KSA offer amnesty for business licensing fraud offenders

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KSA offer amnesty for business licensing fraud offenders
KSA offer amnesty for business licensing fraud offenders :File Photo

Saudi Arabia offered a grace period to the offenders of the anti-business licensing fraud regime, to legalise their status, until August 23.

Amnesty exempts offenders from penalties of up to 5 years in prison, fine of up to SR5m.

The corrective period provides multiple options for violators, whether Saudi or non-Saudi, by exempting those who apply to the Ministry of Trade to request rectification of their legal status from the penalties prescribed in the regime and from paying the income tax retroactively.

Anyone arrested by the ministry for committing a crime or violating the anti-business licensing fraud before submitting a request to rectify their situation, or whoever was referred to the Public Prosecution, or the competent court, will not be exempt.

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Violators of the anti-concealment system can rectify their legal status by submitting an application through the Ministry of Commerce website: mc.gov.sa.

Applicants will have several options, including: Introducing a new legal partner (Saudi or non-Saudi); selling, assigning or dissolving the business; transfer the ownership of the business to a non-Saudi after the latter obtains an investment license; a non-Saudi can apply for a distinct residence visa, or an investment license to continue business; or to apply for final exit.

Saudi Arabia has tightened penalties for business licensing fraud, also known as Tasattur or cover-ups, in which foreign nationals owning businesses in the kingdom, while using the names of Saudi citizens.

A new anti-business licensing fraud regime passed by the Saudi Cabinet, seeks to eliminate the shadow economy and includes tough penalties for offenders of up to 5 years in prison and a fine of up to SR5 million.

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A ministerial committee was set up to take on commercial fraud and propose solutions to bring down its impact.

The committee will take aim at activities such as foreign nationals owning businesses in the kingdom while using the names of Saudi citizens.

There will be advanced levels of coordination among authorities issuing business licenses and manpower visas.

The Saudi Data and Artificial Intelligence Authority will build an index to measure the percentage of suspected cases of commercial cover-ups and keep updating the records based on the data it receives from the authorities.

The new anti-business fraud regime protects whistleblowers and rewards them up to 30 per cent of the fine collected after a final court ruling is issued.

The system stipulated proactive measures to prevent the occurrence of cover-up crimes to narrow the sources of this phenomenon by addressing the stages that preceded the crime, and punishments, the most important of which is the seizure and confiscation of the unlawful funds of the perpetrators.

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The system enables the relevant government agencies to curb business licensing fraud or cover-up crimes, demanding that each entity that issues licenses to businesses follow up on them, and inform the Ministry of Commerce of any suspicious practices.

The new system authorises relevant entities to use technology to prove the crimes and violations of the commercial concealment through “electronic evidence” in addition to other methods of proof.

The system also allows commuting or exempting from penalties for those who report any fraudulent activities.