5-Year Prison Sentence or SR5mln Fine, the penalty for Trade Cover-up

The The Mistry of Commerce confirmed that the application of deterrent penalties against violators of the new anti-cover-up system came into force, 7 months ago on February 25, 2021.

It clarified that no one has ever been arrested for committing a crime or a violation of the law, before submitting a request to correct his status, referred to as the Public Prosecution or the competent court, however the penalties of the new anti-cover-up system were applied against him, are not exempted.

Anti-cover-up system provides for the application of penalties against violators of up to 5 years imprisonment or a fine of up to SR5 million riyal or both, and the confiscation of illegal assets and funds for the perpetrators of the cover-up crime.

The system also imposes other ancillary penalties such as writing off records, liquidating activity, canceling licenses, preventing commercial activity, collecting zakat, fees, and taxes, and removing those who are concealed from the Kingdom and not allowing them to return for work.

The Kingdom will not tolerate the application of the maximum legal penalties against all those involved in committing the crime of cover-up, who did not apply to correct their status during the corrective period that will end on February 16, 2022, the ministry stressed.

Rather, it urged all violators of the anti-cover-up system to expedite the correction and take advantage of the benefits approved by the regulation for correcting the status of violators of the anti-cover-up system, which includes exemption from penalties prescribed in the system and their consequences, exemption from paying income tax retroactively, and ensuring the regular practice of economic activities.

It is noteworthy that the are six correction options specified in the regulation for correcting the status of violators of the anti-coverage system are: partnership in the facility between Saudi and non-Saudi, registration of the facility in the name of a non-Saudi, Saudi continuing to engage in economic activity by introducing a new partner in the facility, Saudi disposition of the facility, non-Saudi acquisition on premium residency, while a non-Saudi must leave the Kingdom.