Referring to the Insolvency Law issued by Royal Decree No. (M/50) dated 28/05/1439H.

SAMA would like to inform you that the law can be accessed through the website of the Ministry of Commerce and Investment through the link.

Referring to the requirements for appointment to senior positions in financial institutions under the supervision of SAMA, as communicated in accordance with Circular No. (1994/67) dated 10/1/1441H which specifies the minimum eligibility standards that financial institutions must adhere to when evaluating the suitability of individuals occupying or being considered for senior positions. It stipulates that a person in a senior role must have the necessary independence to perform the tasks and duties associated with the position and must not have interests, job commitments, or any other circumstances that could lead to a conflict of interest or affect their ability to perform the duties of the position in any way. In reference to the principles of conduct and work ethics in financial institutions, as communicated by Circular No. (72203/67) dated 4/12/1440 H Including a number of professional commitments for employees of financial institutions.

Given that SAMA issued the aforementioned instructions based on a number of Laws that it supervises, due to the nature of the financial sector and the importance of the efficiency of individuals holding senior positions, and their ability to perform their tasks in the best way, and considering that assigning or appointing any individual holding senior positions in financial institutions to general or specific tasks or other responsibilities such as memberships in boards of directors, committees, or similar entities; may affect the ability of those in senior positions within financial institutions to fulfill their job obligations and duties as stipulated in the laws and SAMA instructions or the internal policies of financial institutions in the best possible manner. Additionally, there is a potential for conflicts of interest between their functions in financial institutions and the positions for which they are nominated or occupy, which may influence SAMA's decision to grant non-objection to holding the senior position in the financial institution.

Based on the above, the financial institution must take the necessary steps to modify its internal policies to ensure that the incumbents of its senior positions obtain the financial institution's approval and meet SAMA’s non-objection requirements before accepting nomination or appointment/reappointment with any public or private entity, or assuming other responsibilities such as membership in boards of directors, committees, or similar roles. It should be noted that non-compliance with this is covered under the provisions of Article (20) of the aforementioned requirements.

Please refer to SAMA circular No. (1994/67), dated 10/01/1441H, and its amendments, to read the updated and the amended Requirements for Appointments to Senior Positions.

         Based on the powers vested to SAMA according to the related regulations, and based on SAMA's supervisory and regulatory role over the financial institutions under its supervision, and in order to apply the principles of fairness and transparency in financial transactions.

Accordingly, SAMA wishes to emphasize to financing entities that real estate valuation fees should not be deducted from the customer until the customer has obtained preliminary approval to grant financing. Additionally, before initiating contract procedures, financing entities must inform the customer that they are not entitled to request a refund of the real estate valuation fees if the financing process is not completed for a reason due to the customer, and obtain an acknowledgment from him on that.

Further to SAMA Circular No. (351000036570) dated 20/3/1435 H regarding Emphasizing on the Unification of the Contact Point with the Anti-Corruption Authority through the General Department of Legal Affairs at SAMA.

SAMA emphasizes the need to adhere to the above-mentioned circular that communication with the National Anti-Corruption Commission (Nazaha) should be through SAMA.

For your information and action accordingly.

Based on the powers vested to SAMA pursuant to the relevant laws, regulations and instructions, and based on paragraph (first) of Article 18 of the Finance Lease Law issued by Royal Decree No. (M/48) dated 13/8/1433 H which stated that: "Without prejudice to the provisions of Companies Law, a joint-stock company or more shall be incorporated pursuant to a license from SAMA to register contracts." And in addition to SAMA's circular No. 63911/99 dated 24/10/1440 H, regarding the registration of financial leases contracts.

SAMA would like to announce that "Tawtheeq Company for Leasing Contract Registration" has been licensed to practice in the activity of registering financial leases contracts. Financing entities can register financial leasing contracts with any of the licensed financial leasing contract registration companies.

 Referring to the receipt of SAMA of the letter from the General Authority of Zakat and Income, number 7963/1/1441, dated 2/11/1441 H, which refers to The Executive Regulations of the Value Added Tax Law updated under Commissions and Councils Decisions Number 2-3-20 dated 17/10/1441 H including the addition and amendment of certain articles related to the imposition of value-added tax (VAT) on real estate supplies by natural persons. It mentions the launch of the VAT service for individual real estate transactions on its website in cooperation with the Ministry of Justice. This will help individuals determine the extent to which real estate supplies are subject to tax and register them with the authority. Additionally, the text refers to other benefits provided by this service to individuals, and the commencement of the mandatory registration of real estate vacating transactions with the authority before completing the formal vacating procedures with the Ministry of Justice, starting from July 1, 2020.

Accordingly, I hope of adherence to the value-added tax regulations in financial transactions for assets and properties owned by natural persons, and for reviewing the amendments and additions in The Executive Regulations of the Value Added Tax Law and to act accordingly with it from the date of its enforcement.

Based on The Credit Information Law issued by Royal Decree No. (M/37) dated 05/07/1429 H, and Its implementing regulations issued by the decision of His Excellency the Governor No. (AQ/13709) dated 22/9/1432 H, in addition to the instructions issued by SAMA under Circular No. 381000058506 dated /1/6/1438 H, and Circular No. 67/38477 dated 20/6/1440 H.

In an effort by SAMA to support the commercial sector in general and to improve the quality of credit information related to the small and medium enterprises (SMEs) sector in particular, aiming to enhance transparency levels and assist in estimating the financial commitments and creditworthiness of companies operating in this sector, and to increase the effectiveness of risk management across all financial institutions through the completeness of credit information and the emergence of comprehensive and high-quality credit reports for consumers.

SAMA urges banks, finance companies, and companies operating in the insurance sector within the Kingdom to conduct membership agreements with Bayan Credit Bureau and to share credit information with the company in accordance with The credit information law and Its implementing regulations and membership agreements with the company.

Referring to the role of SAMA in maintaining monetary and financial stability, supporting balanced and sustainable economic growth, including enabling the financial sector to support private sector growth, and its strategy to activate the use of electronic channels to enhance the level of services provided, contributing to the achievement of Vision 2030 of the Kingdom. And towards continuous and fruitful cooperation with all relevant government agencies in a manner that serves the public interest. Referring to the "Tamweel" electronic portal approved by the General Authority for Small and Medium Enterprises "Monshaat", which is a portal that brings together entrepreneurs and owners of small and medium enterprises seeking financing with licensed financing entities.

Accordingly, SAMA urges financing entities to provide their services to entrepreneurs and owners of micro, small, and medium enterprises through the "Tamweel" electronic portal accredited by the General Authority for Small and Medium Enterprises (Monshaat),and to benefit from the services offered through this portal and to process requests received through it within the specified times, due to the numerous benefits of this portal, including fostering competition among financing entities to provide suitable financing offers for these enterprises across various geographic regions, saving time and effort. Ultimately, this will increase lending and investment rates and stimulate economic growth.

Referring to the supervisory and regulatory role of SAMA over financial institutions under its jurisdiction, based on the powers vested to it pursuant to Banking Control Law issued by Royal Decree No. (M/5) dated 22/1386 H, and The Cooperative Insurance Companies Control Law issued by Royal Decree No. (M/32) dated 2/6/1424 H,  and The Finance Companies Control Law issued by Royal Decree No. (M/51) dated 13/8/1433 H, and The rules governing money changing business issued by the decision of the Minister of Finance No. (1357) dated 1/5/1432 H, and SAMA's determination to establish communication channels with the financial institutions under its supervision to ensure the dissemination of its executive and penal decisions.

