediting it to the Payee’s Payment Account, provided that the fee or charge has been clearly communicated to the Payee, and shown in the transaction history provided.
             
            (4)In the case of a Payment Transaction initiated by the Payer, the Payer’s Payment Service Provider must ensure that the Payee receives the full amount of the Payment Transaction.
             
            (5) In the case of a Payment Transaction initiated by the Payee, the Payee’s Payment Service Provider must ensure that the Payee receives the full amount of the Payment Transaction.
             

          • Article 76

            (1)The Payer’s Payment Service Provider must ensure that the amount of the Payment Transaction is credited to the Payee’s Payment Service Provider’s account in the event of executing a payment transaction in SAR or parts thereof by the end of the business day following the time of receipt of the Payment Services Order. The Payment Service User, however, may agree with the Payment Service Provider not to apply the provisions of this paragraph.
             
            (2) Where a payment transaction is not in SAR or parts thereof but is to be wholly executed within the Kingdom, the Payer’s Payment Service Provider must ensure that the amount of the Payment Transaction is credited to the Payee’s Payment Service Provider’s account by the end of the third business day following the time of receipt of the Payment Services Order (or such other day as agreed with the Payment Service User).
             
            (3) The Payee’s Payment Service Provider must transmit a Payment Services Order initiated by or through the Payee to the Payer’s Payment Service Provider within the time limits agreed between the Payee and its Payment Service Provider, enabling settlement in respect of a Direct Debit to occur on the agreed due date.
             

          • Article 77

            The Payment Service Provider may return the received Funds to the Payer’s Payment Service Provider when the Payee does not have a Payment Account with that Payment Service Provider, with the explanation that the Payee does not hold an account with the Payment Service Provider.

             

          • Article 78

            (1)A Payee’s Payment Service Provider shall apply a credit date to the Payee’s Payment Account no later than the business day on which the amount of the Payment Transaction is credited to the account of the Payment Service Provider.
             
            (2) A Payee’s Payment Service Provider must ensure that the amount of the Payment Transaction is put at the Payee’s disposal immediately after that amount has been credited to that Payment Service Provider’s account unless additional time is required to execute a currency conversion, which shall be executed as soon as practically possible.
             
            (3)The debit value date for the Payer’s Payment Account must be no earlier than the time at which the amount of the Payment Transaction is debited to that Payer’s Payment Account.
             

          • Article 79

            (1)A Payment Transaction is considered to be authorized by the Payer when the Payer has given Consent to its execution in accordance with the approach agreed with their Payment Service Provider.
             
            (2)Where a Payer claims not to have authorized an executed Payment Transaction or that a Payment Transaction has not been properly executed by a Payment Service Provider, it is for the Payment Service Provider to prove that the Payment Transaction was authenticated, accurately recorded and not deficient.
             
            (3) If a Payment Service Provider considers that a Payer has acted fraudulently, it is for the Payment Service Provider to prove that and provide supporting evidence during a dispute settlement process.
             
            (4) If a Payment Transaction was initiated through a Payment Initiation Service Provider, it is for the Payment Initiation Service Provider to prove that, within its sphere of competence, the Payment Transaction was authenticated, accurately recorded and not subject to a deficiency arising from the Payment Initiation Service.
             

          • Article 80

            (1)The Payer’s Payment Service Provider shall be liable to the Payer for the correct execution of a Payment Transaction unless it can prove in a timely manner to the Payer and to the Payee’s Payment Service Provider that the Payment Transaction has been correctly executed to the Payee’s Payment Service Provider.
             
            (2) Where the Payer’s Payment Service Provider is liable under the Paragraph above, it must promptly refund the amount of the non-executed or defective Payment Transaction to the Payer and restore the debited Payment Account to the position it would have been had the defective Payment Transaction not occurred.
             
            (3) Where a Payment Transaction is executed late, on request from the Payer’s Payment Service Provider, the Payee’s Payment Service Provider should adjust the credit date of the Payment Transaction to the date as if the Payment Transaction had been executed properly.
             

          • Article 81

            (1)The Payee’s Payment Service Provider is liable to the Payee for the correct transmission of the Payment Services Order initiated by the Payee to the Payer’s Payment Service Provider and where it does so incorrectly, it shall immediately re-transmit the relevant Payment Services Order correctly.
             
            (2)The Payee’s Payment Service Provider must ensure that the Payment Transaction is handled, given the fact that the value of the payments process was deposited into the payment account of the Payee on the date of the transaction properly and in a timely manner.
             
            (3) The Payer’s Payment Service Provider is liable to the Payer if the Payee’s Payment Service Provider proves to the Payee and the Payer’s Payment Service Provider that it is not liable in respect of a non-executed or defectively executed Payment Transaction.
             
            (4) If the Payer’s Payment Service Provider proves that the Payee’s Payment Service Provider has received the amount of the Payment Transaction, it is for the Payee’s Payment Service Provider to value date the amount on the Payee’s Payment Account as if the transaction had been executed correctly.
             

          • Article 82

             (1)This Article applies where a Payment Services Order is initiated by the Payer through a Payment Initiation Service.
             
             (2)The Payment Account Service Provider must refund the Payer the amount of the non-executed or defective Payment Transaction and bring the debited Payment Account back to the position in which it would be if there were no defective Payment Transaction.
             
             (3)

            When requested by the Payment Account Service Provider, the Payment Initiation Service Provider must promptly compensate the Payment Account Service Provider for any loss forthwith as a result of the refund to the Payer. This is if the Payment Initiation Service Provider cannot prove that:

            (a)The Payment Services Order was received by the Payer’s Payment Account Service Provider in accordance with Article 72 of the Implementing Regulations.
             
            (b)Within the Payment Initiation Service Provider’s sphere of influence, the Payment Transaction was authenticated, properly recorded and not affected by a deficiency connected to the non-execution, defective or late execution of the Payment Transaction.

          • Article 83

            (1)If the Payment Service Provider discovers or is made aware of a systemic error in the execution of Payment Transactions, it must investigate and refund all Payment Service Users who are affected by that systemic error within thirty calendar days of discovering the systemic error or being aware of it.
             
            (2) The Payment Service Provider should, as soon as practicable, communicate with and notify SAMA about the systemic error through the appropriate channels.
             
            (3)The Payment Service Provider should, as soon as practicable, issue a communication to all affected Payment Service Users, advising them of the systemic error and the steps taken to correct it, including the amount of any refund to the Payment Service Users’ accounts.
             
            (4)If the Payment Service Provider fails to correct the systemic error within the period prescribed in Paragraph (1) of this Article, it must notify SAMA of the reason for that delay.

          • Article 84

            A Payment Service Provider is liable to the Payment Service User for any charges incurred due to the non-execution or defective or late execution of the Payment Transaction in accordance with the provisions of the Implementing Regulation.

          • Article 85

            Where the liability of a Payment Service Provider under Part 6 of the Regulations of the Implementing Regulation is attributable to another Payment Service Provider, including in respect of Payment Transactions that are unauthorized, defective, non-executed or late, or where liability is the result of the other Payment Service Provider’s failure to use the Payment Service User’s Authentication as measures required by applicable laws, regulations, instructions and circulars, The assigned payments service provider must compensate the assigning Payment Service Provider for any loss incurred or sums paid.

             

          • Article 86

            (1)A Payment Service Provider is not liable for errors made by a Payment Service User if that Payment Service User initiated a Payment Transaction and provided the incorrect Payee-related Unique Identifier Number or provided incorrect bank details.
             
            (2) The Payment Service Provider must make reasonable efforts to recover the Funds from the incorrect recipient of the Funds and the recipient’s Payment Service Provider. The Payment Service Provider may charge the Payment Service User a fee for trying to recover the Funds in accordance with the contract between a Payer and a Payment Service Provider. The Payee’s Payment Service Provider must provide co-operation to the Payer’s Payment Service Provider in recovering the Funds as much as possible. 
             
            (3) If the Payer’s Payment Service Provider is unsuccessful in recovering the Funds, it has to provide - based on a written request from the payer- to the Payer all available relevant information in order for the Payer to claim recovery of the Funds.
             
            (4) SAMA may direct the Payment Service Provider to take specific actions according to the controls it sets, including refunding the Payer.

          • Article 87

             

            (1) Subject to Article 90 of the Implementing Regulation, a Payment Service Provider is liable for Unauthorized Payment Transactions.
             
            (2)Where a Payment Service User raises a Complaint in relation to an allegedly fraudulent Payment Transaction, the Payment Service Provider must handle such Complaint in accordance with Article 129 of the Implementing Regulation.
             
            (3) If such a Complaint is submitted to SAMA, then the Payment Service Provider must provide evidence that the conditions stated in Paragraph (1) of Article 75 of the Implementing Regulation are met and present such evidence to SAMA. SAMA will then seek to decide if such conditions are met.
             

          • Article 88

             (1)Notwithstanding the provisions of Paragraphs (2), (3) and (4) of this Article, a Payment Service Provider which is liable under Article 87 of the Implementing Regulations may require that the Payer is liable up to a maximum of one hundred fifty SAR for any losses incurred in respect of Unauthorized Payment Transactions arising from the use of a lost or stolen or misappropriated Payment Instrument.
             
             (2)

            The provisions of the previous Paragraph do not apply if:

            (a) The loss, theft or exploitation of the Payment Instrument was not detectable by the Payer prior to the payment, except where the Payer acted fraudulently; or
             
            (b) The loss was caused by acts or omissions of an employee, Agent or branch of a Payment Service Provider or of an entity that carried out activities on behalf of the Payment Service Provider.
             
             (3)

            The Payer is liable for all losses incurred in respect of an Unauthorized Payment Transaction where the Payer:

            (a) Has acted fraudulently; or 
             
            (b)Has, with intent or gross negligence, failed to comply with its obligations to keep safe its Payment Instrument and its Personalized Security Credentials.
             
             4.

            Except where the Payer has acted fraudulently, the Payer is not liable for any losses incurred in respect of an Unauthorized Payment Transaction,  where: 

            (a)The unauthorized Payment Transaction arises after the Payer has notified the Payment Service Provider of the loss, theft, exploitation or unauthorized use of its Payment Instrument;
             
            (b) Where the Payment Service Provider has failed at any time to provide the Payer with the appropriate means for notification; or
             
            (c) Where the Payment Service Provider is required by the provisions of the Implementing Regulation -or any other SAMA’s regulations, rules, circulars, or decisions relevant to Authentication requirements - to apply certain Authentication measures that address any potential risks, but the Payer’s Payment Service Provider does not require such strong Authentication.
             
             (5)Where the Implementing Regulation or other SAMA’s regulations, rules, circulars, controls or instructions require the application of certain Authentication measures that address any potential risks, but the Payee or the Payee’s Payment Service Provider does not accept such Authentication, the Payee or the Payee’s Payment Service Provider, or both (as the case may be), must compensate the Payer’s Payment Service Provider for the losses incurred or sums paid as a result of complying with Paragraph (1) of Article 87 of the Implementing Regulation.

          • Article 89

            (1)Notwithstanding the provision of Paragraph (8) of this Article and Paragraph (1) of Article 79 of the Implementing Regulation, where an executed Payment Transaction was not authorized correctly, the Payment Service Provider must refund the amount of the Unauthorized Payment Transaction to the Payer and, where applicable, restore the debited Payment Account to the state it would have been in had the Unauthorized Payment Transaction not taken place.
             
            (2)The Payment Service Provider must provide a refund to the Payer by crediting a Payment Account under Paragraph (1) of this Article as soon as practicable and in any event no later than the end of the business day following the day on which it becomes aware of the unauthorized transaction.
             
            (3)Paragraphs (1), (2) and (6) of this Article do not apply where the Payment Service Provider has reasonable grounds to suspect fraudulent behavior by the Payment Service User and notifies SAMA (and any other competent authority in the Kingdom) of those grounds in writing.
             
            (4)When providing a refund through crediting a Payment Account under Paragraph (2) of this Article, a Payment Service Provider must ensure that the date on which the amount of a Payment Transaction is credited to a& Payee’s Payment Account is no later than the date on which the amount of the Unauthorized Payment Transaction was debited.
             
            (5)Where an Unauthorized Payment Transaction was initiated through a Payment Initiation Service Provider, the Payment Account Service Provider must comply with Paragraph (1) of this Article, and if the Payment Initiation Service Provider is liable for the Unauthorized Payment Transaction (in relation to which see Paragraph (4) of Article 79 of the Implementing Regulation), the Payment Initiation Service Provider must, on the request of the Payment Account Service Provider, compensate the Payment Account Service Provider immediately for the losses incurred or sums paid including the amount of the Unauthorized Payment Transaction. 
             
            (6)Notwithstanding the provisions in Paragraphs (1),(2),(3),(4),and (5) of this Article, the Payment Service Provider must notify the Payment Service User of the conclusion of an investigation and must pay any refund or monetary compensation due to a Payment Service User within seven days of from the completion of any investigation of an error or a complaint by the Payment Service Provider, or on receipt of an instruction from any competent authority in the Kingdom. In case of a delay in payment of any refund or compensation, the Payment Service Provider should notify the Payment Service User of the expected time for crediting the amount due, along with a justification for the delay. 
             
            (7) A Payment Service Provider must hold records on the processing of refunds or monetary compensation, including those referred to under Article 87 and Article 88 of the Implementing Regulation, response timelines and reasons for delays, for a period of ten years from the date of the conclusion of an investigation. Additionally, a Payment Service Provider must submit such records to SAMA on an on-going basis, as specified by SAMA, and must record such refunds against the original transaction with the original transaction sequence number.
             
            (8)A Payment Service User is entitled to a refund under this Article if it notifies the Payment Service Provider without undue delay, and in any event no later than six months after the debit date, upon becoming aware of any Unauthorized Payment Transaction, except where the Payment Service Provider has failed to provide the information concerning a Payment Transaction required by Part 6.

            • Article 90

               

               (1)

              Notwithstanding the provisions in Paragraph (1) of Article 91 of the Implementing Regulation, the Payer is entitled to a refund from the Payee’s Payment Service Provider of the full amount of any authorized Payment Transaction initiated by or through the Payee if the following conditions are met:

              (a)The Payment Transaction authorization did not specify the exact amount of the Payment Transaction when Consent for the authorization was given; and
               
              (b)The amount of the Payment Transaction exceeds the amount that is expected to be paid by the Payer, taking into account the Payer’s previous spending pattern and the conditions of the Framework Contract and the circumstances of the case.
               
               (2) When providing a refund through crediting a Payment Account of the Payer under Paragraph (1) of this Article, a Payment Service Provider must ensure that the credit value date is no later than the date on which the amount of the Unauthorized Payment Transaction was debited.
               
               (3)For the purposes of Paragraph (1) (b) of this Article, a Payer cannot rely on currency exchange fluctuations where the reference exchange rate provided under the contract was applied.
               
               (4)

              The payer and the payment service provider may agree in the framework contract that the right to a refund does not apply where: 

              (a)The Payer has given Consent directly to the Payment Service Provider for the Payment Transaction to be executed; and
               
              (b)Information on the Payment Transaction was provided in an agreed manner to the Payer for at least four weeks before the due date by the Payment Service Provider or by the Payee
               

            • Article 91

              (1)The Payer must request a refund from the Payee’s Payment Service Provider for any Payment Transaction Authorized by or through the Payee within eight weeks from the date on which the Funds were debited.
               
              (2)The Payment Service Provider may require the Payer to provide such information as is reasonably necessary to prove that the conditions in Paragraph (1) of Article 90 of the Implementing Regulation are satisfied. The Payment Service Provider may not refuse the refund until such information is received from the Payer.
               
              (3)The Payment Service Provider of the Payee must provide any refund or justification for refusing a refund within ten business days of receiving a request for a refund or within 10 business days of receiving any further information requested and indicating the bodies to which the Payer may refer the matter if the Payer does not accept the justification provided.
               

            • Article 92

              a Payment Service Provider - on a request from their Payment Service User must make efforts to trace any non-executed or defectively executed Payment Transaction and notify the Client of the outcome free of charge where the Payment Service Provider is liable for the non-executed or defectively executed Payment Transaction, or at a reasonable charge where a Payment Service Provider is not liable under the Implementing Regulation.

      • Part 7: Safeguarding Safeguarded Funds

        • Article 93

           

           (1)

          A Payment Service Provider must safeguard Safeguarded Funds immediately upon receipt. The Payment Service Provider must comply with the following:

          (a)The placing of Safeguarded Funds in a separate account with a Licensed Bank, or any other method determined or deemed acceptable by SAMA; or
           
          (b)To be always in accordance with further applicable SAMA regulations, rules, instructions, controls, or circulars relevant to Safeguarded Funds.
           
           (2) 

          Notwithstanding the generality of Paragraph (1) of this Article, where the Payment Service Provider continues to hold the Safeguarded Funds at the end of the business day following the day on which they were received, it must: 

          (a)Place them in a separate account maintained by the Payment Service Provider with a Licensed Bank, that shall be named “Deposit and Safeguard of Funds of a Payment Service Provider’s Clients“ and include the name of the Payment Service Provider; or
           
          (b)Obtaining SAMA approval before investing the Safeguarded Funds, provided that the investment must be in such secure, liquid assets, and place those assets in a separate account with an authorized custodian.
           
           (3) 

          The Payment Service Provider must verify that an agreement for an account in which Safeguarded Funds are placed with the Licensed Bank includes all the obligations stipulated in the Implementing Regulation or any instructions, controls or circulars issued by SAMA in this regard, provided that they include - as a minimum - the following:

          (a)Be governed by terms of business that clearly set out the roles and responsibilities of the Licensed Bank and the Payment Service Provider in accordance with relevant laws, regulations and rules.
           
          (b)Be designated as an account held for the purpose of safeguarding Safeguarded Funds and may not serve any other purpose and may not be linked to any financial obligation of that Payment Service Provider or of any other Person;
           
          (c) Be used only for holding Safeguarded Funds and not hold any funds received by way of the payment of fees or for use in the payment of operational expenses or the carrying on of any other Payment Service;
           
          (d) Be an account that no Person other than that Payment Service Provider may have any right to or interest in;
           
          (e) Be subject to a daily reconciliation mechanism with the relevant Payment Transactions and outstanding Electronic Money in accordance with the policies, procedures and controls of the Payment Service Provider;
           
          (f)Not be opened, closed, replaced or merged with another account before obtaining a non-objection letter from SAMA; and
           
          (g)Be compliant, at all times, with the Implementing Regulation and such other requirements as SAMA may specify.
           
           (4)A Payment Service Provider must obtain SAMA non-objection before the implementation of such policies and procedures relevant to Safeguarded Funds. SAMA may require changes to be made to such policies and procedures.
           
           (5)The policies, procedures and controls applicable to Safeguarded Funds must include relevant controls that govern access to Safeguarded Funds and make appropriate provisions for the seniority of employees that may exercise access to Safeguarded Funds.
           
           (6)A Payment Service Provider must obtain SAMA's approval before adopting additional safeguarding methods. 

        • Article 94

          (1)A Payment Service Provider must ensure that Safeguarded Funds are protected for the duration of the retention of these Safeguarded Funds in accordance with the provisions of the Implementing Regulation, whether when received directly or through an agent or Electronic Money Distributor.
           
          (2) No Person other than the Payment Service Provider may have any interest in or right over the Safeguarded Funds;
           
          (3)Notwithstanding other applicable laws, the Payment Service Provider must return Safeguarded Funds to the relevant Payment Service Users in the event of bankruptcy, winding up or other liquidation of the Payment Service Provider.
           

      • Part 8: Requirements for Providing Payment Initiation Service and Payment Account Information Service

        • Article 95

          (1)Payment Service Providers must provide access to their Relevant Payment Services in accordance with the decision and instructions related to open banking, cyber security and data privacy issued by SAMA and other competent authorities in the Kingdom.
           
          (2)Payment Service Providers must observe high standards in relation to the secure storage, sharing and transmission of client data when engaging in Payment Account Information Services or Payment Initiation Services. 
           

        • Article 96

           

           (1) A Payment Account Service Provider must grant a Payment Initiation Service Provider and a Payment Account Information Service Provider and each other Payment Service Provider access to Payment Accounts provided that the Payment Services User Consent is received, taking into account providing the access on an objective, non-discriminatory and proportionate basis and in such a way as to allow the Payment Service Provider to deliver Relevant Payment Services in an unhindered and efficient manner.
           
           (2)

          The payer's payments account service provider must:

          (a) Communicate with and transfer information securely to a Payment Initiation Service Provider and a Payment Account Information Service Provider in accordance with the regulations, rules, circulars, controls and instructions related to cyber security issued by SAMA and competent authorities in the Kingdom;
           
          (b) Put in place the necessary policies and procedures to ensure that Payment Services Orders and other requests by the Payer are Authenticated and authorized correctly;
           
          (c) Ensure that any fees applied have been agreed to by the Payer and that such fees are consistent with any regulations, rules, circulars, controls and instructions issued by SAMA;
           
          (d)Immediately after receipt of the Payment Services Order, provide to the Payment Initiation Service Provider all information on the execution of the Payment Transaction and all accessible information.
           
          (e)Treat a Payment Services Order from the Payment Initiation Service Provider in the same ways as a Payment Services Order received directly from the Payer;
           
          (f)Respond to a Payment Services Order from the Payment Initiation Service Provider in a timely manner; 
           
          (g) Treat the data request from the Payment Account Information Service Provider in the same way as a data request received directly from the Payer; 
           
          (h) Respond to data requests from the Payment Account Information Service Provider in a timely manner;
           
          (i)Not require the Payment Initiation Service Provider or Payment Account Information Service Provider to enter into a commercial contract before complying with the preceding requirements in this Article.
           
           (3) 

          A Payment Account Service Provider may deny the Payment Transactions initiation or the access to a Payment Account by a Payment Account Information Service Provider or a Payment Initiation Service Provider based on reasonably justified and duly evidenced reasons relating to unauthorized or fraudulent access. In such cases, the Payment Account Service Provider must:

          (a) Inform the Payment Account Information Service Provider or Payment Initiation Service Provider of the incident and the reason for denial of access;
           
          (b) Notify SAMA immediately regarding the incident in such form that SAMA may direct and include the details of the case and the reasons for taking a deny action; and
           
          (c) Restore account access to the Payment Account Information Service Provider or Payment Initiation Service Provider once the denial of access is no longer justified.
           

        • Article 97

          (1)A Payment Initiation Service Provider must obtain consent from the relevant Payment Service User before providing its service.
           
          (2)A Payment Initiation Service Provider shall not hold, at any time, a Payment Service User’s Funds.
           
          (3)A Payment Initiation Service Provider shall not modify the amount, the Payee or any other feature of a Payment Transaction that it initiates.
           
          (4)A Payment Initiation Service Provider must keep all Payment Service Users’ security credentials, including data related to Personalized Security Credentials, secure and inaccessible to other parties.
           
          (5)A Payment Initiation Service Provider shall not use, access or store any of the Payment Service Users’ data except as necessary to provide the service (and in accordance with its License).
           
          (6)A Payment Initiation Service Provider shall not provide any other information about the Payment Service User except to the relevant Payee, and with explicit consent from the Payment Service User.
           
          (7) A Payment Initiation Service Provider may not request from the Payment Service User any data other than that necessary to provide the Payment Initiation Service according to what is required by the nature of this service and what is determined by SAMA.
           
          (8)A Payment Initiation Service Provider must securely communicate with the Payment Account Service Provider and identify itself for each communication session.
           

        • Article 98

           

           (1)

          Before initiating the payment, the Payment Initiation Service Provider must provide clear and comprehensive information to the Payer in the agreed language. Such information must include -as a minimum- the following:

          (a)The name of the Payment Initiation Service Provider;
           
          (b)The address of the head office of the Payment Initiation Service Provider;
           
          (c) Where applicable, the address of the head office of the Agent or branch offices through which the Payment Initiation Service Provider delivers services in the Kingdom;
           
          (d) Contact details relevant to communication with the Payment Initiation Service Provider, including an electronic mail address; and
           
          (e) The contact details of SAMA.
           
           (2)

          The Payment Initiation Service Provider must immediately after the initiation of the Payment Services Order provide to the Payer and the Payee, where applicable, the following:

          (a)Confirmation of the successful initiation of the Payment Services Order with the Payer’s Payment Account Service Provider;
           
          (b) A reference enabling the Payer and the Payee to identify the Payment Transaction and the Payee to identify the Payer, and any information transferred with the Payment Services Order;
           
          (c) The amount of the payment transaction.
           
          (d)Where applicable, the amount of any charges payable to the Payment Initiation Service Provider.
           
          (e) Provide a Payment Transaction reference to the Payer’s Payment Account Service Provider.

        • Article 99

          (1)A Payment Account Information Service Provider must obtain consent from the Payment Service User before providing its service.
           
          (2)A Payment Account Information Service Provider must delete the relevant data and information belonging to the Payment Service User when consent is withdrawn or cancelled (insofar as it does not conflict with applicable obligations under the relevant laws, regulations and instructions). 
           
          (3)A Payment Account Information Service Provider must ensure that the Personalized Security Credentials of the Payment Service User are not, with the exception of the user and the issuer of the Personalized Security Credentials, accessible to other parties and that they are transmitted through safe and efficient channels.
           
          (4)A Payment Account Information Service Provider must securely communicate with the Payment Account Service Provider and identify itself for each communication session.
           
          (5)A Payment Account Information Service Provider shall only access information from designated Payment Accounts and associated with the relevant Payment Transactions.
           
          (6) A Payment Account Information Service Provider shall not request Sensitive Data linked to Payment Accounts that could be used to carry out fraudulent transactions.
           
          (7) A Payment Account Information Service Provider shall not use, access or store any data for purposes other than performing the service requested by the Payment Service User.
           

        • Article 100

           

           (1)A Payment Service Provider which issues Card-Based Payments may request that a Payment Account Service Provider confirms whether an amount necessary for the execution of Payment Transactions related to the provided service is available on the Payment Account of the Payer. Before submitting such a confirmation request, the Payer consent must be provided and the authentication and secure communication requirements set forth by SAMA must be applied.
           
           (2) 

          A Payment Account Service Provider must immediately, when receiving a request to confirm the availability of funds from the Payment Service Provider, provide the requested confirmation in the form of a ‘yes’ or ‘no’ answer, and in accordance with the following conditions:

          (a) The Payment Account is accessible online when the Payment Account Service Provider receives the request;
           
          (b) The Payer has given the Payment Account Service Provider in advance consent to provide confirmation in response to such requests by that Payment Service Provider.
           
           (3)If the Payer so requests, the Payment Account Service Provider must also inform the Payer of the Payment Service Provider which made the request and the provided answer.
           
           (4)A Payment Account Service Provider must not include with a confirmation provided under this Article a statement of the account balance or block Funds on a Payer’s Payment Account as a result of a request.
           
           (5) The Payment Service Provider which makes a request under this Article must not store any confirmation received or use the confirmation received for a purpose other than the execution of the Card-Based Payment Transaction for which the request was made.
           
           (6) This Article does not apply to Payment Transactions initiated through Electronic Money which is stored and executed through Card-Based Payments.
           

           

      • Part 9: Payment Systems

        • Chapter 1: Designation of Systemically Important Payment Systems

          • Article 101

             

             SAMA shall consider the following criteria in order to determine whether a Payment System is, or is likely to become, a Systemically Important Payment System: 

            (a)Whether the Payment System could pose a risk to financial stability in the Kingdom or could trigger or transmit systemic disruption to the other Payment Systems. Factors informing this may include size, criticality, interconnectedness to the financial markets and the 
            absence of alternative Payment Systems;
             
            (b)Evaluating the Payment System’s degree of connection to financial market infrastructures, whether within or outside the Kingdom, including settlement and clearing systems;
             
            (c) The estimated aggregate value, average value, or volume of transfer orders transferred, cleared or settled through the Payment System on a normal day on which the Payment System is operational and the nature of those transfer orders; and
             
            (d) The estimated number of direct and indirect Members in the Payment System.

          • Article 102

             

             (1) Where SAMA determines that it will commence a designation assessment under Article 101 provisions, SAMA shall issue a notice to the Operator. Such designation assessment may occur simultaneously with the licensing of an Applicant and a designation assessment may occur more than once according to the cases determined by SAMA (for instance, in the event that the previous designation assessment resulted in recommendations for re-assessment or if it was found through the results of the assessment that the payment system may become a Systemically Important Payment System
             
             (2)The operator, its staff and senior management, its board members, and its critical service providers, as well as their agents and any other relevant Persons shall cooperate with SAMA and provide all the documents, information and data related to the characteristics of the Payment System, and clarify its standing against the designation criteria.
             
             (3)

             SAMA may require of the Operator or other relevant Persons- whether they were established, located or incorporated in the Kingdom or outside the Kingdom- that:

            (a) Data or information or documents regarding the Payment System and its operations are made available as SAMA may determine.
             
            (b)Access to the Operator’s staff or such other Persons or representatives is granted to SAMA; and
             
            (c) Such reports or assessments as SAMA determines are necessary to facilitate its determination are provided.
             
             (4)Notwithstanding other applicable laws, SAMA may coordinate with any competent central bank or regulatory authority in other jurisdictions for the purpose of requesting such data or information or documents as may be relevant to a designation assessment.
             
             (5)SAMA shall determine the duration of the designation process depending on the particular circumstances of each case, including the nature and complexity of the Payment System and the interconnection of its operations. 
             
             (6)Before deciding on the designation, SAMA may coordinate with the formal representative of the Payment System in question and the international bodies concerned with the supervision and oversight of the Payment System.
             
             (7)SAMA shall notify the Payment System Operator of the outcome of a designation assessment. Where SAMA designates a Payment System as a Systemically Important Payment System, its notification shall state the scope of that designation, including a reference to the date from which this categorization will take effect for the purposes of the Payment System’s compliance with the provision of the Law and the Implementing Regulation, the Operating Rules of the Payment System, and the activities that are allowed to be carried out through the Systemically Important Payment System. 
             
             (8)SAMA shall publish a notice of designation and record a designation of a Payment System as a Systemically Important Payment System on its public register.
             
             (9)SAMA may enter Payment System Operators that are already subject to its supervision into the register of licensed Payment System Operators after satisfying the relevant requirements.
             
             (10)SAMA may require the Operator of Systemically Important Payment System to cease or amend any of the operations of the Payment System in accordance with the provisions of the Law and the Implementing Regulation and as SAMA may determine.

          • Article 103

            SAMA shall set the frameworks and principles related to the interdependence of the various Payment Systems inside and outside the Kingdom.

        • Chapter 2: PFMI Requirements

          • Article 104

             

             (1)The Operator of a Systemically Important Payment System must, in relation to its scope of designation, comply with the guidance and standards.
             
             (2)

            An Operator of a Non- Systemically Important Payment System may have regard to the guidance and standards in accordance with:

            (a)Standards and directions related to risk management objectives and the assurance of its compatibility with the Operator work methodology; to ensure the protection and promotion of financial stability.
             
            (b) Standards and principles proportionate to the nature, scale and complexity of the Payment System and Interconnectedness of its operations.
             
            (c) Instructions issued by SAMA within the licensing process or after.
             
             (3)SAMA may impose higher requirements than the PFMI for Payment System Operators on the basis of risks posed by that Payment System and the potential impact on financial stability.
             
             (4)The Payment System Operator should apply these requirements on an ongoing basis in the operation of their Payment Systems and business, including when reviewing their own performance, or proposing new services, or proposing changes to risk controls.
             

          • Article 105

             

             (1)

            A Payment System Operator shall ensure that the following requirements are complied with in relation to the management and operation of the system, namely: 

            (a) The risks of the Payment Systems are robustly managed to ensure their safety and promote financial stability;
             
            (b)That the operations of the system are conducted in a safe and efficient manner so as to minimize the likelihood of any outage or disruption to the functioning of the system and to achieve a target of at least a 99.98% uptime;
             
            (c) that there are in place Operating Rules that comply with the requirements specified in Paragraph (2) of this Article and with any requirements set by SAMA relating to the Operating Rules of a Systemically Important Payment System, as well as operational agreements as required;
             
            (d) That there are in place adequate arrangements to monitor and enforce compliance with the Operating Rules of the system, including arrangements regarding the resources available to the system operator;
             
            (e) That there are available to the system financial resources appropriate for the proper performance of the system’s particular functions;
             
            (f)Prepare and annually update recovery and wind-down plans in accordance with the relevant international standards and requirements and consistent with the PFMI
             
             (2)

            The Operating Rules of a Systemically Important Payment System must: 

            (a) Provide that if a Member becomes bankrupt, he may be suspended from the system;
             
            (b) Provide default arrangements that are appropriate for the Payment System, and ensure that it is comprehensive for all possible circumstances and cases. 
             
            (c)Provide appropriate and adequate arrangements to deal with the situation where a system operator, a service provider or a settlement institution of the system is likely to become unable to meet its obligations under or in respect of the system.
             
            (d) Require members to cooperate with SAMA and provide any data, information or necessary documents that may be requested.
             
             (3)SAMA approval must be obtained before approving the Operating Rules for a Payment System or making any changes thereto.
             
             (4)

            A Payment System Operator must ensure that the operations of the system are being conducted in a safe manner, including:

            (a) Verifying the execution and settlement of transfer orders for the purposes of the Payment System and including this in the Operating Rules; 
             
            (b) The reliability and robustness of the operation of the system;
             
            (c) Access control over the system;
             
            (d) The integrity of, and access control over, the information held within the system; 
             
            (e)The risk management and control procedures relating to the operation of the system;
             
            (f) The soundness of the system, including financial soundness; and
            (g) The soundness of the services provided to the system by the infrastructure associated with the system; 
             
             (5)

            A Payment System Operator must ensure that the operations of the system are being conducted in an efficient manner, including, in& particular, any matter relating to:

            (a) The speed and efficiency with which operations relating to transfer orders within the system are carried out;
             
            (b) The overall reasonableness cost to a Member of his participation in the system, taking into account the services provided by the system to its Members; 
             
            (c)The reasonableness of criteria for admission as a Member in the system; and
             
            (d)The reasonableness of measures taken to ensure fair competition, or not to be exploited by the absence of competition, in relation to the functions performed by the system.
             
