10. Disclosure of and Enforcement on Bank Accounts, Balances and Relationships
- Subject to SAMA’s instructions on providing government and non-government entities with documents, information and data of customer bank accounts, the disclosure of and enforcement on bank balances, accounts and relationships (such as, blocking and compulsory deduction) shall be made by an order from SAMA upon the request of the competent authorities.
- Enforcement on banking relationships means blocking, compulsory deduction, check issuance and money transfer from the bank's customer accounts.
- Procedures taken for the disclosure of and enforcement on bank balances, accounts and relationships at all stages shall be strictly confidential. Such requests shall be received only by SAMA except for cases stated in SAMA’s instructions.
- Banks shall carry out requests for disclosure and enforcement according to the form, manner and period specified by SAMA.
10.1 Disclosure of Bank Balances, Accounts and Relationships
For the purpose of disclosing bank balances, accounts and relationships upon SAMA’s request and according to the relevant instructions, banks shall search for all relationships between the bank and the customer, including all active; closed and suspended accounts, inoperative accounts, deposits, valuable boxes, credit cards, remittance accounts (remittance membership) and any other relationships or products offered by the bank. Banks shall ensure that the search is made based on the customer name, ID or the document under which the account is opened according to the following:
- The search shall include sole proprietorships owned by the person inquired about and his/her participation in companies. Banks shall state in the statements submitted to SAMA that the search included such accounts and transactions. However, if the disclosure is requested for a certain relationship/transaction, banks shall only include the requested relationship/transaction in the statement.
- The validity of information sent to SAMA in compliance with the requirements of this Rule shall be checked.
- In case of requesting the disclosure of balances, accounts and relationships of a natural person, the disclosure shall include all the information required above in this Rule, in addition to institutions and stores owned by the natural person pursuant to the principle of full financial disclosure. If disclosure is requested for a specific institution or store, disclosure shall include the relationships related to such institution or store not the owner.
- In case of requesting the disclosure of balances, accounts and relationships of a natural person, disclosure shall be limited to the name of the company and the percentage of ownership. The accounts and balances of companies the natural person co-owns or in which he/she owns shares shall not be disclosed. The same shall apply to joint accounts by disclosing only the number of the account and the percentage of ownership of the customer subject of the disclosure request, unless otherwise provided in SAMA's request.
10.1.1 Attachment of Bank Balances, Accounts and Relationships
Banks shall comply with the following when attaching bank accounts, balances and relationships upon the request of SAMA in accordance with the relevant instructions:
- If a specific amount of money is requested to be attached from the customer’s account, the bank shall, from the receipt of the request, commit to attaching only the amount of money specified from the outstanding balance if the amount is available. In case the amount is not available, the bank shall not allow the customer to make debit transactions from the outstanding balance in the customer’s accounts (withdrawal, transfer, etc.) or open new accounts. Only credit transactions shall be allowed until the amount is available again in the account.
- Attachment shall include all credit balances in the bank accounts and relationships, except the accounts of the companies that the customer co-owns directly or indirectly, and the joint accounts, unless otherwise provided in SAMA's request.
- If the request includes precautionary or executive attachment of a specific amount of money, attachment shall be enforced only on the amount specified. Once the amount requested to be attached is available, SAMA shall be informed and attachment of other accounts and amounts of money shall be lifted.
- If attachment is requested for a specific period of time, attachment shall be automatically lifted upon the expiry of the period.
- Banks shall, when imposing attachment, comply with the instructions issued on deduction. If deducting from an employee, the amount of money seized shall not exceed one third of the net monthly salary, except for the alimony debt if provided for in SAMA’s instructions. If deducting from a retiree, the amount of money seized shall not exceed one quarter of the net monthly pension, except for the alimony debt if provided for in SAMA’s instructions. Banks shall also comply with the instructions issued on bank accounts opened for or receive government compensation and subsidy for citizens, as well as any other instructions on the amounts excluded from attachment. In addition, banks shall allow the withdrawal of such amounts form ATMs.
10.1.2 Instructing Banks to Stop Dealing with Customers
- Upon receipt of requests to stop dealing with customers, banks shall ban such customers from managing their existing banking relationships and shall not
- be allowed to establish new relationships or carry out debit transactions. The ban shall be imposed in respect of the customer’s funds and in his/her personal capacity only,
- and shall not include the fact that the customer is a guardian, curator, legal agent or a person authorized to manage accounts not opened in his/her name, unless otherwise provided in SAMA's request.
- If the stop dealing order is issued for a specific period of time, the order shall be automatically lifted upon the expiry of the period.
- If the stop dealing order is issued with an attachment order, the stop dealing order shall be automatically lifted upon lifting the attachment order by the bank.
10.1.3 Compulsory Deduction from Accounts
- Compulsory deduction shall be enforced by an order issued from SAMA to the bank at the request of the authorized entities. Upon the request, the bank shall deduct a specified amount on a monthly basis from the bank's customer account to a specific beneficiary account.
