Bankers see nothing new in SAMA move to stave off illegal deals

JEDDAH, 12 November 2002 — Saudi bankers have disclosed that there is nothing new in the measures taken by Saudi Arabian Monetary Agency to prevent money laundering and other illegal transactions. "We have been following these measures for the past several years," they told Arab News.

The news about a new SAMA circular to Saudi banks was published on Sunday by the UAE news agency WAM without mentioning the date of the circular.

The SAMA circular spoke of the possibility of freezing personal accounts of Saudis and expatriates if they fail to renew their IDs and iqamas.

The circular also pointed out that expatriates having temporary resident permits will not be allowed to transfer more than SR10,000 during the first three months of their stay in the country.

"These measures have been in place for several years and they are not linked to any specific incident," the bankers said.

A senior bank director told Arab News that SAMA had issued stringent measures after the Sept. 11 events to monitor financial transfers of expatriates.

Banks have been instructed to inform the agency of suspicious transactions. "But this is part of international efforts by central banks to prevent transactions that reach Al-Qaeda network," he said.

According to the WAM report, the accounts of Saudis and expatriates will be frozen 90 days after the expiry of their IDs. "The banks have to keep the frozen accounts under supervision," the agency said quoting the SAMA circular.

The accounts will be suspended if they are not operated without for five years.

The banks have been instructed to implement the "Know you client" program and keep an electronic record of Saudis, residents and foreigners who have accounts with them. The records should have all personal information as mentioned in their IDs.

Referring to controls on financial transfers of expatriates to foreign countries, the report said SAMA prohibits opening of accounts by expatriates having temporary resident permits (in their passports) for three months. The maximum amount they can transfer during the first three months after arrival in the Kingdom is SR10,000. After the first three months, they will be allowed to make transfers only through their bank accounts.

As per the new measures, the banks will freeze all accounts of expatriates when the validity of their iqamas expires and they fail to produce renewed iqamas.

Ninety days after the expiry of the iqama, the accounts will be transferred to unclaimed balance. After 180 days these accounts will be closed and kept under scrutiny. The accounts of expatriates should be closed when they leave the Kingdom on exit only visa.

The banks will also freeze nominal accounts of individuals and organizations 90 days after the expiry of their licenses or commercial registration if they fail to renew their licenses and registrations or fail to produce any document proving they are in the process of renewing them.