Saudi Arabia: Strict controls to freeze terrorist funds in family trusts
In a decisive step reflecting the Kingdom of Saudi Arabia’s firm commitment to international standards of financial transparency, the National Center for the Development of the Non-Profit Sector has issued a binding guide for all non-profit organizations in the Kingdom. This guide aims to establish precise and rigorous mechanisms for implementing the resolutions of the UN Security Council and the National Committee for Combating Terrorism and its Financing, representing a qualitative leap in the governance of charitable and civil society work.
Comprehensive oversight: from large associations to family trusts
This new move aims to close any loopholes that could be exploited by suspicious organizations, as the guide has expanded its mandatory scope to include all components of the non-profit sector without exception. It is no longer limited to large associations and NGOs, but now extends to family trusts and community funds under the center's supervision. This expansion places a broad spectrum of civil society organizations under direct legal and security responsibilities to ensure that no financial channel, no matter how small, is exploited for illicit activities.
International context and commitment to Security Council standards
These measures come within the framework of the Kingdom’s ongoing efforts to strengthen its position as a trusted international partner in combating terrorism financing. The new guidelines are based on royal decrees related to combating terrorism and its financing, the Law of Associations and Foundations, and resolutions of the Permanent Committee for Combating Terrorism. This legislative harmonization aims to ensure a safe and compliant environment for charitable work, adhering to the highest international standards, particularly the recommendations of the Financial Action Task Force (FATF), thereby enhancing global confidence in the Saudi financial and banking system.
The "immediate freeze" mechanism: crucial hours without warning
The guidelines emphasized speed as a crucial factor in the effectiveness of sanctions, requiring organizations to implement asset freezes "without delay," specifically within hours of the issuance of sanctions list decisions. The instructions stressed the necessity of implementing the freeze "without prior notice" for targeted entities to prevent any attempt to smuggle or conceal assets. These measures specifically target organizations such as ISIS, al-Qaeda, and those affiliated with the Taliban, in addition to the unified national list (1373) issued by the Presidency of State Security.
Protecting the charitable sector and promoting transparency
The importance of this guide extends beyond security to protecting the reputation of the Saudi non-profit sector. By requiring associations and institutions to monitor the unified lists of the Security Council and the National Committee on a daily basis, the National Center ensures the protection of donors' funds and their delivery to their intended beneficiaries, free from any suspicion. The guide also warns that any negligence or delay in implementation will subject the responsible organization or individuals to strict legal accountability, while simultaneously emphasizing the confidentiality of exchanged information and data protection.
Finally, the guide enabled organizations wishing to enhance their compliance to request technical assistance and capacity-building programs from the Standing Committee for Combating Terrorism and its Financing, thus confirming the Kingdom’s approach of combining regulatory rigor with institutional development to ensure an effective and secure non-profit sector.