             (6)A Payment System Operator must ensure a proper and continued functioning of the Payment System and comply with any instructions issued by SAMA and any relevant international standards (including the PFMI). 

          • Article 106

            (1)The Operator of Systemically Important Payment System must conduct a self-assessment to test its compliance with the PFMI at least once every year or in the event of a material change to its operating systems or as requested by SAMA.
             
            (2)The Payment System Operator shall enable SAMA such access to its Payment System and related information and cooperate as SAMA requires to conduct an assessment of the Payment System in accordance with its authority by the Law.
             
            (3)The Operator of a Systemically Important Payment System must, after obtaining a non-objection letter from SAMA, publicly disclose its responses to a summary of its PFMI self-assessment in-line with the CPMI-IOSCO Disclosure Framework.
             
            (4)The Operator of a Non-Systemically Important Payment System must conduct a self-assessment to test its compliance with the PFMI on the periodic basis agreed with SAMA under its license authorization or as otherwise determined by SAMA. 

          • Article 107

            (1)The Operator of a Systemically Important Payment System shall ensure that adequate financial resources of its business, including its own capital soundness, are assessed and maintained in respect of the Payment System.
             
            (2)The Operator of a Non-Systemically Important Payment System shall ensure that adequate financial resources of its business, including its own capital soundness, are assessed and maintained as relevant to its business and in a way that is proportionate to its business.
             
            (3)The financial resources to do business maintained in respect of a Non-Systemically Important Payment System shall equal as a minimum the higher of six months’ operating costs arising in connection with the Payment System and ten million SAR in paid-up equity.

        • Chapter 3: Payment Systems Authorities

          • Article 108

             

            (1)SAMA may request information or documents from the Payment System Operator or one of its Members when performing its duties and functions under the Law and the Implementing Regulation.
             
            (2)Notwithstanding any other powers of SAMA, The Payment System Operator or the Member of the Payment System is required to submit the information or documents within the period specified in the request and the Payment System Operator must procure that the relevant Member provides the requested information or documents.
             
            (3)SAMA may examine any books, accounts or transactions of the Payment System Operator when performing its functions and the Payment System Operator must procure cooperation from the Member as required.
             
            (4)SAMA may require a Payment System Operator or one of its Members to submit to SAMA a report prepared by one or more auditors on matters that SAMA requires for discharging or exercising its duties and powers under the Law and the Implementing Regulation and the Payment System Operator must procure cooperation from the relevant Member as necessary. 
             

          • Article 109

             

            (1)SAMA may require the Operator of a Payment System to establish rules for the operation of the system, including the operation of services that form part of the Payment System Operation arrangements and provided by a service provider related to the Payment System, or request any amendment or change on the rules.
             
            (2)A Payment System Operator must notify SAMA of any proposed amendment or change to its rules and not change the rules without the approval of SAMA.
             

          • Article 110

            SAMA may direct a Payment System Operator to take any action necessary to ensure the Payment System compliance with the Law and the Implementing Regulation. Such a direction shall specify the justifications and the actions to be taken or set the standards that must be met in the operation of the system or the services provided through it within the period which SAMA deems appropriate.

          • Article 111

            Notwithstanding any other powers of SAMA, SAMA may appoint one or more Persons other than its employees to inspect the operation of a Payment System or a service provider related to a Payment System and the provision of all services to such a system by a service provider. The Operator of a Payment System must- In accordance with the written permission granted to the person appointed by SAMA:

            (a) Grant an inspector access, on request and at any time, to premises on or from which any part of the system is operated or (as the case may be) premises on or from which any part of the services is provided; and 
             
            (b) Co-operate with an inspector and Provide all the necessary data, information and documents to help perform their functions.

          • Article 112

            SAMA may require the Operator of a Payment System to appoint an expert to report on the operation of the system and impose requirements about the experiences and specialization of the expert to be appointed, the content of the report, treatment of the report (including disclosure and publication) and timing. In the following cases:

            (a)The Operator is not taking –as required- sufficient account of guidance, standards and principles set out in the PFMIs; or
             
            (b) A report is necessary for any other reason to assist SAMA in the performance of its functions under the Law and the Implementing Regulation relating to Payment Systems.

          • Article 113

            Where action has been taken under default arrangements of a Payment System by the Payment System Operator in respect of a Member in the Payment System, SAMA may direct the Payment System Operator to give information relating to the default to any employee nominated by SAMA. The nominated employee is responsible for assessing and examining any matter arising out of or connected with the default of the Member in that Payment System. The liabilities of Members for any loss arising from the default of the concerned Member and the arrangements to handle any disputes over Members’ liability with respect to default transactions should be clearly set out in the rules and procedures, and any such disputes are subject to the disputes provisions included in the Law and the Implementing Regulation.  

             

            • Article 114

               

               (1)

              SAMA may, taking into account the considerations in Paragraph (2) of this Article, determine that the Cross-Border Payment System does not need to be licensed pursuant to the provisions of the Implementing Regulations or that certain provisions and obligations will not be applied or waived, in the event that the conditions of the Cross-Border Payment System comply with the following:

              (a)Where a Payment System falls or will fall within the jurisdictional scope set out in Article 4 of the Implementing Regulations, and
               
              (b) In addition to the Kingdom, it or its Operator operates or will operate in one or more additional jurisdictions.
               
               (2)

              In making such a determination, SAMA shall take into account the following considerations:

              (a)The extent to which the Payment System is or will be subject to a regulatory regime and lead or co-supervision by one or more overseas authorities outside the Kingdom, taking into account the nature and basis of that regime and supervision and whether SAMA has an adequate basis for co-operation with such authorities;
               
              (b)The accepted alternate basis for licensing on which SAMA can supervise and enforce the Payment System’s operations as they relate to the Kingdom, including as to rights to information, to give direction and to enforce non-compliance;
               
              (c) The extent to which an alternate basis of oversight and regulation of the Payment System facilitates SAMA having regard to the objective of the Implementing Regulation; and
               
              (d)The extent to which SAMA is able to supervise and ensure the Payment System’s compliance with the PFMI and is able to meet the responsibilities of market regulators identified under the PFMI.
               
               (3)SAMA shall announce the decision taken with regard to dealing with the Cross-Border Payment System and clarify the approach adopted in this regard, taking into account the principles of transparency and disclosure.
               
               (4) 

              Where a Cross-Border Payment System falls within Paragraphs (a) and (b) of Paragraph (1) of this Article, and it or its Operator conducts additional Payment System business outside the Kingdom or otherwise settles Payment Orders to overseas Members, the following must apply: 
               

              (a)There must be a Memorandum of Understanding in place between SAMA and the competent authority of the relevant jurisdiction in relation to the supervision of Payment Systems; and/or
               
              (b) SAMA must be satisfied that the jurisdiction in question is regulated on a basis that is equivalent or otherwise enables SAMA to supervise the Systemically Important Payment System in terms of information exchange, cooperation and enforceability.

               

        • Chapter 4: Finality and Bankruptcy

          • Article 115

             (1)A Systemically Important Payment System must establish rules and procedures as part of its Operating Rules to enable Final Settlement to take place no later than the end of the intended settlement time and date. 
             
             (2)The related rules and procedures must also ensure certainty in terms of circumstances under which Final Payment Orders effected through the Systemically Important Payment System are to be regarded as achieving Final Settlement.
             
             (3)Notwithstanding Article 6 of the Law, the result of a transfer of Funds and the Final Settlement of a Final Payment Order and Clearing Arrangements and settlement transactions, Default Management Arrangements and Security arrangements will be irrevocable and shall not be reversed, repaid or set aside. The implementation of the above must not conflict with the Procedures defined in Paragraph (6) of this Article.
             
             (4)

            In accordance with the application of Articles 6, 9 and 10 of the Law, the Operating Rules of a Systemically Important Payment System must describe the provisions and procedures necessary for all operations and functions, and that including but not limited to:

            (a)Payment orders;
             
            (b)Settlement procedures;
             
            (c) Arrangements in relation to Security;
             
            (d)Clearing arrangements;
             
            (e) Guarantees; and
             
            (f) Default management arrangements.
             
             (5)SAMA may request any documents or reports that prove the Operating Rules’ compliance with all the provisions of this Article in any form it deems appropriate.
             
             (6)

            A Systemically Important Payment System must ensure that its Operating Rules are sufficiently clear on the application of Articles 6, 9 and 10 of the Law, and shall state that the Operating Rules: 
             

            (a)The Operating Rules do not conflict with the requirements of protection, validity and binding nature of Final Payment Orders, arrangements in relation to Collateral and Clearing Arrangements; and
             
            (b)The Operating Rules do not conflict with bankruptcy procedures, resolution procedures, winding up procedures (voluntary or otherwise), and any special administration procedures (or similar measures, howsoever named) that are put in place under applicable legislation and regulations related to the Payment System or its Members where such measures involve the suspending of, or imposing limitations on, the execution or completion of payments resulting from Payment Orders.
             
             (7)The provisions of Article 6 of the Law do not apply to Final Payment Orders initiated after the expiry of the calendar day in the Kingdom on which the “Procedures” result in a duly published and notified and enforceable order or instruction of the relevant authority for the cessation of business, winding up, bankruptcy or re-organization of the concerned Systemically Important Payment System or its Members (or the expiry of the day that the voluntary winding up is completed).
             
             (8)SAMA may Exclude a Systemically Important Payment System from some of the provisions of this Article, provided that the exception decision is applied starting from the day following the day on which the decision was issued; the decision shall be published according to the method specified by SAMA.
             
             (9)SAMA may apply some or all the provisions included in this Article on the Operating Rules of a specific Non-Systemically Important Payment System.

          • Article 116

             

            Notwithstanding any other applicable laws and regulations in the Kingdom:

             (1) A Payment System Operator must notify SAMA in the event of a Serious Disruption and shall take appropriate measures.
             
             (2)

            A payment System Operator must prepare the necessary policies and procedures for measures to handle Serious Disruption incidents that result in a total or partial actual or potential failure or suspension of the Payment system or lead to actual or potential bankruptcy of the Payment Systems Operator, and they must include:

            (a) Communications to internal and external stakeholders in a timely and methodical manner; and
             
            (b) Steps to resolve issues caused by the Serious Disruption as efficiently as possible. 

          • Article 117

            (1)The Operating Rules of a Payment System Operator must compel each Member to notify that Payment System Operator forthwith of the bankruptcy, potential bankruptcy or the commencement of bankruptcy proceedings relating to any Member.
             
            (2)A Payment System Operator must notify SAMA immediately of the bankruptcy, potential bankruptcy of a Member or the commencement of bankruptcy procedures relating to that Member.

      • Part 10: Supervision and Control

        • Article 118

           

          (1)SAMA is responsible for the monitoring of actions conducted by Payment Service Providers and Payment System Operators and evaluating their compliance, and the monitoring and examination of potential violations of the Law, the Implementing Regulation, and any instructions, decisions or circulars issued by SAMA.
           
          (2)In conducting its supervisory functions, SAMA may conduct supervisory or inspection visits to the licensee's headquarters, branches and agents, including the power to request reports and risk assessments that it deems necessary for the exercise of its functions. 

        • Article 119

          A committee or more may be formed comprising Payment Service Providers and Payment System Operators after obtaining approval from SAMA to be responsible for studying the proposals and recommendations necessary to develop the Payment Systems and Payment Services sector.

        • Article 120

          (1)Licensees will be required to provide data and submit reports periodically as mandated by SAMA.
           
          (2)A Licensee is obliged to submit to SAMA quarterly financial reports (to be reviewed by an external auditor), which include any information that SAMA deems necessary.
           
          (3)A Licensee is obliged to submit to SAMA annual financial statements (reviewed and audited by an external auditor) in a way determined by SAMA.
           
          (4) SAMA may amend and supplement the list and contents of the reports required to be submitted by a Licensee. SAMA may require that a Licensee hires an external auditor to review specific areas of its operations and report directly to SAMA in the manner specified by SAMA.

        • Article 121

           

           (1)

          A Licensee must notify SAMA as soon as possible, and within ten calendar days in any event, if it becomes aware that any of the following events have occurred or are likely to occur:

          (a) Any event that prevents access to or disrupts the operations of one or more of its Relevant Payment Services offered by it or Payment Systems operated by it;
           
          (b)Any breach of its obligations under the Implementing Regulation or other applicable laws, regulations and decisions;
           
          (c) Any legal proceeding against it or any criminal proceeding against any member of its Senior Positions, either in the Kingdom or outside;
           
          (d)The commencement of any bankruptcy, winding up or other liquidation proceedings, or the appointment of any receiver, administrator or provisional liquidator under the law of any country;
           
          (e) Any disciplinary measure or sanction taken against it or imposed on it by a regulatory body other than SAMA, whether in the Kingdom or outside;
           
          (f) Any change in supervisory or regulatory requirements to which it is subject beyond those of SAMA, whether in the Kingdom or outside;
           
          (g)Fraud; and
           
          (h) Any other event specified by SAMA.
           
           Unless any other applicable laws, regulations or rules specify a shorter timeframe, in which case the notification must be made within that shorter timeframe.
           
           (2) Notwithstanding the specific notification obligations set out in Paragraph (1) of this Article, a Licensee must notify SAMA immediately upon identification of any ‘Medium’ or higher classified cyber incident or any operational incident that may affect Clients in compliance with related instructions.

        • Article 122

          (1)Inspectors, appointed based on a decision of the Governor of SAMA pursuant to Paragraph (1) of Article 15 of the Law, shall receive notices, collect information, control necessary evidence and complete legal procedures.
           
          (2) Inspectors may seek assistance from criminal investigation employees if necessary.
           
          (3) Inspectors may hire specialists either as individuals or companies when conducting their survey, examination, and seizing materials connected with violations. The duty of such individuals and companies shall be confined to showing places and materials that require search and capturing during an investigation.
           
          (4) Inspectors shall be subject to any relevant laws, rules, procedures and permissions related to their work.

        • Article 123

           

           (1)

          SAMA may require a report on any matter about which SAMA has required or could require the giving of specified information, or production of specified documents, as SAMA deems necessary and desirable to meet the objectives of the Law, from any of the following:

          (a)A Payment Service Provider;
           
          (b) A Payment Systems Operator;
           
          (c)Member of Senior Positions, employee, Agent, or external auditor of the payment service provider or the payment system operator; or
           
          (d) A controller.
           
           (2)The Person appointed to make a report, as required by the above Paragraph, must be a Person either nominated or approved by SAMA and must, in SAMA’s views, have the skills necessary to make a report on the matter concerned.

        • Article 124

          Notwithstanding relevant provisions as applicable – which in the event of possible contradiction will take precedence - a Licensee must not partially or totally shut down its business activities or apply for a winding up, liquidation or other bankruptcy proceedings without first receiving a non-objection letter from SAMA, which may request information and documents to be provided by the Licensee in this regard.

        • Article 125

          SAMA may exclude a Person or group of Persons from certain licensing requirements for purposes of stimulating innovation and development in the provision of Relevant Payment Services and the operation of Payment Systems, taking into account transparency and justice.

        • Article 126

          An inspector appointed pursuant to a decision from the Governor under Paragraph (1) of Article 15 of the Law shall:

           (1)Be a Saudi national;
           
           (2)Be of good conduct;
           
           (3)Have not been sentenced of a breach of trust offense or a crime involving moral turpitude, unless rehabilitated; and
           
           (4) Hold a bachelor's degree from the Kingdom of Saudi Arabia, or the degree has been equated.

           

           

        • Article 127

           

           (1) 

          SAMA may direct the licensee to take one –or more- corrective actions to ensure their commitment to the provisions of the Law and the Implementing Regulation and any relevant instructions, decisions or circulars issued in implementation thereof as follows: 

          (a) To take any actions to correct the existing situation in the form and time specified. 
           
          (b) To close one of its branches or platforms.
           
          (c) To stop using one or more of its Agents or distributors.
           
          (d) Suspending, restricting or prohibiting specific provided services or products.
           
          (e) The development of progressive cessation restrictions and controls.
           
           (2) Subject to the relevant provisions contained in Article 12 of the Law, SAMA shall issue a penalty decision against anyone who violates the provisions of the Law, Implementing Regulation, instructions or relevant decisions in accordance with the classification schedule of violations and the determination of penalties.
           
           (3)

          Notwithstanding the competence of the Banking Dispute Committee, the Licensee must, if so directed by SAMA to revoke the license:

          (a) Immediately stop practicing the activity related to the License revoked;
           
          (b) Announce the dissolution of the Licensee in a manner as prescribed by SAMA, notwithstanding any other requirements under applicable laws, regulations and decisions;
           
          (c) Enter into liquidation within a period not exceeding six months from the date the Licensee is notified of the License revocation, provided that this is done in accordance with the relevant laws and SAMA has the right to assign a liquidator to carry out the liquidation process; and
           
          (d) Maintain and keep records and data at the disposal of SAMA for the period it specifies without prejudice to the provisions of the relevant laws.
           
           (4)SAMA will monitor such corrective action plan in accordance with a timeframe and reporting mechanism that SAMA will stipulate.

        • Article 128

          Inspectors - appointed further to a decision from the Governor under Paragraph (1) of Article 15 of the Law - law enforcement personnel, experts and specialists assisting them shall not disclose confidential information which they come across in the course of their work even after terminating their services unless such disclosure is necessary for purposes of implementing the Law or the Implementing Regulation or any other applicable laws.

           

           

      • Part 11: Complaints and Disputes

        • Article 129

           

           (1)A Payment Service Provider must ensure that Complaints are handled and addressed in a fair and timely manner, taking proper account of the provisions of the contract signed with the client, the Law and related regulations, rules, instructions, and circulars.
           
           (2)When a Payment Service Provider receives a Complaint, the Payment Service Provider must make every possible effort to address all points raised in a written reply to the Complaint or through means and channels that have been agreed upon between the Payment Service Provider and Payment Service User.
           
           (3) 

          A Payment Service Provider must, at a minimum:

          (a) Have a role, function and channels that handle Complaints and operate a complaint handling system that facilitates the recording, tracking, categorization and status of Complaints and provide access to SAMA contact details for complaints handling;
           
          (b) Prepare Complaints handling policies, controls and procedures that adhere to all SAMA documents that regulate the relationships between a Payment Service Provider and its Payment Service Users;
           
          (c)Provide business phone numbers (landline and mobile) for Payment Service Users to contact free of charge from inside the Kingdom to report Complaints. A Payment Service Provider must publish those phone numbers and services on all channels it makes available to Payment Service Users;
           
          (d) Provide additional online communication channels, such as online live chat or the option for Payment Service Users to register their phone numbers online for Payment Service Provider representatives to contact them;
           
          (e) Submitting a document on the procedures for dealing with complaints and enabling clients to view them, provided that it includes the procedures for submitting a complaint and the required documents and an explanation of the channels and means available for submitting it.
           
          (f) Provide all necessary details to be used by the Payment Service User for following up on a Complaint;
           
          (g) Document the channel used to communicate with a Payment Service User about Complaints and retain details of each Complaint and its handling mechanism; and
           
          (h)Provide the information required by a Payment Service User who wishes to escalate its Complaint within the Payment Service Provider or to SAMA as a result of being dissatisfied with the result of the resolution of their Complaint and direct the Payment Service User to the relevant party.
           
           (4)

          A Payment Service Provider must adhere to the following timings when addressing a Complaint:

          (a)An acknowledgment of the Complaint must be sent within forty-eight hours of receipt.
           
          (b) A full reply must be provided within an adequate timeframe and at the latest ten calendar days after the day on which the Payment Service Provider received the Complaint.
           
          (c) If a full reply cannot be given for reasons beyond the control of the Payment Service Provider, the Payment Service Provider must send a holding reply, clearly indicating the reasons for the delay in providing a full reply to the Complaint and specifying the deadline by which the Payment Service User will receive a full reply, the reply shall not exceed 30 calendar days from the date of receipt of the complaint.
           
           (5)A Payment Service Provider must submit details of its Complaints handling procedures to SAMA. SAMA may review these procedures and direct it to alter or amend the complaints handling procedures in accordance with the requirements of applicable laws and regulations, rules, instructions, and circulars.
           
           (6) A Payment Service Provider must report to SAMA on an annual basis the Complaints that it has received from its Payment Service Users in such form as SAMA may direct.
           
           (7)In addition to the Payment Service Provider’s Complaints handling procedures, SAMA will maintain arrangements to receive Payment Service User Complaints. SAMA will consider such Complaints and may follow them up with a Payment Service Provider to determine any corrective actions to be taken. Further, SAMA may refer the Payment Service User to other competent authorities or entities for the purposes of addressing their Complaints.
           

        • Article 130

          The Banking Disputes Committee shall be responsible for the settlement of all disputes arising between stakeholders of Payment Systems and Payment Service Providers and shall be responsible for the settlement of any grievances of stakeholders from the relevant decisions of SAMA.

      • Part 12: Final Provisions

        • Article 132

          (1)A Payment Service Provider licensed under the Payment Service Provider Regulations shall be deemed to be licensed under and subject to the Implementing Regulation from its effective date.
           
          (2)A Payment Service Provider or Payment System Operator must provide a plan for undertaking corrective procedures to comply with the provisions of the Law and the Implementing Regulation within a maximum of six months from the effective date on which the Implementing Regulation come into effect.
           

           

        • Article 133

          The Implementing Regulation shall come into force from the date of issuance.

    • Credit Information Law

      No: M/37 Date(g): 8/7/2008 | Date(h): 6/7/1429Status: In-Force

      • Article 1: Definitions

        The following words and phrases, wherever mentioned in this Law, shall have the meanings assigned to them, unless the context requires otherwise: 
         
        SAMA:Saudi Central Bank*.
         
        Credit Information:Information and data on consumers with respect to credit transactions, such as: loans, installment purchase, lease, credit sale and credit cards and their commitment to payment.
         
        Member:Any government or private entity which is party to a credit information exchange contract with at least one credit information company.
         
        Consumer:Any natural or corporate person engaging in credit transactions.
         
        Companies:Credit information companies licensed to collect and maintain credit information on consumers and provide the same to members upon request.
         
        Credit Record:A report issued by companies containing consumer credit information.
         
        Public Records:Credit information records maintained by government entities, such as records of funds and banks offering government loans, judicial authorities, government committees, bankruptcy and insolvency records and the like.
         

        * The "Saudi Arabian Monetary Agency" was replaced By the "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.

      • Article 2

        This Law aims at establishing general principles and controls necessary for collection, exchange and protection of consumer credit information.

      • Article 3

        This Law shall apply to companies, members, government and private entities maintaining credit information.

      • Article 4

         1.Government entities maintaining credit information shall provide such information to licensed companies pursuant to controls established by said entities to guard against monopoly of said information.
         
         2.Companies shall collect, provide exchange and protect credit information.
         
         3.Companies shall prepare consumer credit records and exchange the same with members upon request.
         
         4.Companies shall charge a fee for provision and exchange of credit information pursuant to controls set forth in the Implementing Regulations.
         

      • Article 5

         1.Each member shall exchange credit information in its possession with the company it has a contract with and shall be liable for the accuracy and updating of such information.
         
         2.A member may obtain a copy of the consumer credit record from companies subject to the written consent of the consumer.
         

      • Article 6

        Members, companies and their staff shall maintain the confidentiality of consumer credit information, and they may not publish or use such information for any purpose other than those provided for in this Law or its Implementing Regulations, or in accordance with laws and instructions regulating the confidentiality of information in Saudi Arabia.

      • Article 7

        Credit information may be used as statistical figures, provided that such information does not reveal the consumer's identity.

      • Article 8

         1.Members and companies shall provide consumers with information on applicable procedures when applying for any credit transaction.
         
         2.Companies shall set specific procedures for handling consumers' complaints and shall publish such procedures upon SAMA’s approval.
         

      • Article 9

         1.A consumer credit record may not be established with companies for the first time except with the written consent of the consumer.
         
         2.A member shall provide the consumer, upon his/her request, with grounds for declining his/her credit transactions.
         
         3.A consumer whose credit transaction is declined may obtain a free copy of his/her credit record once only.
         
         4.Subject to payment of fees, a consumer may obtain a copy of his/her credit record at any time. Said consumer may obtain a free copy of his/her credit record once only upon establishment of the record.
         
         5.A consumer may add information to his/her credit record indicating his/her personal point of view with respect to credit information provided therein.
         
         6.A consumer who detects an error in his/her credit record may request the company to correct said error upon submission of relevant supporting documents.
         
         7.A consumer, if an error in his/her credit record is not corrected or if he/she notices that his/her credit record is requested for an unlawful reason, may file a complaint with the committee set up pursuant to this Law to decide thereon.
         

      • Article 10

         1.Companies shall maintain credit information.
         
         2.Companies shall set up and maintain records containing all consumer credit record requests.
         
         3.The Implementing Regulations shall specify the duration and controls for maintenance of information and ways of disposal thereof at the end of said period.
         

      • Article 11

        SAMA shall supervise and monitor the implementation of the provisions of this Law and may, in particular, undertake the following: 
         
         1.draft the Implementing Regulations of this Law;
         
         2.determine conditions to be met by companies seeking to provide credit information services, as well as controls and procedures for licensing;
         
         3.issue, renew and amend licenses for credit information companies;
         
         4.set up mechanisms for supervising and monitoring the work of credit information companies;
         
         5.approve work procedures to be followed by members and credit information companies for the application of credit records;
         
         6.detect and investigate violations and prosecute violators before the committee; and
         
         7.determine measures to be taken with respect to credit information in case of revocation of the license of the credit information company, or its dissolution, liquidation or bankruptcy.
         

      • Article 12

        The following acts shall be deemed in violation of the provisions of this Law: 
         
         1.engaging in activities of credit information companies without obtaining a license from SAMA;
         
         2.companies' violation of license conditions and controls;
         
         3.disclosure by any member, credit information company or any other entity subject to the provisions of this Law, or any of their employees, while in office or afterwards, of information gained in the course of their work which is deemed confidential under this Law, in cases other than those specified in this Law;
         
         4.use or exploitation of credit information for unlawful purposes or in violation of the provisions of this Law;
         
         5.delay of members or credit information companies in updating credit information on the dates specified in the Implementing Regulations, or failure to correct an error immediately upon detection;
         
         6.providing incorrect or forged data on consumers;
         
         7.failure of members bound by membership agreements to provide requested credit information, or delay in providing such information on dates specified in the Implementing Regulations; and
         
         8.any other violation of the provisions of this Law or its Implementing Regulations.
         

      • Article 13

        Without prejudice to any harsher punishment provided for in another law, anyone violating the provisions of this Law or its Implementing Regulations shall be subject to one or more of the following penalties: 
         
         1.a fine not exceeding one million riyals; the maximum fine shall be doubled in case of repetition;
         
         2.temporary suspension of the license; and
         
         3.revocation of the license.
         

      • Article 14

        Pursuant to a decision by the Minister of Finance, one or more committees shall be formed to review violations of the provisions of this Law, impose penalties and decide on disputes and disagreements arising between consumers and members and companies. Said committee shall comprise at least three members with expertise in this field, one of them at least shall be a legal counselor. Decisions of said committee shall be passed by majority vote and may be appealed before the Board of Grievances within (60) days from the date of notification thereof. Working mechanism of said committee and remunerations of its members shall be specified in the Implementing Regulations.

      • Article 15

        Anyone sustaining damage resulting from a violation provided for in this Law, after the issuance of a decision by the committee, may recourse to the competent judicial authority to claim compensation for damage sustained.

      • Article 16

        The Governor of SAMA shall issue the Implementing Regulations of this Law within (180) days from the Law's date of promulgation and the Implementing Regulations shall be published in the Official Gazette.

      • Article 17

        This Law shall be published in the Official Gazette and shall come into effect (180) days after the date of publication, and shall repeal any provisions conflicting therewith.

    • Implementing Regulations of Credit Information Law

      No: أق/13709 Date(g): 21/8/2011 | Date(h): 22/9/1432Status: In-Force

      • Definitions

        • Article (1)

          The following words and expressions, wherever they occur in these Implementing Regulations, shall have the meanings given next to them unless otherwise required by the context.

          The Law: The Credit Information Law promulgated by Royal decree No. M/37, dated 5/7/1429H.

          Implementing Regulations: Implementing Regulations of the Credit Information Law.

          SAMA: Saudi Central Bank (SAMA)*.

          Governor: Governor of Saudi Central Bank.

          Credit Information: Consumer Information and data on his/her credit dealings.

          Companies: credit information companies licensed to collect and maintain credit information on consumers, as well as provide members with such information upon their request.

          Member: A government or private entity engaged in a contract to exchange credit information with at least one credit information company.

          Consumer: A natural or juridical person who has credit dealings.

          Credit Record: A report issued by companies containing credit information on a consumer.

          Public Records: Credit information records maintained by government entities, such as records of specialized funds and banks that offer government loans, as well as judicial authorities, government committees, bankruptcy and insolvency files and the like.

          Negative Decision: Any decision made by a member against a consumer based on his/her credit record.

          Negative Information: Any information given by a member that may adversely affect the assessment of a consumer's credit record.

          Committee: The Committee for Settlement of Credit Information Violations and Disputes.

          * The "Saudi Arabian Monetary Agency" was replaced By the "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.

      • Licenses

        • Article (2)

          A natural or juridical person shall not provide credit information services before obtaining a license from SAMA pursuant to the provisions of Law and its Implementing Regulations.

        • Article (3)

          The company licensed to provide credit information services shall:

           1.be a joint stock company with its head office in Saudi Arabia; 
           2.have a paid up capital not be less than SR50 million;
           3.obtain SAMA approval on the Articles of Association and by-laws; 
           4.obtain SAMA approval on the computer system used in provision of the credit information services; 
           5.have competent human resources as well as sufficient financial and operational resources to provide services efficiently according to the Law and its Implementing Regulations; and 
           6.comply with the instructions and business rules issued by SAMA. 

        • Article (4)

          Founders of the company willing to offer credit information services must complete the licensing application form and submit it along with the following:

           1.a statement of the founders' names, addresses, and percentage in share capital of each founding shareholder;
           2.company's Articles of Incorporation and By-Laws;
           3.a bank certificate from a licensed bank in Saudi Arabia attesting that the paid-up capital has been placed in full;
           4.a copy of the national I.D. or commercial registration of the founding shareholders;
           5.description of the computer system that will be used to collect and store credit information of consumers, including system features and capabilities;
           6.an economic feasibility study;
           7.the company's business plan for the first 3 years since its incorporation, including the nature of works it intends to offer, future expansion plans, projected financial statements, estimated growth rates, annual costs based its expected growth rates, anticipated number of staff, corporate governance, internal controls to be implemented by the company, and any other information that may be required by SAMA;
           8.company's organization structure;
           9.a fee of SR 50,000 for reviewing the licensing application; and
           10.a declaration not to conduct any business other than those stated in the company's articles of association, unless after obtaining SAMA’s approval.

        • Article (5)

          The applicant shall complete all deficiencies in its application and furnish SAMA with any required information within a month from the date of notification of such requirements; otherwise, its application will be revoked. SAMA will only give its decision to approve or reject the application once the company has fulfilled all required information and documents.

        • Article (6)

          The applicant shall finalize the incorporation procedures according to the Companies Regulations, including commercial registration. The Governor's decision to grant the license will be issued thereafter. Nevertheless, the company must not in any case provide its services prior to issuance of the Governor's decision; otherwise the application procedures will be revoked.

        • Article (7)

          The license term is five years, renewable according to the conditions and procedures applicable upon such a renewal. SAMA will charge a one-time off fee upon issuance of the license amounting to 1% of the company's paid up capital, and another fee amounting to 0.5% of the company's paid up capital upon renewal of the license. Renewal application shall be submitted at least 6 months prior to the license expiry date.

        • Article (8)

          The license shall be terminated in the following cases:

           1-automatically upon its expiry date, if not renewed;
           2-dissolution of the company for any cause stipulated in the Companies Law;
           3-issuance of a decision to revoke the license; and
           4-failure of the company to conduct business within 12 months from the issuance date of the license without reasonable justifications acceptable to SAMA.

        • Article (9)

          The Company shall obtain SAMA's written approval before:

           1.opening a branch or an office, or establishing a subsidiary inside or outside Saudi Arabia;
           2.entering into a merger or acquisition deal/transaction with another entity; and
           3.affecting any change on its articles of incorporation or by-laws.

        • Article (10)

          Having identified and investigated a violation, SAMA may take the following actions:

           1.notify the company in writing with any error, deficiency, or negligence from its side, and provides SAMA with an acceptable plan to remedy the situation within at least thirty (30) working days of the notification date;
           2.request from the committee a temporary suspension or termination of the license by a written notification to the company, in case the company fails to comply with the above paragraph; and
           3.instruct the company to inform all relevant parties of the committee’s decision.

        • Article (11)

          With due consideration to the Implementing Regulations, the company must inform SAMA of any change or modification to the information provided to SAMA before or after licensing, within three working days of effecting such a change or modification.

      • Scope of Credit Information Services

        • Article (12)

          Upon obtaining SAMA approval, the company may provide any or all of the following services:

           1.receive consumer’s information from all members, collate, store and exchange such information with members and companies;
           2.provide enquiry service on both individuals and businesses;
           3.provide consumers credit evaluation service;
           4.provide advisory services to support credit information;
           5.provide statistical reports and information regarding credit information; and
           6.provide market and statistical researches on credit information.
           

          Companies must obtain SAMA's prior approval on providing any services other than those stated in this Article.

      • Governance

        • Article (13)

          Board members and senior managements of companies must enjoy suitable competencies and experiences that qualify them for their jobs.

        • Article (14)

          SAMA's fit and proper standards and criteria shall apply to all company founders, chairman and members of the board of directors and executive management. They shall complete the fit and proper questionnaire issued by SAMA and provide all forms and requirements specified in the criteria to obtain SAMA "Non Objection" for their appointment.

        • Article (15)

          The nominee for membership in the company’s board of directors shall:

           1.not be a board member of any other credit information company inside or outside Saudi Arabia;
           2.not be convicted by any court with regard to any crime impinging on honor or integrity, unless rehabilitated;
           3.never declared bankruptcy or insolvency;
           4.not be an employee at any other credit information company or an auditor of its accounts;
           5.never been terminated from employment over a disciplinary action;
           6.not pose any conflict of interest due to membership in the company's board of directors or the board of any other company that conducts a different activity; and
           7.have a credit record that is free of any negative information.

