The Effect of Restrictions on Saudi Arabia

Saudi Arabia is definitely an attractive region for fintech. But before establishing a company in the country, any entrepreneur should have the relevant AML knowledge in order to get legal things done properly

Long story short — there are no formal international sanctions applied against Saudi Arabia. Nonetheless, entrepreneurs who plan to invest in projects or onboard new users in Saudi Arabia should be on guard and make some proper AML and KYC check-ups. In the past, Saudi government has had some issues including corruption and money laundering. Several major French firms has even refused to make contracts with Saudi Arabia because of the government issues in 2018.

As for sanctions on Saudi Arabia specifically, the situation has escalated in 2018 when Saudi agents killed Jamal Khashoggi, a journalist who criticized the Royal House of Saud. The US senators have immediately proposed sanctions against Saudi Arabia—’any property or interests in property of the individuals designated today within or transiting US jurisdiction is blocked.’ But still, this proposal has never come into force.

The US has also forbidden entry to sixteen Saudi officials because of the Khashoggi case. That is the response of the US government to a serious human rights abuse as well as the way ‘to protect the financial system of the United States from the same persons.’

The European Commission has added Saudi Arabia to the list of countries that may be a threat due to weak control over terrorist financing and money laundering. The EU ‘blacklist’ today consists of 23 countries, including Iran, Iraq, Syria, Afghanistan, Yemen and North Korea.

In addition to the bad publicity, being in the ‘blacklist’ complicates financial relations with the EU. The banks must conduct additional payment checks if persons from the listed jurisdictions are involved. Mainly it concerns the UK as several top British banks are highly active in the country. According to the data, the Royal Bank of Scotland is the European bank with the largest turnover in Saudi Arabia (around 150 million euros).

Stay updated with Sumsub by signing up for our newsletter

Sign up for our Newsletter

Be up and running in minutes.

Questions? Schedule some time to talk with one of our experts.

By clicking the button you agree with our Privacy Policy.

Thank you for subscribing to our newsletters.

Thanks for contacting us!

We will get in touch with you shortly.