MCI, A Fine of SR 3.7 Million riyals and Defamation against a Citizen and an Expat involved in a Commercial Cover up Case

22 Aug 2017
The two Defendants Detected Violating the Rules & Regulations by Selling and Exporting Plastic and Paper Materials Illegally
The Ministry of Commerce and Investment announced the issuance of a verdict by the Eastern Province Administrative Court against a citizen and an Asian resident. The two defendants have been found guilty of violating the Anti-Commercial Concealment Law by selling and exporting plastic and paper materials to foreign markets in India, Malaysia and Indonesia illegally, where the total amount deposited in favor of the expat bank account reached SR (3,738,897) Saudi riyals during one year.

The relevant investigations showed that the expat has been using three different bank accounts, depositing in one account more than SR 300 thousand riyals per month for the whole year.

The Administrative Court decided to impose a fine of SR 200 thousand riyals against the citizen and the expat. Also to shut down the offending shop, as well as to deport the expat from the Kingdom, and to prevent him from returning to work in the Kingdom, also writing off the Commercial Registration and the license of the violating shop. Besides preventing the citizen of practicing the same commercial activity for five years, in addition to the relevant defamation by publishing the verdict in a local newspaper at the expense of the defendants.

The details and all the evidences prove that the two defendants found guilty of violating the Anti-Commercial Concealment Law, since the citizen enabled the Asian expat to work under his name in marketing and exporting plastic and paper materials, also to receive and deposit the money in the expat’s account. Meanwhile, the defendants admitted during the investigations of opening local bank accounts to deposit the amounts, make transfers and withdraw checks, which is a clear evidence of violating the Anti-Commercial Concealment Law.

According to Article No. 1 of the Anti-Commercial Concealment Law a non-Saudi should not (in any case) practice or invest in any trading activity, he is not licensed to. The said article also points out that enabling the non-Saudi of investing or trading in any commercial activity, he is prohibited or not allowed to practice, would be considered a violation of the said law, whether through using the citizen’s name, license, C.R. or in any other way.

Notably, MCI is working under the National Program for Combating the Commercial Concealment. As part of its initiatives in the National Transformation Program 2020. These initiatives are based on the implementation of six main measures to combat commercial concealment, and to eliminate this harmful phenomenon, which is considered one of the main causes of spreading commercial fraud and raising the level of unemployment.

These relevant measures include monitoring the sources of funds by obliging the commercial institution to open a bank account and to deal with invoices, thus reducing the foreign remittances, besides providing accurate information on any business practices in violation, and giving the necessary treatment for each sector individually. All that for combating the commercial concealment, stimulating the investment, upgrading the level of service provided to the consumer, consolidating the efforts among government agencies to combat commercial concealment, nationalization of jobs and providing fair competition among the commercial sectors to make the Saudi market an attractive environment for investors.

The Ministry has been endeavoring to combat commercial concealment in all commercial sectors and activities through several stages, starting with the retail sector and then the construction sector, as these two sectors constitute the highest percentage of commercial concealment cases, followed by other sectors.

The Ministry aims to combat the phenomenon of commercial concealment and to create a regular commercial environment free from any irregularities, besides enabling the citizens to practice business.

The Ministry of Commerce and Investment has been endeavoring to control and detect any violations related to Anti-Commercial Concealment Law. Therefore MCI is keen to apply the relevant Rules & Regulations, which include two years' imprisonment, a fine of one million riyals for each offender, deporting the non-Saudis from the Kingdom, defaming the names of the violators in the local newspapers at their own expense, besides the closure of the shop and writing off the C.R. and the prohibition of practicing the same business for up to five years.

Last Modified 26 Dec 2018