      • Credit Record

        • Article (16)

          The credit record shall contain information relating to the consumer's credit worthiness, such as:

           1.consumer's name as a natural person, ID number, place of residence, current and previous workplace, marital status, educational qualifications, and personal details;
           2.consumer’s name as a legal person, commercial license or registration number, address, and any other relevant information;
           3.information on any existing or previous credit, acknowledged or disputed, whether its repayment was immediate or deferred, defaulted or delayed, and whether the debt was cancelled or settled, as well as any guarantees given to the consumer;
           4.any credit-related actions brought against the consumer and the judgments made;
           5.any case of insolvency, bankruptcy or liquidation brought against the consumer and the judgments made, name of liquidator or trustee of bankruptcy, assets and debt amounts, repayment dates and liquidation expenses;
           6.bounced checks issued by the consumer, their values and dates, and any actions taken towards these checks;
           7.any claim made by an official authority and has not been settled yet;
           8.number and names of members who requested a consumer credit record during the past two years preceding the issuance date of the credit record, in addition to the number of credit records issued and results reached; and
           9.any other information relating to credit and affecting the credit worthiness of the consumer.
           

          SAMA may change the information required to be included in the credit record as it deems appropriate.

        • Article (17)

          Companies have the right to maintain the negative information in the consumer credit record for no more than five years from the debt or dispute settlement date. An exception is the cases of bankruptcy, insolvency and delayed Zakat or tax obligations which shall be maintained in the record for 10 years. Outstanding judicial cases shall be maintained in the credit record until settlement.

        • Article (18)

          At the request of the member, the company may include in the credit record of a partner in a partnership credit information relating to the other partners after obtaining their written consent.

      • Regulatory and Supervisory Requirements

        • Article (19)

          SAMA may conduct regular or unexpected inspection, through its inspectors or external auditors, to check the company’s accounts and records, and the company’s staff must cooperate and provide any information or data requested.

        • Article (20)

           1.The company shall provide SAMA with the following: 
            a.quarterly financial statements within a month from the end of the quarter, and the final audited statements within two months from the end of the fiscal year; and
            b.a report assessing the efficiency and effectiveness of computer systems used by the company, including the systems for collecting and keeping data. The report shall be provided annually and approved by a certified advisory office.
           2.SAMA may request any other data or information as required. 

        • Article (21)

          Companies shall sign membership agreements approved by SAMA with any party that wishes to obtain credit information about consumer credit records. Such agreements shall indicate rights and obligations of the parties. Each party after signing the agreement will be regarded as a "member".

        • Article (22)

          Credit information shall be shared among companies that are governed by the Law according to bi-lateral or multi-lateral agreements or contracts entered into between such companies. These agreements and contracts shall specify the parties' rights and obligations, documents to be provided concerning such information, validity, method of extension or renewal, and financial charges to be paid. They shall be submitted to SAMA to obtain its non-objection.

        • Article (23)

          Companies shall prepare regular records containing (natural and legal) consumers’ names, capacities, addresses, workplaces, nature of business and credit information.

        • Article (24)

          Companies shall regularly prepare records containing the names of members and companies they are transacting with, whether credit information companies or any other companies governed by the Law and its Implementing Regulations, as well as the agreements and contracts signed with each company, their durations and conditions.

        • Article (25)

          Companies shall take all measures and precautions necessary to ensure soundness, accuracy, integrity and completeness of information obtained according to the Law and its Implementing Regulations and shall:

           1.not collect credit information from any party prior to signing a membership agreement with that party;
           2.gather credit information from members in line with the criteria approved by the company and which include administrative, technical and legal requirements as well as the working rules approved by SAMA;
           3.take the necessary actions to ensure that there are reasons for the member’s request for credit information; and
           4.inform the member of his obligations according to the Law and its Implementing Regulations.
           

          A company shall be held responsible to the parties transacting with it, i.e. public and private institutions/ agencies, firms and consumers, for any invalid or false information and data it provides. However, this will not waive the company’s right of recourse against a member for any damages the company incurs once it proves the member's deception and misleading information.

        • Article (26)

          Companies shall establish data and information security protection controls for the information they have or obtain, and they shall:

           1.record, maintain, reconcile, collect, process and classify credit information in a proper and suitable manner to facilitate reference to such information;
           2.protect information from loss, which includes the adoption of backup systems and the development of contingency recovery plans as well as business continuity plans;
           3.protect credit information from unauthorized access, usage, modification, or disclosure in violation of the Law and its Implementing Regulations;
           4.establish controls and procedures to be applied upon members' request to check credit records;
           5.review the company’s staff confidentiality controls regularly;
           6.review usage patterns of information systems regularly to detect and investigate any unusual usage patterns;
           7.maintain records for all access, modification and audit cases of credit information database, including previous enquiry records as well as all incident records that imply confirmed or suspected violations; and
           8.provide sufficient knowledge to the authorized member representatives concerning the international best security practices relating to the working rules.

        • Article (27)

          Prior to providing a member with any credit record, the company shall:

           1.verify the identity of the applicant and purpose of such a request;
           2.obtain the member's undertaking that the information will not be used except for the reasons specified in the application; and
           3.ensure that the credit information provided is accurate and up to date.

        • Article (28)

          With due consideration to these Implementing Regulations, the company may not issue any credit record on a consumer except based on:

           1.the member's request and consent of the consumer involved;
           2.a request from a local competent dispute settlement body;
           3.SAMA's request; or
           4.the consumer’s request.

        • Article (29)

          Companies shall procure an insurance policy from an authorized insurance provider in Saudi Arabia to cover its liabilities arising from failure, negligence or errors in the provision of credit information services.

        • Article (30)

          The company may not sell, rent or assign its databases except to another licensed credit information company, and after obtaining SAMA’s prior written approval. Upon dissolution of the company for any reason, its databases will go to SAMA or any other organization designated by SAMA.

        • Article (32)

          With due consideration to Article (12) of these Implementing Regulations, companies will collect credit information on consumers from all available sources such as public records and financial institutions whose nature of work involve providing credit in addition to consumers’ current and previous places of work, chambers of commerce and industry, and other related organizations and sources.

        • Article (33)

          Companies shall establish a complaints settlement department and develop a procedural manual for processing consumer complaints to be published after obtaining SAMA’s approval. The manual shall include procedures that ensure:

           1.full understanding of each employee who gets in touch with consumers about these procedures;
           2.complete and immediate investigation into any complaint; and
           3.maintenance of a record for written complaints and documentation of the actions taken.

        • Article (34)

          Companies shall prepare a procedural manual for consumer awareness of credit information and submit it to SAMA for its approval.

      • Confidentiality

        • Article (35)

          With due consideration to the provisions on confidentiality of credit information and the banking rules followed in Saudi Arabia, none of the entities referred to in Article (32) of these Implementing Regulations may refuse to provide the companies with the requested credit data and information on consumers for the purposes stipulated in the Law and its Implementing Regulations.

        • Article (36)

          Members and companies shall maintain confidentiality of credit information and data in their possession and limit the use and sharing of such information to the members, companies, and relevant persons and parties according to the Law and its Implementing Regulations. Without prejudice to the liability of their employees and workers for any violations they might commit, companies and members shall be held fully liable for any violations to the Law and its Implementing Regulations committed by their employees.

        • Article (37)

          Employees and workers of companies and organizations subject to the Law and its Implementing Regulations must not disclose, or keep, any information which they may come upon while performing their job duties, even after the end of their employment.

        • Article (38)

          Provisions on confidentiality of credit information will not apply to the following:

           1.public information as information becomes public once it is announced or published in media; and
           2.any other cases or information as specified by SAMA.

        • Article (39)

          Companies may not establish a credit record of any consumer for the first time, or exchange it with any member or company without the consumer's consent.

      • Members Obligations

        • Article (40)

          The member shall:

           1.obtain the written consent of the consumer upon inquiry, and his/her approval to provide licensed companies with his/her credit information;
           2.not provide companies with any credit information about the consumer if the member knows that such information contains errors or believes that such information may contain incorrect data;
           3.not provide companies with false credit information about the consumer after the member has been informed by the consumer;
           4.periodically update the consumer information, at least once a week;
           5.provide companies, in all circumstances, with correct and complete data about the consumer;
           6.use the consumer information received from the companies for lawful purposes;
           7.immediately inform the companies about any closed credit accounts based on the consumer's request;
           8.not disclose any information received from the companies about the consumer;
           9.develop records including the names and addresses of the companies transacted with as well as the information provided to such companies.
           10.not have the right to provide the companies with negative information about the consumer that includes dispute or complaint without notifying the companies that such negative information is subject of a dispute or complaint; and
           11.verify the consumer information and correct or delete any contained errors.

        • Article (41)

          The member shall inform the consumer about any negative information that will be sent to companies within 30 working days as of registering such information in the consumer’s record. This can be affected through sending a clear and explicit written notification to the consumer.

        • Article (42)

          Members who are committed by membership agreements with companies may not deny or delay the provision of the credit information required by them according to the defined schedules and agreed frequency stipulated in the membership agreements between companies and members.

      • Consumer’s Rights

        • Article (43)

          With due consideration to the cases stipulated in the Law, the consumer shall have the right to know all information contained in his/her credit record. The consumer may request his/her record from any credit information company free of charge, if:

           1.the record is requested for the first time;
           2.a negative decision is made against him/her as stipulated in the Implementing Rules;
           3.the consumer is a victim of a fraudulent transaction, such as a proven manipulation of his/her personal information; and
           4.the consumer's credit record contains false information.

        • Article (44)

          The consumer has the right to:

           1.know the name and address of any party that has enquired about his/her credit record during the past 2 years; and
           2.file a complaint if his/her credit record contains false or incomplete information.

        • Article (45)

          In case the member has taken a negative decision against the consumer for a cause that is partially or entirely due to any information included in his/her credit record, they shall notify the consumer within 7 working days from the date of taking such decision with the negative information as well as the following information:

           1.causes for taking such a negative decision; and
           2.name, address and telephone number of the company from where the member obtained the credit record and a copy of it.

      • Objections and Complaints

        • Article (46)

          The consumer may object at any time against any negative decision or any information contained in his/her credit record if it was false, not updated, incomplete, or old and has already passed the stipulated period for keeping information in the credit record indicated in Article 19 thereof. The company, in this case, shall investigate the complaint free of charge within 30 days of the objection submission date.

        • Article (47)

          Investigation and review of complaints and objections shall be in accordance with the following procedures and timeframes:

           1.the company shall within 5 working days from the date of being informed with the complaint, inform the member who issued the objected negative information in a written form and mention all related information as well as all evidence and documents submitted by the consumer, and give the member no more than 10 working days to respond. If no response is received within 10 working days, this will be taken as valid evidence for supporting the consumer’s claim;
           2.the company shall take its decision within no more than 7 working days of receiving the member’s response or expiry of the period stipulated above;
           3.once the investigation proves partial or complete validity of the claim, or it is proven that the information cannot be verified, the company shall within 2 working days remove the objected information from the record or revise it, as the case may be; and
           4.the company shall not have the right to delete or revise any negative information in the consumer’s credit record once it is proven to be accurate.

        • Article (48)

           1.The company shall notify the objector with the actions taken to investigate his/her objection within at least 10 working days from the date of objection submission. 
           2.The company shall notify the objector in writing with the finding of the investigation within at least 5 working days from the date of taking the decision in this regard, including the following: 
            a.a copy of the revised consumer’s credit record if the objection has proven to be valid; and
            b.a Summary of the consumer’s rights according to the Law and its Implementing Regulations, if it is proven that the objection is invalid.

        • Article (49)

          The company shall refer to the objection raised on any information contained in every credit record it issues during the investigation period. If the investigation fails to settle the objection, the company may, on the request of the objector, undertake the following:

           1.refer to the objection in any subsequent credit record relating to the objector and including any objected negative information;
           2.include in the credit record a clear summary of the actual facts of the negative information objected as viewed by the objector; and
           3.notify, in writing, any party designated by the objector, which had obtained his/her credit record in the year preceding the objection regarding the submission of the objection if that record included any of the objected information.

        • Article (50)

          Once any information contained in the objector’s credit record has been deleted or modified, the company shall notify in writing such deletion or modification to any party defined by the objector that may have obtained his/her credit record during the year preceding the objection, and all licensed credit information companies that are contracted with the company.

        • Article (51)

          The member shall not have the right to re-include any negative information that has been deleted or modified in the consumer’s credit record unless decided by the Committee.

        • Article (52)

          The consumer may, if his/her objection is rejected, approach the Committee indicated in Article (14) of the Law to file a complaint for review and settlement.

      • Committee for Settlement of Credit Information Violations and Disputes

        • Article (53)

          A committee or more shall be instituted according to Article (14) of the Law, composed of at least 3 members, to be appointed, nominated and their tenure is defined through a resolution by the Minister of Finance.

        • Article (54)

          After formation, the Committee shall develop its own charter defining its work processes and arbitration procedures. The Governor shall endorse the Committee’s charter and determine the remunerations of its members.

      • Enforcement and Publication

        • Article (55)

          These Implementing Regulations shall come into effect one month after being published in the official gazette and SAMA’s Website. SAMA may review and recommend a modification of these Implementing Regulations if necessary.

    • Anti-Money Laundering Law

      No: M/20 Date(g): 25/10/2017 | Date(h): 5/2/1439Status: In-Force

      • I. Definitions

        • Article 1

          The following terms and phrases – wherever mentioned in this Law – shall have the meanings assigned thereto unless the context requires otherwise: 
           
           1-The law: the Anti-Money Laundering law.
           2-The regulation: the Implementing Regulation of this law.
           3-Funds: Assets, economic resources or properties of any value or type, however acquired, whether material or immaterial, movable or immovable, tangible or intangible, along with documents, deeds, transfers, letter of credits and instruments of any form, whether inside or outside the Kingdom. This include electronic or digital systems and bank credits that evidence ownership or interest therein, also all types of commercial papers , securities, or any interest, profit or other income generated from such funds.
           4-Predicate Offense: Any committed act within the KSA constituting an offense punishable by Sharia or statutory law, or any act committed outside the Kingdom if it constitutes a crime according to the laws of the State where it was committed and would have constituted an offense under the Sharia or statutory laws of the Kingdom had it been committed therein.
           5-Proceeds of crime: the funds directly or indirectly obtained or acquired from or through the commission of a predicate offense, whether inside the Kingdom or outside, including any funds transferred or converted wholly or partially into other type of funds.
           6-Instrumentalities: Anything prepared, used, or intended to use, in any form to commit a crime of crimes stipulated in the law.
           7-Financial Institution (FI): Any conduct as a business one or more of the financial activities or operations specified in the Implementing Regulation of this Law for or on behalf of a customer.
           8-Designated Non-Financial Businesses or Profession (DNFBP): Any conducted of any commercial or professional activities as specified in the Implementing Regulation.
           9-Non-profit Organizations (NPO): Any non-profit organization entity that – legally authorized, to collects, receives or disburses funds for charitable, religious, cultural, educational, social or cooperative purposes or for any other purposes.
           10-Provisional Seizure: Temporary ban on the transport, transfer, exchange, conversion, disposal, or movement of funds, and temporary possession, pursuant to an order issued by a competent court or authority.
           11-Confiscation: Permanent expropriation and deprivation of funds, Proceeds of crime, or instrumentalities pursuant to an order issued by a competent court or authority.
           12-Supervisory Authority: The authority with responsibility to monitor the compliance by FIs, DNFPBs, and NPOs with the requirements under this Law, its Regulation or any relevant decision or instructions.
           13-Competent Authority: Any administrative authority, law-enforcement authority or supervisory authority.
           14-Bearer Negotiable Instruments: Monetary instruments in bearer form, such as cheques, promissory notes, and money order, that are in bearer form or endorsed or made out to a fictitious payee, or otherwise that are in such form that title thereto passes upon delivery, or incomplete instruments signed but with the payee’s name omitted.
           15-Beneficial owner: Any natural person who ultimately owns or exercises direct or indirect control over a customer or on whose behalf a transaction is being conducted, including on the FIs or DNFBPs or NPOs or any other legal person.
           16-Customer: Any person who conduct or intend to conduct any activities as stipulated in the Implementing Regulation with the FIs, DNFBPs.
           17-Business relationship: Any relationship with a continuing nature, which is established between any of FIs and DNFBPs and its clients related to the activities or services the FIs and DNFBPs provide to them.
           18-Shell Bank: A bank that is incorporated or licensed in a country in which it has no physical presence and that is unaffiliated with a regulated financial group that is subject to regulation and supervision.
           19-Wire Transfer: A financial transaction carried out on behalf of an originator through a financial institution with the view to making an amount of funds available to a beneficiary at another financial institution, irrespective of whether the originator and the beneficiary are the same person.
           20-Due Diligence Measures: The process of obtaining or verifying information on a customer or beneficial owner to enable the FIs or DNFBPs to assess the extent to which the customer exposes it to a range of risks.

      • II. Criminal Acts

        • Article 2

          It shall be considered to have committed a money laundering offence who conduct any of the following acts: 
           
           1-Converts or transfers or conduct any transaction on funds that the person knows are proceeds of crime for the purpose of disguising or concealing the illegitimate origin of the funds, or to help a person involved in the commission of the predicate offense that generated the funds to evade the legal consequences for his/her acts;
           2-Acquires, possesses or uses funds that the person knows are proceeds of crime or from illegal source;
           3-Conceals or disguises the true nature, source, movement, ownership, place, disposition, or manner of disposition, or rights with respect to funds that the person knows are proceeds of crime;
           4-the attempt to conduct any stated acts in Sup (1), (2), (3) in this article, or participation in by means of agreement, or providing assistance, or abetting, or providing counseling, advice, or facilitation, or collusion, cover-up or the attempt to commit any of the acts provided for in this Article.

        • Article 3

          Legal person shall be criminally liable for money laundering if any act clarified in Article 2 was committed in its name or to its account. Criminal liability of a legal person shall not exclude criminal liability of the chairmen, members of boards of directors, owners, employees, authorized representatives, auditors or hired staff, or any other natural person who acted in the legal entity’s name or for its credit.

        • Article 4

           1-A money laundering offence shall be deemed a separate offence from the predicate offense, and a conviction for the predicate offense shall not be necessary for a conviction for money laundering or to establish that funds are proceeds of crime, whether the crime was perpetrated in the Kingdom or abroad.
           2-Intent, knowledge or purpose required as elements of a money laundering offence may be inferred from objective factual circumstances of the case.

      • III. Preventive Measures

        • Article 5

          Financial Institutions (FIs), Designated Non-Financial Businesses and Professions (DNFBPs)shall identify, assess, and document their money laundering risks and keep it up to date, taking into account a wide range of risk factors, including those relating to its customers, countries or geographic areas, products, services, transactions and delivery channels, and provide risk assessment reports to the supervisory authorities upon request. The risk assessment under this Article shall include an assessment, prior to their use, of the risks associated with new products, business practices and technologies.

        • Article 6

          A financial institution shall not keep or open an anonymous accounts or an accounts in obviously fictitious names, or numbered accounts.

        • Article 7

          FIs and DNFBPs shall: 
           
           1-Apply due diligence measures to their customers and the Implementing Regulation shall set forth the instances in which such measures shall be taken and the types of measures to be taken.
           2-Determine the extent of due diligence measures based on the risks relation to a customer or business relationship. Where a higher risk of money laundering was identified, they shall apply enhanced due diligence measures.

        • Article 8

          FIs and DNFBPs shall use appropriate systems to determine whether a customer or beneficial owner is or has become assignee with a prominent public function in the Kingdom or a foreign country; or with a senior management position in an international organization and if so, apply additional measures as prescribed by the Implementing Regulation.

        • Article 9

           1-Before entering into a cross-border correspondent relationship, financial institutions shall apply appropriate risk mitigation measures as prescribed by the Implementing Regulation, and shall satisfy themselves that the respondent institution does not permit their account to be used by a shell bank.
           2-Financial institutions shall not enter into or continue a correspondent relationships with a shell bank or a respondent institution that permits its account to be used by a shell bank.

        • Article 10

           1-Financial institutions provide wire transfer activities shall obtain information on the originator and beneficiary and ensure that such information is kept with the wire transfer or related message throughout the payment chain. A financial institution that is unable to obtain required originator or beneficiary information shall not permit the execution of the wire transfer.
           2-A financial institution shall record all originator and beneficiary information and keep the records, documents, data, and files in accordance with Article 12.
           3-A financial institution shall comply with all measures on wire transfers as set out in the Implementing Regulation.

        • Article 11

           1-FIs and DNFBPs shall apply enhanced due diligence measures proportionate to the risks involving business relationships and transactions with a person from a country that was identified as high risk by the FI or DNFBP or the Anti-Money Laundering Permanent Committee.
           2-FIs and DNFBPs shall apply the countermeasures prescribed by the Anti-Money Laundering Permanent Committee with respect to high risk countries.

        • Article 12

           1-FIs and DNFBPs shall, for all domestic or international financial transactions as well as commercial and monetary transactions, keep all records and documents for a period of no less than ten years from the date of concluding the transaction or closure of account.
           2-FIs and DNFBPs shall keep all records obtained through due diligence measures, account files and business correspondences and copies of personal identification documents, including the results of any analysis undertaken, for at least ten years after the business relationship has ended or a transaction was carried out for a customer is not in an established business relationship.
           3-In specific cases, the Public Prosecution may oblige FIs and DNFBPs to extend the record keeping period for as long as required for the purpose of a criminal investigation or prosecution.
           4-Records shall be sufficient to permit reconstruction of transactions and shall be maintained in a manner so that they can be readily made available to competent authorities upon request.

        • Article 13

          FIs and DNFBPs shall: 
           
           1-Monitor and scrutinize transactions, document and data on an ongoing basis to ensure that they are consistent with the reporting entity’s knowledge of the customer, the customer’s commercial activities and risk profile, and where necessary the customer's source of funds.
           2-Examine any complex and unusual large transaction, and any unusual pattern of transactions that has no clear economic or legal objective.
           3-Where the risks of money laundering are higher, the FI and DNFBP shall perform enhanced due diligence where the ML/TF risks are higher and increase the level and nature of monitoring of the relevant business relationship to determine whether the transaction is unusual or suspicious.
           4-Keep records for a period of ten years and make them available to competent authorities upon request.

        • Article 14

           1-FIs and DNFBPs shall:
            A-Have in place and effectively implement internal policies, procedures and controls against money laundering aimed at managing and mitigating any risks identified as clarified in Article 5. The policies, procedures and controls shall be proportionate to the nature and size of the FI and DNFBP’s business and shall be approved by senior management. FI and DNFBP shall review and enhance them as needed. 
            B-Apply its internal policies, procedures and controls said in (A) of this Article, to all of its branches and majority-owned subsidiaries. 
           2-The Implementing Regulation shall specify the matters that must be addressed in the internal policies, procedures and controls under (1/A) in this Article for Anti-Money Laundering.

        • Article 15

          FIs, DNFBPs, and NPOs including the attorneys and any person providing legal or accounting type services, that suspects or has reasonable grounds to suspect that funds or parts thereof, regardless of their amounts, are proceeds of crime or are related to money laundering or that such funds will be used in acts of money laundering, including attempts to initiate such a transaction, shall Promptly and directly take the following measures: 
           
           1-Report such transaction to the General Directorate of Financial Intelligence; and provide a detailed report including all available data and information on such transaction and relevant parties.
           2-Promptly and fully respond to requests from the Directorate for additional information.

        • Article 16

           1-FIs, DNFBPs, and NPOs as well as their Members of Board of Directors, directors, Members of its executive or supervisory management, and employees are prohibited from disclosing to a customer or any other person the fact that a report under this Law or related information will be, is being or has been submitted to the Directorate, or that a criminal investigation is being or has been carried out. This shall not preclude disclosures or communications between directors and employees or communications with lawyers or competent authorities.
           2-FIs, DNFBPs, and NPOs as well as their Members of Board of Directors, directors, Members of its executive or supervisory management, and employees shall be protected from any liability toward the reported if they report their suspicions to the Directorate in good faith.

      • IV. General Directorate of Financial Intelligence

        • Article 17

          The General Directorate of Financial intelligence shall be under the oversight of the President of the State Security, and shall enjoy adequate operational independence. It shall act as a national central agency to receive suspicious transaction reports, or other information or reports relating to money laundering, predicate offenses or proceeds of crime as provided for by this Law and its Implementing Regulations, to analyze such reports and information, and to disseminate the results of its analysis to competent authorities, either spontaneously or upon request. The President of the State Security shall determine the organizational structure of the Directorate and the Implementing Regulations shall identify its governance, mandate and its methods of operation.

        • Article 18

           1-The Directorate is authorized to obtain any additional information that the Directorate deems necessary to properly carry out its analysis. In cases where a financial institution has not submitted a report under Article 15 of this law, or the Directorate’s request does not relate to a report submitted by the requested financial institution, the Directorate shall requests to provide the requested information only through the supervisory authority. The FIs, DNFBPs and NPOs shall provide what has been requested promptly.
           2-The Directorate may obtain any financial, administrative or legal information and any relevant information collected or maintained by or on behalf of public authorities that it considers is necessary to carry out its function as per the legal provisions set out.

        • Article 19

          The Directorate may on its own motion or by request, disseminate information and the results of its analysis to relevant competent authorities when there are grounds to suspect that a transaction is related to money laundering or a predicate offence. The Directorate shall have the authority to carry out its function freely, including the autonomous decision to conduct analysis, request, disseminate or forward specific information.

        • Article 20

          Every person with duties for or within the Directorate is required to keep confidential any information obtained within the scope of these duties, even after the cessation of those duties.

        • Article 21

          Information disclosed to the Directorate may be exchanged with other competent authorities. The Directorate may enter into an agreement or arrangement with competent authorities to facilitate cooperation and information exchange.

        • Article 22

           1-The Directorate may, , seek from or share with a foreign counterpart any information it has received in the course of its functions, and the Directorate may enter into an agreement or arrangement as per the legal procedures to facilitate the exchange of information with a foreign concerned authority.
           2-Whenever the Directorate provides information under this Article to a foreign counterpart, it shall obtain from that foreign authority a suitable declaration or undertaking that the information provided by the Directorate will only be used for the purpose for which it was sought, unless the foreign counterpart agency seeks and obtains the agreement of the Directorate for the information to be used for another purpose.

      • V. Customs Disclosure

        • Article 23

           1-Any person who enters or leaves the Kingdom of Saudi Arabia in possession of currency, bearer negotiable instruments, gold bars, precious metals or stones or jewelry exceeding the value threshold set by the Implementing Regulation, or who arranges for the transportation thereof into or out of the Kingdom by cargo, courier, postal service or through any other means, shall declare to the General Directorate of Customs and the Directorate shall request additional information on the source and the purpose of the use.
           2-The General Directorate of Customs shall seize the currency, bearer negotiable instruments, gold bars, precious metals or stones or jewelry for (72) hours in case of the suspicious of the ML or predicate offence including cases not exceeding the value threshold set in Sup (1) in this Article, and in case of violating the declaration obligation or the false declaration.
           3-In the case of violating the declaration obligation or the false declaration and no suspicious in the ML or predicate offence, The General Directorate of Customs shall imposed a fine as clarified in the Implementing Regulation.
           4-The General Directorate of Financial intelligence shall obtain all information that the General Directorate of Customs obtained.
           5-The Implementing Regulation shall set forth rules and procedures related to declarations and the powers of General Directorate of Customs to implement the declaration obligations.

      • VI. Supervision

        • Article 24

          Supervisory authorities shall have the following powers and duties to carry out their mandate: 
           
           a.Collect information and other data from FIs, DNFBPs, and NPOs as well as applying appropriate supervisory measures, including on-site inspections and offsite measures;
           b.Compel FIs, DNFBPs, and NPOs to provide any information that the supervisory authority considers relevant to carry out its function under this Law and its Implementing Regulation, and take copies of documents and files, however and wherever stored;
           c.Carry out an anti-money laundering risk assessment for the sectors for which the authority has a supervisory mandate;
           d.Issue guidance, decisions and instructions, rules or any other instruments to FIs, DNFBPs, and NPOs in order to implement the provisions of this Law.
           e.Cooperate and Coordinate with competent authorities when sharing available or accessible supervisory information that is relevant to anti-money laundering supervision with any foreign counterpart, or carry out inquiries on behalf of any foreign counterpart, or request any such information or cooperation from a foreign counterpart;
           f.Verify that FIs, DNFBPs, and NPOs adopt and enforces measures consistent with this Law in relation to its foreign branches and majority owned subsidiaries to the extent permitted by the laws of the foreign country;
           g.Establish and apply effective fit and proper screening procedures for any person aiming to participate in the management or supervision of FIs, DNFBPs, and NPOs or for any person aiming to own or control, directly or indirectly, or becoming a beneficial owner of significant shares;
           h.Maintain statistics concerning any measure adopted and sanction imposed;

        • Article 25

          Without prejudice to any stricter sanctions and subject to the procedures provided for in other laws, if the supervisory authority find that FIs, DNFBPs, and NPOs or any of their directors, board members, executive or supervisory management members failed to comply with any provision of this Law, its Implementing Regulation or relevant decisions or circulars, or any violation referred from other competent authority, the supervisory authority may impose one or more of the following measures: 
           
           1.Issue a written warning;
           2.Issue an order to comply with a specific instruction;
           3.Issue an order to provide regular reports on the measures taken to address the identified violation;
           4.Impose a monetary fine of up to 5.000.000 riyals per violation;
           5.Ban individuals from employment within the sectors for which the supervisory authority has competences for a period to be determined by the supervisory authority;
           6.Restrict the powers of directors, board members, executive or supervisory management members, and controlling owners, including appointing one or more temporary controllers;
           7.Dismiss or replace the directors, members of the Board of Directors or of executive or supervisory management;
           8.Suspend, restrict or prohibit the continuation of the activity, business or profession or of certain business activities or products;
           9.Suspend, restrict or revoke the license;
          The supervisory authority should inform the General Director of Financial Intelligence about the actions taken or imposed sanction. 
           

      • VII. Sanctions

        • Article 26

          Whoever committing a crime of money laundering, as stipulated in Article 2 of the present Law, shall be subject to imprisonment for a period up to ten years and no less than two years, as well as a fine not exceeding five million riyals or both.

        • Article 27

          Whoever committing a crime of money laundering, as stipulated in Article 2 of the Law, shall be subject to imprisonment for a period up to fifteen years and no less than three years, as well as a fine not exceeding seven million riyals or both if the crime accompanied by any of the following :

           1-Commits the crime through an organized crime syndicate;
           2-Uses violence or weapons
           3-Occupied a public office and the crime is connected thereto or if such person abuses his/her powers or influence in committing the crime;
           4-Trafficking in human beings.
           5-Exploits persons or minors and the like;
           6-Commits the crime through a correctional, charitable or educational institution or in a social service facility; or
           7-Has a prior conviction in the Kingdom or abroad.

        • Article 28

          1.A Saudi national who has served his term of imprisonment due to money laundering crime shall be barred from travelling outside the Kingdom for a period equal to the term of imprisonment served.
          2.Non-Saudis shall be deported from the Kingdom upon execution of their penalty with no possibility of return to the Kingdom..

        • Article 29

          The court may reduce the sentence of the convicted person as clarified in Article 30, if perpetrator reports to authorities about the money laundering crime, before they have knowledge, other perpetrators to the crime, and if such reporting leads to arresting the perpetrators or seizing crime instrumentalities or proceeds.

        • Article 30

          Penalties stipulated in Article 26 may be reduced as per the legal decided circumstances to be imprisonment for a period up to seven years and no less than one year, as well as a fine not exceeding three million riyals or both. 
           
          if the perpetrator of the offense provides competent authorities with information they would not have otherwise obtained so as to assist them in: 
           
           a.preventing the commission of another money laundering offense or limiting the effects of the offense;
           b.identifying or prosecuting other perpetrators of the offense;
           c.obtaining evidence;
           d.depriving a criminal organization of funds over which the defendant has no right or control.

        • Article 31

           1-Without prejudice to the criminal liability of a natural person, any legal person that commits a money laundering offense shall be punished by a fine of no more than 50 million riyals and no less than the equivalent of the double of full value of the funds that were the objects of the offense.
           2-A legal person may also be prohibited permanently or temporarily from engaging in certain licensed activities, directly or indirectly, or be ordered to close down its offices, permanently or temporarily, that were used in conjunction with the commission of the offense, or an order be made to liquidate the business.

        • Article 32

          The verdict may include publishing a summary of the verdict in local gazette issued at convicted premises, and on the criminal cost. In the case of no gazette issued at the convicted premises, it shall be in another gazette at the nearest area to the convicted premises, or published in another proper means, as per the type of crime, significance and its effect. The publication shall occurred after the final court verdict.

      • VIII. Confiscation

        • Article 33:

          Without prejudice to the rights of third parties acting in good faith, in the event of a conviction for a money laundering or predicate offence, the competent Court shall issue an order to confiscate the following: 
           
           a.Laundered funds;
           b.Proceeds of the crime, including proceeds intermingled with funds acquired from legitimate sources up to the value of the intermingled proceeds; and
           c.Instrumentalities.
          2.The competent court shall order the confiscation of funds regardless of whether the funds are held or owned by the defendant or a third party. Funds may not be confiscated if a third party can establish that he/she acquired the funds by paying a fair price or in return for the provision of services corresponding to the value of such funds or based on other legitimate grounds, and that he/she was unaware of their illicit origin.
          3.The competent court may invalidate or prohibit an activity, whether contractual or otherwise, if one or more of the parties knew or should have known that such an activity could prejudice the ability of the competent authority to recover funds subject to confiscation.

        • Article 34

          The competent court shall order confiscation associated with money laundering not convicted in case of the court verdict is not issued due to the perpetrator death or escape or the difficulty of recognize him/her or in case of the absence.

