Other Matters
Principle (9) Matters Related to External Operations
Compliance with Regulations and Instructions in the Host Country
93- Banks that choose to conduct banking activities in certain countries must adhere to the regulations, instructions, and laws applicable in those countries. The branches or offices, as well as the structure and responsibilities of the compliance function, must be aligned with the regulatory requirements and local instructions of those countries.
Higher Standards as a Basis When Regulatory Requirements Differ
94- When engaging in banking operations in specific countries, whether through branches or subsidiaries, it is important to recognize that regulatory requirements and instructions may vary from one country to another. These differences might depend on the type of business the bank is conducting or the form of its presence in those countries. Therefore, particular emphasis should be placed on the requirements outlined in Paragraph (2/6) of Section Two of the Anti-Money Laundering and Counter-Terrorism Financing Guide.
Compliance Officers in Host Countries
95- Banks that choose to operate in specific countries must comply with all local regulations and instructions applicable in those countries. For example, banks operating as subsidiaries must meet the regulatory and instructional requirements for companies in the host countries. Banks operating as foreign branches must fulfill the requirements specified for foreign bank branches. The bank must ensure that compliance responsibilities in host countries are carried out by employees with local knowledge and expertise, in addition to oversight by the Chief Compliance Officer in collaboration with other risk and control units in the home country.
Risk Assessment for Overseas Activities
96- Each bank must have implemented and updated procedures to identify and assess potential or increasing risks to its reputation regarding the products and activities offered in host countries through its subsidiaries or branches that are not permitted or practiced in the Kingdom. Principle (10) Delegation of Compliance Unit Tasks
Limited Delegation Agreement and Responsibility
97- The activity of the compliance unit is considered a primary function in managing non-compliance risks within the bank. While some specific activities may be delegated to specialized entities, they must remain under the supervision and responsibility of the Chief Compliance Officer. The Chief Compliance Officer is ultimately responsible for ensuring compliance and cannot delegate their responsibility to others.
Suitability of Agreements with Tasks
98- The bank must ensure that any agreements or arrangements for delegating some compliance tasks do not impede the effectiveness of supervision by SAMA or other regulatory and supervisory bodies. Regardless of delegating certain tasks that the bank deems necessary, the primary responsibility for ensuring compliance with all regulations and instructions remains with the board and senior management.
SAMA Approval
99- The delegation of any compliance activities is subject to the instructions issued by SAMA, including obtaining its non-objection prior to entering into any delegation agreements.