Ministry of Investment: New guidelines for addressing violations and prohibiting gifts
In a move aimed at enhancing the investment environment and raising transparency standards in the Kingdom of Saudi Arabia, the Ministry of Investment a binding procedural guide to regulate the handling of violations of the Investment Law and its implementing regulations. This guide defines precise mechanisms for the work and powers of enforcement officials, ensuring the integrity of oversight procedures and promoting compliance by investment establishments with regulations issued by royal decree, thus representing a significant leap forward in government oversight mechanisms.
The context of Vision 2030 and the modernization of systems
This regulatory measure aligns with the objectives of the Kingdom's Vision 2030, which aims to make the Saudi market an attractive global investment destination. Following the issuance of the updated Investment Law, which aims to equalize the rights of local and foreign investors and protect property rights, it has become essential to have on-the-ground enforcement mechanisms that keep pace with these legislative developments. The new guide clearly distinguishes between serious violations stipulated in Article 30 of the regulations and non-serious violations outlined in the Investor's Guide, ensuring proportionality and fairness in the actions taken.
Supervisory tasks with high professional standards
The guidelines require regulatory officials to perform their oversight duties with complete impartiality and without any favoritism or discrimination, emphasizing the necessity of adhering to Saudi dress and maintaining a professional appearance that reflects the identity of the government agency. The new regulations also stipulate that inspectors must present the investor's official identification card before commencing any procedure, clearly explaining the nature and purpose of the task to ensure absolute transparency and avoid any confusion for business owners.
Complete confidentiality and no gifts
To ensure the independence of regulatory decisions, the ministry has imposed strict confidentiality on all information and documents accessed by regulatory officials during their work, prohibiting their release to any other party without the authorization of the responsible authority. Crucially, to prevent any suspicion of corruption, regulatory officials are strictly forbidden from accepting any gifts, favors, or special services from investors or their employees; this is considered a red line that cannot be crossed.
Disclosure and Conflict of Interest
The inspector must sign a conflict of interest disclosure form before assuming their duties and immediately report any direct or indirect relationship they have with the establishment they are inspecting. Regulations grant inspectors the authority to obtain records, documents, and all data related to the violation, in coordination with the relevant authorities. In return, investors must enable inspectors to perform their duties and provide the necessary facilities, including providing accurate information through approved channels.
Mechanisms for correcting violations and documentation
The procedures adopted a reformative approach by granting a grace period for correcting minor violations. The violator is notified of the nature of the violation and the timeframe for rectification before a report is issued. The Ministry is obligated to notify the violator again 72 hours before the rectification period expires. The procedure escalates to the issuance of an official violation report if a serious violation is detected or if the grace period expires without correction. The violation report includes detailed documentation of the violation and supporting evidence, and enforcement officials are required to refer the report to the Violations Review Committee within ten working days of the date of the violation.
Expected economic impact
This procedural guide is expected to enhance the confidence of local and international investors in the Kingdom's regulatory environment, as clear procedures and fair application are key pillars for attracting capital. Furthermore, the strict application of these standards will reduce commercial disputes and improve the Kingdom's ranking in global ease of doing business indices.