Accordingly, within fifteen working days from this date, all financial institutions under the supervision of SAMA are required to designate a specific email address for receiving SAMA's executive/penal decisions. This email address should be directly linked to the Chairman of the Board or the Board of Directors, the Chief Executive Officer or General Manager, and the Compliance Manager -according to the company's organizational structure-, as the financial institutions must provide SAMA with the updated email address and contact details of the Chief Executive Officer or General Manager, and the Compliance Manager through email.

SAMA wishes to emphasize that the responsibility for monitoring decisions received via postal mail and email, as well as the consequences arising from them, lies with financial institutions and their senior management. Financial institutions must notify SAMA in writing through the official mail and email about any updates to those addresses, these addresses will not take effect with respect to SAMA until one month from the notification date. SAMA also affirms that it will take all regulatory measures against financial institutions that do not comply with the content of this circular.

Based on the powers vested in SAMA by relevant laws, regulations, and instructions, and referring to Article (28) of The Labor Law, issued by Royal Decree No. (M/51) dated 23/8/1426 H which requires employers with twenty-five (25) or more workers to employ at least (4%) of the total number of workers from professionally qualified individuals with disabilities, in accordance with the nature of the work, and in addition to the instructions issued by SAMA Circular No. (41039051) dated 03/06/1441 H regarding the instructions for services provided to persons with disabilities in financial institutions, and referring to the targets of the National Transformation Program to empower persons with disabilities in the labor market, and continuing the efforts of SAMA aimed at raising the level of commitment of financial institutions to regulations and their participation in national plans and strategies.

Accordingly, SAMA emphasizes the importance of increasing the percentage of professionally qualified employees with disabilities to at least the legally specified percentage, in alignment with the nature of the work, and ensuring that the necessary means for their job performance are provided.

SAMA received the letter from His Excellency the Minister of Commerce and Investment, the Chairman of the Board of Directors of the National Competitiveness Center "Tayseer," No. 10201 dated 23/3/1441 H, referring to the Royal Order No. 13563 dated 28/2/1441 H, which stipulates in the first clause to emphasize to all concerned government entities not to obligate private sector establishments to use an official stamp and only ratify the Chamber of Commerce and Industry unless there is a regulatory requirement mandating it. Further to SAMA's instructions pursuant to Circular No. 381000053456 dated 17/5/1438 H, and Circular No. 381000056756 dated 25/5/1438 H, and Circular No. 391000031596 dated 18/3/1439 H regarding the requirements for establishment of institutions and companies and the cancellation of the requirement for the official stamp.

Accordingly, SAMA affirms that it does not require an official stamp from institutions and companies on documents and papers submitted when requesting transactions, and it's sufficient to ratify the Chamber of Commerce and Industry without compromising the requirements of the "Know Your Customer" principle and due diligence procedures for customers, and to announce this through the available means.

Referring to the Royal Decree No. 33322 dated 21/07/1438 H, which approved the Cabinet's recommendations regarding issues related to women's rights and the suggested solutions, and included the confirmation to relevant government agencies not to require women to obtain the consent of a male guardian when providing services or completing their procedures unless there is a legal basis for such a request.

Accordingly, SAMA confirms its commitment to the provisions of the aforementioned Royal Decree and urges the banks to communicate with SAMA in case of any obstacles in its implementation.

Further to SAMA Circular No. 53148/M A/25450 dated 6/12/1433 H addressed to banks operating in the Kingdom and SAMA Circular No. 361000110001 dated 13/8/1436 H addressed to real estate finance companies operating in the Kingdom, which stipulates" Approval of the Property Document Issued by the Economic Cities Authority".

Accordingly, SAMA wishes to emphasize to banks and real estate finance companies operating in the Kingdom that The Property Document Issued by the Economic Cities Authority for any property or land owner within the economic cities should be approved, as an official ownership document, equivalent to the title deed approved outside the economic cities.

In reference to the Royal Decree No. (7/B/2942) dated 01/03/1418H regarding the implementation of the summer training program for students, and the Ministry of Labor Decision No. (1/1047) dated 08/03/1429H, which stipulates the participation of establishments employing twenty-five workers or more in the summer training program.

In light of the importance of the participation of entities supervised by SAMA in summer training programs for students, with the aim of utilizing their time in a beneficial manner, promoting the values of work, and equipping them with skills and experience, SAMA emphasizes the obligation of the entities under its supervision to comply with the Royal Decree and the aforementioned decision.

Entities are required to provide training opportunities for students, register, and announce these opportunities on the program’s platform (saifi.hrdf.org.sa) with the Human Resources Development Fund no later than the end of Thursday, 25/09/1440H.

For your information and act accordingly.

SAMA has received the letter from His Excellency the Director General of Traffic, No. 95817, dated 3/5/1440 H, which indicates that there are vehicles impounded by the traffic authorities that are owned by some banks and finance companies. The reasons for impounding these vehicles include having a notice registered on the vehicle in the computer system as (required for ownership transfer), and involvement in a traffic accident, or a traffic violation necessitating impoundment, however, when representatives from these banks and finance companies are requested to review and collect these vehicles, some do not respond by attending the relevant traffic department.

Accordingly, SAMA urges all banks and finance companies to promptly respond and expedite the review with the relevant traffic departments to finalize the procedures for the seized vehicles upon receiving a review request. It should be noted that the General Traffic Department intends to take several measures against non-compliant banks and finance companies, including the suspension of electronic traffic services for the bank or finance company, and the auctioning of the seized vehicle after ninety days from the date of its seizure.

Based on SAMA's commitment to improve cybersecurity practices within the financial institutions under its supervision, and referring to SAMA Circular No. 381000091275 dated 28/08/1438 H regarding the obligation of financial institutions to comply with the Cyber Security Framework and Maturity Level 3, SAMA emphasizes its dedication to enhance and support cybersecurity measures in the financial sector and the proper implementation of the regulatory framework by financial institutions.

Accordingly, we inform you that SAMA has extended the deadline for compliance with the requirements outlined in the Cyber Security Framework to no later than the end of the fourth quarter of 2019. SAMA also emphasizes the necessity of adhering to the requirements stated in the aforementioned circular, in addition to the following instructions:

First: Financial institution leaders must provide the necessary support to the Information Security Management and provide them with qualified national staff, technical tools, and appropriate training to effectively fulfill their roles.

Second: Quarterly reports must be submitted starting from the end of the second quarter of 2019 until the financial institution complies with SAMA's requirements.

Based on the above, SAMA reaffirms the importance of complying with the Cyber Security Framework according to the issued instructions and regulations, noting that SAMA will conduct field visits to verify compliance with these instructions.

Further to SAMA's instructions issued under Circular No. 351000139826 dated 14/11/1435H, regarding the Council of Ministers Decision No. (295) dated 13/07/1435H, which includes several measures to address the phenomenon of non-compliant foreign control over certain commercial activities. This includes the study concerning the employment of foreign labor in the Kingdom across agricultural, commercial, and all other sectors, and their concealment. Specifically, paragraph 11 of the decision states: "SAMA shall require banks to monitor the movement of bank accounts of foreign labor and report accounts whose activity does not align with their income and wages, in accordance with the regulations and procedures established by SAMA."

