The Anti-Money Laundering Law in the Kingdom of Saudi Arabia is a set of procedural and penal rules specifically addressing the crime of money laundering, clarifying the nature of the crime and the penalties resulting from its commission. It was issued in 2017 to replace the Anti-Money Laundering Law, which had been issued in 2012.
The Anti-Money Laundering Law in the Kingdom aligns with the documents signed by the Kingdom to combat money laundering, in accordance with contemporary international and political trends.
The nature of the crime of money laundering
The Anti-Money Laundering Law in the Kingdom defines the crime of money laundering by first defining the concept of the predicate offense. A predicate offense is any act committed within the Kingdom that constitutes a crime punishable under Islamic law or the regulations in the Kingdom, as well as any act committed outside the Kingdom that is considered a crime according to the laws of the country where it was committed, and under Islamic law or the Kingdom's regulations if it had been committed within the Kingdom.
By defining "funds," the Anti-Money Laundering Law in the Kingdom excludes non-financial crimes from its jurisdiction. The "funds" referred to in the law are assets, economic resources, or property, regardless of their value, type, or method of acquisition—whether tangible or intangible, movable or immovable, physical or non-physical—as well as documents, instruments, transfers, and letters of credit, regardless of their form, whether located inside or outside the Kingdom. This also includes electronic or digital systems and bank credits that signify ownership or an interest in them, as well as all types of commercial and financial papers, or any benefits, profits, or other income generated from these funds.
Cases in which the crime of money laundering applies
The Anti-Money Laundering Law in the Kingdom identifies four specific cases to which the crime of money laundering applies.
The cases considered crimes under the Anti-Money Laundering Law include transferring or transporting funds, or conducting any transaction with them, while knowing they are proceeds of a crime. This is done with the intent to conceal or disguise the illegal origin of the funds or to assist anyone involved in the commission of the predicate crime from which the funds were derived to evade the consequences of their actions.
The second case involves acquiring, possessing, or using funds while knowing they are proceeds of a crime or from an illegal source.
The third case involves concealing or disguising the nature of funds, their source, movement, ownership, location, method of disposal, or the rights related to them, while knowing they are proceeds of a crime.
The fourth case involves attempting to commit any of the acts mentioned in the previous three cases or participating in their commission through agreement, providing assistance, incitement, offering advice, guidance, or counsel, or through facilitation, collusion, concealment, or conspiracy.
Preventive measures for institutions under the Anti-Money Laundering Law
Financial institutions, as well as designated non-financial businesses and professions, must take necessary measures to prevent money laundering by identifying, documenting, and continuously updating money laundering risks. They must provide reports to regulatory authorities when needed and refrain from maintaining numbered or anonymous accounts. Additionally, they must comply with appropriate procedures before entering into correspondent relationships with financial institutions outside the Kingdom, and they must prevent the use of their accounts by shell banks.
Institutions must ensure whether the customer or the ultimate beneficial owner is, or has become, entrusted with prominent public functions or high administrative positions within or outside the Kingdom. In addition, they are required to record all information regarding financial transfers and beneficiaries and to retain records, documents, and data. Enhanced due diligence measures must be applied to business relationships or transactions involving individuals from high-risk countries, as identified by the Anti-Money Laundering Permanent Committee.
Penalties under the Anti-Money Laundering Law
The penalty for committing the crime of money laundering under the Anti-Money Laundering Law can reach imprisonment for no less than two years and no more than ten years, or a fine not exceeding SAR5 million, or both penalties. In certain cases, the penalty can reach imprisonment for no less than three years and no more than fifteen years, or a fine not exceeding SAR7 million, or both penalties.
A Saudi national sentenced to imprisonment for a money laundering crime is prohibited from traveling outside the Kingdom for a period equivalent to the length of their prison sentence. A non-Saudi, after serving their sentence, will be deported and not allowed to return to the Kingdom.
Confiscation under the Anti-Money Laundering Law
The Anti-Money Laundering Law stipulates that, upon conviction for a money laundering crime or a predicate offense, a judicial ruling must order the confiscation of the laundered funds and proceeds. If these proceeds are mixed with funds obtained from legitimate sources, an equivalent value of the illicit proceeds will be confiscated. Additionally, the means used in the crime will be confiscated. The competent court may order the confiscation of funds related to the money laundering crime, regardless of whether they are in the possession or ownership of the perpetrator or a third party. The confiscated funds are transferred to the public treasury.
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