        • Article 35

           1-In cases where confiscation is not possible because the funds are no longer available for confiscation or cannot be located, the court shall order confiscation of any other funds owned by the convict in order to recover an amount that is equivalent in value.
           2-The court shall issue a confiscation order of any other funds owned by the convict to complete the required amount of the confiscation if the extent to which the value of the funds confiscated falls short of the value of funds under Article 33.

        • Article 36

          Unless other Law stipulates otherwise, confiscated funds shall accrue to the Public Treasury. These funds remain bearing any rights lawfully adjudicated in favor of third parties acting in good faith.

        • Article 37

          As per the provisions set out in this law, when funds, proceeds of crime, used instruments are convicted or intentionally were to use or to recover, the competent authority has the authority to deal with them according to the law, or share them with countries that are signatories with the Kingdom to valid agreements or treaties.

      • IX. International Cooperation

        • Article 38

          Competent authorities may exchange information with and make inquiries or investigation on behalf of foreign counterparts in countries that are signatories with the Kingdom to valid agreements, , or on the basis of reciprocity. This shall be done pursuant to applicable statutory procedures, without prejudice to the national sovereignty of the country or provisions and customs related to confidentiality of information.

        • Article 39

          Upon request of a competent court or authority in another country which is a signatory with the Kingdom to a valid agreement or on the basis of reciprocity, the competent authority may provide mutual legal assistance in relation to money laundering and predicate offense investigations and prosecutions and procedures, including but not limited to assistance with the tracing, seizure, recovery and confiscation of funds, or proceeds of crime or Instrumentalities related to the Money Laundering Crimes or predict offences, or the controlled delivery, according to laws in force in the Kingdom. The Implementing Regulation shall further prescribe the types of assistance that may be granted, and conditions that must be agreed by requesting country, and the procedures that must be applied.

        • Article 40

          A final judgment providing for the confiscation of funds, proceeds or instrumentalities related to a money laundering or predicate offense issued by a competent court in another country which is a signatory to a valid agreement with the Kingdom or on the basis of reciprocity, may be acknowledged and enforced in the Kingdom if the funds, proceeds or instrumentalities subject of the judgment can be confiscated, in accordance with laws applicable in the Kingdom.

        • Article 41

          The accused or convicted for Money laundering crime can be extradited from and to another country, which is a signatory with the Kingdom to a valid agreement or on the subject to the principle of reciprocity . In case of the rejection of the extradition, the competent courts in the kingdom undertake the trial and may benefit from the investigations were provided by the requested country. The Implementing Regulation shall further prescribe the conditions for extradition.

        • Article 42

          The Permanent Committee for Mutual Legal Assistance shall be responsible for receiving mutual legal assistance requests in all money laundering and associated predicate crimes.

      • X. Concluding Provisions

        • Article 43

           1-the Public Prosecution, either upon its own motion or upon request by the criminal investigating officer, may order that any person or FIs -through the supervisory authority-or DNFBPs or NPOs provide records, document or information. The requested entity shall execute the order as specified in the order, accurately, and without delay. The Implementing Regulation of this law shall clarify the relevant mechanisms.
           2-Whoever has been served with an order under Sup (1) in this Article shall not disclose to any person the existence or operation of the order, except where such a disclosure is made to other staff or members of the management for the purpose of obtaining advice or determining steps to comply with the order.

        • Article 44

           1-The Public Prosecution, either of its own motion or upon request by the Directorate of financial intelligence or the criminal investigating officer, based on a suspicion of money laundering or a predicate offence, may order the provisional seizure of funds that are or may become subject to confiscation for a period not exceeding 60 days. An order under this Article shall be issued and executed without prior notice to the party concerned. An order under this Article may be extended for a longer period pursuant to a judicial order from the competent court but shall not prejudice the rights of bona fide third parties.
           2-Upon the issuance of the provisional seizure, the Public Prosecution may determine that the funds subject to the order remain under the management of the person that held an interest in it at the time of issuance of the order or a third party, or such funds be transferred by order from the competent court to a designated authority if this is deemed necessary to mitigate the risk of dissipation of the funds.

        • Article 45

          Without prejudice to the provisions of the criminal procedures law, the Public Prosecution may, at its own motion or upon the request of the criminal investigating officer, may issue a warrant permitting the criminal investigating officer or the investigator to enter houses, offices or the Headquarters of the reporting entity to search for, detect and arrest persons, or to search for and seize funds, properties, documents, evidence or information relating to a predicate crime or a ML crime at any time during the period specified in the Search Warrant. In case of urgency, there is no need to obtain a warrant, provided that a report will be written indicating the reasons and grounds of urgency. The order under this Article should be made ex parte and without prior notice to the party concerned. The Public Prosecution will inform the supervising authority of the reporting entities on the procedures taken in this regard.

        • Article 46

          Without prejudice to the provisions of the criminal procedures law, the Public Prosecution may, at its own motion or upon the request of the criminal investigating officer, may issue a reasoned order permitting the criminal investigating officer or the investigator to monitor, control, record, intercept, seize and have access to all forms of evidence, records and messages including letters, publications, parcels, all forms of communications, telephonic conversations, information and data saved in computers, as specified in the Order, whether for a predicate crime or a ML crime. The order under this Article should be made ex parte and without prior notice to the party concerned .

        • Article 47

          The competent court shall have jurisdiction to decide on all crimes provided for in this Law.

        • Article 48

          The Public Prosecution shall investigate and prosecute crimes stipulated in the Law at the competent court, and it shall issues guidelines and instruction to the competent authorities under its supervision by the criminal procedures law.

        • Article 49

          Criminal investigating officers shall have the responsibility of searching, enquiring, and gathering evidence in relation to crimes stipulated in this law each within their own purview as well as criminal and administrative investigation aimed at identifying, tracing or securing proceeds of crime or instrumentalities.

        • Article 50

          The President of the State Security, upon agreement with the Minister of Finance and the Attorney General of the Public Prosecution, shall issue the Implementing Regulations of this Law within no more than ninety days from the date of its issuance.

    • Implementing Regulation to the Anti-Money Laundering Law

      No: 14525 Date(g): 8/11/2017 | Date(h): 19/2/1439Status: In-Force

      • I. Definitions

        • Article 1

           

          The following terms and phrases – wherever mentioned in this Law – shall have the meanings assigned thereto unless the context requires otherwise: 
           
           1-The law: the Anti-Money Laundering law.
           2-The regulation: the Implementing Regulation of this law.
           3-Funds: Assets, economic resources or properties of any value or type, however acquired, whether material or immaterial, movable or immovable, tangible or intangible, along with documents, deeds, transfers, letter of credits and instruments of any form, whether inside or outside the Kingdom. This include electronic or digital systems and bank credits that evidence ownership or interest therein, also all types of commercial papers , securities, or any interest, profit or other income generated from such funds.
           4-Predicate Offense: Any committed act within the KSA constituting an offense punishable by Sharia or statutory law, or any act committed outside the Kingdom if it constitutes a crime according to the laws of the State where it was committed and would have constituted an offense under the Sharia or statutory laws of the Kingdom had it been committed therein.
           5-Proceeds of crime: the funds directly or indirectly obtained or acquired from or through the commission of a predicate offense, whether inside the Kingdom or outside, including any funds transferred or converted wholly or partially into other type of funds.
           6-Instrumentalities: Anything prepared, used, or intended to use, in any form to commit a crime of crimes stipulated in the law.
           7-Financial Institution (FI): Any conduct as a business one or more of the financial activities or operations specified in the Implementing Regulation of this Law for or on behalf of a customer.
           8-Designated Non-Financial Businesses or Profession (DNFBP): Any conducted of any commercial or professional activities as specified in the Implementing Regulation.
           9-Non-profit Organizations (NPO): Any non-profit organization entity that – legally authorized, to collects, receives or disburses funds for charitable, religious, cultural, educational, social or cooperative purposes or for any other purposes.
           10-Provisional Seizure: Temporary ban on the transport, transfer, exchange, conversion, disposal, or movement of funds, and temporary possession, pursuant to an order issued by a competent court or authority.
           11-Confiscation: Permanent expropriation and deprivation of funds, Proceeds of crime, or instrumentalities pursuant to an order issued by a competent court or authority.
           12-Supervisory Authority: The authority with responsibility to monitor the compliance by FIs, DNFPBs, and NPOs with the requirements under this Law, its Regulation or any relevant decision or instructions.
           13-Competent Authority: Any administrative authority, law-enforcement authority or supervisory authority.
           14-Bearer Negotiable Instruments: Monetary instruments in bearer form, such as cheques, promissory notes, and money order, that are in bearer form or endorsed or made out to a fictitious payee, or otherwise that are in such form that title thereto passes upon delivery, or incomplete instruments signed but with the payee’s name omitted.
           15-Beneficial owner: Any natural person who ultimately owns or exercises direct or indirect control over a customer or on whose behalf a transaction is being conducted, including on the FIs or DNFBPs or NPOs or any other legal person.
           16-Customer: Any person who conduct or intend to conduct any activities as stipulated in the Implementing Regulation with the FIs, DNFBPs.
           17-Business relationship: Any relationship with a continuing nature, which is established between any of FIs and DNFBPs and its clients related to the activities or services the FIs and DNFBPs provide to them.
           18-Shell Bank: A bank that is incorporated or licensed in a country in which it has no physical presence and that is unaffiliated with a regulated financial group that is subject to regulation and supervision.
           19-Wire Transfer: A financial transaction carried out on behalf of an originator through a financial institution with the view to making an amount of funds available to a beneficiary at another financial institution, irrespective of whether the originator and the beneficiary are the same person.
           20-Due Diligence Measures: The process of obtaining or verifying information on a customer or beneficial owner to enable the FIs or DNFBPs to assess the extent to which the customer exposes it to a range of risks.

          1/1 - The following terms and phrases - wherever mentioned in the Law and its Implementing Regulation - shall have the meanings assigned thereto unless the context requires otherwise:

           A.Person: Includes any natural or legal person.
           B.Transaction: Includes any disposition of funds, properties, cash or in kind proceeds including but not limited to depositing, withdrawing, transferring, selling, purchasing, loaning, committing, extending of credit, mortgaging, gifting, financing, or exchanging of funds in any currency, whether in cash or checks, payment orders, sticks, bonds or any other financial instruments; or using safe deposit boxes and any other disposition of funds.
           C.Economic resources: Are assets of any kind, whether tangible or intangible, movable or immovable, actual or potential, which may be used to obtain funds, goods or services, including but not limited to equipment, furniture, fittings and fixtures and other items of a fixed nature; vessels, aircraft and motor vehicles; inventories of goods; art; jewelry; gold; oil products, refined products, modular refineries and related material including chemicals and lubricants; minerals, or timber or other natural resources; arms and related materials, raw materials and components that can be used to manufacture improvised explosive devices or unconventional weapons, any types of proceeds of crime, including from the illicit cultivation, production or trafficking of narcotic drugs or their precursors; patents, trademarks, copyrights and other forms of intellectual property, internet hosting or related services.
           D.Correspondent Relationship: It is a relationship between a correspondent institution and a respondent institution through a current or other account or related services, such as cash management, international funds transfers, cheque clearing, foreign exchange services, trade finance, liquidity management, or short-term borrowing. The definition shall also cover correspondent relationships established for securities transactions or funds transfers.
           E.Financial Group: Is a group that consists of a company or of any other type of legal or natural persons that exercises control and coordinating functions over the rest of the group for application of group supervision, together with branches or subsidiaries that are subject to anti-money laundering policies and procedures at the group level.
           F.Legal Arrangements: The relationship established by a contract between two parties or more which not result legal person, such as trusts or other similar arrangement.
           G.False Declaration: Providing a fake information on the value of currency or bearer negotiable instruments which are being transferred, or providing other false information required by the declaration or by the General Directorate of Customs, including not providing the declaration as required.
           H.Controlled Delivery: A method whereby the competent authority, and under its observation, is permitted to allow the illicit or suspicious fund or proceeds of crime to enter the Kingdome, pass it, or go outside the Kingdom for the purpose of identifying and detecting such crime and its perpetrators.
           

          1/2 - All activities and financial transactions mentioned in Para (7) of this Article are as following:

           A.Acceptance of deposits and other repayable funds from the public, including private Banking; 
           B.Lending, financial leasing or any other form of financing; 
           C.Money or value transfer services; 
           D.Issuance and managing means of payment (e.g. credit and debit cards, checks, traveler's checks, payment orders and bankers’ drafts, electronic money); 
           E.Issuance Financial guarantees and commitments; 
           F.Activities related to securities as set out in the Capital Markets Law or any trading in: 
            1.money market instruments including checks, bills of exchange, and certificates of deposit;
            2.currencies;
            3.exchange, interest rate and financial index instruments;
            4.negotiable securities and financial derivatives;
            5.commodity future trading;
           G.Foreign exchange transactions; 
           H.Participation in securities issuing, and provision of financial services; 
           I.Individual and collective portfolio management; 
           J.Safekeeping and administration of cash or liquid securities on behalf of other persons; 
           K.Concluding life insurance contracts and other types of investment related insurance as a provider or an agent or broker of the insurance contract or any other insurance products stipulated in the Law on Supervision of Cooperative Insurance Companies; or 
           L.Investing, administering or managing funds on behalf of other persons.
                     		 

          1/3 - The Commercial and Profession activities mentioned in Para (8) of this Article are as following:

           a.Real estate brokerage when they are involved in transactions for their client concerning the buying and selling of real estate in all its forms; 
           b.Dealing in gold, precious stones, or precious metals, when engaging in cash transactions with a customer equal to or above SAR 50.000, whether the transaction is carried out in a single operation or in several operations which appears to be linked, whether through individual firm or commercial Companies. 
           c.Attorneys and any person providing legal or accounting type services in the exercise of professional activities, when they prepare, execute, or conduct a transaction for customers in relation to any of the following activities: 
            i.Purchase or sale of real estate;
            ii.Management of a customer's funds, including securities, bank accounts, and other assets;
            iii.Establishment, operation, or management of legal persons or legal arrangements and the organization of related subscriptions; or
            iv.Sale or purchase of commercial companies.
           

          1/4 - The Supervisory Authority as stipulated in para (12) of this Article are:

           A.Saudi Central Bank*.
           B.Capital Market Authority.
           C.Ministry of Commerce and Investment.
           D.Ministry of Justice.
           E.Ministry of Labor and Social Development.
           F.Any other authority mandated by law to monitor or supervise financial institutions or designated non-financial businesses of professions or NPOs
           

          1/5 - All activities and works mentioned in Para (16) of this Article are as following:

           a)Arranging, or undertaking a transaction, business relationship or opening account;
           b)A signatory to a transaction, business relationship, or account;
           c)Assigning an account, transferring rights or obligations according to a transaction;
           d)who is authorized to conduct a transaction, or to control a business relationship or an account; or
           e)who attempts to take any of previous actions.
           

          1/6 - The competent Authority stipulated in para (13) of this Article are:

           a.Public Prosecution.
           b.Ministry of Interior.
           c.Presidency of State Security.
           d.Supervisory Authority.
           e.General Directorate of Customs.
           f.General Directorate of Financial Intelligence.
           g.Any other authority assigned to apply the provisions under this Law.
           

          * The "Saudi Arabian Monetary Agency" was replaced By the "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding to 26/11/2020G.

      • II. Criminal Acts

        • Article 2

          It shall be considered to have committed a money laundering offence who conduct any of the following acts: 
           
           1-Converts or transfers or conduct any transaction on funds that the person knows are proceeds of crime for the purpose of disguising or concealing the illegitimate origin of the funds, or to help a person involved in the commission of the predicate offense that generated the funds to evade the legal consequences for his/her acts;
           2-Acquires, possesses or uses funds that the person knows are proceeds of crime or from illegal source;
           3-Conceals or disguises the true nature, source, movement, ownership, place, disposition, or manner of disposition, or rights with respect to funds that the person knows are proceeds of crime;
           4-the attempt to conduct any stated acts in Sup (1), (2), (3) in this article, or participation in by means of agreement, or providing assistance, or abetting, or providing counseling, advice, or facilitation, or collusion, cover-up or the attempt to commit any of the acts provided for in this Article.

          2/1

          The money laundering offense under the law apply, according to the law, to the person who committed the predicate offense and participated in money laundering crime.

        • Article 3

          Legal person shall be criminally liable for money laundering if any act clarified in Article 2 was committed in its name or to its account. Criminal liability of a legal person shall not exclude criminal liability of the chairmen, members of boards of directors, owners, employees, authorized representatives, auditors or hired staff, or any other natural person who acted in the legal entity’s name or for its credit.

        • Article 4

           1-A money laundering offence shall be deemed a separate offence from the predicate offense, and a conviction for the predicate offense shall not be necessary for a conviction for money laundering or to establish that funds are proceeds of crime, whether the crime was perpetrated in the Kingdom or abroad.
           2-Intent, knowledge or purpose required as elements of a money laundering offence may be inferred from objective factual circumstances of the case.

      • III. Preventive Measures

        • Article 5

          Financial Institutions (FIs), Designated Non-Financial Businesses and Professions (DNFBPs)shall identify, assess, and document their money laundering risks and keep it up to date, taking into account a wide range of risk factors, including those relating to its customers, countries or geographic areas, products, services, transactions and delivery channels, and provide risk assessment reports to the supervisory authorities upon request. The risk assessment under this Article shall include an assessment, prior to their use, of the risks associated with new products, business practices and technologies.

          5/1

          Financial institution or designated non-financial business and profession shall identify asses and document their money laundering risks in writing, and regularly update its money laundering risk assessment and any underlying information, and keep both the report and any underlying information readily available for the supervisory authority. The nature and extent of the risk assessment shall be appropriate to the nature and size of the financial institutions’ or designated non-financial businesses and professions’ business.

          5/2

          Financial institution or designated non-financial business and profession when assessing its money laundering risks, shall give consideration to the following:

           a.Customer risk factors and risk factors relating to the beneficial owner or beneficiary;
           b.Risk factors emanating from countries or geographic area in which customer operates or the place of origination or destination of a transaction;
           c.Risk arising from the nature of products, services and transactions offered and the delivery channels for products and services.
           

          5/3

          When carrying out a risk assessment, a financial institutions and designated non-financial businesses or professions shall take into account the any risks identified on the national level and any variables which may increase or decrease the money laundering risk in a specific situation, including:

           a.The purpose of an account or relationship;
           b.The size of deposits or transactions undertaken by a customer;
           c.The frequency of transactions or duration of the relationship.
           

          5/4

          Based on the outcome of the risk assessment, a financial institutions or designated non-financial businesses and professions shall develop and implement internal policies, controls and procedures against money laundering that set out the appropriate level and type of measures to manage and mitigate the risks that have been identified; to monitor the implementation of those policies, controls and procedures; and to enhance them as necessary.

          5/5

          For higher level of risks the financial institution or designated non-financial business and profession shall apply enhanced mitigation measures; for a lower level of risks a financial institution or designated nonfinancial businesses and profession may apply simplified measures to manage and mitigate the risks. Simplified measures shall not be permitted if there is a suspicion of money laundering.

          5/6

          A financial institution or designated non-financial business and profession shall identify and assess the money laundering risks that may arise from the development of a new product, business practice or delivery mechanism, or from the use of a new or developing technology for new or pre-existing products. The risk assessment shall be carried out prior to the launch of the new product, business practice or delivery mechanism or prior to the use of the new technology. A financial institution or designated non-financial business and profession shall take appropriate measures to manage and mitigate the identified risk.

        • Article 6

          A financial institution shall not keep or open an anonymous accounts or an accounts in obviously fictitious names, or numbered accounts.

        • Article 7

          FIs and DNFBPs shall: 
           
           1-Apply due diligence measures to their customers and the Implementing Regulation shall set forth the instances in which such measures shall be taken and the types of measures to be taken.
           2-Determine the extent of due diligence measures based on the risks relation to a customer or business relationship. Where a higher risk of money laundering was identified, they shall apply enhanced due diligence measures.

          7/1

          A financial institution or designated non-financial business and profession shall undertake due diligence measures at the following times:

           a.Before establishing a new business relationship or opening a new account;
           b.Before carrying out a transaction for a customer with whom the financial institution or designated non-financial business and profession is not in an established business relationship, whether the transaction was conducted for one time or several times where the transactions would appear linked to each other;
           c.Before carrying out a wire transfer as prescribed by Article 10 of the Law for a customer with whom the financial institution or designated non-financial business and profession ion are not in an established business relationship;
           d.Whenever there is a suspicion of money laundering, regardless of the amounts involved; or
           e.Whenever the financial institution or designated non-financial business and profession has doubts either about the veracity or adequacy of previously obtained customer information or identification data.
           

          7/2

          Due diligence measures shall be based on risk and, at a minimum, comprise of the following:

           a.Identify the customer and verify the customer’s identity, using reliable, independent source documents, data or information: 
            1.For a customer that is a natural person, the financial institution or designated non-financial business and profession shall obtain and verify the full legal name, residential or the national address, date and place of birth, and nationality;
            2.For a customer that is a legal person or a legal arrangement, the financial institution or designated non-financial business and profession shall, at a minimum, obtain and verify the name, legal form and proof of existence, the powers that regulate and bind the legal person or legal arrangement, the names of all directors, senior managers or trustees, and the address of the registered office and, if different, the principal place of business.
            3.Depending on the risk posed by a specific customer, the financial institution or designated nonfinancial business and profession shall determine whether any additional information must be collected and verified.
           b.Verify that any person purporting to act on behalf of a customer is so authorized, and identify and verify the identity of that person in line with subsection (a); 
           c.Identify the beneficial owner and take reasonable measures to verify the identity of the beneficial owners, using information and data obtained from a reliable source, such that the financial institution or designated non-financial business and profession is satisfied it knows who the beneficial owner is, as following: 
            1.For a customer that is a legal person, a financial institution or designated non-financial business and profession shall identify and take reasonable measures to verify the identity of the natural person who ultimately owns or controls 25% or more of the legal entity’s shares.
            2.Where no controlling ownership interest exists as stipulated in the previous para (1), or there is doubt whether the controlling shareholder is not indeed the beneficial owner, the identity of the natural person exercising control of the legal person through other means; or, as a last means, the identity of the natural person who holds the position of senior managing official, and verify it.
            3.For a customer that is a legal arrangement, a financial institution or designated non-financial business and profession shall identify and take reasonable measures to verify the identity of the endower, beholder, the beneficiaries or classes of beneficiaries, and any other natural person exercising ultimate effective control over the legal arrangement.
           d.Understand and obtain additional information on the purpose and intended nature of the business relationship, as appropriate. 
           e.For the legal persons or legal arrangement, the ownership and control structure of the customer should be understood.
                     		 

          7/3

          A financial institution or designated non-financial business and profession shall verify the identity of the customer and beneficial owners before or during the course of establishing a business relationship or opening an account; or before carrying out a transaction for a customer with whom the financial institution or designated non-financial business and profession is not in an established business relationship. Where the money laundering risk is low, a financial institution or designated non-financial business and profession may complete verification of the customer’s identity as soon as practicable after the establishment of the business relationship if postponing the verification is essential not to interrupt the normal conduct of business and the financial institution or designated non-financial business and profession shall apply appropriate measures to manage the money laundering risk. The financial institution or designated nonfinancial business and profession shall take measures to managing the risk in the circumstances where the customer benefit from the business relationship before the verification is completed.

          7/4

          In addition to the measures under Section 7/2, a financial institution shall, in relation to a beneficiary of a saving and protection insurance or other investment related insurance policy, apply the following due diligence measures as soon as the beneficiary is identified or designated:

           a.For a beneficiary identified by name, take the name of that person whether it is natural or legal person;
           b.For a beneficiary designated by class or characteristics or any other means such as deeds , obtain sufficient information concerning the beneficiary to ensure that the financial institution will be able to identify the beneficiary prior to payout;
           

          In all cases, a financial institution shall verify the identity of the beneficiary prior to a payout under the insurance policy or prior to the exercising of any rights related to the policy.

          7/5

          A financial institution, when determining whether enhanced due diligence measures are required in relation to a specific policy, shall take into account risk factors relating to the beneficiary of the policy and, if the financial institution considers that a beneficiary poses a higher risk, shall in all cases identify and verify the identity of the beneficial owner of the beneficiary at the time of payout.

          7/6

          A financial institution or designated non-financial business and profession shall carry out ongoing due diligence on all business relationships in accordance with the risks posed, verify the transition throughout the business relationship to ensure the consistency with customer’s data, activities and risk posed by customer. Also It should be ensured that documents, data and information collected under the due diligence process is kept up-dates and relevant by undertaking reviews of existing records, in particular for higher risk customers.

          7/7

          A financial institution or designated non-financial business and profession shall apply due diligence measures to customers and business relationships that existed at the date of coming into force of the Law and this Implementing Regulations. A financial institution or designated non-financial business and profession shall apply due diligence measures to existing customers and business relationships based on materiality and risk and conduct ongoing due diligence on such existing customers and business relationships at appropriate times, taking into account whether and when due diligence measures have previously been undertaken, and the adequacy of data obtained.

          7/8

          A financial institution or designated non-financial business and profession that is unable to comply with the due diligence obligations may not open the account, establish the business relationship or carry out the transaction; or in relation to existing customers or business relationships, shall terminate the business relationship; and shall in all cases consider submitting a suspicious transaction report to the Directorate.

          7/9

          Where a financial institution or designated non-financial business and profession has a suspicion of money laundering and it reasonably believes that performing due diligence may tip off the customer, it may opt to not carry out due diligence measures and shall submit a suspicious transaction report to the Directorate of financial intelligence , and stating the reasons as to why due diligence was not applied.

          7/10

          A financial institution or designated non-financial business and profession may rely on another financial institution or designated non-financial business and profession to perform identification and verification of the customer; identification and verification of the beneficial owner; and to take the necessary measures to understand the nature and intended purpose of the business relationship.

          7/11

          If financial institution or designated non-financial business and profession place reliance on another party as stated in 7/10, they shall do the following:

           a.immediately obtains all necessary information as required under Article 7 of the Law and this Implementing Regulation;
           b.take measures to satisfy that copies of identification data and other relevant documentation relating to the due diligence measures will be made available , and without delay;
           c.ensure that financial institution or designated non-financial business and profession relied upon is regulated, supervised for and has measures in place for compliance with due diligence and record keeping requirements in line with the requirements stipulated under the Law and this Implementing Regulation.
           d.Take into account information available with (AMLPC) and the Directorate of Financial intelligence with regard to high-risk countries identified.
           

          The ultimate responsibility of all requirements stipulated in this law and its implementing regulation relay on the requesting financial institution and designated non-financial business and profession.

          7/12

          when a financial institution is being relied upon by another domestic or foreign financial institution, confidentially requirements under Saudi law shall not preclude a financial institution from exchanging information as required for the reliant party to determine whether the relied upon financial institutions applies appropriate standards

          7/13

          A financial institution or designated non-financial business and profession that relies on a financial institution or designated non-financial business and profession that is part of the same financial group may consider that the financial institution or designated non-financial business and profession relied upon meets the requirements under Article 7/10 and 7/11 provided the group applies due diligence and record keeping requirements in line with the Law and this Implementing Regulation, the implementation of such policies is supervised at the group level by a competent authority and any higher country risk is adequately mitigated by the group’s policies and controls.

          7/14

          A financial institution or designated non-financial business and profession shall determine the extent and depth of application of due diligence measures under Article 7 of the Law based on the types and levels of risk posed by a specific customer or business relationship.

          Where the risk of money laundering is higher, a financial institution or designated non-financial business and profession shall apply enhanced due diligence measures consistent with the risks identified. Where the risk of money laundering is lower, a financial institution or designated non-financial business and profession may conduct simplified due diligence measures provided there is no suspicion of money laundering, in which case simplified due diligence shall not be permitted. The simplified measures shall be commensurate with the lower risk.

        • Article 8

          FIs and DNFBPs shall use appropriate systems to determine whether a customer or beneficial owner is or has become assignee with a prominent public function in the Kingdom or a foreign country; or with a senior management position in an international organization and if so, apply additional measures as prescribed by the Implementing Regulation.

          8/1

          The person is or has become assignee with a prominent public function in the Kingdom or a foreign country; or with a senior management position in an international organization is consider as “politically exposed person”, it shall comprise the following:

           a.Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, and important party officials
           b.Directors, deputy directors, and members of the board or equivalent function, of any international organization.
           

          8/2

          The obligations under Article 8 of the Law shall apply in relation to politically exposed persons, their close associates and family members.

          8/3

          A family member of a politically exposed person shall include any individual who is related to a politically exposed person by blood or marriage up to the second degree.

          8/4

          A close associate of a politically exposed person shall include any natural person who is known to have joint beneficial ownership of a legal entity or legal arrangement or who is in a close business relationship with the politically exposed person, or who has a beneficial ownership of a legal entity or legal arrangement which is known to have been set up for the benefit de facto of a politically exposed person.

          8/5

          A financial institution or designated non-financial business and profession shall in relation to politically exposed persons from a foreign country, obtain senior management approval before establishing or continuing such a business relationship; take reasonable measures to establish the source of wealth and the source of funds of the politically exposed person; and conduct enhanced ongoing monitoring on the business relationship; and the same applied in relation to politically exposed persons from the Kingdom, in case of a higher risk of money laundering.

          8/6

          A financial institution shall take the reasonable measures to determine whether the beneficiaries or the beneficial owner from the saving and protection policy or any other investment insurance policy, before the payout of the policy prior to the exercising of any rights related to the policy, are PEPs, if so, the FI shall inform the senior management before the payout or prior to the exercising of any rights related to the policy, and conduct enhanced scrutiny on the business relationship, and consider making a suspicious transaction report.

        • Article 9

           1-Before entering into a cross-border correspondent relationship, financial institutions shall apply appropriate risk mitigation measures as prescribed by the Implementing Regulation, and shall satisfy themselves that the respondent institution does not permit their account to be used by a shell bank.
           2-Financial institutions shall not enter into or continue a correspondent relationships with a shell bank or a respondent institution that permits its account to be used by a shell bank.

          9/1

          Before entering into a cross-border correspondent relationship, a financial institution shall apply the following risk mitigating measures:

           a.gather sufficient information about the respondent institution to understand fully the nature of the respondent’s business, and determine from publicly available information the reputation of the institution and the quality of supervision, and whether the respondent institution has been subject to a money laundering investigation or regulatory action;
           b.assess the respondent institution’s anti-money laundering controls;
           c.obtain approval from senior management before establishing new correspondent relationships; and
           d.clearly understand the respective anti-money laundering responsibilities of each institution.
           e.Reach satisfactory convention that a respondent financial institution does not allow the use of its account by shell banks.
           

          9/2

          Where a financial institution registered and licensed in the Kingdom enters into a correspondent relationship in order to receive services from a foreign correspondent financial institution, confidentially requirements under Saudi law shall not preclude the financial institution from providing to the foreign institution the information and documents required for the foreign institution to satisfy itself that the conditions under 9/1 (a) and (b) are met.

        • Article 10

           1-Financial institutions provide wire transfer activities shall obtain information on the originator and beneficiary and ensure that such information is kept with the wire transfer or related message throughout the payment chain. A financial institution that is unable to obtain required originator or beneficiary information shall not permit the execution of the wire transfer.
           2-A financial institution shall record all originator and beneficiary information and keep the records, documents, data, and files in accordance with Article 12.
           3-A financial institution shall comply with all measures on wire transfers as set out in the Implementing Regulation.

          10/1

          Article 10 of the Law shall apply to cross-border wire transfers and domestic wire transfers in any currency, including serial payments and cover payments, which are received, or sent or processed by a financial institution in the Kingdom, including credit or debit or prepaid card, mobile phone or other digital or IT prepaid or postpaid device that are used to effect a person-to-person transfer of funds. The scope of the Law does not extend to a transfer that

           a.flows from a transaction carried out using a credit or debit or prepaid card, a mobile phone or any other digital or IT prepaid or postpaid device with similar characteristics and exclusively for the purchase of goods or services, provided the credit or debit or prepaid card number accompanies the transfer flowing from the transaction; or
           b.constitutes a transfer or settlement between two financial institutions where both the originator and the beneficiary are a financial institution acting on their own behalf.
           

          10/2

          Originator information shall include:

           a)The full name of the originator;
           b)The originator account number where such an account is used to process the transaction or in the absence of an account number, a unique transaction number that permits traceability of the transaction; and
           c)The originator’s address, or customer identification, or date and place of birth.
           

          Beneficiary information shall include:

           a)The full name of the beneficiary; and
           b)The beneficiary account number where such an account is used to process the transaction or in the absence of an account number, a unique transaction number that permits traceability of the transaction.

          10/3

          A financial institution that orders a wire transfer shall include required and verified originator information and required beneficiary information with each wire transfer. In case of a suspicion, an STR shall be submitted according to Article 15 of the Law. If a financial institution cannot comply with its obligations under this provision, it shall not order the wire transfer.

          10/4

          Where several individual cross-border wire transfers from a single originator are bundled in a batch file for transmission to several beneficiaries, the ordering financial institution shall include in the batch file the required and verified originator information; the required beneficiary information that is fully traceable within the beneficiary country; and the originator’s account number of unique transaction reference number.

          10/5

          For domestic wire transfers, the obligations set out in Article 10/3 shall apply unless the ordering financial institution is in a position to make all required originator and beneficiary information available to the financial institution ultimately receiving the wire transfer or competent authorities by other means, in which case the ordering financial institution may only include the account number or a unique transaction reference number that permits the transaction to be linked with the relevant originator or beneficiary information. The ordering institution shall make the required and verified originator and required beneficiary information available within three business days upon receiving a request for such information from the financial institution ultimately receiving the wire transfer or a competent authority.

          10/6

          A financial institution shall maintain all originator and beneficiary information in accordance with Article 12 of the Law.

          10/7

          For cross-border wire transfers, a financial institution processing an intermediary element of the payment chain shall ensure that all originator and beneficiary information that accompanies a wire transfer is retained with it, and shall keep all wire transfer information including originator and beneficiary information in accordance with Article 12 of the Law.

          10/8

          Where technical limitations prevent the required originator or beneficiary information accompanying a cross-border wire transfer from remaining with a related domestic wire transfer, the intermediary financial institution shall keep a record for ten years of all the information received from the ordering or other intermediary financial institution.