SAMA reiterates to all banks, and money exchange companies the importance of continuing to notify the General Department of Financial Investigation at the Presidency of State Security in the event of any financial suspicions, in accordance with The Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Guide issued by SAMA. In addition, customer transactions must be continuously monitored.

For your information and take the necessary actions in this regard.

Further to SAMA Circular No. 351000058896 dated 08/05/1435H, which refers to the Ministry of Interior’s letter No. 25849 dated 18/04/1435H, containing some indicators of suspicion that can be used as a basis for monitoring transactions related to the collection of funds through bank accounts without obtaining prior approvals from the relevant official authorities. Additionally, referring to the Ministry of Interior’s letter No. 72541 dated 28/11/1435H, which highlights the increasing phenomenon of collecting donations by individuals or entities using SMS technology, the internet, or advertising through various visual and print media without obtaining official approval. This phenomenon often increases during Ramadan and the Hajj season. The letter also recommends implementing issued instructions prohibiting the collection of donations for any entity by any advertising means or through the establishment of kiosks or offices for collecting donations without obtaining official approval.

Accordingly, SAMA emphasizes the need to take the necessary actions to monitor transactions and report any suspected links to such activities.

Based on SAMA's keenness to improve the level of practices and procedures in the financial institutions under its supervision, and its efforts to support and develop the financial sector while considering risks, and regularly reviewing updates to ensure necessary measures are taken to raise the maturity level of these financial institutions. This involves periodic monitoring and issuing related instructions. Based on the regular monitoring of fraud cases in the financial institutions, which showed the need to enhance the principle of Know Your Customer (KYC) by including an additional verification mechanism in the procedures for opening accounts/memberships in person and remotely, as well as for the existing accounts/memberships of current customers by linking the account owner's registered mobile number with the financial institution according to the number verified by "the Tahaqaq service", in order to support the verification process of the information and help reduce identity theft by enhancing procedures and relying on trusted and accredited national sources. Therefore, financial institutions are required to do the following:

For your information and action accordingly, please note that SAMA will take the necessary legal measures in the event of non-compliance with the procedures determined within the specified timeframe mentioned above.
 

In light of the introduction of the new sixth issue of the Kuwaiti Dinar into financial markets, with the continued validity of the currently circulating fifth issue, which retains its legal tender status,

SAMA emphasizes the necessity of accepting the buying and selling of the Kuwaiti Dinar in both its old and new issues ('fifth and sixth issues'), which remain valid and accepted in global markets until a decision is issued by the Central Bank of Kuwait to withdraw them from circulation.

For your information, please notify all your branches to act accordingly.

Referring to SAMA Circular No. 391000059139 dated 22/5/1439 H regarding Amending the Dates of Paying Pensions According to the Gregorian Calendar.

I would like to inform you that SAMA received a letter from the Director General of Financial Affairs at the General Organization for Social Insurance, No. 45984 dated 14/8/1439 H, which includes the approval of the Board of Directors of the General Organization for Social Insurance to change the payment date of beneficiaries' entitlements from the Hijri calendar to the Gregorian calendar. Payments will be transferred on the first day of each Gregorian month. If this date falls on a Friday or Saturday, the transfer will occur on the preceding Thursday, starting from June 1, 2018. Please note that the last month’s Hijri entitlement will be transferred on Wednesday, 1/9/1439 H, corresponding to 16/05/ 2018 G.

Accordingly, SAMA hopes that your specialists will consider the new approved dates for disbursing the entitlements of beneficiaries of the General Organization for Social Insurance when collecting monthly installments for credit obligations.

SAMA received a circular from His Royal Highness the Minister of Interior, No. (66899), dated 16/6/1439H, referring to the launch of  the issuance of the new National Identity Card (third generation), which includes the approval to use it. It is emphasized that the cards from the previous issuance remain valid until their expiration date.

Referring to the decision of His Excellency the Minister of Justice No. (6622) dated 9/9/1438 H, based on the royal decree No. (32749) dated 16/7/1438 H, regarding the Ministry of Justice taking necessary actions to include the provisions of the legal representative-concerning the Law of Advocacy-applying to legal department employees at private legal entities. This includes the addition of paragraph (18/13) to the Implementing Regulations of the Advocacy Law with the following text: "Employees of the legal departments at private legal entities shall be considered as legal representatives—after being licensed by the General Administration of Advocacy—based on a power of attorney from the authorized person. etc."

As a result of the continuous cooperation and coordination between SAMA and the Ministry of Justice in all areas of mutual interest, SAMA would like to inform financing companies that their legal department employees are included in the legal representative status of the financing company. Consequently, legal department employees in financing companies are entitled to represent the company in judicial authorities for more than three cases simultaneously, subject to the following conditions:

      A. The applicant (legal department employee) must personally submit the request to the General Administration of Advocacy at the Ministry.

      B. The application must include the following documents: (1- National ID card. 2- A certified copy of the qualification or presentation of the original for verification. 3- A valid employment contract in the legal department of the financing company with at least one year remaining. 4- A statement from the financing company confirming that the employee is still employed. 5- A certificate of contribution durations and wages from the General Organization for Social Insurance (printout). 6- A valid power of attorney from the authorized person. 7- A copy of the financing company’s registration certificate + a copy of the company’s foundational contract. 8- Four recent personal photos (4*6) with a white background). The General Administration of Advocacy can be contacted through the following details:

SAMA received the letter from His Excellency the Governor of the General Organization for Pension No. 15386/S dated 08/05/1439 H regarding the intention of the General Organization for Pension and the General Organization for Social Insurance to shift to disbursing pensions according to the Gregorian calendar. Pensions will be paid starting from February 2018 on the 25th of each Gregorian month.

Accordingly, SAMA hopes that your specialists will take into account the new approved dates for disbursing pensions when collecting monthly installments for credit obligations.

Based on the powers vested to SAMA under the Banking Control Law issued by Royal Decree No. M/5 dated 22/02/1386 H, and the Finance Companies Control Law issued by Royal Decree No. M/51 dated 13/08/1433 H, and in response to inquiries received by SAMA regarding the Saudization calculation mechanism and its relation to directives issued by the Ministry of Labor and Social Development in this regard.

We inform you that all Saudi citizens must be counted, along with the categories treated as Saudis—according to what is issued by the Ministry of Labor and Social Development—and this must be disclosed through the precautionary data form submitted to SAMA. Financial institutions should ensure verification and compliance with what is issued by the Ministry of Labor and Social Development in this regard, and reflect that periodically on the aforementioned form, notifying SAMA of any updates made in this regard.

Please take note and act accordingly, starting from the first quarter of 2018.

Attached is the Law of Private Security Services issued by Royal Decree No. (M/24) dated 8/7/1426 H, along with its Implementing Regulations issued by Ministerial Decision No. (170/H/D) dated 5/5/1427 H.

When contracting with private civil security guard companies and institutions, compliance with the conditions and requirements stated in SAMA Circular No. (49968/MAT/23756) dated 20/10/1432 H must be ensured.

