A shadow economy, suspicious transfers, and illicit financial activities fuel money laundering and support terrorism. Behind these activities are individuals driven by greed and those who prioritize quick profits, becoming complicit in major crimes punishable by imprisonment, fines not exceeding 5 million riyals, or both. Ongoing efforts, deterrent laws, and harsher penalties continue to combat these shadow economy crimes, which are considered serious offenses warranting arrest. These efforts are being combined to combat these crimes and prosecute their perpetrators and accomplices.

A third party... to resolve the crisis

The Ministry of Commerce revealed that commercial establishments benefited from the corrective period for violators of the anti-concealment system to correct their status and return to the market legally, including a company specializing in food supplies in Al-Ahsa that was established 15 years ago, and whose annual revenues exceed 30 million riyals annually.

The ministry explained that the establishment’s owners’ progress and response to the corrective period for violators of the anti-concealment system resulted in benefiting from the advantages of the correction period by completing the transfer of the company’s ownership to another person (a third party), and thus being exempted from income tax retroactively and avoiding the application of deterrent legal penalties that reach up to 5 years imprisonment and a fine of 5 million riyals, according to the anti-concealment system, and its business is now fully legal.

In another incident, the ministry indicated that a company specializing in car spare parts in Makkah, established 13 years ago, with annual revenues exceeding 9 million riyals annually, benefited from the company, and the owners of the establishment came forward and responded to the corrective period.

The correctors reap the rewards

The Ministry of Commerce reviewed the case of a luxury goods company in Qassim that rectified its status by taking advantage of the grace period after operating illegally for 25 years. The company legalized its status through a partnership agreement between a Saudi citizen and a resident. The Ministry noted that the company's annual revenue exceeds 30 million riyals. In a separate case, the Ministry disclosed the case of a ready-made clothing company in Najran that has been operating for nine years and whose annual revenue exceeds 7 million riyals.

The ministry explained that the progress of the establishment’s owners and their response to the corrective period for violators of the anti-concealment system resulted in benefiting from the advantages of the period and exemption from income tax retroactively and avoiding the application of deterrent legal penalties that reach up to 5 years imprisonment and a fine of 5 million riyals.

How is the follow-up done?

Legal advisor Saif bin Ahmed Al-Hakmi confirmed that the new anti-concealment system enabled a number of government agencies to control concealment crimes and violations, in addition to the Ministry of Commerce, and granted them the powers to use electronic evidence, in addition to other methods of proof, including the irregular tools of the non-Saudi’s absolute control over the establishment.

Al-Hakami explained that using artificial intelligence technologies to prove cases of cover-up, apprehend violators and perpetrators of crimes of the system, and apply penalties against them in accordance with the anti-cover-up system is considered an advancement in government work to combat cover-up.

The new anti-concealment system includes severe penalties of up to 5 years imprisonment, a fine of up to 5 million riyals, seizure and confiscation of the illicit funds of the perpetrators of the crime after final judicial rulings are issued against them, closure of the establishment, liquidation of the activity, cancellation of the commercial registration, preventing the convicted person from practicing any economic activity for 5 years, and deporting those being concealed from the Kingdom and not allowing them to return to it for work.

AI-powered tracking

Talat Hafez, former Secretary General of the Banking Awareness and Media Committee of Saudi Banks, revealed the size of the hidden economy in the Kingdom, indicating that the hidden economy resulting from commercial concealment represents approximately 20% of the GDP

He pointed out that commercial concealment causes an increase in unemployment, especially since the concealer resorts to employing people from his own group whom he is concealing.

The National Anti-Concealment Program has unveiled a new phase of joint oversight, relying on artificial intelligence and data analysis technologies from 20 regulatory bodies to detect suspected cases of concealment, apprehend violators, and impose legal penalties. Ministry of Commerce spokesperson Abdulrahman Al-Hussein explained that the oversight approach to apprehending violators of the anti-concealment law has changed significantly. Previously, it relied on inspection tours and responding to reports. He noted that the current phase involves linking data with 20 government agencies and identifying over 120 indicators of suspected concealment. Following electronic data analysis, oversight teams are dispatched to violating establishments across the Kingdom to apprehend those involved and impose legal penalties.

200 billion riyals in sales

The CEO of the National Program to Combat Commercial Concealment, Ahmed Al-Suwailem, confirmed that the second phase, following the implementation of the electronic invoice as the first phase, will be a platform that collects all data, after which the indicators will begin to reduce the percentage of suspected concealment, which amounts to 200 billion riyals in financial sales for those establishments suspected of concealment, and represents 15 to 20% of the percentage of the gross domestic product.

Al-Suwailem pointed out that citizens have a major role in reporting violations of the cover-up practices that are gnawing at the Saudi economy and harming the private sector that is committed to the existence of cover-up and violating establishments that monopolize supply chains and pose a difficulty for those who are committed. The electronic invoice limits monopolies, reveals manipulation, and combats cover-ups with the prescribed regulations and penalties.