          10/9

          A financial institution ultimately receiving or processing an intermediary element of a wire transfer shall have in place and apply procedures for:

           a)Identifying wire transfers that lack required originator or beneficiary information;
           b)Determining, on a risk basis, when to execute, reject, or suspend a wire transfer that lacks required originator or required beneficiary information; and
           c)Taking appropriate risk based follow-up action which may include restricting or terminating the business relationship.
           

          10/10

          A financial institution ultimately receiving a cross-border wire transfer shall take reasonable measures to identify cross-border wire transfers that lack required originator or beneficiary information. Such measures may include post-even monitoring or real-time monitoring where feasible. , if the identity has not been previously verified, a financial institution ultimately receiving the transfer shall verify the identity of wire-transfer sender’s information and maintain this information in accordance with Article 12 of the Law.

          10/11

          Confidentially requirements under Saudi law shall not preclude a financial institution from exchanging information with other domestic or foreign institutions that are processing any part of the transaction as required to comply with the provisions under this Article.

        • Article 11

           1-FIs and DNFBPs shall apply enhanced due diligence measures proportionate to the risks involving business relationships and transactions with a person from a country that was identified as high risk by the FI or DNFBP or the Anti-Money Laundering Permanent Committee.
           2-FIs and DNFBPs shall apply the countermeasures prescribed by the Anti-Money Laundering Permanent Committee with respect to high risk countries.

        • Article 12

           1-FIs and DNFBPs shall, for all domestic or international financial transactions as well as commercial and monetary transactions, keep all records and documents for a period of no less than ten years from the date of concluding the transaction or closure of account.
           2-FIs and DNFBPs shall keep all records obtained through due diligence measures, account files and business correspondences and copies of personal identification documents, including the results of any analysis undertaken, for at least ten years after the business relationship has ended or a transaction was carried out for a customer is not in an established business relationship.
           3-In specific cases, the Public Prosecution may oblige FIs and DNFBPs to extend the record keeping period for as long as required for the purpose of a criminal investigation or prosecution.
           4-Records shall be sufficient to permit reconstruction of transactions and shall be maintained in a manner so that they can be readily made available to competent authorities upon request.

        • Article 13

          FIs and DNFBPs shall: 
           
           1-Monitor and scrutinize transactions, document and data on an ongoing basis to ensure that they are consistent with the reporting entity’s knowledge of the customer, the customer’s commercial activities and risk profile, and where necessary the customer's source of funds.
           2-Examine any complex and unusual large transaction, and any unusual pattern of transactions that has no clear economic or legal objective.
           3-Where the risks of money laundering are higher, the FI and DNFBP shall perform enhanced due diligence where the ML/TF risks are higher and increase the level and nature of monitoring of the relevant business relationship to determine whether the transaction is unusual or suspicious.
           4-Keep records for a period of ten years and make them available to competent authorities upon request.

        • Article 14

           1-FIs and DNFBPs shall:
            A-Have in place and effectively implement internal policies, procedures and controls against money laundering aimed at managing and mitigating any risks identified as clarified in Article 5. The policies, procedures and controls shall be proportionate to the nature and size of the FI and DNFBP’s business and shall be approved by senior management. FI and DNFBP shall review and enhance them as needed. 
            B-Apply its internal policies, procedures and controls said in (A) of this Article, to all of its branches and majority-owned subsidiaries. 
           2-The Implementing Regulation shall specify the matters that must be addressed in the internal policies, procedures and controls under (1/A) in this Article for Anti-Money Laundering.

          14/1

          The policies, procedures and internal controls shall be proportionate to the nature and size of the financial institution or designated non-financial business and profession’s business and shall address the following:

           a.Due diligence measures as required under this law and its Implementing Regulation, including risk management procedures for utilization of a business relationship prior to completion of the verification process;
           b.Transaction reporting procedures;
           c.Appropriate anti-money laundering compliance management arrangements, including appointment of an anti-money laundering compliance officer at the senior management level;
           d.Adequate screening procedures to ensure high standards when hiring employees;
           e.Ongoing employee training programs; and
           f.An independent audit function to test the effectiveness and adequacy of internal policies, controls and procedures.
           

          14/2

          A financial group shall implement a group-wide program against money laundering, apply the internal policies, controls, procedures to all of its branches and majority-owned subsidiaries and ensure effective implementation thereof by all branches and majority-owned subsidiaries. In addition to the issues set out in subsection 14/1, a group level policy shall address also the sharing of information between all members of the group; the provision of customer, account and transaction information to group-level compliance, audit or anti-money laundering functions; and the safeguarding of confidentiality and use of the information exchanged.

          14/3

          Where the anti-money laundering requirements of a foreign country are less strict than those imposed under the Law and this Implementing Regulation, a financial institution or designated non-financial business and profession shall ensure that its branches and majority-owned subsidiaries operating in that foreign country apply measures consistent with the requirements under the Law and this Implementing Regulation. If the foreign country does not permit the proper implementation of such measures, the financial institution or designated non-financial business and profession shall inform the Saudi supervisory authority of this fact and take any additional measures necessary to appropriately manage and mitigate the money laundering risks associated with its operations abroad. The financial institution or designated non-financial business and profession shall comply with any instructions received from the supervisory authority in this regard.

        • Article 15

          FIs, DNFBPs, and NPOs including the attorneys and any person providing legal or accounting type services, that suspects or has reasonable grounds to suspect that funds or parts thereof, regardless of their amounts, are proceeds of crime or are related to money laundering or that such funds will be used in acts of money laundering, including attempts to initiate such a transaction, shall Promptly and directly take the following measures: 
           
           1-Report such transaction to the General Directorate of Financial Intelligence; and provide a detailed report including all available data and information on such transaction and relevant parties.
           2-Promptly and fully respond to requests from the Directorate for additional information.

          15/1

          Suspicious reporting requirement stipulated under this article shall include the following:

           a)A financial institution or designated non-financial business or profession or NPO that suspects or has reasonable grounds to suspect that funds or parts thereof, are proceeds of crime or are related to money laundering or that such funds will be used in acts of money laundering, including attempts to initiate such a transaction,
           b)A financial institution or designated non-financial business or profession or NPO that suspects or has reasonable grounds to suspect that any of the complicated, high-volume, or suspicious transaction that relates to money laundering, including the attempt to execute any of these transations.
           

          15/2

          The reporting obligation under Article 15 of the law applies regardless of the amounts involved.

          15/3

          A financial institutions, designated non-financial businesses and professions, or NPO shall implement indicators of suspected acts of money laundering. These indicators shall be updated on a continuous basis according to the development and diversity of methods used to carry out such acts, while complying with the publications of supervisory authorities in this regard.

          15/4

          The reporting shall be provided as per the form adopted by the Directorate, and as minimum shall include the following information:

           A.Names, addresses and phone numbers of those carrying out suspicious transactions;
           B.A statement of the suspicious transaction, its involved parties, circumstances surrounding its detection and its current status;
           C.Specifying the amount of the suspicious transaction and relevant bank or investment accounts; and
           D.The reasons and causes of suspicion on the basis of which the employee made such report.
           

          The directorate of financial intelligence shall further specify the manner in which reports under this Article are to be made and the information that shall be transmitted as part of the report.

        • Article 16

           1-FIs, DNFBPs, and NPOs as well as their Members of Board of Directors, directors, Members of its executive or supervisory management, and employees are prohibited from disclosing to a customer or any other person the fact that a report under this Law or related information will be, is being or has been submitted to the Directorate, or that a criminal investigation is being or has been carried out. This shall not preclude disclosures or communications between directors and employees or communications with lawyers or competent authorities.
           2-FIs, DNFBPs, and NPOs as well as their Members of Board of Directors, directors, Members of its executive or supervisory management, and employees shall be protected from any liability toward the reported if they report their suspicions to the Directorate in good faith.

          16/1

          The protection under Article 16 of the Law shall include protection from any criminal, civil, contractual, disciplinary or administrative liability and applies also in situations where the financial institution or designated non-financial business and profession or its employees or directors did not know precisely what the underlying criminal activity of the reported transaction was and regardless of whether illegal activity actually occurred.

      • IV. General Directorate of Financial Intelligence

        • Article 17

          The General Directorate of Financial intelligence shall be under the oversight of the President of the State Security, and shall enjoy adequate operational independence. It shall act as a national central agency to receive suspicious transaction reports, or other information or reports relating to money laundering, predicate offenses or proceeds of crime as provided for by this Law and its Implementing Regulations, to analyze such reports and information, and to disseminate the results of its analysis to competent authorities, either spontaneously or upon request. The President of the State Security shall determine the organizational structure of the Directorate and the Implementing Regulations shall identify its governance, mandate and its methods of operation.

          17/1

          The General Directorate of Financial Intelligence shall be headquartered is located in Riyadh and it may open other branches in regions of the Kingdom, shall assume the following functions:

           a.Receive suspicious transaction reports, or other information or reports relating to money laundering, predicate offenses or proceeds of crime as provided for by the Law;
           b.Gather information that will enable the Directorate to perform its work effectively;
           c.Analyze the reports and information received;
           d.Disseminate the results of its analysis to competent authorities, either spontaneously or upon request;
           e.Establish a database including all reports and information received. The database shall be updated consecutively while maintaining the confidentiality of the information included therein;
           f.Request and exchange information with competent authorities;
           g.Request and exchange information with foreign counterparts;
           h.Prepare templates for use by reporting entities to report suspicious transactions;
           i.Issue and update guidance to financial institutions, designated non-financial business and profession, and NPOs on identifying and reporting suspicious transactions;
           j.Seek assistance, at its discretion, from experts and specialists from relevant agencies;
           k.Provide feedback to reporting entities on information and suspicious transaction reports received;
           l.Participate in the preparation of awareness programs on combatting money laundering in coordination with the Permanent Committee on Anti-Money Laundering;
           m.Enter into memoranda of understanding with other financial intelligence units according to applicable laws and procedures;
           n.Prepare annual reports;
           o.Prepare typology reports based on the outcome of its strategic analysis;
           p.Directorate of financial intelligence, as member of Egmont group, follow up with the Egmont group’s requirement, participate in its conference; ;
           q.Stop the suspicious transaction, if necessary, up to (72) hours from the time the suspicious transaction report is received.
           r.Request the Bureau of Public Prosecution to apply a seizing measure in relation to funds or instrumentalities
           s.Conduct research and inquiries, in coordination with the competent authorities, or request from the competent authorities to conduct field investigation.
           

          17/2

          The Directorate shall conduct the following:

           a.Operational analysis: which is the use available and obtainable information to identify suspects, to trace particular activities or transactions, and to determine links between those suspects and possible proceeds of crime, or money laundering or predicate offenses.
           b.Strategic analysis: which is the use available and obtainable information, including data that may be provided by other competent authorities, to identify money laundering related trends or patterns.
           

          17/3

          The Directorate of financial intelligence shall protect the information it received or maintains by:

           a.Establishing rules governing the security and confidentiality of information, including procedures for handling, storage, dissemination, and protection of, and access to information;
           b.Ensuring that there is limited access to the Directorate’s facilities and information, and IT systems.
           

          17/4

          The Directorate of financial intelligence shall be operationally independent and autonomous by:

           a.Having the authority to carry out its functions freely, including the autonomous decision to analyze, request and/or forward or disseminate specific information;
           b.Having the capability to place arrangement or work independently with other local competent authorities, or foreign counterpart in relation to exchange of information,
           c.Having distinct functions to distinguish them in the performance of its work from other parties under the chairmanship of the State Security;
           d.Be able to obtain and deploy the resources needed to carry out its functions, on an individual or routine basis, free from undue political, government or industry influence or interference, which may compromise its operational independence.
           

          17/5

          All domestic and international obligations under the former name (Financial Investigation Unit) shall be referred to The Directorate of financial intelligence.

        • Article 18

           1-The Directorate is authorized to obtain any additional information that the Directorate deems necessary to properly carry out its analysis. In cases where a financial institution has not submitted a report under Article 15 of this law, or the Directorate’s request does not relate to a report submitted by the requested financial institution, the Directorate shall requests to provide the requested information only through the supervisory authority. The FIs, DNFBPs and NPOs shall provide what has been requested promptly.
           2-The Directorate may obtain any financial, administrative or legal information and any relevant information collected or maintained by or on behalf of public authorities that it considers is necessary to carry out its function as per the legal provisions set out.

          18/1

          The Directorate of financial intelligence is authorized to request additional information directly from a financial institution if that financial institution has submitted a report under Article 15 of the Law and the Directorate’s request is in relation to a transaction or person mentioned in this report. In all other cases, the Directorate may request and the financial institution shall provide the requested information through the supervisory authority.

          18/2

          The Directorate of financial intelligence is authorized to request additional information directly from a designated non-financial business or profession in all cases, whether or not that designated non-financial business or profession has submitted a report under article 15 of the Law, or the Directorate’s request is in relation to such report. The Directorate does not have to consult or involve the supervisory authority.

        • Article 19

          The Directorate may on its own motion or by request, disseminate information and the results of its analysis to relevant competent authorities when there are grounds to suspect that a transaction is related to money laundering or a predicate offence. The Directorate shall have the authority to carry out its function freely, including the autonomous decision to conduct analysis, request, disseminate or forward specific information.

          19/1

          When disseminating any information or the results of its analysis to competent authorities, the Directorate of financial intelligence shall use dedicated, secure and protected channels.

        • Article 20

          Every person with duties for or within the Directorate is required to keep confidential any information obtained within the scope of these duties, even after the cessation of those duties.

          20/1

          The Directorate of financial intelligence shall ensure that their staff members have the necessary security clearance.

          20/2

          The Directorate of financial intelligence shall take appropriate measures to ensure that their employees understand their responsibility in dealing with sensitive information, and its dissemination

        • Article 21

          Information disclosed to the Directorate may be exchanged with other competent authorities. The Directorate may enter into an agreement or arrangement with competent authorities to facilitate cooperation and information exchange.

        • Article 22

           1-The Directorate may, , seek from or share with a foreign counterpart any information it has received in the course of its functions, and the Directorate may enter into an agreement or arrangement as per the legal procedures to facilitate the exchange of information with a foreign concerned authority.
           2-Whenever the Directorate provides information under this Article to a foreign counterpart, it shall obtain from that foreign authority a suitable declaration or undertaking that the information provided by the Directorate will only be used for the purpose for which it was sought, unless the foreign counterpart agency seeks and obtains the agreement of the Directorate for the information to be used for another purpose.

           

          22/1

          Where the Directorate of financial intelligence receives information from a foreign counterpart, it shall use the information received only for the purpose for which it was sought, unless the foreign counterpart grants its approval that the Directorate may use the information obtained for another purpose. The Directorate provide the feedback for the foreign counterpart, if feasible and upon request it receives, on the information disseminated by the counterpart agency, or the outcome of the result based in the information provided.

      • V. Customs Disclosure

        • Article 23

           1-Any person who enters or leaves the Kingdom of Saudi Arabia in possession of currency, bearer negotiable instruments, gold bars, precious metals or stones or jewelry exceeding the value threshold set by the Implementing Regulation, or who arranges for the transportation thereof into or out of the Kingdom by cargo, courier, postal service or through any other means, shall declare to the General Directorate of Customs and the Directorate shall request additional information on the source and the purpose of the use.
           2-The General Directorate of Customs shall seize the currency, bearer negotiable instruments, gold bars, precious metals or stones or jewelry for (72) hours in case of the suspicious of the ML or predicate offence including cases not exceeding the value threshold set in Sup (1) in this Article, and in case of violating the declaration obligation or the false declaration.
           3-In the case of violating the declaration obligation or the false declaration and no suspicious in the ML or predicate offence, The General Directorate of Customs shall imposed a fine as clarified in the Implementing Regulation.
           4-The General Directorate of Financial intelligence shall obtain all information that the General Directorate of Customs obtained.
           5-The Implementing Regulation shall set forth rules and procedures related to declarations and the powers of General Directorate of Customs to implement the declaration obligations.

          23/1

          The value threshold for declarations under Article of the Law shall be SAR 60.000 or its equivalent , which include currency, bearer negotiable instrument, precious metals or stones or jewelry that have to be declared when entering or exiting the kingdom Declarations under Article 23 of the Law shall be made in writing and in accordance with the approved template.

          23/2

          For the benefit of performing his functions under this Chapter, a customs official shall have the power to stop and search any person or vehicle, including cargo containers and postal deliveries exiting or entering the Kingdom and shall have available all powers provided for in the Common Customs Law. All powers shall be applied and searches be carried out in accordance with Common Customs Law, its Implementing Regulation and relevant Administrative Resolutions including how the inspection is preformed

          23/3

          The General Directorate of Customs may stop or seize, partially or in full, any currency, bearer negotiable instrument, gold bars, precious metals or stones or jewelry for up to (72) hours, in the following cases:

           a.The value or amount of currency, bearer negotiable instrument, gold bars, precious metals or stones or jewelry was not declared or not declared truthfully as required under the Law.
           b.If there is a suspicion that such currency, bearer negotiable instrument, gold bar or precious metal or stone or jewelry is proceeds of crime or instrumentalities, or is related to a money laundering or a predicate offense, including in cases where the threshold under Article 23/1 is not met; or
           

          The General Directorate of Customs shall immediately inform the Public Prosecution of the seizure, the General Directorate of Customs shall request and obtain additional information from the carrier about the origin and the intended use thereof.

          23/4

          The General Directorate of Customs shall prepare an incident report. In case the measure was taken by another security agency, the security agency shall prepare an incident report and refer the case to the General Directorate of Customs. Then the custom conduct preliminary investigation, and the reasons of declaration failure, false declaration, or suspicions of money laundering or predicate offence. Seized items are deposited by customs in account designated for within the custom.

          23/5

          Prior to expiration of the provisional seizure, the General Directorate of Customs shall ask the Public Prosecution to extend the seizure, and the Public Prosecution may inform the Custom to extend the provisional seizure to a period not exceeding 60 days, according to the law. If there is a need to extend the provisional seizure, if there are reasonable grounds for the suspicion or that the continued detention of the seizure items is justified while its origin or derivation is further investigated or consideration is given to instituting a criminal investigation related to the predicate offense or ML crimes, the Public Prosecution may ask the competent court as per the provision stipulated in the Criminal Procedures law, and the Public Prosecution shall investigate on the origin of the funds and the intended use.

          23/6

          Any person who fails to or makes a false declaration, and the custom convinced on the reasons behind that, and provided that no suspicious related to the ML or predicated offences, the custom shall impose a fine for 25% of the seizure items if the first time, 50% for any repeating cases.

          23/7

          In all case, if there is suspicious related to predicted offences or ML, after completing the initial procedures, the case shall be refer to the Public Prosecution for further investigation, and notification shall be made to the Directorate of financial intelligence.

          23/8

          In case a departing traveler was carrying gold bar or precious metal or stone or jewelry of a value exceeding SAR 60,000 when departing or entering the Kingdom, he/she shall visit Customs offices at the port to declare them, and present a receipt of purchase to confirm their value. If it turned out that the goods are for commercial purposes, the ‘Common Customs Law and its Implementing Regulations’ shall apply.

          23/9

          Upon declaration, a customer officer shall ensure the validity of money not being forged or forfeited.

          23/10

          In the case of not notifying the Public Prosecution and Custom of the required procedures, the custom shall request the Public Prosecution to left the seizure on the currency, bearer negotiable instrument, precious metals and stones, gold bars, or jewelry.

          23/11

          These measures shall apply to companies, financial institutions, designated non-financial businesses and professions, non-profit organizations, gold vendors, Hajj and Umra missions and service providing companies concerned with transferring cash, postal and non-postal packages and shipments, while preserving their right to conduct business.

          23/12

          Saudi Customs shall establish a database including the information contained in decoration form, the incident reports; other related information, the suspicious cases of ML or predicted offences, while notifying the General Directorate of Financial intelligence immediately, and provide access to the Directorate, and the Directorate request more information.

          23/13

          Saudi Customs shall prepare and develop a declaration form as provided for in this Article in coordination with other authorities and distribute it to ports of entry/exit.

          23/14

          The General Directorate of Customs, in coordination with other competent authorities, shall take the necessary measures to inform the instructions with all possible means, and provide prominent warning sign in all boarder ports, illustrating procedure and sanctions to be applied against violators.

          23/15

          If within 60 days from the first seizure by the General Directorate of Customs no person has asserted a claim to the seized currency, bearer negotiable instrument, gold bar, or precious metal or stone or jewelry; or if the suspect has escaped or could not be caught, the currency, gold bar, bearer negotiable instrument, precious metal or stone or jewelry shall be considered to be unclaimed and shall be processed in accordance with the provisions of the Common Customs Law in dealing with unclaimed and relinquished goods.

          23/16

          The General Directorate of Customs may, acting on its own initiative or upon request, cooperate and exchange available and accessible information with or carry out inquiries for a foreign counterpart agency in relation to a money laundering or predicate offense investigation or inquiry, or for the purpose of identifying, tracing or seizing or confiscating proceeds of crime or instrumentalities.

      • VI. Supervision

        • Article 24

          Supervisory authorities shall have the following powers and duties to carry out their mandate: 
           
           a.Collect information and other data from FIs, DNFBPs, and NPOs as well as applying appropriate supervisory measures, including on-site inspections and offsite measures;
           b.Compel FIs, DNFBPs, and NPOs to provide any information that the supervisory authority considers relevant to carry out its function under this Law and its Implementing Regulation, and take copies of documents and files, however and wherever stored;
           c.Carry out an anti-money laundering risk assessment for the sectors for which the authority has a supervisory mandate;
           d.Issue guidance, decisions and instructions, rules or any other instruments to FIs, DNFBPs, and NPOs in order to implement the provisions of this Law.
           e.Cooperate and Coordinate with competent authorities when sharing available or accessible supervisory information that is relevant to anti-money laundering supervision with any foreign counterpart, or carry out inquiries on behalf of any foreign counterpart, or request any such information or cooperation from a foreign counterpart;
           f.Verify that FIs, DNFBPs, and NPOs adopt and enforces measures consistent with this Law in relation to its foreign branches and majority owned subsidiaries to the extent permitted by the laws of the foreign country;
           g.Establish and apply effective fit and proper screening procedures for any person aiming to participate in the management or supervision of FIs, DNFBPs, and NPOs or for any person aiming to own or control, directly or indirectly, or becoming a beneficial owner of significant shares;
           h.Maintain statistics concerning any measure adopted and sanction imposed;

          24/1

          A supervisory authority may exchange the following information with foreign counterparts where such information is requested by the foreign counterpart for anti-money laundering purposes:

           a.regulatory information and general information on the financial sector;
           b.prudential information such as information on a financial institution or designated non-financial business and profession ’s business activities, beneficial ownership, management and the fit and properness of any managers, directors, shareholders or beneficial owners; and
           c.Other relevant information such as on the internal policies, controls and procedures of a financial institution or designated non-financial business and profession, customer due diligence information, customer files, samples of accounts and transaction information.
           

          24/2

          Where a supervisory authority obtains information from a foreign counterpart, the supervisory authority shall obtain authorization from the foreign counterpart prior to any dissemination or use of the information received. And where a supervisory authority is obliged of declaration or reporting of information, then it shall inform the counterpart of this obligation.

          24/3

          A supervisory authority may apply supervisory measures on behalf of foreign counterparts and, as appropriate, facilitate the ability of the foreign counterpart to carry out consolidated group supervision.

          24/4

          A supervisory authority may exempt a specific category of reporting entities from the requirement in Article 5 of the Law to carry out an institutional risk assessment, if the supervisory authority has confirmed that the identified risks of the sector are clear and understood, or that a specific activity carried out by the financial institution or designated non-financial business and profession is of a low risk.

          24/5

          A supervisory authority may instruct a financial institutions or designated non-financial business and professions to take certain measures in relation to foreign branches and majority-owned subsidiaries that pose a higher risk, including placing additional controls on the branch or majority-owned subsidiary or the financial group, or requesting the financial group to close down its operations in the host country.

          24/6

          A financial institution or designated non-financial business and profession shall comply with any instructions, rules, guidelines or any other instruments issued by a supervisory authority, including an order under Article 24 (b) of the Law to provide any information as specified by the supervisory authority.

        • Article 25

          Without prejudice to any stricter sanctions and subject to the procedures provided for in other laws, if the supervisory authority find that FIs, DNFBPs, and NPOs or any of their directors, board members, executive or supervisory management members failed to comply with any provision of this Law, its Implementing Regulation or relevant decisions or circulars, or any violation referred from other competent authority, the supervisory authority may impose one or more of the following measures: 
           
           1.Issue a written warning;
           2.Issue an order to comply with a specific instruction;
           3.Issue an order to provide regular reports on the measures taken to address the identified violation;
           4.Impose a monetary fine of up to 5.000.000 riyals per violation;
           5.Ban individuals from employment within the sectors for which the supervisory authority has competences for a period to be determined by the supervisory authority;
           6.Restrict the powers of directors, board members, executive or supervisory management members, and controlling owners, including appointing one or more temporary controllers;
           7.Dismiss or replace the directors, members of the Board of Directors or of executive or supervisory management;
           8.Suspend, restrict or prohibit the continuation of the activity, business or profession or of certain business activities or products;
           9.Suspend, restrict or revoke the license;
          The supervisory authority should inform the General Director of Financial Intelligence about the actions taken or imposed sanction. 
           

      • VII. Sanctions

        • Article 26

          Whoever committing a crime of money laundering, as stipulated in Article 2 of the present Law, shall be subject to imprisonment for a period up to ten years and no less than two years, as well as a fine not exceeding five million riyals or both.

        • Article 27

          Whoever committing a crime of money laundering, as stipulated in Article 2 of the Law, shall be subject to imprisonment for a period up to fifteen years and no less than three years, as well as a fine not exceeding seven million riyals or both if the crime accompanied by any of the following:
           1-Commits the crime through an organized crime syndicate;
           2-Uses violence or weapons
           3-Occupied a public office and the crime is connected thereto or if such person abuses his/her powers or influence in committing the crime;
           4-Trafficking in human beings.
           5-Exploits persons or minors and the like;
           6-Commits the crime through a correctional, charitable or educational institution or in a social service facility; or
           7-Has a prior conviction in the Kingdom or abroad.

        • Article 28

          1.A Saudi national who has served his term of imprisonment due to money laundering crime shall be barred from travelling outside the Kingdom for a period equal to the term of imprisonment served.
          2.Non-Saudis shall be deported from the Kingdom upon execution of their penalty with no possibility of return to the Kingdom..

          28/1

          A Ministry of interior is authorized to expel non-Saudi sentenced to prison on money laundering offences, and never return to the kingdom unless for Umra and Hajj.

        • Article 29

          The court may reduce the sentence of the convicted person as clarified in Article 30, if perpetrator reports to authorities about the money laundering crime, before they have knowledge, other perpetrators to the crime, and if such reporting leads to arresting the perpetrators or seizing crime instrumentalities or proceeds.

        • Article 30

          Penalties stipulated in Article 26 may be reduced as per the legal decided circumstances to be imprisonment for a period up to seven years and no less than one year, as well as a fine not exceeding three million riyals or both. 
           
          if the perpetrator of the offense provides competent authorities with information they would not have otherwise obtained so as to assist them in: 
           
           a.preventing the commission of another money laundering offense or limiting the effects of the offense;
           b.identifying or prosecuting other perpetrators of the offense;
           c.obtaining evidence;
           d.depriving a criminal organization of funds over which the defendant has no right or control.

        • Article 31

           1-Without prejudice to the criminal liability of a natural person, any legal person that commits a money laundering offense shall be punished by a fine of no more than 50 million riyals and no less than the equivalent of the double of full value of the funds that were the objects of the offense.
           2-A legal person may also be prohibited permanently or temporarily from engaging in certain licensed activities, directly or indirectly, or be ordered to close down its offices, permanently or temporarily, that were used in conjunction with the commission of the offense, or an order be made to liquidate the business.

        • Article 32

          The verdict may include publishing a summary of the verdict in local gazette issued at convicted premises, and on the criminal cost. In the case of no gazette issued at the convicted premises, it shall be in another gazette at the nearest area to the convicted premises, or published in another proper means, as per the type of crime, significance and its effect. The publication shall occurred after the final court verdict.

      • VIII. Confiscation

        • Article 33

          Without prejudice to the rights of third parties acting in good faith, in the event of a conviction for a money laundering or predicate offence, the competent Court shall issue an order to confiscate the following: 
           
           a.Laundered funds;
           b.Proceeds of the crime, including proceeds intermingled with funds acquired from legitimate sources up to the value of the intermingled proceeds; and
           c.Instrumentalities.
          2.The competent court shall order the confiscation of funds regardless of whether the funds are held or owned by the defendant or a third party. Funds may not be confiscated if a third party can establish that he/she acquired the funds by paying a fair price or in return for the provision of services corresponding to the value of such funds or based on other legitimate grounds, and that he/she was unaware of their illicit origin.
          3.The competent court may invalidate or prohibit an activity, whether contractual or otherwise, if one or more of the parties knew or should have known that such an activity could prejudice the ability of the competent authority to recover funds subject to confiscation.

        • Article 34

          The competent court shall order confiscation associated with money laundering not convicted in case of the court verdict is not issued due to the perpetrator death or escape or the difficulty of recognize him/her or in case of the absence.

        • Article 35

           1-In cases where confiscation is not possible because the funds are no longer available for confiscation or cannot be located, the court shall order confiscation of any other funds owned by the convict in order to recover an amount that is equivalent in value.
           2-The court shall issue a confiscation order of any other funds owned by the convict to complete the required amount of the confiscation if the extent to which the value of the funds confiscated falls short of the value of funds under Article 33.

        • Article 36

          Unless other Law stipulates otherwise, confiscated funds shall accrue to the Public Treasury. These funds remain bearing any rights lawfully adjudicated in favor of third parties acting in good faith.

          36/1

          In the implementation of this Article regarding funds, proceeds or instrumentalities subject to confiscation, the Council of Ministers’ Resolution no. 48, dated 18/2/1421H shall be taking into consideration.

        • Article 37

          As per the provisions set out in this law, when funds, proceeds of crime, used instruments are convicted or intentionally were to use or to recover, the competent authority has the authority to deal with them according to the law, or share them with countries that are signatories with the Kingdom to valid agreements or treaties.

          37/1

          The competent authority mentioned under this article that are competent to disposal of fund or confiscated instrumanlities is the authority that made the provisional seizure.

          37/2

          The competent authority mentioned under this article that are competent to share confiscated funds is the Permanent Committee on Mutual Legal Assistance.

      • IX. International Cooperation

        • Article 38

          Competent authorities may exchange information with and make inquiries or investigation on behalf of foreign counterparts in countries that are signatories with the Kingdom to valid agreements, , or on the basis of reciprocity. This shall be done pursuant to applicable statutory procedures, without prejudice to the national sovereignty of the country or provisions and customs related to confidentiality of information.

          38/1

          The Public Prosecution may exchange domestically available or accessible information with foreign counterparts for intelligence or investigative purposes relating to money laundering and associated predicate offenses, including for purpose of identifying, tracing or securing proceeds of crime or instrumentalities. The Public Prosecution may use all of its powers available in a domestic case also to conduct inquiries and obtain information on behalf of a foreign counterpart.

          38/2

          Criminal investigating officers, each within their own purview, in coordination with competent authorities may exchange domestically available or accessible information with foreign counterparts for intelligence or investigative purposes relating to money laundering and associated predicate offenses, including for purpose of identifying, tracing or securing proceeds of crime or instrumentalities. Criminal investigating officers may use their powers available in a domestic case also to conduct inquiries and obtain information on behalf of a foreign counterpart; and may form joint intelligence teams to conduct cooperative intelligence, or establish bilateral or multilateral arrangements to enable such joint intelligence.

        • Article 39

          Upon request of a competent court or authority in another country which is a signatory with the Kingdom to a valid agreement or on the basis of reciprocity, the competent authority may provide mutual legal assistance in relation to money laundering and predicate offense investigations and prosecutions and procedures, including but not limited to assistance with the tracing, seizure, recovery and confiscation of funds, or proceeds of crime or Instrumentalities related to the Money Laundering Crimes or predict offences, or the controlled delivery, according to laws in force in the Kingdom. The Implementing Regulation shall further prescribe the types of assistance that may be granted, and conditions that must be agreed by requesting country, and the procedures that must be applied.

          39/1

          The competent authority, including the judicial authority, through the Permanent Committee on Mutual Legal Assistance, may provide mutual legal assistance to a foreign country in any investigation, prosecution or judicial proceeding relating to:

           a.a money laundering or predicate offence;
           b.the determination of whether funds are proceeds of crime or instrumentalities of crime and the tracing of such funds;
           c.a possible confiscation order, whether or not based on an underlying criminal conviction; or
           d.the freezing or seizure of proceeds of crime or instrumentalities.
           

          39/2

          The competent authorities provide all available power given to implement the following types of mutual legal assistance may be provided:

           A.Providing information, documents, or evidence, including the financial records from financial institutions, designated non-financial business profession, NPOs, or any other person.
           B.The hearing of statements of persons, including hearing statements of person present inside the KSA that could not be present on the territories of a requesting State, with utilization of live visual telecommunication. The hearing shall be agreed upon with a judicial authority of the requesting country in the presence of a judicial authority of the Kingdom. The costs shall be borne by the requesting country unless otherwise.
           C.The full range of powers and techniques, including controlled delivery, covert operations, communication interception and access to automated systems.
           D.Informing related person on the judicial papers and documents, including documents related to testimony.
           E.Inspecting, seizing, and arresting procedures.
           F.Examining objects and visiting sites.
           G.Providing information.
           H.Seeking the help of specialists.
           I.Locating sites, persons connected with the crime and their identities
           J.Providing the original of documents, records, and government papers received from financial institutions, any party, or other companies from the private sector or other ratified pictures of it.
           K.Identifying and tracing the funds subjected to confiscation or that might be confiscated.
           L.Seizing funds in the context of confiscating-based procedures with conviction or without conviction.
           M.Facilitating the voluntary appearance of persons in the requesting countries.
           N.Inform the relevant authority with judicial document.
           