Referring to the issuance of numerous local and international regulations and instructions related to combating money laundering and financing terrorism, including the most recent ones issued by The Law of Terrorist Crimes and its Financing issued by Royal Decree No. M/16 dated 24/2/1435 H and the updates that occur from time to time regarding the amendment of some laws, regulations, and rules, among others. In addition, the periodic warning statements issued by the Financial Action Task Force (FATF) concerning countries that suffer from weaknesses in their regulatory measures to combat money laundering and terrorism financing.

We would like to emphasize the importance of all relevant parties continuously monitoring related websites, including SAMA's website and to follow up on the regulations and instructions being issued, as well as those published by international and regional organizations, such as the United Nations, the Financial Action Task Force (FATF), and the Middle East and North Africa Financial Action Task Force (MENAFATF), in order to ensure the banking and financial system in the Kingdom complies with the standards and requirements for combating money laundering and terrorism financing.

    Therefore, we hope that everyone adheres to what is mentioned above.

With reference to the Royal High Order No. 8/759 dated 5/10/1421 H, which stipulates that allowing women to work in government departments or other public or private institutions, companies or professions that lead to mixing with men and the like is not possible, whether the woman is Saudi or non-Saudi, as it is prohibited by Islamic Shariaa and contradicts the customs and traditions of this country, and that if there is a department that employs women in jobs that are not suited to their nature or in jobs that lead to mixing with men, this is a mistake that must be avoided. As well as the Royal Decree No. 187 dated 17/7/1426 H, which includes in its third paragraph a reference to the controls of employing women as wages for employers, including Not mixing with men in workplaces, and referring to the letter of His Royal Highness the Prince of Riyadh Region No. 16944 dated 7/8/1433 H, based on the letter of His Eminence the Grand Mufti, Chairman of the Council of Senior Scholars and Scientific Research Department No. 33011031 dated 7/7/1433 H, which includes the directive to emphasize adherence to the regulations and instructions governing the employment of women, in addition to the provisions related to the employment of women contained in the Labor Law issued by the Holy Royal Decree No. M/51 dated 23/8/1426 H and its Implementing Regulations, as well as the Women's Work Guide in the Private Sector issued by the Ministry of Labor and published on the Ministry's website (first version Muharram 1435 H) and any updates to it.

In line with SAMA's commitment to providing a suitable work environment for male and female employees in the financial institutions it supervises, the Central Bank emphasizes the necessity of adhering to the following:

First: The financial institution and all its employees must adhere to the provisions of the above-mentioned royal orders, regulations and directives, especially those related to the regulation of women's work in the private sector.

Second: All female workers in financial institutions must adhere to modesty in dress and appearance in accordance with the requirements of Sharia regulations and the customs and traditions of society.

Third: The management of the financial institution must adopt internal procedures and policies that regulate the work of women in accordance with the provisions of the Supreme Orders, regulations and directives referred to above, and take the necessary measures to implement this in order to provide a suitable work environment for its female employees that allows them to practice their work freely and separately from men.

Fourth: The financial institution must establish a fair and clear mechanism for job evaluation and annual promotions for all its employees to ensure justice and regulate the relationship between superiors and subordinates (Code of Conduct).

Fifth: The financial institution must fully comply with all the above-mentioned procedures and put them into actual implementation within a maximum period of 31/12/2014G, provided that SAMA is provided in writing with the date of actual implementation of these procedures.

Pursuant to Circular No. 371000052146 dated 13/2/2016G, and with reference to SAMA Circulars No. 351000096501 dated 26/07/1435 H, No. MT/23423 dated 09/09/1433 H, No. 24593/MT/280 dated 20/05/1429 H, and No. 17479/MT/164 dated 02/11/1421 H, SAMA emphasizes the need to comply with the aforementioned circulars, and the instructions regulating the work of women and the controls of women's work in all circumstances, whether inside or outside the establishment's premises, such as meetings and training courses held outside the establishment's premises, and that failure to comply with any of these instructions and controls will lead to taking legal action against the establishment.

Referring to the Royal Order No. A/270 dated 26/09/1438 H, issued to return all allowances, bonuses, and financial benefits for state employees, both civilian and military, retroactively, as mentioned in Cabinet Resolution No. (551) dated 25/12/1437 H.

SAMA wishes to emphasize that the amounts returned under the aforementioned Royal Order must not be affected, whether through seizure, deductions, or similar actions, and instructs your specialists to comply and act accordingly.

Referring to SAMA's approval of cash deposit procedures for Category (A) exchange companies directly at the branches of SAMA.
It is required that banks operating in the Kingdom sign an agreement with Category (A) exchange companies that includes the procedures for cash deposits made by these companies directly at the branches of SAMA, taking into account the content of the agreement and the conditions and procedures that must be adhered to by the banks and Category (A) exchange companies, which include the following:

1. The agreement must include a clause authorizing the exchange company to conduct the deposit on behalf of the bank.
2. Authorization of the bank to representatives of the exchange companies to make deposit on its behalf, specifying their names and details, and that the exchange companies comply with the legal procedures for implementing deposit requirements according to the cash deposit policy applied by SAMA, as well as compliance with the Law of Transporting Money, Precious Metals, and Valuable Documents and the approved implementing regulation for this purpose.
3. Commitment of exchange companies to precautionary measures for importing Riyals concerning the safety of those funds and the reliability of the foreign exchange companies they deal with, ensuring the validity of their licenses.
4. Commitment of exchange companies to the counting and sorting instructions issued by SAMA and the resulting responsibility for discrepancies or counterfeit currency. The bank shall be liable to SAMA for such cases and will deduct from the exchange company accordingly.
5. Adoption of procedures for placing identification cards for the exchange companies on the supplied links to the branches, stamped with the bank's name as a document to prove discrepancies or counterfeit currency.

Based on the powers vested to SAMA under Saudi Arabian Monetary Authority Law issued by Royal Decree No. (23) dated 23/05/1377 H, and the Banking Control Law issued by Royal Decree No. (M/5) dated 22/02/1386 H, and the Finance Companies Control Law issued by Royal Decree No. (M/51) dated 13/08/1433 H, and referring to the Registered Real Estate Mortgage Law issued by Royal Decree No. (M/49) dated 13/08/1433 H.

SAMA emphasizes that banks and finance companies must adhere to the following:

First: Document mortgages according to the actual contract, and cease any procedures related to transferring ownership of the property instead of mortgaging it.

Second: Correct the status of real estate currently registered in the name of the bank or finance company within a period not exceeding three (3) years, and inform customers accordingly.

Third: Provide SAMA with cases proving the refusal of notaries to register the mortgage for the benefit of the bank or finance companies.

Referring to the Ministry of Justice Circular No. 13/T/6458 dated 28/11/1437 H directed to all government entities, which mentions Cabinet Decision No. 66954 dated 07/10/1435 H regarding the Regulation of Notaries and Their Work, which stipulates in Article One that the licensed notary must document several tasks, including power of attorney and its revocation, company contracts, amendments, and decisions of authorized parties. The work of notaries began gradually in issuing and revoking powers of attorney and documenting company bylaws starting from 25/11/1437 H. The circular also requests awareness and adherence to the documents issued by notaries in their jurisdiction and considers them as executable instruments according to the provisions of the Enforcement Law and its regulation.

We would like to inform you that SAMA has received a letter from His Excellency the Minister of Justice No. 38/2450340 dated 01/07/1438 H, stating that inquiries can be made regarding the validity of notaries’ licenses through the Notaries Portal at the link. Accordingly, the issuance of documents by licensed notaries from the Ministry of Justice within their jurisdiction, as outlined above, is accepted.

