15 months post Saudi corruption crackdown, campaign moves to penalty phase  

January 31, 2019 12:28 pm

The latest Saudi news as reported by media today was that the kingdom had put an end to its crackdown on a corruption campaign that began in earnest November 2017.

While that particular case involving hundreds of high ranking officials, princes and businessmen may be coming to an end, Saudi can now transition to implementing the penalties associated with breaking the laws associated with corruption.

Just 2 days earlier, Saudi suspended 126 local government employees on corruption charges.

It’s not over, not by a long shot. The rule of law in the kingdom will be enforced now and any time people or businesses try to breach it.

Between 2012 and 2017, Saudi Arabia has improved its score on the Transparency International Corruption Perceptions Index (CPI) from 44 to 49.

The zero-tolerance approach that has surfaced over the past 15 months has the potential to greatly improve the integrity of Saudi Arabia’s business market, according to Mondaq.com, a prominent intelligence site.

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Closing this curtain

Reuters reported today that Saudi has ended its crackdown on corruption ordered by Crown Prince Mohammed bin Salman that it said had recovered more than $106 billion through settlements with scores of senior princes, ministers and top businessmen.

“A royal court statement said the government had summoned 381 people, some as witnesses, under the campaign launched in November 2017, but it provided no names. It said 87 people confessed to charges against them and reached secret settlements that included the forfeiture of real estate, companies, cash, and other assets,” Reuters reports.

“The public prosecutor refused to settle the cases of 56 others due to existing criminal charges against them, and eight more who declined settlement offers stand accused of corruption,” the statement said. These face prosecutions in the court of law and face penalties and/or jail time if found guilty.

Detainees who were not indicted were freed.

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Who’s still in

Former Riyadh governor Prince Turki bin Abdullah has not been heard from since his detention. Also believed to be detained is former economy minister Adel Fakieh, and former chief of the royal court Khalid al-Tuwaijri.

“Amr Dabbagh and Mohammed Hussein al-Amoudi only got out this month,” said Reuters.

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New curtain rising

The Saudi Gazette reported on Tuesday that Saudi authorities had suspended 126 local government employees at municipalities across the kingdom on corruption charges.

“They are charged with involvement in a number of cases including financial and managerial corruption, abuse of power as well as other legal and criminal violations,” the Ministry of Municipal and Rural Affairs said on Twitter.

Last year, King Salman ordered the establishment of specialized departments in the public prosecutor’s office in order to accelerate the investigation and prosecution of corruption cases. The public prosecutor said then that the campaign would work its way through lower-level offenses.

Last summer, unrelated to the November corruption probe, OCCRP.org reported that an official from the Saudi Defence Ministry was arrested on charges of bribery along with two other unnamed individuals, quoting a Reuters report based the Saudi Press Agency (SPA).

SPA said the official, who wasn’t named, was arrested for abuse of power and allegedly receiving a one million riyal ($267,000) bribe.

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Penalty phase

Efforts to level the playing field in Saudi Arabia may bring fairer weather to businesses as the obstacles associated with pervasive corruption are gradually eliminated from the system, according to Mondaq.com.

The primary anti-corruption provisions are provided by the anti-bribery law issued by Royal Decree No. M/36 of 29-Dhu al-Hijjah-1412 (corresponding to 30 June 1996) (the “Anti-Bribery Law”).

The Anti-Bribery Law is primarily focused on public servants, extending to personnel of joint stock companies, along with their board members and directors, and private sector individuals working on government-related projects.

Under the law, penalties for the offenses set out above can reach maximum penalties of imprisonment for a term not exceeding ten years and/or a fine not exceeding one million riyals (about $275,000).

In an attempt to prevent perpetrators from benefitting from the proceeds of crime, the Anti Bribery Law provides that any money, benefit or privilege derived from committal of the offense be confiscated wherever possible.

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An official may accept gifts only given at visits and official occasions or at receptions of official guests, in accordance with custom and the courtesy protocols of such visits and occasions, though they cannot be cash.

Where the manager or any employee of a private company is convicted of any offense under the Anti-Bribery Law, the law provides for a fine not exceeding ten times the value of the bribe and/or a ban from entering into public procurement or project contracts of at least 5 years.

The briber can be exempted from punishment if he informs the authorities prior to the discovery of the offense.

Article 17 of the Anti-Bribery Law provides for rewards for information substantiating an offense. Any person or accomplice who provides incriminating information substantiating any offense set out in the Anti-Bribery Law shall receive a reward not less than five thousand riyals (about $1,350) and not more than half of the money confiscated.

King Salman’s, in May 2018 provided whistleblower protection to prevent any abuse of the reporting system.

“Overall, however, Saudi Arabia’s recent multifaceted approach to reform has created the perfect storm for investors and, with an impending multitude of investment projects, businesses have a prime opportunity to invest at the leading edge of FDI, assured that corrupt practices are not operating with impunity,” said Mondaq.com.

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Hadi Khatib
By Hadi Khatib
Hadi Khatib is a business editor with more than 15 years' experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about it.