Fighting Dirty Money in the Desert Kingdom: The Evolving State of AML in Saudi Arabia

With vast oil wealth and a strategic geography, Saudi Arabia holds an influential position, both in the Middle East and globally. However, with growing prosperity comes the risk of illicit finance. In this blog, we explore how the Kingdom is working to prevent dirty money from entering its financial system.

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Fuelled by petrodollars, Saudi Arabia has undergone a remarkable economic transformation, emerging as a regional powerhouse. The numbers speak for themselves:

• GDP of US$793 billion in 2021, the largest in the Middle East

• GDP more than doubled over the past decade

• Oil and gas still account for 50% of GDP and 70% of exports

• US$19.3 billion in foreign direct investment recorded in 2022

To sustain this momentum, Crown Prince Mohammed bin Salman has launched Saudi Vision 2030, a national strategy aimed at reducing dependence on oil and developing sectors such as tourism, infrastructure, mining, and financial services.

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However, with rising economic activity come increased vulnerabilities to money laundering. Some trends include:

• Estimates suggest that up to US$10 billion may be laundered annually within the Kingdom

• High cash usage continues in sectors such as real estate and precious metals trading

• The luxury goods market is expanding, increasing the risk of misuse for money laundering

• Greater global integration is exposing the economy to more cross border illicit finance flows

As Saudi Arabia’s economy continues to grow, strong anti money laundering (AML) controls are essential to ensure long term stability and sustainable development.

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While the foundation is strong, Saudi Arabian authorities continue to enhance their anti money laundering and counter terrorist financing regime through newly introduced laws and regulations:

• Increased penalties for money laundering and expansion of predicate offences

• Alignment of terrorist financing rules with FATF standards on targeted financial sanctions

• Enhanced supervision of non profit organisations to prevent financial crime abuse

• Regulation of fintech companies under the new payments law for AML and CFT compliance

• Criminalisation of proliferation financing

• Broader regulatory scope covering virtual assets and crowdfunding platforms

These reforms address technical shortcomings identified in mutual evaluation reports and reflect a proactive approach to emerging risks. Further progress is needed, but the commitment to improvement is clear.

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As Saudi Arabia continues to strengthen its AML/CFT regime, financial institutions and DNFBPs must ensure full regulatory compliance. This means going beyond a tick-box approach by implementing robust Know Your Customer (KYC) procedures, effective transaction monitoring, and risk-based due diligence.

MemberCheck offers advanced solutions including:

• Automated screening for PEPs, sanctions and adverse media

• Identity document verification

• Risk-based enhanced due diligence

• Real-time transaction monitoring

• Predictive risk scoring engine

By leveraging MemberCheck’s advanced platform, organisations in Saudi Arabia can cost-effectively manage evolving illicit finance risks. Get in touch today to schedule a demo.

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Saudi Arabia has made strong progress in its AML and CFT efforts, yet risks persist, particularly with emerging technologies, complex international networks, and a diversifying economy. To stay ahead of financial crime risks, ongoing legislative reform, effective regulation, and cross border collaboration remain essential.

Financial institutions and DNFBPs operating in the Kingdom must treat robust AML and CFT frameworks as a strategic priority. With continued leadership and commitment, Saudi Arabia is well positioned to protect the integrity of its financial system.