Saudi Arabia is tightening the checks surrounding high-value precious metals and gemstone transactions, placing greater emphasis on knowing who is behind major cash deals.
SR50,000 Triggers Closer Checks
Under requirements outlined by the Ministry of Commerce, businesses must verify customer identities and conduct due diligence on cash purchases or sales worth SR50,000 or more.
The same rules apply when several transactions appear to be connected, reinforcing oversight of high-value deals and closing the door to attempts to divide a high-value deal into smaller amounts.
More boldly, the requirements extend beyond the transaction itself. According to a Ministry of Commerce memo issued to the Federation of Saudi Chambers and reviewed by Okaz, traders must identify and verify their customers while maintaining the necessary information and records in line with the Anti-Money Laundering Law.
ID Requirements Take Center Stage
The ministry has also placed greater emphasis on making these requirements clear to customers before transactions take place.
Businesses trading in precious metals and gemstones must prominently display awareness notices at all their branches, explaining when customer identification is required and which documents may be used to verify identity.
Saudi citizens must provide a valid national ID, while residents must present a valid residency permit and non-residents a valid passport.
The framework also allows for other identification documents and methods where they are legally approved, ensuring that businesses have recognized means of establishing and confirming a customer’s identity.
Does the Threshold End the Checks?
These identification requirements do not end once the transaction falls within a particular value range.
The ministry emphasized that the SR50,000 threshold does not exempt businesses from their other obligations under the Precious Metals and Gemstones Law and its executive regulations.
Moreover, they must still issue the required invoices, maintain the relevant information on buyers and sellers and comply with any additional identity verification measures required by law.
An ID Is Only the First Step
The ministry also made clear that presenting an identity document is only the first step in the verification process.
Businesses must verify the authenticity of the document, carry out all applicable due diligence measures and retain the required customer information and records in accordance with the relevant regulations.
Crucially, businesses must apply the necessary measures regardless of transaction value whenever there is suspicion of money laundering or terrorist financing, or when customer information appears inaccurate or insufficient.
The ministry further stressed that suspicious transactions must be reported in line with the procedures established under the relevant regulations.
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