In a move aimed at strengthening the administrative justice system and enhancing the efficiency of judicial procedures, the Board of Grievances in the Kingdom of Saudi Arabia has approved a set of new regulations concerning the use of enforcement service providers. This step complements the ongoing judicial development in the Kingdom and ensures the implementation of administrative rulings according to the highest standards of quality and transparency.

The context of judicial development and the importance of the decision

The adoption of these regulations is an integral part of activating the enforcement system before the Board of Grievances, representing a qualitative leap in the history of Saudi administrative justice. Previously, enforcing judgments against administrative bodies faced procedural challenges. These regulations establish a clear institutional framework governing the relationship between the court, the party seeking enforcement, and private sector service providers. This framework aims to expedite the recovery of rights, positively impacting the business and investment environment in the Kingdom and enhancing the reliability of dealings with government entities.

Services are restricted to licensed entities, with specific exceptions

The new regulations explicitly stipulate in Article 3 a ban on referring any enforcement service to those not legally authorized, in order to ensure the quality of outputs and adherence to professional standards. However, the regulations also allow for the necessary flexibility in the administration of justice, making two exceptions:

• Agreement of the implementing parties to select a specific service provider, provided that the department approves this selection and that the provider adheres to the regulations.
• If a licensed service provider is unavailable, the department may in this case use an unlicensed provider after granting him a temporary license.

Strict commitments to ensure neutrality and confidentiality

The regulations placed great emphasis on protecting beneficiary data and ensuring the integrity of procedures, with Article Five obligating service providers to adhere to a set of standards, most notably:

• Strict confidentiality: Disclosure of any information or data relating to the implementation work is prohibited except with official permission.
• Documentation and archiving: Keeping certified copies of all procedures for a minimum of five years.
• Preventing conflicts of interest: Prohibiting the provision of services in cases in which the service provider or one of his relatives up to the fourth degree has an interest, or participating in auctions that they supervise.

Financial guarantees and asset protection

Regarding the procedures for receivership and judicial sale, the regulations established precise mechanisms to protect funds and assets. Article 8 authorized the judicial department to request an unconditional financial guarantee or insurance policy from the receiver or judicial custodian to cover any potential professional errors, provided that the guarantee does not exceed 5% of the value of the funds, thus providing a financial safety net for the parties to the case.

Expected impact of the new regulations

This regulation is expected to contribute to creating a competitive market for judicial enforcement services, thereby raising the level of professionalism and reducing the time required to complete enforcement procedures. Furthermore, establishing a fee-setting mechanism based on "fair market rates" or agreement between the parties ensures financial fairness for all involved, thus reinforcing the principles of efficient justice that the Board of Grievances strives to achieve.

As part of its ongoing efforts to regulate the professional services market and protect the national economy, the Saudi Organization for Certified Public Accountants (SOCPA) announced that it has referred two commercial establishments to the Public Prosecution, in direct coordination with the relevant security authorities. This decisive action was taken after it was proven that the two establishments were engaged in accounting, auditing, and financial consulting activities without obtaining the necessary licenses from SOCPA.

Details of observed violations

The investigations and oversight conducted by the Authority's teams revealed details of the violations. It was found that a licensed financial advisory firm (excluding securities) exceeded the scope of its license by publishing promotional advertisements on its website and social media platforms offering "financial statement certification" services. This constitutes a clear violation of the provisions of the Accounting and Auditing Profession Law, as the firm does not possess the license authorizing it to provide auditing services.

In a related context, the Authority detected another commercial establishment that offered auditing services through its website, in addition to placing an external sign in front of its headquarters containing phrases that suggest to the public that it practices the profession of accounting and auditing, without obtaining any regulatory license that allows it to practice this sensitive activity.

Regulatory context and protection of the profession

These actions are part of the oversight role undertaken by the Saudi Organization for Certified Public Accountants (SOCPA) to ensure adherence to professional and ethical standards. These violations are considered offenses under Article 10 of the Accounting and Auditing Profession Law, given their potential to mislead the public and investors, and to seriously harm the integrity of the profession and the credibility of financial reports, which are fundamental to sound economic decision-making.

The importance of monitoring the investment environment

This measure is of paramount importance both domestically and economically, as the Kingdom seeks to enhance transparency and credibility in the business sector. The existence of financial reports issued by unlicensed entities can lead to misleading financial information, jeopardizing shareholders' rights and negatively impacting the confidence of local and international investors in the Saudi market. Therefore, addressing such violations is an integral part of protecting the investment environment and ensuring the quality of financial outputs.

The authority concluded its statement by affirming its continued commitment to taking all regulatory and supervisory measures firmly, stressing the need for all individuals and establishments to comply with the relevant regulations and bylaws to avoid legal accountability and the resulting penalties.