          And any other forms of legal assistance that does not contradict with the internal laws of the Kingdom.

          39/3

          If a foreign country requests a form of assistance not specifically mentioned in this subsection but available under Saudi law for domestic criminal matters, the judicial authority may provide the assistance sought to the same extent and under the same conditions as would be available to competent authorities in a domestic criminal matter.

          39/4

          Mutual legal assistance may not be refused solely on the grounds that the offense is considered to involve fiscal matters, or based on secrecy or confidentiality provisions.

          39/5

          Where a request for mutual legal assistance involves non-coercive measures, such assistance may be provided also in the absence of dual criminality. In all other instances, dual criminality is required for mutual legal assistance to be rendered.

          39/6

          The legal assistance application shall include as much information as possible to facilitate the implementation process, including:

           1.The legal document based on which the application is submitted.
           2.Determination of the authority responsible for investigations, prosecutions or proceedings related to the application, communication channels with all the persons able to respond to the inquiries related to the application and description of the criminal incident, its conditions and circumstances.
           3.Description of the required assistance and the measures to be taken, as well as all the requirements that the applying State wishes to meet.
           4.If the application is related to the inspection of a place, attachment or confiscation of assets, it shall include a precise description thereof, including providing the widest range of accurate information on the targeted funds, such as the type, amount, and location, as well as the owner of the funds, provide the available information, such as the account number, the securities number, or the real estate number and the car.
           5.Determination of the required time for the application shall be implemented, if necessary.
           6.A certified copy of the judicial order or judgment rendered by the competent Court shall be submitted when necessary.
           7.Enclosing a written undertaking by the applying State to preserve the confidentiality of information or evidence provided upon implementation of the application, and that the submitted information or evidence will not be used for other than the purposes stated in the application, unless prior approval is obtained from the Committee.
           8.The applying State shall submit any additional information or documents that the Committee deems necessary to implement the application or facilitate the implementation thereof.
           

          39/7

          The Competent authorities may undertake the following:

           A.Coordinating and understanding with the competent authorities of the country concerned to allow the proper use of the method of controlled delivery of funds across the Kingdom to expose persons involved in the commission of crimes and their contributors, subject to the provisions of the laws, regulations and instructions in force in the Kingdom.
           B.Applications for the controlled delivery of funds must be in writing, and the competent authorities in the Kingdom shall take the decisions to respond to them on a case-by-case basis. The requesting country shall include the willingness to provide assistance to the Kingdom in such a request as may be required.
           C.It may be agreed with the interested parties of other States to inspect and verify the consignments agreed upon for the controlled delivery and then allow them to proceed.
           D.In the controlled delivery and after agreement with the parties concerned in other country, the agreed funds may be exchanged for similar materials for fear of leakage during transport.
           

        • Article 40

          A final judgment providing for the confiscation of funds, proceeds or instrumentalities related to a money laundering or predicate offense issued by a competent court in another country which is a signatory to a valid agreement with the Kingdom or on the basis of reciprocity, may be acknowledged and enforced in the Kingdom if the funds, proceeds or instrumentalities subject of the judgment can be confiscated, in accordance with laws applicable in the Kingdom.

          40/1

          Requests for the execution of foreign confiscation orders or rulings, issued by the competent authority or court in the requested country, shall be executed according to the competent law of the kingdom. Any ruling intended to be recognized and executed shall include the following document and information:

           a.An official copy of the ruling issued, and a copy of the law on which the confiscation order is based, and certificate on the ruling stating that the ruling is final , and issued by the competent judicial authority in the requesting country;
           b.The person involved in the case has been called to attend, and has been represented rightly, and able to defend himself;
           c.The ruling does not conflict with any ruling or order issued in the same subject from competent court in the kingdom, provided that no ongoing trail in the kingdom on the subject ruled by the requesting country;
           d.The ruling does not contain any provision not applicable to general law, and Sharia law in the kingdom;
           e.A statement that includes the procedures and measures taken by the requesting countries to protect the persons of good will.
           f.A description of the funds that the request is issued for in accordance to this article, estimation of their value, their possible location, and information about any person who keeps them or has them in his possession. However, the requesting countries shall provide a statement about the facts that the request is based on.
           g.The order of confiscation issued by the Kingdom determines how to preserve and manage confiscated funds. It is permissible to the competent court to request the hiring of a judicial guard, if needed, in which his expenses are deducted from the value of the funds he’s guarding.
           

          40/2

          In case of the received requests, where the perpetrator of the crime cannot be prosecuted because of death, escape, absence, or lack of identification, the Committee shall refer the request to the Public Prosecution to take the necessary procedures, provided that the request contains a statement which includes the merits and reasons it was based on, considering that such funds are linked to criminal conduct.

        • Article 41

          The accused or convicted for Money laundering crime can be extradited from and to another country, which is a signatory with the Kingdom to a valid agreement or on the subject to the principle of reciprocity . In case of the rejection of the extradition, the competent courts in the kingdom undertake the trial and may benefit from the investigations were provided by the requested country. The Implementing Regulation shall further prescribe the conditions for extradition.

          41/1

          The extradition process is governed by the bilateral agreements signed between the kingdom and the requested country, or multilateral agreements ratified by the kingdom as per the applicable law.

          41/2

          The Kingdom may refuse to extradite Saudi nationals. Where a request for extradition is denied based on nationality of the accused or convict, the public prosecution shall, without delay, determine whether there are grounds for prosecution of the offense set forth in the request.

          41/3

          Extradition shall be subject to dual criminality. The dual criminality principal is available when the request country and the kingdom criminalized the act subject to the extradition, regardless the classification of the act as per the criminal laws.

          41/4

          The following requirements shall be included in the extradition:

           A.Received a written and through the official channels;
           B.Attached a certified copy, or request the original of the conviction, or the detention order related to the extradited person,
           C.A statement on the crimes the extradition sought, including the widest range of information available, such as the time and location of the crime.
           D.The legal text, or the statement of the legal ground, to allow for assessing the request,
           E.The necessary information to identify the wanted persons,
           F.Any other information seek by the competent authority deemed necessary to execute the request.
           

        • Article 42

          The Permanent Committee for Mutual Legal Assistance shall be responsible for receiving mutual legal assistance requests in all money laundering and associated predicate crimes.

          42/1

          The Permanent Committee for Mutual Legal Assistance at the Ministry of Interior shall arrange for the execution of mutual legal assistance requests and for any arrangements deemed necessary to transmit the evidentiary material gathered in response to a request for assistance to the competent authority of the requesting State. Where a request for mutual legal assistance results, directly or indirectly, in the confiscation of funds, the Permanent Committee for Mutual Legal Assistance shall determine whether the confiscated funds shall be shared with the requesting country.

      • X. Concluding Provisions

        • Article 43

           1-the Public Prosecution, either upon its own motion or upon request by the criminal investigating officer, may order that any person or FIs -through the supervisory authority-or DNFBPs or NPOs provide records, document or information. The requested entity shall execute the order as specified in the order, accurately, and without delay. The Implementing Regulation of this law shall clarify the relevant mechanisms.
           2-Whoever has been served with an order under Sup (1) in this Article shall not disclose to any person the existence or operation of the order, except where such a disclosure is made to other staff or members of the management for the purpose of obtaining advice or determining steps to comply with the order.

          43/1

          The supervisory authority, when receiving request from the public prosecution to provide records, documents, or information subject to confidentiality, shall, without delay and prior notice to the party concerned, forward the order to the financial institution, requesting it to produce the requested records, documents or information within the timeframe and in the manner and form as stipulated in the order.

          43/2

          Immediately upon receiving of the produced records, document or information, the supervisory authority shall notify the Public Prosecution of that fact and provide the produced records, documents or information, as and within the timeframe stipulated by the Public Prosecution.

          43/3

          The supervisory authority shall not have any power to review any orders issued by the Public Prosecution on the merits, to refuse its assistance in the implementation of any particular order, or to filter or withhold any records, documents or information produced by the financial institution.

        • Article 44

           1-The Public Prosecution, either of its own motion or upon request by the Directorate of financial intelligence or the criminal investigating officer, based on a suspicion of money laundering or a predicate offence, may order the provisional seizure of funds that are or may become subject to confiscation for a period not exceeding 60 days. An order under this Article shall be issued and executed without prior notice to the party concerned. An order under this Article may be extended for a longer period pursuant to a judicial order from the competent court but shall not prejudice the rights of bona fide third parties.
           2-Upon the issuance of the provisional seizure, the Public Prosecution may determine that the funds subject to the order remain under the management of the person that held an interest in it at the time of issuance of the order or a third party, or such funds be transferred by order from the competent court to a designated authority if this is deemed necessary to mitigate the risk of dissipation of the funds.

        • Article 45

          Without prejudice to the provisions of the criminal procedures law, the Public Prosecution may, at its own motion or upon the request of the criminal investigating officer, may issue a warrant permitting the criminal investigating officer or the investigator to enter houses, offices or the Headquarters of the reporting entity to search for, detect and arrest persons, or to search for and seize funds, properties, documents, evidence or information relating to a predicate crime or a ML crime at any time during the period specified in the Search Warrant. In case of urgency, there is no need to obtain a warrant, provided that a report will be written indicating the reasons and grounds of urgency. The order under this Article should be made ex parte and without prior notice to the party concerned. The Public Prosecution will inform the supervising authority of the reporting entities on the procedures taken in this regard.

        • Article 46

          Without prejudice to the provisions of the criminal procedures law, the Public Prosecution may, at its own motion or upon the request of the criminal investigating officer, may issue a reasoned order permitting the criminal investigating officer or the investigator to monitor, control, record, intercept, seize and have access to all forms of evidence, records and messages including letters, publications, parcels, all forms of communications, telephonic conversations, information and data saved in computers, as specified in the Order, whether for a predicate crime or a ML crime. The order under this Article should be made ex parte and without prior notice to the party concerned .

        • Article 47

          The competent court shall have jurisdiction to decide on all crimes provided for in this Law.

        • Article 48

          The Public Prosecution shall investigate and prosecute crimes stipulated in the Law at the competent court, and it shall issues guidelines and instruction to the competent authorities under its supervision by the criminal procedures law.

        • Article 49

          Criminal investigating officers shall have the responsibility of searching, enquiring, and gathering evidence in relation to crimes stipulated in this law each within their own purview as well as criminal and administrative investigation aimed at identifying, tracing or securing proceeds of crime or instrumentalities.

          49/1

          The investigating officer, may issue a reasoned order permitting an investigating officer to conduct an undercover operation for the purpose of gathering evidence of a money laundering or predicate offense. An undercover operation is an operation for intelligence conduct by the investigation officer to gain evidence or information related to the criminal behavior.

          49/2

          Investigating authorities may conduct or participate in a controlled delivery under the supervision of Ministry of interior.

          49/3

          Investigating authorities may take the necessary measure to reach the perpetrator.

        • Article 50

          The President of the State Security, upon agreement with the Minister of Finance and the Attorney General of the Public Prosecution, shall issue the Implementing Regulations of this Law within no more than ninety days from the date of its issuance.

    • Law on Combating the Financing of Terrorism

      No: M/21 Date(g): 1/11/2017 | Date(h): 12/2/1439Status: In-Force
      The Combating Terrorism and Financing of Terrorism Law promulgated by Royal Decree No. (M/21) dated 12/02/1439H (corresponding to 01/11/2017) amended in accordance with the Royal Decree No. (M/142) dated 19/10/1441H (corresponding to 11/06/2020).

      • Chapter One Definitions

        • Article 1

          The following terms and phrases - wherever mentioned in this Law - shall have the meanings assigned thereto unless the context requires otherwise: 
           
          1.Law: Combating Terrorism Crimes and their Financing Law
           
          2.Regulation: Implementing Regulation of the Law
           
          3.Terrorist Crime: Any act committed, individually or collectively, directly or indirectly, by a perpetrator, with the intention to disturb public order, destabilize national security or state stability, endanger national unity, suspend the Basic Law of Governance or some of its articles, undermine state reputation or status, cause damage to state facilities or natural resources, attempt to coerce any of its authorities into a particular action or inaction or threaten to carry out acts that would lead to of the aforementioned objectives or instigate such acts; or any act intended to cause death or serious bodily injury to a civilian, or any other person, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a Government or an international organization to do or to abstain from doing any act; or
           
           Any act which constitutes an offense as set forth in any of the international conventions or protocols related to terrorism or its’ financing or listed in the Annex to the International Convention for the Suppression of the Financing of Terrorism that the Kingdom of Saudi Arabia has ratified.
           
          4.Terrorism Financing Crime: The financing of terrorist act or terrorist entity or a terrorist in any forms as set forth under this Law, including financing the travel and training of a terrorist individual.
           
          5.Terrorist: Any natural person, whether located inside or outside the Kingdom of Saudi Arabia, who Commits or attempts to commit or participate or organizes or contribute to any crimes as set under this law, by using any means directly or indirectly.
           
          6.Terrorist Entity: Any group of persons, whether located inside or outside the Kingdom of Saudi Arabia that commits any of the acts set forth under this Law.
           
          7.Competent Court: The Specialized Penal Court.
           
          8.Funds: Assets, economic resources or properties of any value or type, however acquired, whether material or immaterial, movable or immovable, tangible or intangible, along with documents, deeds, transfers, letter of credits and instruments of any form, whether inside or outside the Kingdom. This include electronic or digital systems and bank credits that evidence ownership or interest therein, also all types of commercial papers , securities, or any interest, profit or other income generated from such funds.
           
          9.Proceeds of Crime: the funds directly or indirectly obtained or acquired from or through the commission of a predicate offense, whether inside the Kingdom or outside, including any funds transferred or converted wholly or partially into other type of funds
           
          10.Instrumentalities: Anything prepared, used, or intended to use, in any form to commit a crime of crimes stipulated in the law.
           
          11.Provisional Seizure: Temporary ban on the transport, transfer, exchange, conversion, disposal, or movement of funds, and temporary possession, pursuant to an order issued by a competent court or authority.
           
          12.Confiscation: Permanent expropriation and deprivation of funds, Proceeds of crime, or instrumentalities pursuant to an order issued by a competent court.
           
          13.Utilities and Public or Private Property: Real estate, property and movables owned by the state or public corporate persons or dedicated to serve public interest including existing installations owned or constructed by the state, activities offered for realizing public interest, including real estate property and movables owned by individuals, private corporate persons, or diplomatic bodies and international and humanitarian organizations operating in the Kingdom.
           
          14.Financial Institutions: Any conduct as a business one or more of the financial activities or operations specified in the Implementing Regulation of this Law for or on behalf of a customer.
           
          15.Designated Non-Financial Businesses or Profession: Any conducted of any commercial or professional activities as specified in the Implementing Regulation.
           
          16.Non-profit Organizations: Any non-profit organization entity that – legally authorized, to collects, receives or disburses funds for charitable, religious, cultural, educational, social or cooperative purposes or for any other purposes.
           
          17.Customer: Any person who conduct or intend to conduct any activities as stipulated in the Implementing Regulation with the FIs, DNFBPs.
           
          18.Business relationship: Any relationship with a continuing nature, which is established between any of FIs and DNFBPs and its clients related to the activities or services the FIs and DNFBPs provide to them.
           
          19.Wire Transfer: A financial transaction carried out on behalf of an originator through a financial institution with the view to making an amount of funds available to a beneficiary at another financial institution, irrespective of whether the originator and the beneficiary are the same person. .
           
          20.Beneficial owner: Any natural person who ultimately owns or exercises direct or indirect control over a customer or on whose behalf a transaction is being conducted, including on the FIs or DNFBPs or NPOs or any other legal person.
           
          21.Competent Authority: Any administrative authority, law enforcement authority, control authority or supervisory authority with competences in the areas of combating terrorism and its financing, induction, search, attachment, freezing., arrest, investigation, public prosecution, trial, as per the context, in accordance with this Law.
           
          22.Supervisory Authority: The authority with responsibility to verify compliance by FIs, DNFBPs, and NPOs with the requirements under this Law, its Implementing Regulation or any relevant Ministerial decision or instructions
           

      • Chapter 2 General Provisions

        • Article 2

          The crimes of terrorism and its financing are considered major crimes requiring detention.

        • Article 3

          Notwithstanding the principle of territoriality, the provisions of this Law shall apply to any person, Saudi or non-Saudi, who commits, aids, attempts, instigates, participates or conspires to commit - outside the Kingdom - a crime provided for in this Law, and is not tried for such crime, if such crime aims to: 
           
          1.Change the government system in the Kingdom,
           
          2.Suspend the Basic Law of Governance or some of its articles,
           
          3.Coerce the State into a particular action or inaction,
           
          4.Assault Saudi citizens abroad,
           
          5.Cause damage to State properties abroad, including embassies or other diplomatic or consular premises,
           
          6.Carry out a terrorist crime on board any means of transport registered in the Kingdom or carrying its flag, or
           
          7.Undermine the interests of the Kingdom, its economy or national or societal security.
           

      • Chapter 3 Procedures

        • Article 4

          The State Security Presidency shall be responsible for criminal control and deduction functions, including search, detection, control criminal and administrative persecution, collection of evidence, indicators, financial investigation and operations of secret nature, as well as identification, tracking seizing and keeping of funds of suspected persons, proceeds and instrumentalities for the crimes set forth in this Law.

        • Article 5

          The Public Prosecution may issue a warrant of arrest or summon any person suspected of committing a crime provided for in this Law.

          In all cases, the arrested person may not be held for more than (7) days except by written order, as per the procedures and requirement specified by the implementing regulation.

        • Article 6

          1.The Public Prosecution may at its own motion or upon the request of the criminal investigating officer, order that any person, a financial institution, designated none-financial businesses or nonprofit organization provide records, documents or information, the requested party shall execute the request rightly and accurately as specified in the order and without delay. In the case of the request issued to the financial institutions, the request shall be executed through the supervisory authority. The Implementing Regulations of this Law shall set forth the relevant mechanisms.
           
          2.The state security presidency may at its own motion or upon the request of the criminal investigating officer, order that any person, a financial institution, designated none-financial businesses or nonprofit organization provide records, documents or information the requested party shall execute the request rightly and accurately as specified in the order and without delay. In the case of the request issued to the financial institutions, the request shall be executed through the supervisory authority. The Implementing Regulations of this Law shall set forth the relevant mechanisms.
           
          3.A person who has been served with an order under Sup (1) and (2) of this article, shall not disclose to any person the existence except where such a disclosure is made to a competent officer for the purpose of complying with the order; or where such a disclosure is made to other staff or members of the management for the purpose of obtaining advice or determining steps to comply with the order.
           

        • Article 7

          1.The Public prosecutor may issue a search order to enter houses, offices or premises, at any time during the period specified in the search order- to search, arrest persons seize funds, properties, documents, evidences or information in any of the crimes indicated in this Law.
           
          2.In case of taking any of the procedures stated in Sup (1) of this Article against any of the financial institutions, designated non-financial businesses and professions or non-profit organizations, the respective supervisory authority of these entities shall be notified.
           
          3.In case of exigent circumstances, no permit shall be required to perform any of the procedures stated in Sup 1 of this article, provided that a report shall written within 24 hours indicating the reason and grounds of urgency, and the implementing regulation shall clarify the exigent circumstances.
           

        • Article 8

          The Attorney General of the Public Prosecution may issue a reasoned order to monitor and have access to evidence, records and messages, including letters, publications, parcels and all communication instrument and information and documents saved in electronic systems relating to any of the crimes stated in this Law, and to intercept, seize and records all these materials.

        • Article 9

           1-The Public Prosecution may order the competent authority the provisional seizure, on an urgent basis without prior notice the party concerned, on the funds, instrumentalities or proceeds suspected to be connected to any of the crimes set forth in this Law, and will be used therein and which will be subject to confiscation.
           
           2-The President of the State Security may, at the stage of deduction, order the competent authority to urgently effect a provisional seizure, with prior notice to the party concerned, on funds, instrumentalities or proceeds suspected of being connected with any of the crimes stated in this Law, or will be used therein and shall be subject to confiscation. Notification to the Public Prosecution shall be made within a limited time not exceeding 72 hours.
           

        • Article 10

           1-The president of the State Security, may ban a person suspected of committing any of the crimes stated in this Law from travel outside the Kingdom, or may take other measures relating to his travel or return and should notify the Public Prosecution within 72 hours of the issuance of order. The order may include not notify the suspect what had been taken against him where the security interest requires so.
           
           2-The Attorney General of the Public Prosecution, may ban a accused person to committed crimes stated in this Law from travel outside the Kingdom. The order issued may include not notify the suspect what had been taken against him where the investigation requires so.
           

        • Article 11:

          Without prejudice to civil right, the Public Prosecution may stop the proceeding of the prosecution against any person who reports a crime provided for in this Law, prior to or after its commission, and cooperates with the competent authorities during the investigation for the purpose of apprehending the remaining perpetrators of said crime or of another crime similar in kind and gravity, or leads the authorities to wanted persons or persons plotting to commit similar crimes.

        • Article 13:

          The convicted of crimes under this law may not be provisionally released except temporary by order of the president of the State Security throughout the execution of the sanction, and the implementing regulation shall specify the requirement and condition.

        • Article 14:

          The president of the State Security may issue controls and procedures to ensure the safety of the released persons in the crimes stipulated in this Law.

        • Article 15

          The criminal investigation officers or military officers responsible to combating the crimes provided for in this Law may use force in accordance with the rules stipulated in the competent law.

        • Article 16:

          A person accused or convicted of one of the crimes provided for in this Law, who sustains damage due to prolonged detention or imprisonment, may petition the President of the State Security seeking indemnification prior to appearing before the specialized criminal court. The petition shall be reviewed by a settlement committee formed for such purpose, pursuant to a decision by the president. Said committee shall comprise at least three members, including a Sharia counselor and a legal counselor. Committee decisions shall be taken by majority within a period not exceeding ninety days from the date of filing the petition.

        • Article 17

          With prejudge to the provision stipulated for the Custom authority in the AML law, , and upon suspicion of the financing of terrorism, the Customs Authority shall seize immediately the suspect currency or bearar negotiable instruments, gold bullion, precious metals or precious stones, whatever their value, refer it and its holder to the competent authority to proceed with the required procedures, and notifying the General Directorate of Financial Intelligence, and the implementing regulation shall specify the provision to implement this article.

        • Article 18

          The Public Prosecution shall investigate and prosecute crimes stipulated in the present Law at competent court.

        • Article 19

          The Public Prosecution may order the detention of any person accused of a crime provided for in this Law for a period, or successive periods, not exceeding any period above 30 days, and not exceed in total for twelve months. In the cases where the investigation requires longer periods of detention, the matter shall be referred to the specialized criminal court to decide on the extension.

        • Article 20

          Without prejudice to the right of the accused to inform his family of his arrest, the public prosecution may issue an order barring contact with the accused for a period not exceeding ninety days if the investigation so warrants. If the investigation requires a longer period, the matter shall be referred to the specialized criminal court for decision thereon.

        • Article 21

          Without prejudge the right of the person to seek the assistance of a licensed lawyer to defend himself, the public prosecution may restrict this right if the investigation required so.

        • Article 22

          Without prejudice to the rights of other third parties, the Public Prosecution shall have the power to determine, trace and trace funds, instrumentalities and proceeds that may be subject to confiscation.

        • Article 23

          Investigation proceedings or filing of criminal cases relating to crimes provided for in this Law or crimes related thereto shall not be conditional upon a complaint by the victim, his representative or his heirs.

          The civil claimant may file his case before the specialized criminal court after the completion of the investigation relating to public right.

        • Article 24

          The specialized criminal court shall decide on the following: 
           
           1-Crimes set forth in this Law.
           
           2-Claims for annulment of decisions and claims for compensation in connection with the application of this Law.
           
           3-Requests for the execution of final foreign judgments relating to any terrorist offense or terrorist financing offense, including those relating to the confiscation of funds, proceeds or instruments associated with any such offense.
           
            The judgments issued in respect of Sup (1) and (2) of this article shall be appealed at the Specialized Supreme Criminal Court, and may be challenged before a specialized circuit at the Supreme Court as per the circumstance stipulated in the Criminal Procedures law.
           

        • Article 25

          The competent court may issue a conviction in the absence of the accused in the commission of any of the offenses provided for in this Law if it is reported by means of notification or an official media. Upon arrest or attendance, the sentenced person shall be brought to the court, which rendered the absentee conviction for re-prosecution.

        • Article 26

          If there are several crimes related to each other, one of which is one of the crimes provided for in this Law, the competent court shall decide on all crimes against the accused, unless separate documents of these crimes are settled before being submitted to the Court.

        • Article27

           1-The competent court-if needed- may seek the assistance of experts, and may conduct the testimony of witnesses in the absence of the accused person and his lawyer. The accused or his lawyer shall be informed of the content of the expert report and the testimony without disclosing the identity of person made it. Necessary protection must be provided as required by the state of the witness or expert, the circumstances of the case and the types of potential risks.
           
           2-The president of the competent court may, at the time of the proceedings, permit the recording, transmission or presentation of any proceedings of the trial.
           

        • Article 28

          The competent authority may execute the order of a provisional seizure of funds or instrumentalities or proceeds promptly.

        • Article 29

          1.The prosecution in any of the crimes provided for in this Law shall not be eliminated by the extension of the period.
           
          2.In the case of the preservation of the papers or the prosecution of the accused – due to the loss of eligibility
           
          -in any of the crimes provided for in this Law, he shall be placed in a specialized treatment center, provided that when the absence of symptoms of incapacity is presented to the Public Prosecution to consider the resumption of the prosecution.
           

      • Chapter 4 Sanctions

        • Article 30

          Whoever describes, explicitly or implicitly, the King or the Crown Prince as infidel, or challenges him in his religion or justice shall be sentenced to no more than a ten-year prison term of no less than a five-year term.

        • Article 31

          Whoever carries a weapon or explosives for executing a terrorist crime shall be sentenced to no more than a 30-year prison term or no less than a 10-year prison term.

        • Article 32

          Whoever establishes or manages a terrorist entity or assumes a leading position therein, shall be sentenced to no more than a twenty-five-year prison term or no less than a fifteen-year prison term. Should the doer be an officer in the armed forces, or one of their staff, or should he have received training at a terrorist entity, the prison sentence shall not be less 20 years or no more than thirty years.

        • Article 33

          Whoever joins a terrorist entity or participates therein shall be sentenced to no more than a twenty-year prison term or no less than a three-year term. Should the doer be an officer in the armed forces, or one of their staff, or should he have received training at a terrorist entity, the prison sentence shall not be less 15 years or no more than thirty years.

        • Article 34

          Whoever supports or call for any terrorist ideology, a terrorist entity, a terrorist crime or the approach of its perpetrator, expresses sympathy with it, justifies the act of the crime, promotes, or lauds it, or acquires or obtains any document , publications or recorded materials – with intention of publication or promotion- whatever their types are that include justification or promotion of the terrorist ideology , the terrorist offence and lauding same, shall be sentenced to no more than an eight-year prison term or no less than a three-year term.

        • Article 35

          Whoever instigates another person to join any terrorist entity or to participate in its activities, or recruits, or contributed to financing any such act shall be sentenced to no more than twenty-five-year prison term or no less than an eight-year term; however, should he ban him from withdrawal from the entity, or exploits for this purpose his competence, power or responsibility over him or any other educational, training, guidance, social, instructive or information capacity the punishment shall not be less than fifteen years.

        • Article 36

          Whoever performs any of the following acts – for committing any of the crimes set forth under this Law- shall be sentenced to no more than a twenty-year prison term or no less than ten years: 
           
          1.Dedicates, prepares or manages a place for training.
           
          2.Trains, receives trains or finance training in any of the following:
           
           a)Use of any weapons, explosives, nuclear, chemical, biological, radiant, or poisonous materials, or criminating devices, or any wire and wireless communication or electronic mediums, or their manufacturing, preparation, assembling, development, preparation, acquisition, possession or importing them.
           
           b)Forgery or use of information media or methods.
           
           c)Warfare technics or fighting skills.
           

        • Article 37

          Whoever provides a terrorist entity, any of its members, or any terrorist with any weapons, explosives, ammunitions, nuclear, chemical, biological, radiant, poisonous materials or burning devices, shall be sentenced to no more than a thirty-year prison term or no less than ten years.

          In addition, whoever provides a terrorist entity, any of its leaders, any of its members or any person who is related to crimes stipulated in the present law, with any valid or forged documents.

        • Article 38

          Whoever provides a terrorist entity, any of its members or any terrorist with any communication means, or furnishes any of them with information, consultation, assistance, a livelihood means, housing, shelter, medical care, transport, a meeting place or any other facilities that could help in achieving their purposes, shall be punished by no more than twenty year prison term or no less than a ten-year term.

        • Article 39

          Whoever smuggles any weapons, ammunitions, explosives, nuclear or chemical, biological, radiant or poisonous materials, or any burning devices, any wire or wireless or electronic communication mediums, or manufactures develops, assembles, prepares imports acquires or possesses them, or smuggles any of the raw materials or devices used in manufacturing, preparing and providing them, or transporting them through post parcels, public and private transport means or any other means with the intention of their use in committing any of the crimes state in this Law, shall be punished by no more than a twenty-five-years prison terms or no less than a fifteen-year term.

        • Article 40

          Whoever kidnaps a person, detains or imprisons him, or threatens of any of such deeds for committing a terrorist offence or terrorism financing crime shall be sentenced to no more than a thirty-year prison term or no less than a ten-year term. The court may sentenced a death if any of such deeds was associated with using of weapons or explosives for threatening.

        • Article 41

          Whoever highjacks any means of air, sea or land transport or threatens to carry out any of such acts for committing a terrorist crime or terrorism financing offence shall be sentenced to no more than a thirty-year prison term or no less than a ten-year term. The court may sentenced to death if any of such deeds was accompanied with the use of or threatening with weapons or explosives.

        • Article 42

          Whoever destroys any of the public or private utilities or any means of transport, or any air, sea or land companies or platforms fixed at the bottom of the sea, exposes them to risks, damages them of obstruct service therein, for executing a terrorist crime, shall be sentenced to no more than a fifteen-year prison term or no less than an eight-year term.

        • Article 43

          Whoever establishes a web site on the internet or a program on a computer system or any electronic systems, or transmits any of them for committing a crime stipulated under this law, or facilitate communication with a leader or members of any terrorist entity, or promulgate its thoughts, or finances it, publishes how to manufacture burning devices or explosives, or any other device for their use in committing a terrorist offence shall be sentenced to no more than a twenty-year prison term or no less than a five-year term.

        • Article 44

          Whoever broadcast in any means news, a statement, false or malicious rumor for implementing a terrorist crime, shall be sentenced to no more than a five-year prison term or no less than one-year term.

        • Article 45

          Whoever selects the Kingdom’s territories as a location for planning or meeting to commit a terrorist crime or TF offence or a TF crime outside the Kingdom shall be sentenced to no more than a ten-year prison term or no less than a five-year term.

        • Article 46

          Whoever obstructs the progress of investigation or trial, or attacks or threatens to attack any of the officers enforcing the provisions of this Law, or challenges him or attacks or threaten to attack any of his relatives or properties , shall be punished by a prison term of no more than ten years or no less than a three-year term.

        • Article 47

          Whoever provides, raises, collects, and receives funds or allocates, transfers, converts , acquires them, or calls for contributing such funds in any manner, directly or indirectly, from a legitimate or illegitimate sources- with the intention that they should be used or in the knowledge that they are to be use wholly or in part for committing a terrorist offence, inside or outside the Kingdom or they are related to it or they will be used by a terrorist entity or a terrorist for whatever purpose, even if the crime has not occurred or the funds have not been used, shall be sentenced to no more than fifteen-year prison term and no less than a five-year term. If the doer has exploited, for this purpose, the facilities empowered to him by his job capacity or his professional activity or social standing, the punishment shall not be less a ten-year prison term.

        • Article 48

          Whoever has traveled to another State for the purpose of committing any of the offenses set out in this Law shall be punished by imprisonment for a term not exceeding fifteen years and not less than five years.

        • Article 49

          Any legal person whose any of his owners, representatives, directors, or agents have committed any of the offences set out in this law or contributed thereto shall be sentenced to a fine of no more than ten million Saudi riyals and no less than three million Saudi riyals, if the crime has occurred in his name or for his own account without prejudice to the responsibility of the natural person who has committed the crime. Courts may have the right to suspend the activity of the legal person on a temporary or permanent basis, or close his offices associated with the crime on a temporary or permanent basis, liquidate his business or appoint a judicial guard to manage funds and transactions. In all cases, the judgement issued against him shall provide for publishing a summary thereof at the cost of the sentenced legal person in a local newspaper issued at his residency area. If no newspaper exits in residency area, it will be published at the region closest to him, or the summary may be published in any appropriate means.

        • Article 50

           1)Whoever commits any act stipulated in this law resulting in the death of one or more persons shall be sentenced to death.
           
           2)The imprisonment penalty term for whoever commits any of the crimes stated in this Law shall not be less than half of the greater term specified if its execution is associated with any of the following:
           
            a)Use or threaten to use any weapons or explosives,
                     		 
            b)If the crime is committed through any club or NPO,
                     		 
            c)If the perpetrator resumes committing the crime,
                     		 
            d)Exploitation of minors and so on in committing the crime.
                     		 

        • Article 51

           1)Whoever attempt to commit any of the crime set forth in this Law shall be subject to the punishment prescribed for this act.
           
           2)Whoever commits one of the following acts shall deemed as a partner and he shall be punished by the penalty prescribed for the crime:
           
            A)Participated through agreement, instigation or help in committing any of the deeds stated in this Law,
                     		 
            B)Deliberately concealed or destroyed things used or prepared to be used in committing any of the acts stated in this Law or obtained thereof or documents that could have disclosed the crime and its evidence or the punishment of the person who had committed the crime.
                     		 
            C)Enabled a detainee, prisoner or a person wanted in a terrorist crime to run away.
                     		 

        • Article 52

          None of the punishments prescribed under this Law shall prejudice a more severe punishment based on the provisions of Islamic Sharia Law or other laws.

        • Article 53

          1.A Saudi citizen, convicted for imprisonment in cases related to the crimes stated in this Law, shall be banned from travel outside the Kingdom-on completion of his prison term- for a period similar to the punishment term of which he had been convicted.
           
