An Expat fined with SR 500,000 for doing cover-up business in Saudi Arabia

The Ministry of Commerce and Investment was informed that a Saudi and an Expat were involved in a commercial cover-up (Tasattur). The two men were involved in importing and exporting textiles and furniture in Dammam.

How was the cover-up business working? The investigation revealed that the expat was able to establish this cover-up business with the help of a Saudi. The Saudi assisted him to establish a business for which he held no license. The business was being carried out by using the Saudi’s account via the citizen’s commercial register (CR).

Without holding a license, the expat was not allowed to invest or participate in such a business activity. Further investigation uncovered the financial details. The expat was holding an account from which transactions of more than SR 1 million were made in the last year.

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He remitted SR 500,000 from his account: The value of his imported and exported goods was estimated to be SR 900,000. He had also remitted an amount of SR500,000.  The case was thereby taken to the judicial authorities to take the legal action against the culprits.

The decision was made according to the Anti-Commercial Concealment law. The Criminal court of Dammam sentenced them with Sr 500,000 fine. Moreover, the trade commercial registration is canceled and the trading activity has been liquidated. 

The expat would be deported with a lifetime ban to enter back to Saudi Arabia: While the Saudi national is not allowed to undergo business in the same field, the expat would be deported and would never be allowed to re-enter the Kingdom of Saudi Arabia.

The news of the cover-up business shall be published in the local newspaper to defame the two and that too at the expense of both the culprits.

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What do Saudi laws say about cover-up activities? The Anti-Commercial Concealment Law states that a non-Saudi cannot and shall not get involved in an investment or a trade activity for which he does not holds any license.

A Saudi who assists a non-Saudi in a cover-up business by using his name, license, CR or other ways shall be considered a helping partner of the expat criminal.

As the Saudi Authorities are now vigilant to put an end to the cover-up businesses in Saudi Arabia as it a vital threat to the economy: the penalties thereby involved are kept high.

1-Those involved in cover-up businesses shall be imprisoned for a maximum time span of 2 years.

2-The fine shall reach up-to SR1 million.

3-The expat involved shall be deported

4-The business shall be liquidated.

5-The violators (Saudi or non-Saudi) be defamed.

Inform the ministry about the violators and get rewarded: For the betterment of Saudi Arabia and its economy, it is duty bound on the people of Saudi Arabia to inform the ministry about any such cover-up businesses. One can call at 1900 or use the website to lodge a complaint. The informer shall be rewarded with 30% of the fine collected.

Source: Saudi Gazette

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