Saudi Arabia: Pair convicted of business licensing fraud named and shamed
Saudi man enabled Afghan to run Yanbu restaurant in return for 15% of profits
Abu Dhabi: The Saudi Ministry of Commerce has named and shamed a Saudi citizen and an Afghan after they were convicted of business licensing fraud, local media reported.
“The Saudi was found guilty of enabling the Afghan resident to fraudulently run a resturant in Saudi Arabia’s major Red Sea port of Yanbu through a trade licence registered in the name of the citizen, Madani Mohammed Abdullah, in return for 15 per cent of the profits,” according to court records.
The ministry published on Wednesday a summary of the judicial ruling issued by the Criminal Court in Yanbu, including a fine of SR2 million, closing the firm, liquidating its activities and revoking its license.
The court ruling also cancelled the commercial register of the business, collecting zakat, fees and taxes.
The court also ordered the Afghan man deported after serving his term, not allowing him to return to the Kingdom.
Saudi Arabia has tightened penalties for business licensing fraud, also known as Tasattur or cover-ups, in which foreign nationals own businesses in the Kingdom while using the names of Saudi citizens.
A new anti-business licensing fraud regime passed by the Saudi Cabinet seeks to eliminate the shadow economy and includes tough penalties for offenders of up to 5 years in prison and a fine of up to SR5 million.
The regime protects whistleblowers and rewards them up to 30 per cent of the fine collected after a final court ruling is issued.
The system stipulates proactive measures to prevent cover-up crimes to narrow the sources of this phenomenon by addressing the stages that precede the crime, and punishments, the most important of which is the seizure and confiscation of the unlawful funds of the perpetrators.
The system enables the relevant government agencies to curb business licensing fraud, demanding that each entity that issues licenses to businesses follow up on them, and informs the Ministry of Commerce of any suspicious practices.
The new system authorises relevant entities to use technology to prove the crimes and violations of the commercial concealment through “electronic evidence” in addition to other methods of proof.
The system also allows commuting or exempting from penalties for those who report any fraudulent activities.