FATF Status

Saudi Arabia is not currently on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Saudi Arabia was undertaken in 2019. According to that Evaluation, Saudi Arabia was deemed Compliant for 17 and Largely Compliant for 21 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective for 4 of the Effectiveness  & Technical Compliance ratings.

US Department of State Money Laundering assessment (INCSR)

Saudi Arabia was deemed a Jurisdiction of Concernx by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

The Kingdom of Saudi Arabia is a rapidly expanding financial center in the Gulf region and the second largest source of remittances in the world. There is no indication of significant narcotics- related money laundering. Bulk cash smuggling and money transfers from individual donors and Saudi-based charities have reportedly been a significant source of financing for extremist and terrorist groups over the past 25 years.  Despite serious and effective efforts to counter the funding of terrorism originating within the Kingdom, Saudi Arabia is still home to individuals and entities that continue to serve as sources of financial support for Sunni-based extremist groups. Saudi Arabia has publicly imposed targeted sanctions on more than 20 Hizballah- affiliated individuals and companies since May 2015. Funds are allegedly collected in secret and illicitly transferred out of the country in cash, often via pilgrims performing Hajj and Umrah. The government has responded in recent years and increased policing to counter this smuggling. Recent regional turmoil and sophisticated usage of social media have facilitated charities outside of Saudi Arabia with ties to extremists to solicit donations from Saudi donors. Some Saudi officials acknowledge difficulties in following the money trail with regard to illicit finance, in large part due to a preference for cash transactions and regulatory challenges posed by hawala networks, which are illegal and dismantled upon discovery.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                         52

World Governance Indicator – Control of Corruption             64

Companies operating or planning to invest in Saudi Arabia face a high risk of corruption. Abuse of power, nepotism and the use of middlemen (wasta) to do business are particularly common. There is an overlap between business and politics, and the latter is generally based on patronage systems. The Combating Bribery Law and the Civil Service Law criminalize various forms of corruption, including active and passive bribery (baksheesh) and abuse of functions, but the government enforces these laws selectively. No law regulates conflicts of interest, and some officials engage in corruption with impunity. The royal family and social elite heavily influence the oil and petrochemicals sectors. Gifts are regulated under Saudi law, but facilitation payments are not addressed. For further information - GAN Integrity Business Anti-Corruption Portal

In 2022, the Saudi Arabian government (SAG) continued its ambitious socio-economic reforms, collectively known as Vision 2030. Spearheaded by Crown Prince Mohammed bin Salman, Vision 2030 provides a roadmap for the development of new economic sectors and a transition to a digital, knowledge-based economy. The reforms aim to diversify the Saudi economy away from oil and create more private sector jobs for a young and growing population.

To accomplish these ambitious Vision 2030 reforms, the SAG is seeking foreign investment in burgeoning sectors such as infrastructure, tourism, entertainment, health and science, technology, and renewable energy. Saudi Arabia aims to become a major transport and logistics hub linking Asia, Europe, and Africa. Infrastructure projects related to this goal include various “economic cities” and special economic zones, which will serve as hubs for petrochemicals, mining, logistics, manufacturing, and digital industries. The SAG plans to double the size of Riyadh city and welcomes investment in its multi-billion-dollar giga-projects around the country (including NEOM, Qiddiya, the Red Sea Project, and Diriyah Gate), which are the jumping-off points for its nascent tourism industry. The Kingdom is also developing tourism infrastructure at natural sites, such as AlUla, and the SAG continues to grow its successful Saudi Seasons initiative, which hosts tourism and cultural events throughout the year and across the country.

The Saudi entertainment and sports sector, aided by a relaxation of social restrictions, is also primed for foreign investment. The country hopes to build hundreds of movie theaters and the SAG aims to sign agreements for production studios in Saudi Arabia for end-to-end film production. The SAG seeks to host world class events, such as Expo 2030, and has already hosted the European Golf Tour, Diriyah ePrix, Dakar Rally, and Saudi Formula One Grand Prix. In addition, recent film festivals and concerts have demonstrated strong demand for art and cultural events.

Saudi Arabia’s healthcare privatization program provides lucrative opportunities for foreign investment. The SAG also aims to partner with tech companies to become a leader in next-generation technologies and digital infrastructure. Lastly, Saudi Arabia is eager for foreign investment in green projects related to renewable energy, hydrogen, waste management, and carbon capture to reach net-zero emissions by 2060. It is particularly interested in green capacity-building and technology-sharing initiatives.

Despite these investment opportunities, investor concerns persist regarding business predictability, transparency, and political risk. Although some prisoners have recently been released, the continued detention and prosecution of activists and individuals for their social media commentary remains a significant concern, while there has been little progress on fundamental freedoms of speech and religion. The pressure to generate non-oil revenue and provide increased employment opportunities for Saudi citizens has prompted the SAG to implement measures that may weaken the country’s investment climate going forward. Increased fees for expatriate workers and their dependents, as well as “Saudization” policies requiring certain businesses to employ a quota of Saudi workers, have led to disruptions in some private sector activities. Additionally, Saudi Arabia announced in 2021 that multinational companies wanting to contract with the SAG must establish their regional headquarters in Saudi Arabia by 2024. The SAG has taken important steps since 2018 to improve intellectual property rights (IPR) protection, enforcement, and awareness. The United States Trade Representative (USTR) removed Saudi Arabia from its Special 301 report in 2022. Some concerns remain regarding IPR protection, particularly related to enforcement and regulatory data protection.

While the sharp downturn in oil prices in 2020 put pressure on Saudi Arabia’s fiscal situation, the subsequent spike in oil prices following Russia’s further invasion of Ukraine increased government revenue and the SAG ran an estimated $27 billion budget surplus in 2022. It expects a $4.26 billion surplus in 2023.

Country Links

Saudi Arabia Financial Investigation Unit (SAFIU)​

Saudi Arabian Monetary Authority