For your information, and to notify all relevant departments and branches.

In reference to SAMA's instructions regarding the application of Security Council resolutions related to combating terrorism and its financing as stipulated in the Rules Governing Anti-Money Laundering & Combating Terrorist Financing for all Banks and Money Exchangers and Foreign Banks' Branches Operating in the Kingdom of Saudi Arabia issued in February 2012G, as well as the Rules for Combating Money Laundering and Terrorist Financing in the Insurance and Reinsurance Companies and Liberal Professions.

SAMA wishes to inform you of the issuance of an update to the mechanisms for implementing Security Council resolutions related to combating terrorism and its financing, as per the cable from His Royal Highness the Crown Prince, Deputy Prime Minister, Minister of Interior, and Chairman of the Supreme Committee for Combating Terrorism No. 109130 dated 25/04/1438H. This update is based on Article (32) of the Law on Combating the Financing of Terrorism, which stipulates that the Permanent Committee for Combating Terrorism at the Ministry of Interior shall establish the necessary mechanisms to implement Security Council Resolutions No. (1267) and No. (1373) and related resolutions, issued by a decision of the Minister of Interior. The cable from His Royal Highness included approval and implementation of the updated mechanisms for applying Security Council resolutions related to combating terrorism and its financing, which are as follows:

1. The mechanism of Security Council resolutions concerning those on the Security Council Committee's No.(1267) consolidated list of ISIS, Al-Qaeda, and associated individuals, institutions, and entities.
2. The mechanism for implementing Security Council Resolution No. (1373) and subsequent resolutions related to combating terrorism and its financing.
3. The mechanism for implementing Security Council Resolution No. (1988) and subsequent related resolutions.

In implementation of the updated mechanisms for applying the Security Council resolutions mentioned above, the following actions must be taken, and feedback on the measures taken in this regard should be provided within one week from the date of this notice:

Referring to the powers vested to SAMA under relevant regulations, rules, and instructions. And referring to the decision of the Board of Directors of the General Authority for Small and Medium Enterprises No. (2-1-1438) dated 14/03/1438 H regarding the approval of the definition of small and medium enterprises operating in the Kingdom. The following has been decided:

First: The definition of small and medium enterprises is as follows:

* The revenue criterion is adopted in the classification of the type of enterprises, and in the absence of revenue data (new enterprise), the criterion of the number of full-time employees is the criterion in the classification of the type of enterprise.
 

Second: It will be effective as of its date.

Based on the Credit Information Law issued by Royal Decree No. (M/37) dated 05/07/1429 H and its implementing regulations issued by the decision of the Governor No. A Q/13709 dated 22/09/1432 H, and referring to the license granted to Bayan Credit Bureau under decision No. 2/37 dated 23/09/1437 H to practice credit information activities.

Accordingly, we hope to cooperate with Bayan Credit Bureau by sharing credit information for the commercial establishments sector, which will enhance the level of transparency in this sector and help assess the size of the financial obligations and creditworthiness of companies operating in this sector.

We would like to inform you about the signing of a Service Level Agreement (SLA) between the Banking Execution Department, the Special Execution Division, and the General Directorate of Information Technology at the Central Bank, which will come into effect starting from March 1, 2017G. The agreement outlines the classification and prioritization of SAMA Net system issues based on their importance, the mechanism for resolving them, and the timeframes for addressing these issues according to their classification. It also specifies the timelines for handling other requests related to the SAMA Net system. The aim of this agreement is to minimize SAMA Net system issues and prevent their recurrence, as well as to ensure swift, effective, sustainable, and comprehensive solutions. The agreement also emphasizes performance monitoring and evaluation to enhance service efficiency.

Attached is a table detailing the types of issues or malfunctions, their levels of importance, and the instructions for reporting and submitting complaints to the General Directorate of Information Technology at the Central Bank regarding these issues and malfunctions.

Please take note of this and comply with the attached instructions starting from March 1, 2017G.

• A table showing the classification of issues and failures:

•  Instructions for registering communications and requests:

Communications that do not meet the stated requirements will not be accepted after you have received this circular.

         In reference to the ongoing and fruitful cooperation between SAMA and the Ministry of Justice in all fields that serve the public interest, and to the meeting held on Sunday, 19/3/1438H, between His Excellency the Governor of SAMA and His Excellency the Minister of Justice at the Ministry of Justice headquarters regarding discussing ways to improve support for the investment environment in the financial sector and discussing topics of mutual interest, especially some challenges facing financial institutions under the supervision of SAMA with some entities affiliated with the Ministry of Justice. To address these challenges, SAMA hopes to be provided with the following:

1. Data, information, and modern official communication methods and means for every financial institution that enable the execution judiciary to notify in the specified manner and time.
2. Confirmed cases of some notaries refusing to complete the mortgage in favor of financing entities.
3.  Data on overdue execution cases.
4. The non-responsiveness encountered by insurance companies from some judges in cases involving blood money and compensation.
5. Proven cases of different procedures between notaries in the Kingdom.
6. The confirmed cases of different procedures in the execution court from one court to another.

SAMA hopes to be provided with the aforementioned information no later than the end of January 2017. For coordination on this matter, please contact SAMA.

SAMA received a letter from the Undersecretary of the Capital Market Authority No. S 1/6/6966/16 dated 7/11/1437 H, informing that the Board of the Capital Market Authority issued its decision dated 15/9/1437 H, which includes the following:

(a) Non-Saudis are not permitted to purchase shares – including investment through swap agreements – or debt instruments convertible into shares issued by the following listed companies:

 1) Mecca Construction and Development Company, Taiba Holding Company, Jabal Omar Development Company, and Knowledge Economic City.

2) Companies in which non-Saudis are prohibited from owning shares according to instructions issued by supervisory and regulatory authorities that these companies are subject to.

(b) Current non-Saudi owners of shares in the companies mentioned in paragraph (a) of this decision are prohibited from purchasing additional shares in these companies and are only permitted to sell. In the event that these companies increase their capital by issuing priority rights shares, these owners are allowed to subscribe to these rights or sell them without purchasing new rights.

 (c) In the event that shares of the companies referred to in paragraph (a) of this decision are transferred through inheritance to non-Saudis, the provisions stated in paragraph (b) of this decision shall apply to them, in accordance with the procedures approved in this regard, especially the provisions included in the Securities Depository Center Rules.

Based on the above, SAMA affirms to all banks and finance companies operating that it is not permissible to lend to non-Saudis through stock Murabaha for the companies referred to in paragraph (a) of the aforementioned Capital Market Authority Board decision.

Based on Articles V and VII of the Anti-Money Laundering Law issued by Royal Decree No. (M/31) dated 11/05/1433H and its Implementing Regulations, Rule No. (5.1.2) regulating telegraphic transfers, Rule No. (4.3) on the principle of know your customer, Rule (4.4) on customer due diligence (CDD) of the Rules Governing Anti-Money Laundering and Combating Terrorist Financing, and what was stated in the sixteenth recommendation of the Financial Action Task Force (FATF) on wire transfers, which included that financial institutions are required to ensure that all wire transfers are accompanied with the required and accurate information about the originator of the transfer, the beneficiary and the purpose of the transfer.

