Saudi Arabia has issued a new royal order today instructing the Ministry of Justice to ensure effective measures are taken to curb the practice of financial activity by unauthorized persons, according to the Finance Companies Control Law. The order requires financial organizations to accurately track down the offenders, immediately putting them on litigation and inflicting penalties on them.
The minister of justice and the chairman of the Supreme Judicial Council, Dr. Walid bin Mohammed Al-Samaani, said that the new regulations will help to reduce the exploitation of debtors’ default through illegal means that do not take into account the debtors’ credit status and their ability to repay the debt.
Furthermore, he observed that the royal order will secure the ministry’s online links to the Saudi Arabian Monetary Authority (SAMA) so that it can put in place the imminent mechanisms and methods, in partnership between the two organizations.
Article 4 of the Finance Companies Control Law states that no finance activities, as specified under this law, maybe engaged in without obtaining a license in accordance with the provisions of this law and other applicable laws.
It also states that an unlicensed person may not, by any means, indicate, explicitly or implicitly, the engagement in finance activities as specified under this law.
According to the second clause of Article 35 any person violating any of the provisions of the law shall be subject, depending on the gravity of the violation, to a fine not exceeding SR 500,000 ($133,000) and imprisonment for a term not exceeding two years, or either penalty.