The Anti-Concealment Law punishes the crime of enabling a non-Saudi to practice an unlicensed economic activity by using another person's license with imprisonment for up to five years and a fine of up to five million riyals, or either of these two penalties. The Ministry of Commerce is responsible for oversight, receiving reports, and detecting these crimes and violations, while the Public Prosecution handles investigation and prosecution, and the Criminal Court rules on them.
What Is Commercial Concealment (Tasattur)?
For the purposes of the Law, concealment (tasattur) means an agreement or arrangement whereby a person enables another, non-Saudi, person to practice an economic activity in the Kingdom that they are not licensed to practice, using the license or approval issued to the person providing the cover.
Major Crimes and Their Penalty
It is a crime punishable under the Law for a person to enable a non-Saudi to practice, for their own account, an economic activity in the Kingdom that they are not licensed to practice, including by enabling them to use the person's name, license, approval, commercial register, or trade name. Without prejudice to any harsher penalty stipulated in any other law, a person who commits any of these crimes is punished by imprisonment for a period not exceeding (five) years and a fine not exceeding (five) million riyals, or by either of these two penalties.
Lesser Violations and Their Penalty
It is a violation punishable under the Law for an establishment to unlawfully grant a non-Saudi tools that give them absolute control over the establishment, for a non-Saudi to unlawfully possess or use such tools, or for the establishment to use another bank account not belonging to it in its dealings. A person who commits this violation is punished by one or both of the following penalties: a fine not exceeding (five hundred thousand) riyals, or closure of the establishment for a period not exceeding (ninety) days.
Repeat Offenses and the Right to Object
Penalties for the crimes stipulated in the Law are doubled in the case of recidivism, and a person is considered a repeat offender if they commit any of these crimes for which they were finally convicted within (three) years from the date of conviction. A person against whom a penalty decision is issued for violations under Article Four has the right to appeal it before the Administrative Court within (sixty) days of being notified of the decision.
Investigation Measures: Travel Ban and Precautionary Seizure
The Ministry may request the Public Prosecution to impose a travel ban on a person suspected of committing any of the crimes stipulated in the Law. The Public Prosecution may also, on its own initiative or at the request of criminal investigation officers, order the precautionary seizure of funds that may become subject to confiscation, for a period not exceeding (sixty) days, which may be extended by a judicial order from the Criminal Court.
Penalty Mitigation for Cooperating with the Authorities
The Criminal Court may reduce the penalties stipulated in the Law if the accused, after the Ministry becomes aware of the crime, comes forward with evidence or information that could not have been obtained by any other means and relies on it to prove the crime.
Confiscation of Proceeds
If a person is convicted of the crime of concealment, the proceeds arising from it are confiscated by a judicial ruling, regardless of whether they are in the possession or ownership of the convicted person or any other party, with due regard for the rights of a bona fide third party. If confiscating those proceeds is not possible because they have been mixed with lawfully acquired funds or their location cannot be determined, other funds of equivalent value are confiscated by a judicial ruling instead.
Legal References
- Anti-Concealment Law — Articles Two, Three, Four, Five, Eight, Nine, Ten, and Fourteen.
For questions about your specific situation, you can ask the Saudi Arabia Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.