 In view of the recent fact that it has been noted that there has recently been an increase in reports received from banks operating in the Kingdom to the Financial Intelligence Unit about transfers of funds from foreign individuals with simple professions to several countries and beneficiaries, they may be misused to transfer funds to suspicious persons in exchange for sums of money, and because of the consequences of confining them and the Financial Intelligence Unit from them of useless cost at the expense of other subjects and after some investigations, it became clear that some of the transferred clients did not know the beneficiaries to whom the funds were transferred or that the purpose of the transfer was unclear. 

Therefore, SAMA emphasizes the necessity for banks to verify that clients are making their transfers to beneficiaries with whom they have a connection or knowledge and that they are not making the transfer on behalf of others. Banks must add a field that includes a declaration from the client and his signature stating "knowledge that the Kingdom's regulations prohibit the transfer of money without the transferring client knowing the beneficiary (transferee) or without a legal relationship linking him to the beneficiary or without a legitimate purpose", and more effort should be made to enhance due diligence towards clients, in compliance with local regulations and rules and international recommendations. And inform us of receipt and commitment within two weeks from its date.

SAMA has received several inquiries from banks and citizens, regarding the acceptance of five-year Iqama permits carried by some tribesmen and issued by Passport Departments in Hafr Al-Baten and Arar as an identification document.

By writing to the Ministry of Interior in this respect, SAMA received the answer of the Ministry No. 40344 dated 22-5-1409 H in which it said that the original of such permits may be accepted as an ID during its validity.

Please be informed and notify all your branches to act accordingly.

In reference to Article Eleven of the Implementing Regulation of the Real Estate Finance Law issued by Royal Decree No. M/50 dated 13/8/1433 H, which states that. "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." And based on what is required by the public interest.

I would like to inform you that SAMA has decided to increase the maximum ratio of the financing amount to the value of the residential property stated in Article 12 of the Implementing Regulation of the Real Estate Finance Law from (70%) to (85%) for real estate finance companies, excluding banks.

I would like to emphasize the necessity for commercial banks and finance companies to verify the beneficiary's repayment capacity before granting financing—of all types—taking into account the financial and credit obligations of the beneficiary, and to fully comply with the instructions issued by SAMA in this regard.

SAMA emphasizes the importance of the financial sectors operating in the Kingdom within the scope of their supervision to comply with the AML/CFT instructions communicated by SAMA and the standards issued by the relevant international organizations - the Financial Action Task Force (FATF) and the Basel Committee (BIS) - regarding the correct application of the risk-based approach (RBA), which is based in one aspect on financial institutions conducting a study and assessment of the risks resulting from dealing with individuals, natural and legal persons, states and various entities in a way that ensures the provision of all financial services to all segments of society.

When implementing precautionary measures in its dealings with certain countries, entities, and individuals classified as high-risk—such as those associated with countries subject to economic sanctions, those failing to comply with international standards, or those that do not fully or adequately implement such standards—it is necessary to conduct prior studies and assess the risks on a case-by-case basis. Decisions should be made individually in cases where the information provided by the client is insufficient. A blanket prohibition on financial dealings or the collective termination of financial relationships should be avoided, as this may deprive segments of society of access to financial services through licensed channels.

SAMA cautions against the misconceptions surrounding the concept of "De-risking," particularly the notion that it inherently fulfills anti-money laundering (AML) or counter-terrorism financing (CTF) requirements. De-risking should not be understood as financial institutions terminating, restricting, or avoiding business relationships with entire categories of clients solely due to the limited financial returns derived from dealing with them compared to the increased costs of enhanced monitoring and oversight. Nor should it be viewed as a means to avoid reputational risks associated with engaging with such categories.

Based on the above, appropriate measures for combating money laundering and terrorist financing must be implemented to achieve the goal of financial inclusion, ensuring that all members of society have access to affordable and accessible financial services. These measures should facilitate access for vulnerable and underserved groups, including those with limited income and residents of remote areas, rather than forcing them to turn to unregulated channels where tracking financial transactions becomes more challenging, thereby undermining the effectiveness of anti-money laundering and counter-terrorism financing efforts.

An analytical study and periodic reassessment of procedures must be conducted continuously to evaluate the financial transaction risks associated with countries, entities, and individuals. This ensures a balance between continuing to provide financial services to those who need them and maintaining full compliance with relevant local and international standards and requirements for combating money laundering and terrorist financing.

Referring to inquiries about the existence of accounts reported to the Financial Intelligence Unit that have been enhanced and are still active and the reporting banks have not received any feedback from the Unit.

 We would like to inform you that SAMA has received the letter of His Excellency the General Supervisor of the Financial Intelligence Unit No. 1/20/1/3/2858 dated 19/05/1436 H, which states that banks are required to continue enhancing reports on accounts that have not received any feedback from the Unit in the event of transactions that differ from what was stated in the original report or a significant increase in the volume of transactions. Due diligence should be exercised in the area of ​​knowing customers before reporting to raise the level of reporting efficiency.

SAMA received a letter from His Excellency the Minister of Finance No. 6112, dated 11/7/1436H, attached with a copy of the telegram from His Royal Highness the Crown Prince, Deputy Prime Minister, Minister of Interior, and Chairman of the National Committee for Combating Drugs, number 778, dated 3/7/1436H regarding the launch of the National Anti-Drug Committee's for National drug prevention (NEBRAS) in partnership and coordination with relevant authorities. His Highness expressed the desire to mandate the competent authority, when preparing any similar preventive programs, to adopt the (NEBRAS) slogan to unify and integrate efforts, and to coordinate with the General Secretariat of the National Anti-Drug Committees in this regard.

Accordingly, SAMA hopes to coordinate with the General Secretariat of the National Committee for Drug Control when preparing any similar preventive programs, in order to unify and integrate efforts.
 

Based on Paragraph (2) of Article (25) of the Finance Lease Law which stated that "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." Referring to the instructions of the Ministry of Interior prohibiting the recovery of vehicles in cases where the contract between the parties includes the lessor's right to recover them except through the competent authorities.

Therefore, licensed financing entities engaged in the activity of financial leasing must comply with the Ministry of Interior's regulations on this matter until the Ministry of Justice licenses specialized companies to perform this task, pursuant to the provisions of the aforementioned article. Additionally, we clarify that anyone who attempts to recover movable assets from the employees of the financing entities without referring to the competent authorities will be subject to legal prosecution.

Referring to the powers vested to SAMA under the Real Estate Finance Law issued by the Royal Decree No. (M/50) dated 13/8/1433 H and The Finance Companies Control Law issued by the Royal Decree No. (M/51) dated 13/8/1433 H, and where SAMA has received many inquiries regarding the extent to which land financing is subject to the provisions of Article Twelve of the implementing regulations of the Real Estate Finance Law issued by the decision of the Minister of Finance No. (1229) dated 10/04/1434 H. 

Accordingly, SAMA confirms that the individual land financing by all real estate financiers (banks and finance companies) is subject to the provisions of Article 12 of the Implementing Regulations of the Real Estate Finance Law.

Referring to the Credit Information Law issued by Royal Decree No. (M/37) dated 05/7/1429 H and the implementing regulations issued by the decision of His Excellency the Governor No. (A Q/13709) dated 22/9/1432 H through which the general principles and necessary regulations for collection, exchanging, and protecting credit information about consumers have been established, through companies licensed by SAMA.

