Saudi Arabia tightens regulations on money flow to UAE, in latest sign of deepening rift

Saudi Arabia has intensified regulatory oversight on financial transfers to the United Arab Emirates, a move typically reserved for countries deemed high-risk for illicit money flows. This development, not publicly announced, signals a deepening rift between the two wealthy Gulf nations.

Several companies have reported difficulties in transferring funds from Saudi Arabia to the UAE in recent months. Businesspeople have informed Reuters that their companies have experienced delays or outright returns of transfers in various currencies by Saudi banks without official explanations. This enhanced scrutiny has not been previously reported.

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There are no direct restrictions on specific countries.

The Saudi central bank stated that there are no direct restrictions on specific countries. It emphasized its robust framework for combating money laundering and terrorism financing, aligning with global standards. Banks in the Kingdom, it added, apply necessary controls based on internal assessments and institutional risk appetite, considering factors like country and geographic risk.

However, sources with direct knowledge indicated that the Saudi central bank notified key banks earlier this year to apply heightened measures for settlements with the UAE. A Western executive operating in Saudi Arabia also received the same explanation from their bank regarding transaction delays. A UAE official stated that the economy ministry has not received reports from private companies about difficulties with inter-country bank transfers.

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All banks in the Kingdom apply necessary controls and preventive measures to mitigate risks based on their own internal assessments and institutional risk appetite, while also assessing various risk factors, including country and geographic risk.