Name
Global FinTech Guide
Country _ Name
Saudi Arabia
SectionTitle
KYC requirements
Body
The know your customer or know your client (KYC) guidelines and regulations for financial services require that professionals try to verify the identity, suitability, and risks involved with maintaining a business relationship.

Legal affairs

National regulatory framework regarding AML and effective date of the regulations

Saudi Arabia established its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regime with the issuance of the Anti-Money Laundering Statute in 2003 and its Implementing Regulations in 2005. These laws provide a statutory basis for criminalizing money laundering and terrorist financing activities.

National regulator or relevant authority for AML controls

The requirements of the KYC, as a minimum, include the following:

  • Determining the identity of the customer and constantly verifying the identity of all customers using valid, original documents approved as a system of identity identification.
  • Regularly updating and verifying customer data and performing due diligence procedures.
  • Determining the identity of the beneficial owner, and taking reasonable measures to verify his/her identity.

Customer Due Diligence

Conduct of a typical KYC identification process

The requirements of the KYC, as a minimum, include the following:

  • Determining the identity of the customer and constantly verifying the identity of all customers using valid, original documents approved as a system of identity identification.
  • Regularly updating and verifying customer data and performing due diligence procedures.
  • Determining the identity of the beneficial owner, and taking reasonable measures to verify his/her identity.

Possibility to meet customer due diligence requirements by relying on third parties who are obliged by law themselves to comply with AML regulations

A financial institution may seek the assistance of a third party, whether it is a financial institution or any of the owners of designated non-financial businesses and professions, to implement the due diligence measures.

Possibility to outsource customer due diligence by contract to other third parties who are not obliged by law to meet AML regulations and rely on these (e.g., WebID, IDnow, PostIdent)

No, the Saudi Central Bank (SAMA) has announced the issuance of the Governing Rules for Electronic Issuance and Authenticity Verification of Banking Documents. These rules became effective April 1, 2022. Certain rules outlined by SAMA include:

  • Regulation and Oversight: Ensure that the third party is subject to regulation, supervision, and oversight.
  • Due Diligence and Record Keeping: The third party must apply due diligence and record-keeping measures as contained in the Anti-Money Laundering Law and its Implementing Regulations, and the Anti-Terrorism Crimes and Financing Law and its Implementing Regulations.
  • Access to Information
    • : The financial institution must take measures to ensure that access to due diligence information is made available when ordered and without delay from the third party.
  • Prompt Access: There must be prompt access to all information related to due diligence measures, including Enhanced and Simplified Diligence Measures from the third party.

    • Presence of a license or registration requirement for the third party in case of outsourcing customer due diligence

    According to the SAMA guidelines, financial institutions are allowed to outsource certain customer due diligence functions to third parties, provided that the conditions include:


    Further questions

    Entities that could be relied on specifically by law as a third party to comply with AML regulations (regardless of outsourcing)


    Yes credit institutions
    Yes financial institutions
    Yes auditors, external accountants, and tax advisors
    Yes notaries and other independent legal professionals
    Yes other trust or company service providers
    Yes estate agents
    Yes other persons trading high-value goods
      providers of gambling services


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