Therefore, SAMA emphasizes that the collection, exchange, and protection of consumer credit information is subject to Credit Information Law and its Implementing Regulations referred to above, and that any arrangements or agreements for the exchange of credit information outside the scope of companies licensed by SAMA are considered violations for the law and for its implementing regulations that requires punishment.

For your information and action accordingly, and to acknowledge receipt.

Referring to Article 83 of the Implementing Regulations of the Finance Companies Control Law. which stipulates that "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, "and to Article Nine of the Regulations for Consumer Financing. which stipulates that "All fees, costs and administrative services charges to be recovered from the Borrower by the Creditor must not exceed the equivalent of (1%) of the Amount of Financing or (5,000) five thousand Saudi riyals, whichever is lower."

SAMA would like to clarify that the fees and administrative service costs referred to in the above articles include all amounts that the beneficiary is required to pay, aside from the financing amount and the cost of the term, including all unavoidable fees, costs, and commissions necessary to obtain financing, such as, but not limited to, fees for studying the financing request, property appraisal fees, property inspection fees, registration fees.....etc. SAMA also emphasizes that communicating with concerned authorities to finalize the financing procedures (such as property appraisers and registration authorities) and paying the due costs to them is the sole responsibility of the bank and it is not permissible to authorize the beneficiary (customer) to pay any amounts related to third parties, taking into account that all fees and expenses the beneficiary must pay to obtain the financing must be included in the annual percentage rate.

We would like to inform that the Central Bank received the letter of His Excellency the Acting Minister of Finance No. 6491, dated 01/08/1434H, annexing to its letter No. 10764, dated 10/10/1431H, attached herewith a copy of the Royal Order No. 6927 / MB, dated 22/9/1431H, approving the mandatory application of thermal insulation to all new buildings, whether residential, commercial or any other facilities, similar to government facilities in the main cities in the regions of the Kingdom.

Referring to the review of complaints submitted to SAMA, it was observed that some banks have not complied with the instructions regarding the percentage of salary deductions. In some cases, deductions exceeded the regulatory limit, surpassing 50% of the monthly salary of customers who were in default. Additionally, we refer to the instructions emphasizing the bank's responsibility to adhere to the salary deduction limits for employees and retirees who have obtained credit products (e.g., personal loans, credit cards).

We emphasize on the following:

1. The monthly deduction must not exceed 33% of the employee's salary and 25% of the retiree's salary, as stipulated in SAMA Circular No. 341000076474 dated 19/6/1434 H.
2. No seizing may be made on an employee's salary without an order from the competent authority, and the amount deducted each month must not exceed one-third of the net monthly salary, except in cases of alimony debts. Banks must establish a mechanism to link the monthly installment deduction directly with salary deposits to avoid the accumulation of unpaid installments, as per SAMA Circular No. MAT/552 dated 10/6/1430 H.
3. The monthly installment must be deducted on the agreed date and aligned with the customer's salary deposit date in their account with the bank, as outlined in the Banking Consumer Protection Principles.
    

For your information, we request strict compliance with these instructions based on the bank's responsibility to assess customer risk levels before approving credit. Please inform us of the actions taken within two weeks from the date of this notice.

SAMA has received the cable of HE the Minister of Finance and National Economy No. 3/1333 dated 15-2-1415 H, together with an attached copy of the cable of HE the Minister of Information No. 197/Bs dated 4-2-1415 H, referring to Royal Decree No. M/12 dated 16-7-1414 H, regarding the approval of joining the International Agreement for the Protection of Literary and Artistic Works, amended in Paris in July 24, 1971 A.D. and the presentation of the membership document to UNESCO by the Ministry of Information on 13-4-1994 A.D.

Whereas this Agreement went into effect on 13-7-1994 A.D. (5 Safar 1415 H); and

Whereas the Ministry of Information is in charge of implementing this Agreement, HE the Minister has requested us to notify all companies, banks and establishments that use the computer to refrain from using copies of software and to use only original software after obtaining an original certificate from the software producer authorizing the user to use such software. This was confirmed by the Ministry of Finance and National Economy which instructed us to notify local banks and licensed money exchangers accordingly.

We, therefore, hope you comply with the instructions of HE the Minister of Information and instruct your branches of act accordingly.

Further to the Central Bank's circulars regarding the statements issued by the plenary meetings of the Financial Action Task Force (FATF) regarding the risks of dealing with certain parties. And The Central Banks' requeste to identify all transactions with the countries mentioned in the statement, assess the banking relationships with them, take the necessary measures, provide the Central Bank with a detailed report on them, follow up on what is issued by other relevant authorities regarding countries and regions that have weaknesses in their AML/CFT procedures or those that do not apply or do not adequately apply the FATF recommendations or represent a high degree of risk, and take caution about existing transactions with them.

Emphasizing the provisions of paragraph (5.2) of the AML&CFT Rules  (Second Update) issued by the Central Bank Circular No. 00042/MAT/829 dated 29/12/1429H, that banks and exchange houses must strengthen due diligence procedures with special attention to business relationships and operations with individuals, including companies and banks that operate or practice their activities within countries or geographical areas that do not apply or insufficiently apply the FATF recommendations.

In order to keep pace with local and international developments and requirements in the field of AML/CFT, banks and licensed exchange houses operating in the Kingdom must take appropriate countermeasures that reduce the risk of dealing with entities located in countries and regions that have weak AML/CFT procedures or those that do not apply or insufficiently apply the FATF recommendations, as follows:

1. Pay particular attention to business relationships and operations with individuals (including legal persons and other financial institutions) from or in countries that have weak AML/CFT procedures or that do not apply or do not adequately apply the recommendations of the Financial Action Task Force (FATF)
2.  Classify the risk level of all countries mentioned by all international organizations, including but not limited to the FATF, Security Council, Chapter VII Committee of the United Nations Charter ... and others issued warning bulletins as high, medium, low risk in accordance with the classification of those organizations as a minimum, and determine the necessary action to be taken regarding monitoring transactions with them or limiting the formation of business relationships and financial operations with the concerned countries or individuals in those countries.
3.   Adhere to the statements of these organizations, whether the warning issued by the Financial Action Task Force (FATF) or the resolutions of the Security Council and the Chapter VII Committee of the United Nations Charter, and identify any transactions related to them and prepare detailed reports on them, follow up on what is issued by the relevant authorities and take the necessary measures regarding them.
4.   Strengthening customer due diligence requirements to identify the ultimate beneficiary before establishing business relationships with individuals or companies from these countries.
5.    Immediate cessation of dealings with entities, individuals, or financial institutions from countries subject to financial sanctions by the United Nations Security Council, including measures under Chapter VII of the UN Charter. This cessation must cover all banking and financial transactions.
6.   Enhanced due diligence must be exercised when entering into new business agreements or opening correspondent banking accounts with countries subject to advisory notices issued by the Financial Action Task Force (FATF), the United Nations Security Council, or the Chapter VII Committee of the UN Charter. It is essential to ensure that the correspondent bank is not listed on local or United Nations sanctions or prohibition lists.
7.    Immediately update the requirements to complete or fulfill AML/CFT procedures and take enhanced due diligence procedures for all banking transactions with related parties in those countries.
8.    Classify all banking activities and relationships conducted by the bank with entities affiliated with countries subject to advisory notices (including government relations, correspondent banking relationships, commercial relationships with companies or individuals, resident customer relationships, and others) at a risk level commensurate with the nature of these activities and relationships, as well as the risk level of the respective countries.
9.   Ensure that all banking activities and relationships conducted by the bank with entities affiliated with countries subject to advisory notices are for clear economic or legal purposes. Identify the ultimate beneficiaries of these activities and relationships, and based on this, determine the risk level and the necessary monitoring requirements.
10.   If these operations do not have a clear economic or legal purpose, the background and purpose of these operations should be studied as much as possible, and the results of this study should be kept in writing and made available when needed to assist the competent authorities.
11.  Conduct a comprehensive review of all commercial relationships conducted by customers, including credits and guarantees, to determine their purpose and identify their beneficiaries.
12.  Informing the Bank's senior management and compliance department of the Bank's current banking relationships with entities affiliated with these countries, and obtaining the necessary approvals from the Bank or the supervisory authorities regarding dealing with these countries, depending on the severity of the case. 
13.     Strictly adhere to the instructions for reporting suspicious transactions in general, and reinforce reports related to suspicious financial transactions with those countries for which warning notices have been issued to the Financial Investigation Unit (FIU). 
14.  Taking into account the content of all relevant international resolutions and warning bulletins issued by various regional and international organizations, referring to the websites of these organizations periodically and continuously, researching other reliable sources of information and taking the necessary measures regarding them.
15.  Circulate to the business sectors within the bank or exchange shop to include internal and external branches and subsidiaries to take note of the supervisory instructions issued in this regard, and verify their implementation.
     

