Saudi Commerce minister seeks public opinion on regulations of new anti-concealment law

The executive regulations of the law explain the illegal tools used in the concealment practices and the procedures for reporting such crimes and violations and determining regulations for disbursing rewards for whistleblowers

  
Image used for illustrative purpose. A gavel is seen in a hearing room in Panama City April 7, 2016.

Image used for illustrative purpose. A gavel is seen in a hearing room in Panama City April 7, 2016.

REUTERS/Carlos Jasso

RIYADH Saudi Arabia's Minister of Commerce Dr. Majed Al-Qasabi has called on the public and all those interested to express their views on the draft executive regulations of the new Anti-Commercial Concealment Law.

“This is line with the principle of participation and transparency pursued by the Ministry of Commerce for commercial laws and legislations so as to achieve the goals of the Kingdom’s Vision 2030,” he said.

Al-Qasabi hoped that the anti-concealment regulations would contribute to providing a fair and competitive commercial environment that would ensure the protection of investors and enable entrepreneurs to carry out their activities in a regular manner and contribute to supporting the national economy.

The Ministry of Commerce will receive opinions and proposals on the draft regulations through the National Competitiveness Center’s platform “Istitlaa” until Jan. 28 on the following link: https://istitlaa.ncc.gov.sa/ar/Trade/mci/CoverUp/Pages/default.

The executive regulations of the law explain the illegal tools used in the concealment practices and the procedures for reporting such crimes and violations and determining regulations for disbursing rewards for whistleblowers, and the powers, tasks, and obligations of criminal investigation officers.

The regulations clarified the evidence for the suspicious involvement in the crime of concealment, the most important of which are the non-Saudi workers not registering in the General Organization for Social Insurance; the firm not using the wage protection program approved by the Ministry of Human Resources and Social Development; the firm not registering with the General Authority of Zakat and Tax; not activating the establishment’s bank account; not providing electronic payment methods, and the absence of evidence to transfer the worker’s wages through the establishment’s bank account.

The executive regulations also defined the illegal tools for the absolute handling of the establishment and these include granting powers of a commercial establishment to a non-Saudi, which is any contractual or practical arrangement that enables a non-Saudi to exercise the powers prescribed for the owners of the firm or its partners, or control unilaterally with wide discretionary powers and allowing to handle the firm’s transactions and assets.

Among the most important illegal tools is the non-Saudi’s collection of the firm’s revenues or profits or the proceeds of the contracts that were concluded directly or indirectly, or his participation in the collection of proceeds from the sale or transfer of assets or liquidation of the establishment for his own account, or his exercising sole control by any means over the establishment’s income and its bank or investment accounts.

Among the tools that are considered as crimes and violations of the concealment are non-Saudi’s possession of commercial papers, documents, papers, and contracts signed on blank paper, and his approval of the profits that are distributed to the partners in the company or the method of their distribution, as well as his control over the accounting systems of the establishment, or its financing or economic activities as well as appointment or dismissal of managers or officials.

The executive regulations take into account preserving the confidentiality of the whistleblowers’ identity, as the reports submitted against those suspected of violating the provisions of the law are recorded in a secret register prepared for this purpose.

The regulations clarified the methods for disbursing rewards and the mechanism for dividing them among the whistleblowers, who are entitled to the financial reward stipulated by the law, which represents 30 percent of the total fine imposed after its collection.

The regulations also take into account when granting the financial reward, the type and size of the economic activity involved in the crime or violation, and the multiplicity of whistleblowers, and the financial reward is to be distributed equally in the event of several whistleblowers.

The Ministry of Commerce would receive reports about suspicious concealment crimes or violations stipulated in the law, in accordance with procedures that ensure speed and quality in dealing with them, through the approved reporting channels, as the regulation enables control officers to use electronic means when exercising their powers and performing their duties.

The regulations stipulate that the Ministry of Commerce shall request the Public Prosecution to prevent the travel of those suspected of committing any of the crimes stipulated in the law and complete the application of the statutory penalties against them.

It is noteworthy that the new Anti-Commercial Concealment Law stipulated heavy penalties of up to five years in prison, a fine of up to SR5 million, seizure and confiscation of illegal funds of perpetrators of the crime after final court rulings were issued against them, in addition to other penalties such as closing the firm where the crime was committed and dissolving activity, canceling the commercial register, preventing the convicted person from practicing any economic activity for a period of five years, and deporting the non-Saudi convict from the Kingdom and not allowing him to return to work.

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