Article 19 of the Saudi Privatization Law
المادة 19 من نظام التخصيص
At the private party's request and with the competent authority's approval, the contracting authority issues a certificate confirming that the competent authority approved the contract and that it and its documents are subject to the Law.
Official text (Arabic)
This article has not been amended since the law was issued.
تُقدّم الجهة التنفيذية -بموافقة الجهة المختصة- بناءً على طلب الطرف الخاص شهادة له تتضمن ما يأتي:
1- أن الجهة المختصة وافقت على العقد، أو العقد التابع.
2- أن العقد أو العقد التابع، وأي مستندات، أو سندات، أو وثائق ذات صلة موقعة أو سيتم توقيعها، تخضع لأحكام النظام.
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 19 explained in plain English
This article gives the private party a practical way to prove its sound legal position: an official certificate.
- Who issues it: the contracting authority, with the approval of the competent authority.
- When: at the request of the private party.
- What it states:
- That the competent authority approved the contract or the subsidiary contract.
- That the contract or subsidiary contract, and any related documents, instruments or papers signed or to be signed, are subject to the provisions of the Privatization Law.
Why does it matter? It is an official document proving the competent authority's approval and that the contract is subject to the Law, which removes doubt about its legal standing. It is especially useful when dealing with:
- Banks and lenders who want to be sure the contract is valid before financing, which links to Article 18 on financing.
- Investors who want to join the project company.
The text makes the certificate available at the private party's request, so it is advisable to request it early. It helps to consult a lawyer who specializes in commercial matters or banking and finance.
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 19 of the Saudi Privatization Law
What is the certificate that a contract is subject to the Privatization Law?
It is a certificate issued by the contracting authority with the competent authority's approval, confirming that the competent authority approved the contract and that the contract and its documents are subject to the Law.
Is the certificate issued automatically?
No. It is issued at the request of the private party.
More articles on Concluding and Financing a Privatization Contract
- Article 16
Privatization contracts are concluded in the government's name, with the executing entity representing it, and only with a private party. A body with public legal personality may not contract with the government as a private party.
1- تُبرم العقود الخاضعة لأحكام النظام باسم الحكومة، وتُعدّ الجهة التنفيذية مُمثلًا للحكومة في كل ما يرتبط بالعقد وأي عقد تابع، ما لم ينص قرار الموافقة على توقيع
- Article 17
No government entity may conclude a privatization contract without the competent authority's approval, and a contract concluded in breach is void unless the competent authority ratifies it.
لا يجوز لأي جهة حكومية إبرام عقد تخصيص دون الحصول على موافقة الجهة المختصة، ويقع باطلًا كل عقد تم إبرامه بالمخالفة لذلك، ما لم تجزه الجهة المختصة.
- Article 18
With written approval from the contracting authority, the private party may take financing and mortgage its own project assets, but may never sell or mortgage State-owned assets.
1- يجوز للطرف الخاص بعد الحصول على موافقة مكتوبة من الجهة التنفيذية ما يأتي: أ- إبرام عقود تمويل للأعمال والخدمات محل مشروع التخصيص مع جهة مصرفية، أو تمويلية، ع
- Article 25
A partnership contract may not be assigned without written approval from the contracting authority, while subcontracting is allowed and the private party remains directly responsible.
1- لا يجوز للطرف الخاص التنازل كليًّا أو جزئيًّا عن عقد الشراكة بين القطاعين العام والخاص -أو العقد التابع- للغير إلّا بعد الحصول على موافقة مكتوبة من الجهة الت
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.