Sep 12 2013
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Saudis warned: 'Shun cover-up trade traps'
A senior Saudi official has warned Saudi nationals against being lured into financial offers made by expatriates to cover up their illegal businesses in the Kingdom, adding that they would face stiff punishment for cover-up activities (known as "tasattur").
"These illegal workers have offered fixed monthly payments to Saudis who cover up their businesses or a percentage of profit agreed upon between them," said Mansour Al-Shathry, president of the Riyadh Center for Small & Medium Enterprises (SMEs).
According to a revised "anti-Tasattur" law, expatriates involved in such illegal activities could be arrested and deported for doing business for their personal accounts, while Saudis will face imprisonment, defamation and huge fines, he said.
Al-Shathry, who is a member of the Riyadh Chamber of Commerce and Industry's board of directors, also warned Saudis that they would be responsible for violations committed by expat workers under their sponsorship and should pay compensation for damages caused by their workers to others.
The volume of cover-up business in the Kingdom is estimated at SR236.5 billion, equivalent to 16.78 percent of GDP.
There are more than 250,000 SMEs in the country run by expats without a single Saudi worker.
The Labor Ministry has instructed the so-called Saudi "owners" of SMEs to work for their firms full-time and register their names with the General Organization for Social Insurance as part of its move to fight the "tasattur" phenomenon.
"We want to reorganize work at SMEs to prevent cover-up businesses," said Hattab Al-Anazi, spokesman of the ministry, adding that the ministry's ongoing campaign was aimed at driving out illegal workers and preventing cover-up businesses.
Al-Shathry said the ministry was offering incentives to develop Saudi-run SMEs.
They can transfer the services of up to four expat workers without fulfilling the condition of appointing any citizen.
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