30% of the collected fine is equivalent to whistleblowers .. Saudi Arabia issues a list of the commercial concealment system

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Riyadh – Mubasher: The new anti-commercial concealment system in the Kingdom of Saudi Arabia will take effect 6 months after it was published in the “Umm Al-Qura Official” newspaper on Friday.

The newspaper published King Salman bin Abdulaziz’s order to approve the new system, which we seek to prepare the Ministry of Trade and the Ministry of Interior in coordination with: the ministries of (Human Resources, Social Development, and Investment), the Center for Distinguished Residence, and whomever you see from other competent authorities – during (sixty) Days from the date of approval of the anti-concealment system – a list issued by a decision of the Council of Ministers that includes a mechanism to correct the conditions of those who violate the anti-concealment system issued by Royal Decree No. (M / 22) on 4-5-1425 AH, who continue their violations after the enforcement of the system stipulated in clause ( First) from this decree.

The royal decree affirmed that the regulations take into account:

1- Determine the options available to correct conditions.

2- Exemption from the penalties prescribed in the two above-mentioned systems, and from paying the income tax retroactively, within 180 days of the effective date of this system, to the Ministry of Commerce, who applies to the Ministry of Commerce to rectify his situation.

3- The exemption stipulated in Paragraph (2) of this clause does not include those who initially committed a violation under the anti-concealment system – stipulated in Clause (first) of this decree – as well as those who caught an offense or crime committed by him under either of the two systems The two referred to in this clause, and whoever was referred to the Public Prosecution or the competent court.

4- The mechanism for dealing with those whose status has been rectified wishing to leave the Kingdom permanently.

5- That this mechanism does not prejudice the private rights resulting from the transactions they entered into.

The newspaper also published in its issue today the Cabinet’s decision to approve the new system, which confirmed in one of its clauses that the Ministry of Finance agreed with the Ministry of Trade to allocate a sum of money to it to support efforts to combat the phenomenon of concealment and encourage the growth of small and emerging enterprises and entrepreneurs.

The second chapter of the executive regulations of the new system, published in the “Umm al-Qura” issue issued today, Friday, specified crimes and violations as “for the purposes of implementing the provisions of the system, concealment means an agreement or arrangement by which a person enables a non-Saudi person to carry out an unlicensed economic activity in the Kingdom. By practicing it by using the license or approval issued to the sneaker. “

Article 3 also specifies crimes punishable by law for committing any of the following:

A- A person enables a non-Saudi to practice – for his own account – an economic activity in the Kingdom that he is not authorized to practice, and this includes enabling him to a non-Saudi to use: his name, license or approval issued to him, or his commercial register, or trade name, or about that.

B – The non-Saudi conducting an economic activity for his own account in the Kingdom that he is not authorized to practice, through the person who is empowered for it.

C – Participation in committing any of the two crimes stipulated in Paragraphs (A) and (B) of this Article. Anyone who instigates, aids or advises in committing it with his knowledge of that is considered an accomplice in the crime whenever the crime is committed or continues based on this incitement, assistance or advice.

D- Obstructing or preventing the people charged with implementing the provisions of the system from performing their duties in any way, including not disclosing information or providing incorrect or misleading information.

Article 4 considered a violation punishable by law for committing any of the following:

A- Any establishment irregularly grants non-Saudi tools that lead to conduct in an absolute manner in the establishment.

B – The illegal possession or use of tools by non-Saudis that lead to absolute disposal of the facility.

C – The firm’s use of another bank account in its economic activity that is not related to it. The regulation determines the provisions related to this article, taking into account the cases in which the granting or possession of the tools took place in good faith.

Article Five defines the terms of reference in the system as follows:

1- The Ministry is responsible for monitoring, receiving reports, and controlling crimes and violations stipulated in the system.

2- The Public Prosecution office is competent to investigate and prosecute crimes stipulated in the system.

3- The criminal court has jurisdiction over the crimes stipulated in the system.

4- By a decision of the Minister, a committee of not less than three members shall be formed, provided that its chairman and at least one of its members shall be of those with formal qualification. To look into violations of the provisions of Article (four) of the system, and to impose the penalties stipulated in Article (fourteen) of the system. The committee’s work rules are issued, and the remuneration of its members and the secretariat will be determined by a decision of the minister.

And Article Seven emphasized that proof of the crimes and violations stipulated in the system shall be by all methods of proof, including electronic evidence.

Chapter Four of the Regulations for the Penal Code defined the penalties as follows:

Article 9:

1- Without prejudice to any penalty stipulated in any other law, whoever commits any of the crimes stipulated in the system shall be punished with imprisonment for a period not exceeding (five) years and a fine not exceeding (five) million riyals or one of these two penalties, provided that this is taken into consideration when Determining the penalty: the size of the economic activity subject of the crime, its revenues, the period of conducting the activity, and the consequences of the crime.

2- In the event of recidivism, the penalties prescribed for the crimes stipulated in the system are doubled, and whoever commits any of the crimes for which he is convicted by a final judgment shall be deemed a returnee Within (three) years from the date of sentencing him.

3- The criminal court may reduce the penalties stipulated in the system, if the accused – after the ministry’s knowledge of the occurrence of the crime – took the initiative to provide evidence or information that could not be obtained by another way and relied on it to prove the crime.

Article Ten:

1- Without prejudice to the rights of others (good faith), in the event of a conviction for committing any of the two crimes stipulated in Paragraphs (A) and (B) of Article (Three) of the Law; The proceeds shall be confiscated by a court judgment, regardless of whether they are in the possession or ownership of the convict or any other party.

2- If the proceeds cannot be confiscated in accordance with Paragraph (1) of this Article, or they are mixed with funds acquired from legitimate sources or their location cannot be located, then any other money equivalent to the value of those proceeds shall be confiscated by a court ruling.

