Ali bin Talib bin Touzan

Money Laundering Crime: How is Saudi Arabia Confronting the Journey of Concealing Illicit Funds?

12 July 2026 - 18:02 | Last update 12 July 2026 - 18:02

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Money may appear legitimate on the surface, but in reality it carries the traces of serious crimes such as bribery, corruption, drug trafficking, fraud, human trafficking, and financing criminal activities. This is where the journey of money laundering begins; the perpetrator seeks to strip the money of its criminal nature and give it a legitimate appearance, severing the link between it and its illicit source, making it tradable within the economy as if it were the fruit of a legitimate activity.

Aware of the gravity of this crime and the threat it poses to the national economy, market integrity, and investor confidence, the Saudi regulator issued the Anti-Money Laundering Law, which includes a precise definition of the crime, deterrent penalties, and an integrated regulatory system in line with best practices and international standards.

The Saudi law is distinguished by not limiting the crime of money laundering to merely concealing illicit funds, but rather adopting a broad concept of criminalization that includes any act aimed at disguising the truth or conferring legitimacy on funds derived from criminal activity, recognizing that perpetrators of this crime do not merely hide funds, but seek to integrate them into the economic cycle in a seemingly legitimate manner, making it difficult to detect their true source.

Because the legal definition is the foundation on which criminal liability is based, the regulator provided a precise explanation of the crime of money laundering in the law, stipulating that it is committed if any person, knowing that the funds are derived from criminal activity or an illicit source, commits any of the following acts: Conducting any transaction on the funds or proceeds.

Transferring, acquiring, using, holding, or receiving the funds. Concealing or disguising the nature, source, movement, ownership, location, manner of disposal, or related rights of the funds. Participating by agreement, assistance, incitement, advice, facilitation, collusion, concealment, or attempt to commit any of these acts.

This text reveals a clear legislative philosophy; the regulator did not criminalize the money itself, but rather criminalized any behavior aimed at severing the link between the money and its criminal source, leading to the appearance of illicit proceeds as if they were the result of legitimate transactions. Therefore, it did not require the financial transaction to be complex or cross-border, as the crime may be committed merely by possessing, using, or transferring the funds, provided that the perpetrator knows of their illicit source.

Through this definition, it becomes clear that the crime of money laundering rests on three main pillars: first, the existence of funds derived from criminal activity; second, committing one of the acts specified by the law; and third, the knowledge of the illicit source of those funds. Therefore, good faith is an essential element in distinguishing between legitimate financial transactions and criminally punishable behavior.

Moreover, the concept of funds in the law is comprehensive, not limited to cash, but extending to include all assets, properties, financial rights, commercial papers, and negotiable instruments, whether tangible or intangible, movable or immovable, reflecting the regulator's keenness to close all loopholes that perpetrators might exploit to conceal their proceeds or convert them into different financial forms.

One notable feature of the law is that the crime of money laundering is independent of the original crime from which the funds originated. It is a derivative crime in terms of the source of the funds, but independent in terms of criminal liability, proof, and prescribed penalty. Furthermore, it is not required that the perpetrator of money laundering be the same as the perpetrator of the original crime; any other person may be held liable if they deal with those funds in the manner specified by the law, knowing their illicit source. Therefore, proving the crime of money laundering does not depend on a final conviction of the perpetrator of the original crime, provided evidence exists that the funds are derived from criminal activity and that the accused was aware of this, which enhances the efficiency of judicial prosecution and prevents perpetrators of this crime from escaping accountability.

The regulator did not stop at punishing the principal offender but expanded the scope of liability to include anyone who contributes to concealing funds or disguising their reality, or who provides advice, assistance, facilitation, or conceals the perpetrators of the crime, provided that knowledge of the illicit source exists. This reflects a legislative recognition that money laundering often occurs through collaborative networks that share roles, rather than by a single individual.

These provisions emphasize that the Anti-Money Laundering Law aims not only to protect the financial sector but also to safeguard the entire national economy, preserve fair competition, enhance confidence in the investment environment, and dry up the sources of illicit funds before they turn into tools that finance further crimes or infiltrate the legitimate economy.

The most dangerous aspect of money laundering is that it does not limit itself to hiding crime proceeds but gives them a new life within the legitimate economy, making them appear as untainted legitimate funds. Hence, the definition of the crime in Saudi law is broad and precise, so that illicit money finds no path to artificial legitimacy, and the national economy does not become a haven for organized crime proceeds. Therefore, combating money laundering is not merely a legal obligation but a pillar for protecting the national economy, enhancing the integrity of financial transactions, and safeguarding society's security and stability.

• Legal Advisor