- Compulsory deductions and expenses are considered priority and must be carried out or deducted before any other debts. Necessary steps shall be taken by banks to ensure the execution of such action.
- SAMA’s deduction request for expenses or debts is to be made on the customer bank account to which salary payments are credited. The deduction shall be made promptly upon crediting such payments to the account. Necessary steps shall also be taken to ensure the execution of such action. The only exception here, however, is when SAMA’s request states that such deductions shall be made from another bank account.
10.2 Freezing in the Event of Death, Bankruptcy or Loss of Legal Competence
10.2.1 Official Notice on Freezing by Reason of Death, Loss of Legal Competence, Starting Any Liquidation or Administrative Liquidation Procedures Under the Bankruptcy Law, or Going into Liquidation Under Companies Law
I. In accordance with the applicable laws, the bank must stop all dealings related to the account and freeze the balance therein if it becomes aware of, or receives official notification from a competent authority about, any of the following:
a. Death of the account holder or one of the account holders.
b. Restriction on the legal competence of the account holder or one of the account holders.
c. Issuance of a judicial order or a decision from the company’s general assembly or partners to liquidate the company that owns the account.
d. Starting any liquidation or administrative liquidation procedures under the Bankruptcy Law for the account holder.
II. When carrying out the above, the following shall be considered.
- The absence of a provision in the company’s memorandum of association and articles of association that allows the company to continue if any of the cases mentioned in Paragraphs (a) and (b) of Item (I) stated above occurs.
- The account must be operated in accordance with Paragraph (c) of Item (I) stated above by the liquidator appointed by a judicial liquidation decision or a decision of the company’s general assembly or partners. The decision should include the appointment of the liquidator, restrictions imposed on its power and the period needed for liquidation (provided that such period shall not exceed five years if the decision is issued by the company’s general assembly or partners). The exception to the provisions of this paragraph and Paragraph (c) of Item (I) above is when the company’s memorandum of association, its articles of association, or partners’ agreement contain(s) a provision on how to liquidate the company. In such case, the liquidation should be performed thereby, as the case may be.
- The account shall be operated in accordance with Paragraph (d) of Item (I) above by the liquidator or bankruptcy committee as determined in the decision of the competent court.
- Checks issued before the occurrence of any of the cases mentioned in Item (I) above should be considered, unless otherwise stated by a court order issued thereon.
10.2.2 Request of Heirs, Guardians and Curators to Banks to Disclose Transactions and Account Balances of their Deceased or Incompetent Persons and the Like
10.2.2.1 Inquiring About and Operation of a Deceased’s Account
- If any person requests a bank to disclose transactions, accounts’ balances or banking relationships of his/her legator, the bank must respond to the request after verifying the existence of the necessary documents, which empower him/her to act so, including, as a minimum, the death certificate and determination of heirs deed (or an original copy thereof) that defines the names of heirs, including the person requesting the disclosure. If the requesting person is a legal agent of all the heirs or of one of them, he should produce the original power of attorney of his heirs or any of them that gives him the right to inquire about the legator's balances. The inquirer should be provided with the answer in a written form. The statement provided should be accurate and should include all banking relationships pertaining to the deceased. The Bank should keep a copy of the statement after being signed by the recipient.
- To operate the accounts of a deceased after freezing balances and stopping dealings because of death, the bank must verify the persons who have the right to the account of the deceased. Disbursement should be made based on legal practices and documents, including, as a minimum, the provision of the determination of heirs deed (or an original copy thereof) and the presence of heirs or their representatives collectively or individually, provided that such representatives have a power of attorney thereon. In addition, the decision of disbursement or distribution made by mutual agreement or by the competent court should be presented to the bank. If it is impossible to provide any of the required documents in connection with the deceased expatriate, the bank, after obtaining an attested death certificate, should issue a banking check with the amount of the balance in the name of the deceased’s country’s embassy to hand it to his/her heirs. The bank must comply with the requirements and procedures for heirs’ accounts set forth in Rule (200.1.1).
- Providing heirs or their representative with the deceased’s account statements or account activity for the period preceding the date of death is prohibited unless SAMA informs the bank of the issuance of a judicial order requiring so.
10.2.2.2 Inquiring About Incompetent Persons’ Accounts
If any person contacts a bank to inquire about or require disclosing of transactions, accounts’ balances or banking relationships of an incompetent person, the bank must respond to the request after verifying the existence of the necessary empowering documents, including, as a minimum, a legal document that proves the person’s guardianship or custody over the incompetent person. The inquirer should be provided with the answer in a written form. The statement provided should be accurate and should include all banking relationships pertaining to the incompetent person. The bank should keep a copy of the statement after being signed by the recipient. Providing curators or guardians with the incompetent person’s account statements or account activity information for the period preceding the issuance of the custody or guardianship deed is prohibited. For account operation, the provisions of the related rules should be applied on a case-by-case basis (interdicted, disabled, etc.).