Article 3 of the Saudi Anti-Money Laundering Law
المادة 3 من نظام مكافحة غسل الأموال · الفصل الثاني: التجريم
The article provides that a legal person is considered to have committed money laundering if it is committed in its name or on its behalf, while criminal liability of the related natural persons remains.
Official text (Arabic)
This article has not been amended since the law was issued.
يُعد الشخص الاعتباري مرتكباً جريمة غسل الأموال إذا ارتكب باسمه أو لحسابه أي من الأفعال الواردة في المادة (الثانية) من النظام، وذلك مع عدم الإخلال بالمسؤولية الجنائية لرؤساء وأعضاء مجالس إداراته أو مالكيه أو العاملين فيه أو ممثليه المفوضين أو مدققي حساباته، أو أي شخص طبيعي آخر يتصرف باسمه أو لحسابه.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 3 explained in plain English
This article extends the scope of the money laundering offense to the legal person, such as companies, establishments and entities with independent legal personality. If any of the acts mentioned in Article 2 is committed in the name of the legal person or on its behalf, it is itself considered to have committed the offense.
The acts meant in Article 2 are: converting or transferring funds or carrying out a transaction with them knowing they are proceeds of a crime, in order to conceal their source or help the person involved escape; acquiring, possessing or using them knowing their source; and concealing their nature, source or ownership; in addition to attempt and participation in these.
For the legal person to be held liable, the text requires that the act was committed in its name or on its behalf.
Most importantly, holding a company liable does not relieve individuals; the article provides that this is without prejudice to the criminal liability of:
- Chairpersons and members of boards of directors.
- Owners and employees.
- Authorized representatives and auditors.
- Any other natural person acting in the name of the legal person or on its behalf.
So a company may be held liable, and along with it any of these persons who committed or took part in the act, each according to their role. Companies and their officials would do well to consult a lawyer who specializes in criminal and corporate cases to assess any particular situation.
Practical example
A commercial company in Jeddah used its accounts to receive funds that its manager knew were proceeds of a crime, then re-transferred them in the form of fictitious deals to conceal their source. Here the company is considered to have committed money laundering because the act was done in its name and on its behalf, and this does not prevent holding the manager and any employee who took part in the transaction liable.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 3 of the Saudi Anti-Money Laundering Law
Can a company itself be accused of money laundering?
Yes. A legal person is considered to have committed the offense if any of the acts in Article 2 is committed in its name or on its behalf.
If the company is punished, are its managers and employees excused?
No. The article provides that this is without prejudice to the criminal liability of chairpersons and members of boards of directors, owners, employees, authorized representatives, auditors and any person acting in its name or on its behalf.
Can a company's auditor be held liable?
The article expressly names auditors among those whose criminal liability is not affected by the company's liability, meaning they are held liable if the elements of the offense are met in their case.
Articles this article refers to
More articles on The Money Laundering Offense
- Article 2
The article lists the acts that make a person guilty of money laundering, including converting or possessing proceeds or hiding their source with knowledge, attempt and participation.
يعد مرتكباً جريمة غسل الأموال كل من قام بأي من الأفعال الآتية: 1- تحويل أموال أو نقلها أو إجراء أي عملية بها، مع علمه بأنها من متحصّلات جريمة؛ لأجل إخفاء المصدر
- Article 4
The article makes the money laundering offense independent of the predicate offense, and provides that intent, knowledge or purpose is established from the objective and factual circumstances of the case.
1- تعد جريمة غسل الأموال جريمة مستقلة عن الجريمة الأصلية، ولا تلزم إدانة الشخص بارتكاب الجريمة الأصلية من أجل إدانته بجريمة غسل الأموال أو من أجل اعتبار الأموال
- Article 31
The article punishes a legal person that commits money laundering with a fine up to SAR 50,000,000 and not less than twice the value of the funds, with the possible additional penalties of barring it from its activity, closing its offices or liquidating it.
1- مع عدم الإخلال بالمسؤولية الجنائية للشخص ذي الصفة الطبيعية، يعاقَب أي شخص ذي صفة اعتبارية يرتكب جريمة غسل الأموال بغرامة لا تزيد على خمسين مليون ريال سعودي و
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.