2 weeks ago
Saudi Arabia Tightens Anti-Crime Oversight on UAE Bank Transfers
Saudi Arabia and the United Arab Emirates are two rich countries that sit next to each other in the Middle East.
They have been close business partners for a long time.
Lately, Saudi Arabia started checking bank payments that go to the UAE much more carefully.
These checks are normally used for countries that are seen as risky for money crime.
Some business people say their payments got stuck or were sent back.
Saudi Arabia says it is not trying to block the UAE on purpose.
It says it is just following rules to stop bad money from moving around.
The UAE says it has not heard about any problems with payments.
The two countries sometimes disagree, for example about oil.
Most experts think they will keep trading with each other anyway.
Saudi Arabia has placed financial transfers to the UAE under extra regulatory oversight reserved for jurisdictions considered high-risk for illicit money flows, according to three people with direct knowledge of the matter.
Six businesspeople told Reuters their companies have had transfers in various currencies delayed or returned by Saudi banks with no official explanation.
Saudi Arabia's central bank said there are no direct restrictions on specific countries, saying banks apply risk-based controls aligned with standards set by the Financial Action Task Force (FATF).
A UAE official said its economy ministry has not received reports from private-sector companies regarding difficulties or unusual delays in transfers between the two nations.
A Saudi insider said the enhanced oversight was intended as a 'subtle message' to Emirati leaders amid tensions over oil quotas, Yemen, Iran policy, and economic rivalry.
- Who
- Saudi Arabia's central bank and its banks, the UAE government, and businesspeople making UAE-bound transfers
- What
- Enhanced regulatory oversight on Saudi-to-UAE financial transfers, causing some payments to be delayed, returned, or routed through third countries
- Where
- Between Saudi Arabia and the United Arab Emirates
- When
- Reported on August 18; enhanced oversight was introduced earlier this year, with difficulties beginning after the UAE announced its OPEC exit on April 28
- Why
- Saudi Arabia applies extra checks to jurisdictions it deems high-risk for money laundering and terrorism financing; a Saudi insider said it also sends a 'subtle message' amid tensions between the two Gulf states
Official government accounts
Businesspeople and informed sources
Nature of the measures
Official government accounts
The Saudi central bank says there are no direct restrictions on specific countries and that banks apply controls based on internal risk assessments in line with FATF standards.
Businesspeople and informed sources
Three people with direct knowledge say UAE settlements were added to oversight reserved for high-risk jurisdictions; a Saudi insider called it a 'subtle message' to Emirati leaders.
Impact on cross-border payments
Official government accounts
A UAE official says its economy ministry has not received reports of difficulties or unusual delays in bank transfers between the two nations.
Businesspeople and informed sources
Six businesspeople report transfers delayed or returned with no official explanation, some routing payments via third countries; an investor says two UAE firms were asked not to do business with companies in the UAE.
Key facts
- Affected transfers
- Saudi-to-UAE payments in various currencies, delayed or returned with no official explanation
- Sources
- Three people with direct knowledge, six businesspeople, and three bankers cited by Reuters
- Saudi central bank statement
- "There are no direct restrictions on specific countries"
- UAE statement
- Economy ministry has not received reports of difficulties or unusual delays in transfers
- UAE risk status
- Among more than half a dozen regional countries deemed high-risk by Saudi Arabia; delisted by FATF in 2024
- Payment delays cited
- Weeks for some transfers, including amounts below 1 million dirham ($272,257); some transfers never processed
- Trade ties
- Saudi Arabia is the UAE's largest Arab-world trading partner; UAE was Riyadh's fifth-largest export destination and fourth-largest import source in 2024
- Timing trigger
- Difficulties began weeks after the UAE announced on April 28 that it was leaving OPEC
Quotes
UAE economy ministry official
Official from the UAE Economy Ministry
“"The UAE and Saudi Arabia maintain deep and longstanding economic and commercial ties, supported by significant trade and investment flows."”
theprint.in
“"There are no direct restrictions on specific countries."”
theprint.in
Sources
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