SAMA received the telegram of His Royal Highness the Assistant Minister of Interior for Security Affairs No. 1Sh/72617 dated 1/12/1430 H, including the report on the recent developments on the mechanism for issuing national identity cards, and that the delivery of renewed cards will take place fourteen days after submission, while the citizen keep his old card and it will be withdrawn from him upon receiving the new card, and that this issue has been studied comprehensively from all aspects by the competent authorities and the public interest has been taken into account when charging the citizen with the consequences of these changes in the system of issuing the national identity, as the renewal of the card may take up to a month in the event that the renewal period coincides with one of the official holidays (Eids). Therefore, banks will freeze all accounts and financial transactions of citizens unless they submit their renewed cards. It also includes His Highness's directive to accept the expired card for a maximum period of one month from the official expiry date so that accounts and financial transactions are not frozen before one month has passed from the expiry date, and the need for banks to display guidance messages to their customers to remind them of the imminent expiry of their cards in their statements of accounts and when they visit banks or when using ATMs or websites and alert them that the expiration of the card will lead to freezing their accounts.

We inform you to allow the acceptance of status cards and national identity cards whose validity date has expired for a maximum period of one month from the expiry date, for citizens who do not have bank accounts or contractual relationship agreements and wish to implement a banking service such as cashing checks or receiving internal transfers transferred to them from customers of the same bank and similar services, and SAMA stresses the need to take into account the contents of Rule No. (3-1-1) of the third update of the rules for opening bank accounts and the general rules for their operation issued under Circular No. 55777/ BCI/777 dated 16/12/1429 H concerning the freezing of the accounts of Saudi individuals, which stipulated giving a grace period of (90) days from the expiry date of the validity of the civil status card or national identity card for existing customers. It also confirms the contents of Circular No. 57409/MAT/1075 dated 6/12/1430 H regarding the need to comply with the requirements of Rule No. (3-2) that banks notify their customers of the date of account freezing at least one month before the date of freezing, and that they develop programs, procedures, means and methods to achieve this for each customer or authorized person on the customer's accounts independently for each customer and document this policy and its application processes. Failure to renew will lead to the freezing of their accounts and banking transactions, through the various means of transactions and communication available to customers.

Further to SAMA Circular No. 107 dated 14/2/1428 H, regarding activating the role of banks in providing financial transfer services to their customers easily and simply, implementing marketing programs to attract customers to benefit from these services, fully complying with the regulations and instructions issued in this regard, taking the necessary precautionary measures to detect abnormal transactions in their early stages, informing the concerned authorities immediately thereof, and providing SAMA with reports on what has been taken regarding these directives. 

We would like to report that through the presentation and analysis of the banks' responses received by SAMA, it became clear that banks are seeking to diversify their financial transfer services through the multiple transfer channels represented by the bank's branches and transfer centers spread throughout the Kingdom and using the electronic banking means available at the bank such as ATMs, Internet, phone banking and mobile transfer service.

In view of the effective role of these services provided by banks in reducing the phenomenon of illegal transfer, which is considered a port for money laundering and other crimes and violations. SAMA urges all banks to take the following steps:

1.  Introducing new, more competitive and secure money transfer channels, especially for banks that may suffer from a lack of diversity of their transfer channels in line with international best practices. 
2. The importance of studying the needs of customers, especially expatriates to the Kingdom, and identifying the categories of nationalities from countries that the bank can serve significantly, in order to force the expansion of the development of new channels that meet their needs and increase the number of correspondents in those countries.
3. The need to educate citizens and residents about the danger of using irregular channels, and urge them to use regular channels, and to redouble marketing efforts to introduce financial services, especially remittances provided by the bank.
4. Ensure the application of all necessary precautionary measures when providing these services and ensure their effectiveness to detect suspicious operations early.

 We hope to report within three months from its date on what has been taken in this regard.

In response to the Royal Circular No. 16749 dated 4/5/1435H, which emphasizes that all governmental entities must maintain and care for their documents and address any shortcomings in their conditions, and to the Royal Circular No. 46315 dated 24/12/1434H, which restricts the handling of confidential documents to authorized personnel only, and mandates that each governmental entity educate its employees about the importance of maintaining the confidentiality of information and documents, as well as the penalties associated with their disclosure and the implementation of the Penal Law on Dissemination and Disclosure of Classified Information and Documents 1432H

Attached, you will find the document Instructions for Handling Confidential Documents and Information No. (2-1434) dated 22/4/1434H. Please ensure that all employees under your supervision read and understand it thoroughly, and take responsibility for complying with the instructions contained therein.

          Referring to the complaints recently submitted to SAMA and what has been observed regarding the delay of some members of the Saudi Credit Bureau (SIMAH) in updating the records of customers who have defaulted on their debts, or the inclusion of disputed information pending before judicial authorities and committees, which has caused disruptions to customers' interests. And referring to Credit information Law and its implementing regulations, and also the Banking Consumer Protection Principles issued by Circular No. 341000095960 dated 03/08/1434 H. SAMA would like to emphasize the members' responsibility to do the following:

1. Update customers' credit information periodically at least once a week.
2.  Refrain from providing credit information companies with negative data about the customer, that involves a dispute or complaint without notifying them that the negative information is currently under dispute or complaint.

We hope to review and act accordingly, and inform SAMA of the measures taken within two weeks from its date, noting that SAMA will investigate any violations of the instructions is detected in accordance with Article (10) of the implementing regulations. The "Committee for Reviewing Violations and Resolving Credit Information Disputes" will take appropriate measures regarding the customers’ objections that have been previously rejected, as well as the violations submitted to it by SAMA in accordance with the provisions in Article (12) and (13) of the Credit Information Law.