3- Without prejudice to the rights of others (good faith), the criminal court – on its own initiative or at the request of a stakeholder – may nullify or prevent the implementation of any action or action – contractual or otherwise – if the parties, one of them, or someone like them knew that Any of these procedures or actions would affect the ability of the competent authorities to recover the proceeds subject to confiscation.

4- Unless another law stipulates otherwise, the confiscated funds shall be transferred to the state’s public treasury, and these funds remain loaded within the limits of their value with any rights legitimately determined for any other bona fide party.

Article Eleven:

1- The judgment – issued condemning anyone who commits any of the two crimes stipulated in Paragraphs (A) and (B) of Article (Three) of the Law and inflicting the penalty on him – shall include the text to publish its summary, provided that the publication is after the verdict acquires the final status. The Ministry shall publish the summary of the final judgment in the manner it deems appropriate.

2- The ruling convicting a non-Saudi for committing any of the crimes – stipulated in Article (3) of the system – shall lead to his removal from the Kingdom and preventing him from entering it in accordance with the relevant laws and rules and what is specified by the regulations, after the implementation of the court ruling against him and the payment of the fees owed. Other taxes and obligations as determined by the Criminal Court.

Article 12:

1- A conviction for committing the crime stipulated in Paragraph (a) of Article (Three) of the following system:

A- The establishment dissolving the object of the crime, revoking the license and the approval issued to it to practice the activity, and canceling the commercial register of the convicted person, unless the criminal court deems otherwise.

B – Prevent the convicted person from practicing the economic activity subject of the crime and any other commercial activity for a period of (five) years starting from the date on which the judgment acquires the final status.

2- It shall be fulfilled, jointly, among those convicted of committing any of the two crimes stipulated in Paragraphs (A) and (B) of Article (Three) of the Law; Zakat, taxes, fees, and any other obligation imposed on the facility.

3- The competent authority shall provide the Ministry with a copy of the judgment issued regarding any of the crimes stipulated in the system. To take the necessary actions in a system.

4 – The competent authority shall provide the General Authority for Zakat and Income with a copy of the judgment issued condemning the commission of any of the two crimes stipulated in paragraphs (a) and (b) of Article (three) of the system; To take the necessary actions in a system.

Article Thirteen:

If any of the perpetrators of the crimes – stipulated in the system – informs the competent authorities about the crime or about its other perpetrators before its discovery, and his notification leads to their arrest or seizure of funds or means or proceeds of the crime, then the Criminal Court may exempt him from the penalties mentioned in Paragraph 1 of Article (Ix) of the order; According to rules prepared by the Ministry and issued by a decision of the Council of Ministers, and this does not include exemption from zakat and tax obligations.

Article Fourteen:

1- Without prejudice to any penalty stipulated in any other system, whoever commits any of the violations stipulated in Article (4) of the system shall be punished by either of the following two penalties or both:

A- A fine not exceeding (five hundred thousand) riyals.

B- Close the establishment for a period not exceeding (ninety) days.

2- The committee stipulated in paragraph (4) of Article (five) of the system may include in its decision to oblige the violator to submit any of the following documents and information to the Ministry for a period not exceeding (five) years:

A- The entity’s financial statements.

B- Bank statements of the establishment.

C- The payroll of the facility’s employees.

The committee may impose the penalties mentioned in paragraph (1) of this article on those who do not comply with what he is obligated to submit based on this paragraph.

3- In determining the penalty inflicted by the committee, the size of the economic activity subject to the violation, its revenues, the period of practicing the activity, the severity and recurrence of the violation, and the resulting impact shall be taken into account.

4- If the committee finds, through its consideration, a violation of what indicates the existence of a crime; It must refer what is related to the crime to the competent authority, and the committee will continue to consider the violation, unless it becomes apparent to it that it cannot continue to do so until after the competent authority decides on the crime.

5- Anyone against whom a penalty decision has been issued has the right to appeal against it before the Administrative Court within (sixty) days from the date of notification of the decision according to the means of reporting specified by the regulations.

Article Fifteen:

Without prejudice to the rights of others (bona fide), every contract or act whose purpose or purpose is to conceal it shall be deemed void.

Article 16 clarified that “the fines collected under the system shall be deposited in the current account of the Ministry of Finance with the Saudi Arabian Monetary Agency, after deducting the remuneration stipulated in paragraph (2) of Article (eighteen) of the system.”

Article eighteen also affirmed: “The confidentiality of the whistleblower’s identity must be preserved in a secret record and not included in the case file. This does not prejudice the Public Prosecution’s right to request the disclosure of the identity of the reporter if the investigation requires this according to procedures that ensure the confidentiality of the whistleblower’s identity.”

2- By a decision of the Minister, a financial reward of not more than (30%) of the fine collected for any crime or violation stipulated in the system shall be granted to those who report it – who are not specialists in implementing the provisions of the system – if he provides information that can be relied upon in the beginning of the investigation, and it is issued. A final judgment proving the crime or the decision to prove the violation has become final, and that amount was not convicted. The bylaw specifies the procedures to be followed to report crimes and violations stipulated in the system, the controls for disbursing rewards, and the mechanism for dividing them if there are multiple informants.

Article Nineteen:

The Minister, in agreement with the Minister of Interior, shall issue the regulations within (one hundred and eighty) days from the date of publication of the system, and it shall take effect from the date of its implementation.

Article Twenty:

The system replaces the anti-concealment system issued by Royal Decree No. (M / 22) dated 4-5-1425 A.H.,

He repeals all provisions that contradict it, and takes effect after (one hundred and eighty) days from the date of its publication in the Official Gazette.

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