MCI, a Fine and Defamation against a Female Citizen for Enabling Two Expats of Practicing Trading & Contracting and Providing the Cover up for them

26 Mar 2018
Penalties Included Deporting the two Expats, Writing off C.R. and Liquidation of Trading Activity
The Ministry of Commerce and Investment announced the issuance of a judgment by the Criminal Court in Riyadh against a female citizen and two workers of Arab nationality, who were found guilty of violating the Anti-Commercial Concealment Law. The female citizen provided the cover up for the two expats by enabling them to practice trading & contracting under her name.

The verdict included imposing a fine of 75 thousand riyals, deporting the two expats and not to be allowed to re-enter the Kingdom for work, in addition to writing off the Commercial Registration, as well as the liquidation and prohibition of practicing the same trading activity, besides defamation against the defendants in the local newspapers at their expense.

The details go back when a female citizen enabled two expats of practicing trading activity in the field of contracting under her name, provided that 70% of the profits will go to the said citizen and 30% for the two expats. The two expats were involved of concluding contracts, providing building materials, machines, labors, etc. The defendants acknowledged the receipt of revenues and the deposit of the amounts in two bank accounts. It was disclosed that one of the expats deposited in his account 7 million riyals within one year.

In accordance with the Anti-Commercial Concealment law, a non-Saudi shall not, in any case, practice or invest in any trading activity, he is not allowed or licensed to practice or invest in. Any citizen enables the non-Saudi to invest or practice trading activity will be subject to commercial concealment provisions, whether by using the citizen’s name or license or C.R. or in any other way.

The Ministry of Commerce and Investment has been endeavoring to control and stop any violations by applying the rules and regulations relevant to combating the commercial concealment. The penalties may reach to two-year imprisonment, a fine of 1 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 closing and liquidation of the trading activity, writing off the C.R. and the prohibition of practicing the same business.

It is worth mentioning that the Ministry is endeavoring to implement the initiative of “The National Program for Combating the Commercial Concealment” as part of its initiatives in the National Transformation Program 2020. These initiatives are based on 6 main measures to combat the commercial concealment, which is one of the main causes of commercial fraud and unemployment.

These measures focus on monitoring the sources of funds by imposing the opening of bank accounts for the commercial establishment, and the need to deal with invoices, which reduces foreign remittances, besides providing accurate information on business practices in violation, and the necessary treatment or remedies for each individual sector. All that for combating the commercial concealment, stimulating the investment, upgrading the level of service provided to consumers, integrating the efforts among the government agencies to combat commercial cover up, Nationalization of jobs, providing fair competition in the commercial sector to make the Saudi market an attractive environment for investors.

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

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

Last Modified 26 Dec 2018