Saudi Arabia strengthens its regulatory framework to combat money laundering

The kingdom is taking new measures to prevent cybercrimes amid the Covid-19 pandemic

Saudi Arabia, the Arab world’s biggest economy is aiming to strengthen its regulatory and legislative framework to combat money laundering and terrorist financing. Reuters

Saudi Arabia strengthened its regulatory and legislative framework to combat money laundering and terrorist financing, Saudi Central Bank governor Ahmed Alkholifey said on Wednesday.

“Based on its belief in the importance of enhancing compliance with the international standards issued by the Financial Action Task Force for combating money laundering and terrorist financing, the kingdom has been keen over the past years to strengthen the legislative and regulatory framework to combat these crimes,” Mr Alkholifey said.

“The relevant authorities have approved the regulations and instructions that contribute to raising the level of protection of financial transactions and their integrity and transparency.”

Mr Alkholifey made the remarks while speaking at the virtual Compliance and Anti-money Laundering Seminar, which was organised by the Saudi Central Bank and Refinitiv.

Countries across the globe are strengthening regulations to tackle money laundering and prevent the financing of terrorist activities. In November, the UAE's Ministry of Economy set up a new anti-money laundering department to ensure all non-financial businesses and professionals comply with local laws.

The Central Bank of the UAE also instructed all hawala providers – informal funds transfer service providers for individuals utilising non-bank methods – to register with the central bank to "enhance transparency in financial transactions" and strengthen the oversight of money transfers.

It also imposed administrative sanctions on two exchange houses operating in the country and fined them Dh1.45 million ($395,000) for not complying with the country's anti-money laundering rules in October.

Mr Alkholifey said the kingdom’s Anti-Money Laundering Permanent Committee is undertaking a number of initiatives and providing international expertise to boost the performance and efficiency of the authorities to tackle the problem.

“The Anti-Money Laundering Permanent Committee, in partnership with the appropriate committees in the kingdom, has been keen on developing the performance of the competent authorities, undertaking a number of initiatives and providing international expertise in order to contribute to enhancing the performance and efficiency of the authorities concerned, and boosting the application of international obligations and standards in this regard.”

Leaders from G20 countries are committed to combating money laundering and financing of terrorism and arms proliferation, said Mr Alkholifey, who is also the chairman of the kingdom's Anti-money Laundering Committee.

These crimes affect the global financial system and G20 leaders will “work closely with the FATF to prevent criminal organisations from benefiting from the conditions experienced by countries of the world”, he added.

At the height of the Covid-19 stay-at-home measures, more than 2.57 million phishing attacks were detected across the Middle East in the second quarter of this year, cybersecurity firm Kaspersky said in August.

Saudi Arabia, the biggest Arab economy, witnessed 973,061 phishing attacks, the most in the region, followed by the UAE with 617,347 attacks, it said.

The kingdom is taking appropriate measures to prevent cybercrimes and is encouraging financial institutions to enhance electronic and digital payments amid the Covid-19 pandemic, he said.

"In response to the threats arising from the spread of the corona pandemic, the kingdom, represented by the competent authorities, including the Saudi Central Bank, has taken many procedures and measures necessary to manage these risks by developing appropriate policies to respond to them."