          2.A non-Saudi person, convicted of a prison term in cases related to the crimes stated in this Law, shall be repatriated from the Kingdom upon the completion of his punishment, and he shall not be permitted to return to the Kingdom.
           

        • Article 54

          Whoever has been aware of an attempt for the execution of a terrorist crime or its financing and has not reported it to the competent authority, with his ability to report, shall be sentenced to no more than a five- year prison term.

        • Article 55

          Whoever covers any of the crimes stipulated in this Law or one of its perpetrators shall be sentenced to no more than five-year prison term.

        • Article 56

          The competent court may reduce the punishments prescribed under this Law, provided that imprisonment punishment shall not be less than the half of the minimum sentence prescribed, and the fine punishment shall not be less than half of the limit prescribed, if the perpetrator informs competent authorities, of information that could not have been reached at in other ways. This is to help in: 
           
           a)Prevent the commitment of any crime stipulated in this law.
           
           b)Identify others accomplices of the crime or their legal persecution.
           
           c)Obtain evidence.
           
           d)Avoid the effects of the crime or reducing them.
           
           e)Deprive terrorist entities or terrorists form having access to funds or prevent their control over them.
           

        • Article 57

          The competent court may suspend the sentence of imprisonment for reasonable reasons which leads to the belief that the sentenced person will not return to commit any of the crimes stipulated in the law, provided that: 
           
           1-No previous judgment on one of the crimes stipulated in the Law.
           
           2-To show regret for his crime.
           
          If the convict returns to commit any of the offenses set out in the provisions of the Law, the suspension of execution shall be suspended without prejudice to the penalty prescribed for the new offense. 
           

      • Chapter 5 Confiscation

        • Article 58

          Without prejudice to the rights of third persons in good faith, the Court shall in the event of a conviction; issue an order to confiscate the following: 
           
           a.Proceeds of the crime, including proceeds intermingled with funds acquired from legitimate sources up to the value of the intermingled proceeds;
           
           b.Instrumentalities; and
           
           c.Funds related to the crimes stipulated in this law, or intend to be used.
           

        • Article 59

          In cases where confiscation of funds, proceeds of the crime, instrumentalities, are not possible because the funds are no longer available for confiscation or cannot be located, the court shall order confiscation of any other funds owned by the convict in order to recover an amount that is equivalent in value to funds under Article 58.

        • Article 60

          funds, proceeds of the crime, instrumentalities may not be confiscated if the owner can establish that he/she acquired the funds by paying a fair price or in return for the provision of services corresponding to the value of such funds or based on other legitimate grounds, and that he/she was unaware of their illicit origin.

        • Article 61

          The competent court may invalidate or prohibit an activity or action, whether contractual or otherwise, if one or more of the parties knew or should have known that such an activity could prejudice the ability of the competent authorities to seize or recover funds subject to confiscation.

        • Article 62

          If the confiscation of funds, Instrumentalities or proceeds is deemed to be non-destructive, the competent authority may act in accordance with the law, recover or share them with countries that have conventions or treaties with the Kingdom.

      • Chapter 6 Preventive Measures

        • Article 63

          FIs, DNFBPs, and NPOs shall identify, assess, understand and document its financing of terrorism risks, taking into account a wide range of risk factors, including those relating to its customers, countries or geographic areas, products, services, transactions and delivery channels, and provide its risk assessment report to the supervisory authorities upon request. The risk assessment under this Article shall include an assessment, prior to their use, of the risks associated with new products, business practices and technologies.

        • Article 64

          FIs and DNFBPs shall apply due diligence measures, and determine the extent of due diligence measures, on the basis of TF risks, to its customers and the business relationship, and shall apply enhanced due diligence measures when the TF risks are high. The Implementing Regulation shall set forth the instances in which such measures shall be taken and the types of measures to be taken.

        • Article 65:

           1-FIs, and DNFBPs shall keep records, for all domestic or foreign financial transactions as well as commercial and monetary transactions, keep all records and documents for a period of no less than ten years from the date of concluding the transaction or closure of account.
           
           2-In specific cases, the Public Prosecution may oblige FIs and DNFBPs to extend the record keeping period for as long as required for the purpose of a criminal investigation or prosecution.
           
           3-Records shall be sufficient to permit reconstruction of transactions and shall be maintained in a manner so that they can be readily made available to competent authorities upon request.
           

        • Article 66

          FIs and DNFBPs shall apply enhanced due diligence measures proportionate to the risks involving business relationships and transactions with a person from a country that was identified as high risk by the FIs, DNFBPs, or the Permanent Committee on Combating Terrorism and its financing. FIs and DNFBPs shall apply the risk mitigating measures prescribed by the supervisory authorities.

        • Article 67

          FIs, DNFBPs, and NPOs shall have in place and effectively implement policies, procedures and controls against financing of terrorism, aimed at managing and mitigating any risks identified. The Implementing Regulation shall specify matters to be addressed by such policies, procedures and controls.

        • Article 68

           1-Before entering into a cross-border relationship with other institutions, financial institutions shall apply appropriate risk mitigation measures, as prescribed by the Anti-Money Laundering Law.
           
           2-FIs shall apply the requirements stipulated in the AML Law when practice wire transfer activity.
           

        • Article 69

          FIs and DNFBPs must monitor and scrutinize transactions, documents, and data on an ongoing basis as prescribed by the relevant provisions stipulated in the Anti-Money Laundering Law, and examine any complex and unusual large transaction, and any unusual pattern of transactions that has no clear economic or legal objective.

        • Article 70

          FIs, DNFBPs, and NPOs including the providers of legal and account services that suspect or has reasonable grounds to suspect that funds or parts thereof are related or linked to or be used for financing of terrorism, including attempts to initiate such a transaction, shall take the following measures: 
           
           1-Promptly and directly, Report such transaction to the General Directorate of Financial Intelligence; and provide a detailed report including all available data and information on such transaction and relevant parties.
           
           2-Respond to requests from the Directorate for additional information.
           

        • Article 71

           1-FIs, DNFBPs, and NPOs as well as their Members of Board of Directors, directors, Members of its executive or supervisory management, and employees are prohibited from disclosing to a customer or any other person the fact that a report under this Law or related information will be, is being or has been submitted to the Directorate, or that a criminal investigation is being or has been carried out. This shall not preclude disclosures or communications between directors and employees or communications with lawyers or competent authorities.
           
           2-FIs, DNFBPs, and NPOs as well as their Members of Board of Directors, directors, Members of its executive or supervisory management, and employees shall be protected from any liability toward the reported if they report their suspicions to the Directorate in good faith
           

      • Chapter 7 International Cooperation

        • Article 72

          Competent authorities may exchange information with and make inquiries or joint investigation on behalf of foreign counterparts for the purpose of providing assistance in the investigation or controlled delivery to the funds, with countries that are signatories with the Kingdom to valid agreements, or on the basis of reciprocity. This shall be done pursuant to applicable statutory procedures, without prejudice to the national sovereignty of the country or provisions and customs related to confidentiality of information.

        • Article 73

          An accused person or convicted of a crime set out in the law may be extradited to and from another state provided that such extradition is pursuant to a valid agreement between the Kingdom and the requesting state, or on the basis of reciprocity. If the extradition request is denied, he shall be tried before the competent courts in the Kingdom, using investigations provided by the state requesting extradition.

        • Article 74:

          The Committee for Mutual Legal Assistance shall receive and process requests for mutual legal assistance concerning crimes set out in this law.

        • Article 75

          The Permanente Committee for Combating Terrorism and its financing receive requests from countries and organizations for the implementation of UN Security Council Resolutions relating to the prevention and suppression of terrorism and financing of terrorism. The Committee shall put in place, and update, mechanisms, and take the necessary measures are be taken to implement the said resolutions by the committee. The mechanisms shall be issued pursuant to a decision by the President of State Security.

      • Chapter 8 The General Directorate of Financial Intelligence

        • Article 76

          The Directorate – as a national central agency, shall enjoy adequate operational independence, shall undertake receiving suspicious transaction reports or other reports or information relating to financing of terrorism as provided for by this Law and the Implementing Regulation, to analyze such reports and information, and to disseminate the results of its analysis to competent authorities, either spontaneously or upon request.

        • Article 77

           1-The Directorate is authorized to obtain any additional information that the Directorate deems necessary to properly carry out its analysis. In cases where a financial institution has not submitted a report under Article 70, or the Directorate’s request does not relate to a report submitted by the requested financial institution, the Directorate shall request to provide the requested information only through the supervisory authority. The FI must provide the requested information promptly.
           
           2-The Directorate may obtain any financial, administrative, or law enforcement information and any relevant information collected or maintained by or on behalf of competent authorities that it considers is necessary to carry out its function as per the legal provisions.
           

        • Article 78

          Every person with duties for or within the Directorate is required to keep confidential any information obtained within the scope of these duties, even after the cessation of those duties.

        • Article 79

          The Directorate may, on its own motion or by request, disseminate information and the results of its analysis to relevant competent authorities when there are grounds to suspect that a transaction is related to financing of terrorism. The Directorate shall have the authority to carry out its function freely, including the autonomous decision to conduct analysis, request, disseminate or forward specific information.

        • Article 80

          Information disclosed to The Directorate may be exchanged with competent authorities.

        • Article 81

           1-The Directorate may seek from or share with a foreign counterpart any information it has received in the course of its functions, and the Directorate may enter into an agreement or arrangement as per the legal procedures to facilitate the exchange of information with a foreign concerned authority.
           
           2-Whenever the Directorate provides information under this Article to a foreign counterpart, it shall obtain from that foreign authority a suitable declaration or undertaking that the information provided by the Directorate will only be used for the purpose for which it was sought, unless the foreign counterpart agency seeks and obtains the agreement of the Directorate for the information to be used for another purpose.
           

      • Chapter 9 Supervision

        • Article 82

          Supervisory authorities shall have the following powers and duties to carry out their mandate: 
           
          1.Collect information and other data from FIs, DNFBPs, and NPOs; and apply appropriate supervisory measures, including on-site inspections and offsite measures;
           
          2.Compel the FIs, DNFBPs, and NPOs to provide any information that the supervisory authority considers relevant to carry out its function, and take copies of documents and files, however and wherever stored;
           
          3.Carry out an financing of terrorism risk assessment for the sectors for which the authority has a supervisory mandate;
           
          4.Issue guidance, decisions and instructions, rules or any other instruments to FIs, DNFBPs, and NPOs to implement the provisions of this Law;
           
          5.Cooperate and share available or accessible supervisory information that is relevant to combating financing of terrorism supervision with any foreign counterpart or carry out inquiries on behalf of any foreign counterpart, or request any such information or cooperation from a foreign counterpart;
           
          6.Verify that the FIs, DNFBPs, and NPOs adopt and enforces measures consistent with this Law, and implement to its foreign branches and majority owned subsidiaries to the extent permitted by the laws of the foreign country;
           
          7.Establish and apply effective fit and proper screening procedures for any person aiming to participate in the management or supervision of the FIs, DNFBPs, and NPOs or for any person aiming to own or control, directly or indirectly, or becoming a beneficial owner of significant shares of a reporting entity; and
           
          8.Maintain statistics concerning any measure adopted and sanction imposed.
           

        • Article 83

          Without prejudice to any stricter sanctions and subject to the procedures provided for in other laws, if the supervisory authority find that FIs, DNFBPs, and NPOs or any of their directors, board members, executive or supervisory management members failed to comply with any provision of this Law, its Implementing Regulation or relevant decisions or circulars, or any violation referred from other competent authority, the supervisory authority may impose one or more of the following measures: 
           
          1.Issue a written warning;
           
          2.Issue an order to comply with a specific instruction;
           
          3.Issue an order to provide regular reports on the measures taken to address the identified violation;
           
          4.Impose a monetary fine of up to 5.000.000 riyals per violation;
           
          5.Ban individuals from employment within the sectors for which the supervisory authority has competences for a period to be determined by the supervisory authority;
           
          6.Restrict the powers of directors, board members, executive or supervisory management members, and controlling owners, including appointing one or more temporary controllers;
           
          7.Dismiss or replace the directors, members of the Board of Directors or of executive or supervisory management;
           
          8.Suspend, restrict or prohibit the continuation of the activity, business or profession or of certain business activities or products;
           
          9.Suspend, restrict or withdraw the license;
           

      • Chapter 10 Concluding Provisions

        • Article 84

          The Permanent Committee for Counter terrorism and its Financing shall coordinate, revise and update periodically national policies in the field of counter-terrorism and its financing, on the basis of international obligations, requirements and developments, as well as the assessment and financing of terrorism risks, including high-risk countries. The President of State Security shall issue the internal regulation for the Permanent Committee for Counter terrorism and its Financing.

        • Article 85

          The competent authorities shall: 
           
           1-Ensure the rights of victims in the offenses set forth in this Law, through providing the proper help and support to get their rights,
           
           2-Provide the necessary protection to witnesses, sources, judges, prosecutors, investigators, defense counsel and others in the event of serious reasons that endanger their lives, safety, basic interests or family members to damage or danger.
           
          The Implementing Regulation shall set the proper mechanism therein. 
           

        • Article 86

          Competent authorities in the kingdom may exchange information with each other that are released by FIs, DNFBPs, and NPOs. This shall be done pursuant to applicable statutory procedures, without prejudice to the provisions and customs related to confidentiality of information.

        • Article 87

          Any person concerned with the implementation of the provisions of this Law shall maintain the confidentiality of information he becomes privy to, and such information may not be disclosed except for the use of the competent authorities. Unless justified, no disclosure may be made to any person of any of the reporting, inquiry, investigation or trial procedures, or of data related thereto, in respect of any of the crimes set forth in this Law.

        • Article 88

          Specialized Centers shall establish. The centers are mandated to provide care to persons detained for or convicted of any of the crimes provided for in this Law, to correct their ideas and deepening national affiliation. The rules of work of the committees in these centers and how to form them, and rewarding their members and those who are assisted shall issue by the President of State Security.

        • Article 89

          The State Security Presidency shall establish "Correction and Rehabilitation Centers" which provide care to persons detained for or convicted of any of the crimes provided for in this Law, which aim to facilitate their integration into society, deepen their national affiliation, and correct their misconceptions, and the President of the State Security shall issue the rules governing the role and rewards of its employees and collaborators.

        • Article 90

          The President of the State Security shall issue a list of security procedures, rights, duties, breaches and penalties, classification of detainees and prisoners within the detention centers and prisons designated for the implementation of the provisions of this Law, and what is necessary to rectify and improve their social and health conditions.

        • Article 91

          Inferring the intent, the knowledge or the purpose of committing a crime of terrorism or the crime of financing terrorism shall be through the circumstances and the objective and factual circumstances of the case.

        • Article 92

          The provision set out in the Anti-Money Laundering Law shall also apply for FIs, DNFBPs, and NPOs in cases not provided for in this law.

        • Article 93

          The provisions of the Criminal Procedures Law shall apply in cases not provided for in this Law.

        • Article 94

          This law shall replace the law of terrorist crimes and its financing, issued by Royal Decree No. (M / 16) dated 24/2/1435 AH, and repeal any contrary provisions.

        • Article 95

          The Council of ministers shall issue Implementing Regulations after the preparation of state security presidency, public prosecution, ministry of justice, and Ministry of Finance within no more than (180) days.

        • Article 96

          This Law shall enter into force on the day following the date of its publication in the Official Gazette.

    • Implementing Regulations of the Law of Combating Terrorist Crimes and its Financing

      No: 228 Date(g): 8/1/2019 | Date(h): 2/5/1440Status: In-Force
      The Implementing Regulations of the law of Combating Terrorism and Financing of Terrorism promulgated by the Minister Council Decision No. (228) dated 02/05/1440H (corresponding to 08/01/2019) amended in accordance with the Royal Decree Royal Order No. (637) dated 17/10/1441H (corresponding to 09/06/2020).

      • Article 1

        The financial activities or transactions referred to in Article 1(14) of the Law are:

         1.accepting deposits and other payable funds, including private banking services; 
         2.lending, finance leasing, or any other financing activity; 
         3.providing wire transfer or currency exchange services; 
         4.issuing and managing payment instruments, including: credit cards, debit cards, checks, traveler’s checks, payment orders, bank transfers, and electronic currency; 
         5.issuing letters of guarantee or other securities; 
         6.engaging in foreign currency exchange; 
         7.participating in the issuance of securities and the provision of financial services; 
         8.managing investment portfolios; 
         9.maintaining and managing cash or securities on behalf of others; 
         10.concluding contracts of protection, savings, or other investment-related types of insurance, in the capacity of an insurer, broker, or agent in an insurance contract or any insurance company product; 
         11.investing and managing funds on behalf of others; and 
         12.engaging in activities related to securities, as provided in the Capital Market Law and its Regulations, or the following trading activities: 
          a.certificates of deposit, derivatives, and other instruments;
          b.currencies;
          c.currency exchange instruments, interest rates, and financial indicators;
          d.tradable securities and financial derivatives; and
          e.commodity futures contracts.

      • Article 2

        Commercial or professional activities referred to in Article 1(15) of the Law are:

         1.real estate brokerage; 
         2.trading in gold, precious stones, or metals where the value of the transaction exceeds 50,000 Saudi riyals, whether said transaction is carried out in a single transaction or seemingly-linked multiple transactions, and whether carried out through a sole proprietorship or a commercial company; and 
         3.legal or accounting services relating to any of the following activities that are provided by lawyers, accountants, or other persons in the practice of their profession: 
          a.customer’s purchase, sale, or lease of real property;
          b.management of a customer's funds, including his bank or investment accounts or his other assets;
          c.establishment, operation, or management of entities with legal personality or subject to a legal arrangement, or the organization of subscriptions related thereto; and
          d.customer’s acquisition or sale of commercial companies.

      • Article 3

        Activities that a customer conducts or attempts to conduct with a financial institution or a non-financial business and profession, referred to in Article 1(17) of the Law are:

         1.arranging or performing any transaction or business relationship, or opening an account for the customer;
         2.signing an approval of any transaction, business relationship, or account;
         3.designating an account for a certain transaction;
         4.transferring an account, rights, or liabilities pursuant to a certain transaction; and
         5.authorizing the customer to conduct a transaction or control a business relationship or an account.

      • Article 5

         1.For purposes of applying Article 5 of the Law, the Public Prosecution shall be immediately notified upon arresting a suspect for committing one of the crimes stipulated in the Law, and the suspect shall be brought before it upon completion of the pre-investigation proceedings within seven days from the date of his arrest.
         2.If the pre-investigation proceedings and examination of the suspect require extension of the period referred to in Article 5 of the Law, the Presidency of State Security shall file a reasoned request to the Public Prosecutor or his designee to issue a written order extending such period for a period or periods not exceeding seven days in aggregate.

      • Article 6

         1.Upon receipt of a request in accordance with the provisions of Article 6 of the Law, the agency monitoring a financial institution shall immediately refer such request to the financial institution without giving notice to the concerned party, to submit required records, documents, or information to the monitoring agency within the period and manner specified in the request.
         2.Any person, designated non-financial business and profession, or nonprofit organization shall, upon receiving a request for providing any records, documents, or information in accordance with Article 6 of the Law, execute the request within the period and manner specified in the request.
         3.The monitoring agency shall, upon receiving the required records, documents, or information, immediately notify the requesting agency and provide it with such records, documents, or information within the period and manner specified in the request.

      • Article 7

        In implementation of Article 7 of the Law:

         1.A warrant to enter and search residences shall be issued by the head of the public prosecution branch in the area or his designee. 
         2.A warrant to enter and search non-residential premises shall be issued by an investigator having territorial and subject-matter jurisdiction. 
         3.A warrant to enter and search residences, offices, or buildings shall be in writing. The warrant shall be reasoned and shall include the name, signature, and capacity of the person who issued it; date and time of issuance; and scope of the search. 
         4.The exigent circumstances referred to in Article 7(3) of the Law, where no warrant is required to enter and search residences, offices, or buildings shall include: 
          a.Cases of flagrante delicto in crimes stipulated in the Law.
          b.If, based on field or technical investigation, it is established that failure to respond promptly might result in the escape of wanted persons; destruction, disposition of, or removal of evidence relating to any of the crimes stipulated in the Law; or loss of crime funds, proceeds, means, documents, possessions, and the like.
         

        Reasons and findings of the search shall be submitted to the Public Prosecution within a period not exceeding 24 hours from completion of such search.

      • Article 8

         1.If proceedings in a case are stayed in accordance with the provisions of Article 11 of the Law, the Public Prosecution may refer the case to the pre-investigation agency , and it may resume the case if the need arises.
         2.If the stay of proceedings does not apply to other accused persons in the same case, the Public Prosecution may assign separate papers for those against whom the proceedings are stayed.

      • Article 10

        The terms and conditions of provisional release referred to in Article 13 of the Law shall be as follows:

         1.the provisional release does not entail any security concerns;
         2.the provisional release shall be granted for social or health reasons, or reasons relating to a pre-investigation procedure; and
         3.the released person shall comply with procedures and restrictions stipulated in the provisional release order.

      • Article 11

         1.The Saudi Customs shall, in accordance with its powers, apply the provisions stipulated in Article 17 of the Law, in cases of suspicion of terrorism financing, whether or not a true or false declaration is submitted.
         2.The Saudi Customs shall require any person carrying currencies, bearer negotiable instruments, gold bars, precious metals or stones, or jewelry suspected to be used in financing terrorism, if any, to provide any information relating to the source and purpose of such items, or any other information it deems necessary.
         3.The Saudi Customs shall prepare a report stating grounds for suspicion, a list of seized items, any other relevant information, and action taken .
         4.The Saudi Customs shall take any additional measures in the carrying out of its duties relating to the combating of terrorism financing.

      • Article 12

         1.If the interest of the investigation requires the detention of the person accused of committing any of the crimes stipulated in the Law, the investigator shall issue a warrant for his detention for a period not exceeding 30 days from the date of referral to the Public Prosecution. If the investigator decides to extend such period, he shall, prior to its expiry, refer the case to the head of the Public Prosecution branch or his designee from among the heads of departments within his jurisdiction, to issue an order extending his detention for a period or successive periods, none of which exceeds 30 days and the aggregate of the successive periods does not exceed 180 days from the date of referral to the Public Prosecution. In cases requiring longer detention periods, the matter shall be referred to the Public Prosecutor, or his designee from among his deputies, to issue an order extending detention for a period or successive periods, none of which exceeds 30 days, and the aggregate of which does not exceed 12 months from the date of referral to the Public Prosecution.
         2.The detention department shall coordinate with the Public Prosecution in ample time prior to the expiry of the period or periods stated in the detention warrant, and the accused may not be released except pursuant to an order issued by the Public Prosecution.

      • Article 13

        An order issued by the Public Prosecution in accordance with Article 20 of the Law banning contact with the accused shall specify the persons covered by such order.

      • Article 14

        Final foreign judgments relating to terrorist crimes or its financing, including judgments relating to the confiscation of funds, proceeds, or means associated with any crimes referred to in Article 24(3) of the Law shall be enforced in accordance with the Kingdom’s laws. To consider a request from a foreign state, the following must be satisfied:

         1.attachment of an official copy of the judgment and the legal basis upon which it was based, along with proof that the judgment is final and that it was rendered by a competent court in the requesting state;
         2.the person against whom the judgment was rendered was summoned to appear before the court and was duly represented and given the opportunity to defend himself;
         3.the judgment shall not conflict with the provisions of Sharia and public order in the Kingdom;
         4.the judgment shall be enforceable;
         5.the judgment shall not conflict with a judgment previously rendered by a court in the Kingdom in the same case;
         6.the judgment sought to be enforced does not relate to a crime being considered by a court in the Kingdom;
         7.attachment of a list of procedures and measures taken by the requesting state for the protection of bona fide persons; and
         8.attachment of a description of the funds subject of enforcement, estimate of their value, their potential location, information relating to any person holding or in possession of such funds, and a statement of the facts upon which the request is based.

      • Article 15

        The competent authority referred to in Article 62 of the Law, in charge of the recovery and division of confiscated funds, proceeds, or means among states that are signatories to valid treaties and agreements with the Kingdom, is the Standing Committee for Legal Assistance Requests at the Ministry of Interior.

      • Article 16

        Upon assessment of risks of terrorism financing in accordance with the provisions of Article 63 of the Law, financial institutions, designated nonfinancial businesses and professions, and non-profit organizations shall observe the following:

         1.risk factors associated with customers and factors associated with the beneficial owner or the beneficiary of the transactions;
         2.risk factors arising from countries or geographic areas where the customers conduct their business, or from the source or purpose of the transaction;
         3.risks arising from the nature or channels of delivery of the products, services, or transactions offered; and
         4.any risks identified at the national level, or any variables that may increase or decrease risks of terrorism financing, the purpose of the account or business relationship, the volume of deposits or transactions carried out by the customer, the frequency of his transactions, or the duration of the business relationship.

      • Article 17

         1.Financial institutions and designated non-financial businesses and professions shall apply the due diligence measures referred to in Article 64 of the Law in the following cases:  
          a.prior to opening an account or establishing a business relationship; 
          b.prior to conducting a transaction for the benefit of a customer with whom they have no business relationship, whether such transaction is conducted only once or through multiple transactions where they appear to be linked; 
          c.prior to conducting a wire transfer for the benefit of a customer with whom they have no business relationship; 
          d.upon suspicion of a terrorism financing transaction, regardless of the amount; and 
          e.upon suspicion of the accuracy or adequacy of their customer’s particulars. 
         2.Financial institutions and designated non-financial businesses and professions shall, in the absence of suspicion of terrorism financing, apply due diligence measures based on the type and level of the risk posed by the customer or the business relationship associated therewith, in proportion to the specified risks. Due diligence measures shall be strengthened or mitigated depending on the levels of risks posed. In cases of suspicion of terrorism financing, enhanced due diligence measures shall be applied.  
         3.Financial institutions and designated non-financial businesses and professions shall apply due diligence measures, including, at a minimum, the following:  
          a.verifying the customer’s identity by using documents, data, or information from a reliable and independent source, as follows: 
           i.for a natural person: obtaining and verifying his full name as stated in official records, residence address or registered national address, place and date of birth, and nationality.
           ii.for a person with legal personality or subject to a legal arrangement: obtaining and verifying its name, legal structure, proof of incorporation, powers, names of directors and senior staff, registered official address, and the place of business, if different from the registered official address.
           iii.requesting and verifying any additional information according to the risks posed by the customer.
          b.verifying that the person acting on behalf of the customer is authorized to act in such capacity and verifying his identity, in accordance with the procedures stipulated in paragraph (a) of this Article; 
          c.verifying the identity of the beneficial owner by using documents, data, or information from a reliable and independent source, as follows: 
           i.verifying the identity of the person who owns or controls (25%) or more of the legal person.
           ii.in the absence of ownership or controlling share as stipulated in paragraph (1) above, or suspicion that the controlling shareholder is not the beneficial owner, the identity of the natural person exercising control over the legal person shall be verified by all means possible.
           iii.verifying the identity of the originator or administrator of the legal arrangement, the beneficiaries or classes of beneficiaries, and any other natural person exercising actual and ultimate control over the legal arrangement or holding a position similar to other types of legal arrangements.
          d.determining the purpose and nature of the business relationship and obtaining any additional information as needed. 
          e.determining the structure of ownership and control over the customer, whether a person having a legal personality or subject to a legal arrangement; and 
          f.any other measures imposed by the monitoring agency on financial institutions and designated non-financial businesses and professions. 
         4.To avoid any interruption of the normal conduct of business, financial institutions and designated non-financial businesses and professions may postpone the verification of the identity of the customer or the beneficial owner until after the establishment of the business relationship, provided the following are promptly taken:  
          a.appropriate and effective measures to control risks of terrorism financing; and 
          b.taking appropriate risk management measures if the customer is permitted to benefit from the business relationship prior to the verification process. 
         5.Financial institutions and designated non-financial businesses and professions shall apply due diligence measures to all business relationships according to risk level, audit transactions conducted during the business relationship to verify their consistency with the customer’s information, activities, and the risks posed by him. They shall also verify that documents, data, and information gathered while exercising due diligence are relevant and up to date through auditing their records, particularly those relating to high risk customers, and applying measures of due diligence to current customers and beneficial owners at appropriate times based on their importance and the risks associated with them.  
         6.Financial institutions and designated non-financial businesses and professions shall, in cases where application of due diligence measures is not feasible, take the following:  
          a.refuse to open an account for a new customer, establish a business relationship with him, or execute any transaction for his benefit; and 
          b.terminate the business relationships they have with their customers or existing business relationships.
                 		 

        In all cases, they shall report the matter to the General Directorate of Financial Intelligence.

         7.Due diligence measures may not be applied in cases where the financial institutions and designated non-financial businesses and professions suspect that a terrorism financing operation is underway and they believe that exercising due diligence may alert the customer of such suspicion. In such case, they shall promptly file a report of the suspicious operation to the General Directorate of Financial Intelligence and state the reasons as to why due diligence was not applied.

      • Article 18

         1.In setting the policies, procedures, and rules referred to in Article 67 of the Law, financial institutions, designated non-financial businesses and professions, and non-profit organizations shall include therein the following: 
          a.provisions relating to the measures provided in the Law and Regulations, including those relating to risk management procedures of business relationships taken prior to completion of customer verification;
          b.procedures for reporting suspicious transactions;
          c.appropriate measures for the compliance department for combating terrorism financing, including the appointment of a compliance officer at the senior management level;
          d.any additional measures adopted by the monitoring agency for the combating of terrorism financing;
          e.adequate screening procedures to ensure that recruitment meets high standards;
          f.continuing employee training programs;
          g.an independent audit procedure to test the effectiveness and adequacy of policies, procedures, and rules for combating terrorism financing; and
          h.risk management obligations associated with the operations of their subsidiaries outside the Kingdom and limitation thereof, as appropriate.
         

        It shall be taken into account, upon setting such policies, procedures, and rules, that they comply with the nature and volume of their business.

         2.Financial institutions and designated non-financial businesses and professions shall ensure that all of their branches and subsidiaries in a foreign country, in which they hold a majority share, comply with the requirements set forth in the Law and Regulations in cases where the requirements of combating terrorism financing in a foreign country are less stringent than those provided for in the Law and Regulations. If this is not permitted by the foreign country, the financial institutions and designated non-financial businesses and professions shall notify the monitoring agency in the Kingdom of the same, and shall comply with any instructions received from the competent monitoring agency in this regard.
         3.Based on the outcomes of risk assessment, financial institutions, designated non-financial businesses and professions, and non-profit organizations shall implement and update, monitor, and enhance, when necessary, internal rules, policies, and procedures for combatting terrorism financing. This shall include determining the risk level and proper measure for the effective management and mitigation of such risk.

      • Article 19

        The legal arrangement provided for in these Regulations shall include any legal relationship established between multiple parties under an agreement, such as trust funds or other similar arrangements.

      • Article 20

        The receiving, sending, or intermediary financial institutions of wire transfers shall comply with the requirements issued by the Standing Committee for Combating Terrorism and its Financing.

      • Article 21

         1.The competent agencies provided for in Article 72 of the Law are the Public Prosecution and the Presidency of State Security, each within its jurisdiction. Said agencies shall coordinate with relevant agencies, when necessary.
         2.Requests for controlled delivery of funds shall be executed in accordance with the provisions of the Procedures for the Implementation of the International Convention for the Suppression of Financing of Terrorism.
         3.The Presidency of State Security may, in assisting investigations, allow funds, proceeds, or means likely to be used in any of the crimes stipulated in this Law into or through the Kingdom’s territory, in order to identify persons related to the commission of any of the crimes stipulated in the Law.

      • Article 22

         1.The extradition referred to in Article 73 of the Law shall be governed by the bilateral agreements signed between the Kingdom and other states and the Kingdom's obligations under international conventions or protocols to which the Kingdom is party, or subject to the principle of reciprocity. 
         2.The act for which the extradition request is made must constitute a crime in the Kingdom and the requesting state . 
         3.An extradition request shall not be considered unless the following requirements are satisfied: 
          a.the request shall be in writing and delivered through official channels;
          b.attachment of the original or a true copy of the conviction judgment or the detention order issued against the person sought to be extradited;
          c.a list of crimes for which the extradition request is made as well as detailed information of such crimes, including time and place of commission;
          d.all necessary information to identify the person sought; and
          e.any other information the competent agencies deem necessary for the execution of the request .
         4.An extradition request, whether for nationals or residents, may be rejected. In cases of rejection, the matter shall be immediately referred to the Public Prosecution for the prosecution of the crime stated in the request. 

      • Article 23

         1.To carry out its duties, the General Directorate of Financial Intelligence may take all necessary measures, including the following: 
          a.use of modern technology; and
          b.development and update of forms for reporting suspicious transactions to be used by financial institutions, designated nonfinancial businesses and professions, and non-profit organizations.
         2.Upon receiving reports and information relating to a crime of terrorism financing, the General Directorate of Financial Intelligence shall conduct the following: 
          a.operational analysis: the use of information to identify specific targets, to track certain activities or transactions, and to determine links between such targets and potential proceeds of terrorism financing crimes; and
          b.strategic analysis: the use of information, including data submitted by other competent agencies, to identify the trends and patterns of terrorism financing crimes.

      • Article 24

         1.In cases where the monitoring agency obtains information from a foreign counterpart for monitoring purposes in accordance with Article 82(5) of the Law, such agency shall obtain the consent of the counterpart foreign agency prior to the transfer or use of such information. In the case where the monitoring agency is required to disclose or report such information, it shall immediately inform the foreign counterpart of such requirement.
         2.The agency monitoring financial institutions may, in implementation of Article 82(5) of the Law, conduct inquiries on behalf of counterpart foreign agencies, and may, at its discretion, authorize such agencies to conduct the inquiries or facilitate the same, for purposes of consolidated monitoring at the level of the financial group supervised by the monitoring agency.

