In July 2024 the Saudi Council of Ministers authorized a strong framework of legal instruments that targets government employee corruption. The Saudi Oversight and Anti-Corruption Authority (Nazaha) Law is scheduled to start on November 7, 2024. The government introduced the law through Prime Minister Decree No. 165 of 2011 until Law No. M/25 of 2024 made revisions. The latest reform of Nazaha Law strives to strengthen these initiatives.
Nazaha Law Key Changes
The New Law contains complete protocols to prosecute public officials when their assets surpass their reported financial gain. Article 2 requires public officials to demonstrate the legitimacy of unexplained wealth acquired through corruption or bribery or power abuse when these assets lack explainable sources according to law. The obligation to prove legitimacy applies directly to spouses and their children and parents of personnel. Through this approach The New Nazaha Law displays its strict enforcement techniques.
Traditional legal practices face a major transformation because of the new requirement that places the proof responsibility on defendants. The Nazaha Authority counterposes proof standards to improve the chance of securing corruption case convictions. Nazaha fails to provide clear definitions of what evidence types qualify as acceptable for its purposes.
Increased Accountability for Public Employees
Under Article 19, if a public employee’s wealth increases disproportionately after taking office, and investigations uncover evidence of corruption, the individual will be required to justify the source of their wealth. Failure to do so will result in the case being escalated to a Nazaha investigative unit, potentially leading to severe penalties, including asset recovery or confiscation under The New Nazaha Law.
In circumstances where the accused either absconds or passes away prior to prosecution, Nazaha, in collaboration with relevant authorities (Article 20), will continue to gather evidence and pursue the recovery of any misappropriated funds. The agency will also coordinate with the Ministry of Justice to enforce rulings both domestically and internationally. Article 22 introduces a settlement process for accused individuals, details of which are yet to be disclosed.
Expanded Nazaha Mandate and Investigative Powers
Under Article 10 Nazaha gains new specialized units that directly answer to King Salman bin Abdulaziz Al Saud together with Crown Prince Mohamad Bin Salman. The specialized units under Nazaha leadership will perform criminal investigations along with prosecutions while also managing integrity protection and transparency enhancement together with anti-corruption initiatives and administrative oversight and international collaboration. The commitment to accountability for corruption cases without exception extends to both princes and ministers as stated in the New Nazaha Law.
The definition includes all types of corruption practices in the public sector. The Authority at Nazaha investigates financial and administrative violations through direct investigation which leads them to file cases at a competent court. Article 5 grants the Authority the power to request documents from reviewed entities as each entity must fulfill these demands in established time periods. The agency takes responsibility to recover all illegally obtained assets via corruption and to establish safeguard systems for whistle-blowers.
Impact on Businesses in Saudi Arabia
Companies conducting business in Saudi Arabia must consider this New Law to be strategically important. Nazaha conducted numerous operations in 2024 that led to the capture of 155 public servants and 924 facility inspections during the month of June. Since the September 2024 inception of the Nazaha Criminal Investigation Unit investigations have numbered 280 with 130 people subject to arrest (Article 14). The new measures in The New Nazaha Law resulted in the arrest of 5,000 people for corruption offenses between 2021 and 2023.
Mitigating Corruption Risks for Businesses
Businesses operating in Saudi Arabia need to conduct active internal and compliance practice analyses as the country strengthens its anti-corruption measures. Companies should analyze their policies that pertain to presenters’ gifts as well as hospitality offerings while looking at payments for facilitating activities and interactions with third parties. Corporations must provide systematic training sessions to their staff members regarding the regulations and internal anti-bribery measures for complying with The New Nazaha Law.
Conclusion
Through the implementation of the Nazaha Law Saudi Arabia demonstrates its dedication to developing transparent governance procedures. The Kingdom seeks to protect public funds and boost investment opportunities through intensified powers of Nazaha and regulatory changes in corruption-related laws. The new legislation supports Vision 2030’s broader goals which prove Saudi Arabia’s dedicated focus on integrity along with the rule of law for national development. The implementation of The New Nazaha Law will activate its practical effects that public officials and private entities must adjust to the step-change in governance and accountability procedures.