      • Article 25

         1.The rights of victims and persons of similar status referred to in Article 85(1) of the Law shall be protected by raising their awareness of their rights and providing them with the assistance and support needed, including the hiring of lawyers. 
         2.Protection of persons referred to in Article 85(2) of the Law through one or more of the following: 
          a.provision of personal protection;
          b.provision of temporary residence;
          c.non-disclosure of identity information;
          d.designation of a telephone number for reporting a situation where the protected person is exposed to danger or harm;
          e.monitoring the means of communication upon obtaining the written consent of the protected person;
          f.recommending the assignment of the protected person to work at another place upon obtaining his written consent; and/or
          g.concealing the particulars of the witness or the informant in a manner that does not reveal their identity.
         

        The relevant agencies may take other measures to ensure the safety of persons referred to hereinabove.

      • Article 26

        These Regulations shall enter into force on the day following the date of its publication in the Official Gazette.

    • Systemically Important Financial Institutions

      No: M/38 Date(g): 10/12/2020 | Date(h): 25/4/1442Status: In-Force

      • Chapter 1: Definitions

        • Article 1

          1.In this Law, the following terms and phrases shall have the meanings assigned thereto, unless the context requires otherwise:
           
          Law: Law of Systemically Important Financial Institutions. 
           
          Implementing Regulations: Implementing regulations of the Law. 
           
          Competent Authority: The Saudi Central Bank or the Capital Market Authority, each with respect to financial institutions falling under its supervision. 
           
          Financial Institution: A financial institution supervised by the competent authority. 
           
          Systemically Important Financial Institution (SIFI): A financial institution designated by the competent authority as SIFI in accordance with Article 2 of this Law. 
           
          Foreign Branch: A branch of a non-Saudi financial institution supervised by the competent authority. 
           
          Holding Company: A financial or non-financial company controlling one or more subsidiary financial institutions. 
           
          Subsidiary: A financial or non-financial institution controlled by a financial institution. 
           
          Financial Group: A holding company and its subsidiaries, of which any is a financial institution. 
           
          Competent Judicial Authority: The commercial court with respect to financial institutions supervised by the Saudi Central Bank, and the committees for resolution of securities disputes with respect to financial institutions supervised by the Capital Market Authority. 
           
          Amendment of Rights: A measure taken by the competent authority to reduce or terminate the rights of creditors or holders of capital instruments, or convert them from one type or category to another. 
           
          Transferee: A person who purchases or receives any of the stocks, shares, assets, or liabilities of a SIFI under resolution in accordance with the provisions of this Law. 
           
          Transitional Entity: A company established by the competent authority to transfer all or part of the shares, stocks, assets, or liabilities of a financial institution or more under resolution in accordance with the provisions of this Law. 
           
          Asset Management Entity: An entity with a legal personality established by the competent authority to receive assets from a SIFI under resolution or a transitional entity. 
           
          Critical Activities: Services or acts provided by a financial institution, the suspension of which may lead to the disruption of services vital to the economy or damage financial stability. 
           
          Settlement Systems: Payment systems, cash settlement systems, securities settlement systems, deposit systems, and set-off systems. 
           
          Guarantee: An asset provided or agreed to be provided as security for a financial liability within a financial guarantee arrangement, or a financial guarantee arrangement by transfer of ownership. 
           
          Financial Guarantee Arrangements: Arrangements according to which the guarantor provides a guarantee to fulfill a financial liability, provided that it does not include the transfer of ownership of the guarantee to the obligee; this shall include pledges. 
           
          Financial Guarantee Arrangements by Transfer of Ownership: Arrangements by which the guarantor transfers the ownership of the guarantee to the obligee to guarantee the fulfilment of a financial liability; this shall include repurchase agreements. 
           
          Guaranteed Liability: Any financial liability secured by a guarantee. 
           
          Suspension: Suspending the right of any party, with the exception of the competent authority, to initiate or complete any procedure or action against a financial institution or its holding company or subsidiary. 
           
          Acceleration: Any arrangement which entails the maturity of a financial liability against a financial institution prior to the maturity date. 
           
          Termination: Any arrangement which grants the party engaged in dealings with the financial institution the right to terminate, suspend, reduce, or cancel the liabilities thereof, or the closure, set-off or liquidation of financial positions prior to the maturity date. 
           
          Assets: Movable and immovable property, intellectual property rights and receivables, whether current or future, and any associated rights, as well as other assets with current or future financial value. 
           
          Capital Instrument: What constitutes part of the capital of a financial institution, whether in the form of securities or shares. This includes instruments which enable its holder to subscribe to capital instruments. 
           
          Owner: Any natural or legal person who owns any capital instrument. 
           
          2.The Implementing Regulations shall include definitions of other terms mentioned in this Law.
           

      • Chapter 2: General Provisions

        • Article 2

          A financial institution shall be classified as SIFI pursuant to a decision by the competent authority based on criteria set thereby for institutions falling under its supervision, provided such criteria includes the size of the financial institution, interconnectedness and the complexity of its relations with local and foreign financial institutions, its modus operandi, and associated risks.

        • Article 3

          The competent authority may take resolution procedures against any SIFI or its owners or creditors to achieve any of the following objectives: 
           
          1.Protect the financial system and the financial sector in the Kingdom, and avoid and limit the impact of substantial adverse effects on their stability.
           
          2.Ensure the continuity of the critical activities of the SIFI under resolution.
           
          3.Reduce dependence on government support by relying on the resources and revenues of the financial institution.
           
          4.Protect deposits, client assets and funds, and rights arising from insurance policies.
           
          5.Protect settlement systems and ensure their stability.
           

        • Article 4

          This Law shall apply to financial institutions, holding companies, subsidiaries, foreign branches, and financial groups.

        • Article 5

          The Implementing Regulations shall regulate the relationship between the Saudi Central Bank and the Capital Market Authority with regard to the implementation of the resolution procedures on a financial group the financial institutions of which are supervised by either the Saudi Central Bank or the Capital Market Authority.

      • Chapter 3: Recovery Plan and Resolution Plan

        • Recovery Plan

          • Article 6

            1.The financial institution shall, within 180 days from the date of the request of the competent authority, prepare a recovery plan of the steps and procedures to be taken towards recovering its financial position upon exposure to fundamental changes with a negative impact.
             
            2.If the financial institution is a holding company, it shall prepare a recovery plan for the financial group and a recovery plan for each subsidiary financial institution.
             
            3.The recovery plan must include:
             
             a)a summary of its key components and an indication of the financial institution’s ability to recover;
             
             b)a summary of the fundamental changes in the financial institution since the last recovery plan submitted to the competent authority;
             
             c)an outreach and disclosure plan to address any anticipated negative reaction from the markets as a result of the impact of the fundamental changes on the financial institution;
             
             d)steps to recover capital and liquidity requirements, preserve the financial institution, and regain its financial position;
             
             e)an estimation of the timeframe required to implement the primary components of the plan;
             
             f)a detailed description of potential risks which may hinder implementation;
             
             g)identification of the critical activities provided by the financial institution;
             
             h)a detailed description of procedures for determining the market value of each activity in the financial institution as well as its operations and assets, and their potential to be marketed and sold;
             
             i)arrangements and procedures to obtain liquidity, including identification of potential sources for liquidity and evaluation of the guarantees available for acquiring such liquidity;
             
             j)arrangements and procedures for rescheduling and restructuring debts or for restructuring the institution activities and reducing any potential risks;
             
             k)arrangements and procedures required to ensure the continued operation of settlement systems;
             
             l)arrangements necessary for the sale of certain assets or activities of the financial institution in order to recover its financial position within an appropriate time; and
             
             m)governance procedures of the plan, including identification of persons in charge of its preparation and implementation.
             
            4.The competent authority may require the financial institution to include in its recovery plan quantitative and qualitative indicators reflecting the position of the financial institution, as well as the actions the institution may take with regards to each indicator in order to recover its financial position.
             
            5.The competent authority may include in the Implementing Regulations additional rules and provisions governing the preparation and implementation of the plan.
             

          • Article 7

            1.The financial institution shall, upon management approval, submit the recovery plan or any update thereto to the competent authority for approval.
             
            2.The competent authority shall, within 90 days from receipt of the recovery plan, approve the plan or return it to the financial institution for amendment and resubmission within a specified period.
             
            3.The financial institution shall update the recovery plan at the request of the competent authority within a period specified thereby.
             
            4.The competent authority shall, upon requesting a recovery plan, take into account the importance of the financial institution, its size, interconnectedness and the complexity of its relations with local and foreign financial institutions, its modus operandi, and associated risks.
             

        • Resolution Plan

          • Article 8

            1.The competent authority shall devise a resolution plan for each SIFI, which includes the resolution procedures to be taken upon the existence of the conditions referred to in Article 10 of this Law.
             
            2.If the financial institution is a holding company, the competent authority shall devise a resolution plan for the financial group, and a resolution plan for each subsidiary financial institution.
             
            3.In preparing the resolution plan, the competent authority shall identify significant obstacles which may hinder resolution procedures, and shall propose contingency plans.
             
            4.In preparing the resolution plan, the competent authority shall take into account all potential crises and causes thereof, whether related to the SIFI or having an impact thereon.
             
            5.The resolution plan must include the following:
             
             a)Identification of the main competent authority, where necessary, and any relevant entity the cooperation of which is required in addition to the identification of its tasks and powers.
             
             b)A summary of the main components of the plan.
             
             c)A summary of fundamental changes in the SIFI which took place after the drafting of the last resolution plan.
             
             d)Clarification of the method of separating critical activities or any other major activities from other activities legally and economically to ensure the continuity of the SIFI operation.
             
             e)An estimated timeframe for the implementation of each key component of the plan.
             
             f)A detailed description of procedures for determining the market value of each SIFI activity, operations, and assets, as well as the feasibility thereof to be marketed and sold.
             
             g)Description of how the resolution procedures are funded.
             
             h)Description of alternative resolution procedures which may be implemented depending on the status and circumstances of the SIFI.
             
             i)Description of the options available for the continuity of the SIFI as a member of the settlement systems, and an assessment of options for transferring client assets, deposits, funds, accounts, and insurance policies.
             
             j)Analysis of the impact of the resolution plan on SIFI personnel, its cost, and available settlement options.
             
            6.The competent authority shall share with the SIFI its vision of the main components of the resolution plan or its update in order to receive feedback from the SIFI within a specified period, provided that it is not less than 60 days.
             
            7.The competent authority shall update the resolution plan as necessary.
             
            8.The competent authority may include in the Implementing Regulations additional rules and provisions on the preparation and implementation of the resolution plan.
             

          • Article 9

            1.The competent authority shall submit the resolution plan and any update thereto along with the SIFI’s opinion, following its review in light of the SIFI’s feedback, to the Council of Economic and Development Affairs for approval.
             
            2.The Council of Economic and Development Affairs shall, within 60 days from receipt of the resolution plan or its update, decide to either approve the plan or return it with comments to the competent authority for resubmission within a period set by the Council.
             

      • Chapter 4: Resolution Procedures

        • General Provisions

          • Article 10

            1.The SIFI must fulfil the following conditions for any resolution procedure:
             
             a)The SIFI suffers or is likely to suffer a crisis that would threaten its existence and its ability to fulfil its obligations.
             
             b)The SIFI experiences difficulty in fulfilling its obligations within an appropriate time, which threatens its existence if resolution procedures are not invoked.
             
             c)The resolution procedures would achieve any of the objectives of the Law.
             
             d)The resolution procedures would be a better alternative to dissolution of the SIFI.
             
            2.For the purpose of implementing this Article, a crisis threatening the SIFI’s existence and ability to fulfil its obligations shall include:
             
             a)Lack of financial and administrative resources necessary to ensure financial adequacy, cash flow, risk management, or the management of the institution, and achieve the standing obligations under the license that, if not available, would justify its revocation.
             
             b)The value of assets falls below the value of liabilities or is likely to fall in the near future.
             
             c)Inability or expected inability to settle its debts upon maturity.
             
             d)Need for exceptional government support.
             

          • Article 11

            1.The SIFI shall notify the competent authority when it faces or expects to face a crisis.
             
            2.Without prejudice to the support agreements between members of a financial group, the SIFI may not be granted support from any other member of its financial group if the SIFI is likely to face a crisis, except in the following cases:
             
             a)The support received by the SIFI would prevent the crisis.
             
             b)The support does not adversely affect the status of the supporting member or the financial group as a whole.
             
             c)Obtaining the approval of the competent authority supervising the financial institution providing support.
             
             d)The support provided to the financial institution is in the form of loans or loan guarantees, or assets to be used as collateral.
             
             e)The decision to provide support is taken by the management of the institution providing support and the management of the SIFI receiving the support.
             
             f)The support is provided in accordance with an agreement approved by voting shareholders of the institution providing support.
             

          • Article 12

            1.Prior to deciding to impose resolution procedures on a SIFI, the competent authority shall conduct a preliminary assessment, either by itself or through an accredited valuer.
             
            2.In the absence of any risk to the stability of the financial sector due to the SIFI experiencing a crisis, the competent authority may request the relevant agencies to initiate bankruptcy procedures.
             
            3.If the competent authority decides to impose resolution procedures on the SIFI, it shall first assess the value of its assets and liabilities through an accredited valuer. If it is not possible to appoint a valuer within an appropriate time, the assessment shall be carried out by the competent authority.
             
            4.The assessment referred to in paragraph (3) of this Article aims to:
             
             a)ensure the existence of conditions for initiating the resolution procedures stipulated in Article 10 of this Law;
             
             b)determine suitable resolution procedures;
             
             c)identify capital instruments and debts to be reduced, terminated, or transformed for the amendment of rights; and
             
             d)identify assets, liabilities, and capital instruments to be sold, and determine their value in case of sale of the SIFI or transitional entity.
             
            5.The competent authority shall, in cooperation with the Saudi Authority for Accredited Valuers, issue rules for the assessments referred to in paragraphs (1) and (3) of this Article and Article 22(3) of this Law.
             

          • Article 13

            1.The competent authority may take one or more of the following procedures on any SIFI and its holding company or a subsidiary financial institution upon the existence of all conditions referred to in Article 10 of this Law:
             
             a)Sale of the SIFI.
             
             b)Establishment of a transitional entity.
             
             c)Separation of SIFI assets.
             
             d)Amendment of rights of the SIFI.
             
            2.The competent authority may take resolution measures on the holding company or a subsidiary financial institution which does not qualify for resolution in cases where this is necessary to complete the resolution of the SIFI.
             

          • Article 14

            1.If the competent authority decides to take resolution procedures on a SIFI, it shall first prepare an action plan to be approved by the Governor of the Saudi Central Bank or the Board of the Capital Market Authority, as the case may be, prior to implementing the resolution plan.
             
            2.With the exception of urgent cases, if there is a need for the amendment of the action plan referred to in paragraph (1) of this Article or part thereof, the competent authority must obtain the approval of the Governor of the Saudi Central Bank or the Board of the Capital Market Authority in accordance with the aforementioned paragraph.
             
            3.The competent authority may include in the action plan, referred to in paragraph (1) of this Article, procedures other than those in the resolution plan if it deems that they are consistent with this Law and achieve its objectives.
             

          • Article 15

            In carrying out resolution procedures, the competent authority shall observe the following principles: 
             
            1.The losses incurred by the SIFI under resolution shall be borne by its owners and then by its creditors, taking into account the order of priority of their legal and contractual debts.
             
            2.Accord the creditors of the SIFI subject to resolution a fair treatment to ensure that they will not receive a value less than the value they would receive if the SIFI is dissolved at the start of resolution procedures.
             
            3.Mitigate the potential negative impact arising from resolution procedures on other financial institutions within the financial group or sector.
             
            4.Avoid unnecessary depreciation of assets and reduce the cost of resolution procedures, as possible.
             

        • Sale of the SIFI Procedure

          • Article 16

            1.The competent authority may sell all or part of the shares, stocks, assets, or liabilities of the SIFI under resolution, whether the sale occurs in one or multiple stages. The Implementing Regulations shall set the rules governing the sale procedures.
             
            2.The sale referred to in paragraph (1) of this Article does not require the consent of the owners or creditors of the SIFI under resolution, or any other related party apart from the transferee.
             
            3.The sale referred to in paragraph (1) of this Article shall be subject to the following:
             
             a)The transferee shall be the successor of the SIFI under resolution to the extent of what is transferred thereto, and shall exercise all rights related to the transferred assets and liabilities.
             
             b)The owners or creditors of the SIFI under resolution, or any other related party whose shares, stocks, or assets are not transferred, shall not be entitled to any right related to the transferred shares, stocks, assets, or liabilities.
             
             c)The owners shall receive the value of sold capital instruments, while the value of the sold assets and liabilities shall be received by the SIFI under resolution.
             
            4.The transferee must hold the license necessary for engaging in the activity transferred thereto, or be in the final stages of obtaining such license.
             

        • Establishment of a Transitional Entity Procedure

          • Article 17

            1.To achieve the objectives of this Law, particularly the continuity of the critical activities of the SIFI under resolution, the competent authority may take the necessary actions to establish a transitional entity to which all or part of the shares, stocks, assets, or liabilities of the SIFI under resolution are transferred, whether in one or multiple stages, provided that the total value of transferred liabilities do not exceed the total value of transferred assets.
             
            2.The transfer referred to in paragraph (1) of this Article shall be subject to Article 16(2) and (3) of this Law.
             
            3.The management of the transitional entity shall exercise due diligence and shall not be liable towards the SIFI under resolution, its owners, or creditors for any errors in the performance of its duties, with the exception of cases of gross negligence, fraud, or deception.
             
            4.The competent authority may include in the Implementing Regulations additional rules to regulate the transfer of stocks, shares, assets, or liabilities to the transitional entity, and regulate the transitional entity’s activities, including the management and governance thereof.
             
            5.The competent authority shall take necessary actions to sell the transitional entity in accordance with the Implementing Regulations.
             
            6.Subject to causes of termination stipulated in the Companies Law, the transitional entity shall terminate in any of the following cases:
             
             a)Merger with another entity.
             
             b)The sale of all or a significant portion of its assets; in which case the termination shall be decided by the competent authority.
             
             c)The lapse of two years from the last transfer by a SIFI of shares, stocks, assets, or liabilities thereto. The competent authority may extend this period, provided that each extension is reasoned and does not exceed one year.
             
             d)Dissolution prior to the expiry of the period stipulated under paragraph (c) of this Article.
             
            Termination of a transitional entity shall entail its liquidation. 
             

        • Separation of Assets Procedure

          • Article 18

            1.The competent authority may take necessary actions to establish an asset management entity to which assets or liabilities of a SIFI under resolution or a transitional entity are transferred, provided that this procedure is only carried out in conjunction with another resolution procedure.
             
            2.Application of the procedure referred to in paragraph (1) of this Article shall be meant to achieve any of the following:
             
             a)Appreciation of assets to obtain a greater return upon their sale or liquidation.
             
             b)Ensuring the existence of the SIFI under resolution or the transitional entity.
             
             c)Avoiding damage to the market as a result of liquidating such assets.
             
            3.The asset management entity may pay for such assets or liabilities by issuing securities, at the value determined in accordance with Article 12(3) of this Law.
             
            4.The transfer referred to in paragraph (1) of this Article shall be subject to Article 16(2) and (3) of this Law.
             
            5.The management of the asset management entity shall work towards appreciation and sale of transferred assets and liquidation of the entity.
             
            6.The management of the asset management entity shall exercise due diligence and shall not be liable towards the SIFI under resolution, its owners, or creditors for any errors in the performance of its duties, with the exception of cases of gross negligence, fraud, or deception.
             
            7.The competent authority may include in the Implementing Regulations additional rules to regulate the separation of assets and the work of the asset management entity, including management, governance, and liquidation.
             

        • Amendment of Rights Procedure

          • Article 19

            1.The competent authority may conduct the amendment of rights procedure on the SIFI under resolution by amending the rights of its creditors and capital instrument holders to the extent that enables the institution to recover its status and fulfill statutory requirements.
             
            2.The competent authority may amend the rights of creditors and capital instrument holders in the SIFI under resolution prior to the sale of any of its shares, stocks, assets, or labilities, or the transfer thereof to the transitional entity, the transferee, or the asset management entity.
             
            3.When converting the debts of the SIFI under resolution to capital instruments, the competent authority shall take into account the priority of the debts in its conversion rates, in accordance with the Implementing Regulations.
             
            4.The holder of the reduced capital instrument shall not be entitled to any amount or compensation, unless the maturity of such amount or compensation occurs prior to the reduction.
             
            5.The Implementing Regulations shall regulate the handling of derivatives to which the SIFI under resolution is party.
             

          • Article 20

            The competent authority may not amend any of the following rights and liabilities: 
             
            1.Deposits, as determined by the competent authority.
             
            2.Insurance policies.
             
            3.Guaranteed liabilities, except where the value of the guarantee exceeds the value of the liability.
             
            4.Client assets and funds, as determined by the competent authority.
             
            5.Consignments.
             
            6.Any liability due in less than seven days, except for liabilities owed to an institution within the same financial group.
             
            7.Any due liability resulting from subscription to settlement systems.
             
            8.Dues of employees of the SIFI under resolution, except for performance bonuses.
             
            9.Liabilities arising from the import of goods and services essential to the daily operations of the SIFI under resolution, including e-services, utility bills, rent, maintenance services, and the like, except for liabilities owed to institutions within the same financial group.
             
            10.Zakat and social security dues.
             
            11.Resolution funds dues.
             
            12.Rights and liabilities which the competent authority considers, when implementing the amendment of rights procedure, important to be excluded entirely or partially from the amendment, to establish financial stability, ensure continuity of the critical activities of the SIFI under resolution, or maintain the value of such liabilities, if the amendment thereof would affect the rights of other creditors more than the exclusion thereof from amendment.
             

          • Article 21

            1.The SIFI subject to the amendment of rights procedure shall, within 30 days from the conclusion of the procedure, submit to the competent authority an action plan which includes the following:
             
             a)A detailed account of the factors leading to the crisis.
             
             b)A description of the procedures to be taken to achieve recovery in the long term.
             
             c)A timeframe to implement such procedures.
             
            2.The competent authority shall, within 30 days from receipt of the plan, decide whether to approve the plan or notify the SIFI of required amendments. The SIFI shall amend the plan and resubmit the same to the competent authority within 14 days.
             
            3.Semi-annual progress reports on the implementation of the plan shall be submitted by the SIFI or at the request of the competent authority.
             
            4.The competent authority may include in the Implementing Regulations additional rules and provisions governing the preparation of the action plan.
             

      • Chapter 5: Protection of Rights

        • Article 22

          The resolution procedures referred to in this Law shall be applied as follows: 
           
          1.If the SIFI or the transitional entity is to be sold, the amount received by the owners and creditors, whose assets or liabilities are not transferred, shall not fall below what they would have received had the SIFI been liquidated at the start of the procedure.
           
          2.When the amendment of rights procedure is taken, the losses sustained by the owners and creditors whose rights have been amended may not exceed the losses they would have sustained had the SIFI been liquidated at the start of the procedure.
           
          3.In order to determine the rights of owners and creditors, as set forth in paragraphs (1) and (2) of this Article, the competent authority shall take any action necessary to assess the SIFI through an accredited valuer after implementing resolution procedures. The assessment stated herein shall aim to:
           
           a)determine the amounts the owners and creditors would have received had the SIFI been liquidated at the start of procedures;
           
           b)state the amounts received by the owners and creditors from resolution procedures; and
           
           c)determine the difference between what they have received in accordance with subparagraph (b) of this paragraph, and what they would have received in accordance with subparagraph (a) of this paragraph, and they shall be compensated for the difference by the resolution funds and the competent authority.
           

        • Article 23

          1.The following rights and arrangements shall be protected when implementing the resolution procedures stipulated under this Law:
           
           a)Guaranteed liabilities.
           
           b)Settlement and set-off arrangements.
           
           c)Securitization arrangements.
           
           d)Liabilities arising from subscription to settlement systems.
           
          2.The rights and liabilities referred to in paragraph (1) of this Article shall be protected as follows:
           
           a)Prohibiting the transfer of a guarantee without the transfer of the related guaranteed liability, and vice versa.
           
           b)Prohibiting the transfer of part of the guarantees or liabilities subject to the financial guarantee measures by the transfer of ownership and set-off arrangements.
           
           c)Prohibiting the partial transfer of assets or liabilities arising from securitization arrangements.
           
           d)Prohibiting the amendment, cancellation, or reduction of the arrangements stipulated under paragraph (1) of this Article, including any procedure that would render these arrangements inexecutable.
           
           e)Prohibiting any procedure that would hinder the implementation of settlement system contracts, or the rules stipulated therein, and render them inexecutable.
           

      • Chapter 6: Powers of the Competent Authority

        • Article 24

          To carry out resolution procedures, the competent authority shall have the powers to: 
           
          1.demand any person to provide any information or documents relevant to the implementation of this Law;
           
          2.assume the powers of the owners and management of the SIFI under resolution, including dismissal of the management and appointment of a new management, and take necessary actions to file a liability claim against the management;
           
          3.sell and transfer any of the capital instruments or securities of the SIFI under resolution, and order any entity or person to amend relevant records;
           
          4.reduce the nominal value of the capital instruments issued by the SIFI under resolution, subject to the provisions on determining nominal values provided for in the Companies Law;
           
          5.order the SIFI under resolution or its holding company to issue capital instruments;
           
          6.amend the maturity date or the amount of the liabilities of the SIFI under resolution, with the exception of guaranteed liabilities;
           
          7.close the financial positions of the SIFI under resolution and terminate its financial contracts and derivative contracts; the Implementing Regulations shall determine the positions and contracts indicated in this paragraph;
           
          8.demand the suspension of the trade of any security or its delisting, or demand the re-listing and trade of debt instruments after their depreciation;
           
          9.suspend the right to terminate or expedite any liability to which the SIFI under resolution is party, including liabilities which have been sold or transferred to the transferee or the transitional entity, provided that the suspension of the rights related to guaranteed liabilities does not exceed two business days, with the exception of the guaranteed liabilities arising from subscriptions to settlement systems; and
           
          10.order any party to continue with the implementation of contracts to which the subsidiary institution of the SIFI under resolution is party, where the contractual liabilities of the subsidiary institution are guaranteed or supported by the SIFI, regardless of any contractual right to termination, liquidation, or expedition.
           

        • Article 25

          1.The competent authority shall initiate resolution procedures in accordance with the provisions of the Law, without the need to satisfy any other statutory or procedural requirements.
           
          2.The competent authority may appoint a natural or legal person as an administrator for the resolution procedures, in accordance with criteria set thereby, to replace the management of the SIFI under resolution. The competent authority shall determine his remuneration and its source, and may also grant him all the powers necessary to manage the SIFI. The administrator shall exercise due diligence and shall not be held liable for any damage arising from his actions, unless the damage is a result of bad faith, willful misconduct, gross negligence, fraud, or deception.
           

        • Article 26

          The competent authority may determine the method for executing new financing contracts concluded by the SIFI under resolution, including the execution of the following: 
           
          1.The obligation to pay or deliver, or the obligation to receive or accept payment.
           
          2.Termination or expedition.
           
          3.Set-off or payment of agreed settlement.
           
          4.Identification of cases where sham or fraudulent transactions which precede the SIFI crisis are terminated.
           
          5.Enforcement of guarantees.
           

        • Article 27

          1.It shall not be permissible to register a request for initiating bankruptcy procedures or a judicial filing of a SIFI without the approval of the competent authority, which shall either accept or reject the request within 90 days; such period may be extended by the authority.
           
          2.The lapse of the period indicated in paragraph (1) of this Article without a decision being rendered by the competent authority shall be deemed an approval.
           
          3.Subject to the provisions of paragraph (4) of this Article, if the competent authority refuses to initiate bankruptcy procedures for the SIFI, it shall initiate resolution procedures if the conditions stipulated in Article 10 of this Law are met.
           
          4.If any bankruptcy procedure is initiated for the SIFI and the competent authority decides to subject the SIFI to resolution procedures, it shall submit a request to terminate the initiated bankruptcy procedure and obtain a final ruling prior to commencing the resolution procedures.
           
          5.Any judicial proceeding for the SIFI under resolution shall be suspended, and may not be resumed except after the resolution procedures are completed or upon the consent of the competent authority.
           

      • Chapter 7: Transboundary Resolution Procedures

        • Article 28

          1.The competent authority may conclude international agreements with their foreign counterparts regarding the development and execution of transboundary resolution plans, in accordance with statutory procedures.
           
          2.If the resolution procedure requires actions to be taken regarding assets or liabilities subject to the jurisdiction of another state, the competent authority may order the concerned party to undertake any of the following:
           
           a)Take necessary actions to complete the sale or transfer.
           
           b)Safeguard related assets for the benefit of the transferee, the transitional entity, or the asset management entity pending the completion of the sale or transfer in the manner determined by the competent authority.
           
           c)Satisfy relevant obligations on behalf of the transferee, the transitional entity, or the asset management entity pending the completion of the sale or transfer in the manner determined by the competent authority.
           
          The competent authority may order the SIFI under resolution to bear the costs of sale or transfer procedures. 
           

        • Article 29

          Subject to relevant international agreements and conventions to which the Kingdom is party, the competent authority may apply resolution procedures to any foreign branch of a foreign financial institution, even if the relevant foreign regulatory authority does not apply any resolution procedure to the parent institution.

        • Article 30

          1.The foreign branch shall notify the competent authority when the parent financial institution is subject to resolution procedures.
           
          2.Without prejudice to relevant international agreements and conventions to which the Kingdom is party, the competent authority may, upon its knowledge that the foreign branch is subject to resolution procedures, accept or reject wholly or partially such procedures to achieve the objectives of this Law.
           
          3.Acknowledgement of resolution procedures taken by a foreign competent authority against a foreign branch shall not prejudice the provisions of the Bankruptcy Law in applicable cases.
           
          4.Without prejudice to the principle of reciprocity, the competent authority may cooperate with foreign counterparts regarding the impact of initiating resolution procedures on a foreign SIFI in other countries.
           

      • Chapter 8: Resolution Funds

        • Article 31

          The competent authority may, in order to finance resolution procedures and cover associated costs, establish funds the contribution to which is made by SIFIs. Such funds, including its purposes, amounts and manner of submission of preliminary and subsequent contributions, manner of collection, manner of disbursement, and reporting thereon shall be according to rules approved by the Council of Economic and Development Affairs upon the recommendation of the competent authority.

      • Chapter 9: Penalties and Appeals

        • Article 32

          1.Without prejudice to any harsher penalty stipulated in any other law, the competent authority shall impose on any financial institution a fine not exceeding 2% of its capital if any of the following violations are committed:
           
           a)Failure to prepare or update a recovery plan in cases requiring such measures.
           
           b)Failure to cooperate with the competent authority to prepare or implement the resolution plan, or hindering the implementation of any part thereof.
           
           c)Failure of the SIFI to notify the competent authority of an actual or potential crisis.
           
           d)Provision of support by the financial institution to a sister financial institution in violation of Article 11(2) of this Law.
           
           e)Failure to provide information or documents requested by the competent authority for the purpose of implementing this Law.
           
           f)Failure to comply with the orders of the competent authority issued in accordance with this Law regarding foreign assets and liabilities without acceptable justification.
           
          2.The competent authority shall impose on a foreign branch a fine not exceeding five million riyals if it violates Article 30(1) of this Law.
           
          3.The competent authority may impose the penalties stipulated in paragraphs (1) and (2) of this Article on any member of the management team of the financial institution or the foreign branch who has caused or contributed to the violations referred to in paragraphs (1) and (2) of this Article.
           
          4.The competent authority shall, when imposing the penalties stipulated in this Article, take into account the size of the financial institution and the gravity and impact of the violation.
           
          5.An aggrieved party may file an appeal before the competent court within 30 days from notification of the penalty decision.
           

        • Article 33

          A party with interest may appeal before the competent court against decisions and procedures taken by the competent authority in accordance with the provisions of this Law. The competent court may compensate the aggrieved party or rule to remedy the damage by any means, provided that: 
           
          1.the appeal does not entail stay of execution of the relevant decision or the procedure;
           
          2.the annulment of the decision or the procedure is premised on lack of jurisdiction, a fault in the form or the cause, a violation of the provisions of this Law, an error in the characterization or interpretation of the violation, or an abuse of power; the ruling shall be limited to compensation if an annulment ruling would prejudice the rights of bona fide third parties to whom assets or liabilities of the SIFI under resolution are transferred; and
           
          3.compensation claims are not heard after the lapse of five years from the date of knowledge of the procedure or the date of issuance of the decision subject of the claim.
           

      • Chapter 10: Final Provisions

        • Article 34

          1.A person who becomes privy to any information during the implementation of this Law or due to carrying out any action related thereto may not disclose such information to a third party, even after completion of resolution procedures or end of work relationship.
           
          2.The confidentiality provision in paragraph (1) of this Article shall not include exchange of information among the competent authority employees, potential buyers, or professional advisors the competent authority appoints or approves their appointment, as well as the exchange of such information with relevant authorities in the Kingdom or foreign authorities concerned with resolution procedures, provided the exchange is for the purpose of implementing the resolution procedures or this Law.
           
          3.The competent authority may allow unauthorized persons to disclose and exchange information in cases pertaining to the implementation of resolution procedures or to ensuring the financial stability of the Kingdom or of another state, provided the disclosure or exchange of information is subject to confidentiality requirements and to the extent required by such cases.
           
          4.The competent authority shall impose on violators of this Article a fine not exceeding five hundred thousand riyals, and the aggrieved party may appeal the penalty decision in accordance with Article 32(5) of this Law.
           

        • Article 35

          An employee of the competent authority or any person assigned thereby shall not be liable for any resolution procedure he takes except in cases of willful misconduct, gross negligence, or bad faith.

        • Article 36

          Without prejudice to the jurisdiction of relevant authorities, employees designated pursuant to a decision by the competent authority shall detect and report violations of this Law as well as its Implementing Regulations and decisions and rules issued in implementation thereof. The Implementing Regulations shall determine their powers and work procedures.

        • Article 37

          The Implementing Regulations of this Law shall be drafted by the Saudi Central Bank and the Capital Market Authority and shall be issued pursuant to a decision by the Council of Ministers.

        • Article 38

          This Law shall enter into force 180 days following the date of its publication in the Official Gazette.

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