CORPORATE CRIME IN THE KINGDOM OF SAUDI ARABIA (KSA)

The rapid industrial expansion of the KSA has been the result of oil exploitation, as well as growth in the sectors of agriculture, tourism and urbanism.^[676] However, given the existing autocracy, which has been the traditional form of rule in the KSA, many opportunities for corruption and corporate crime arose.^[677] Leaders in the KSA have been taking advice from councils, consisting of various elders and advisers, many of them from among the leader’s family.

It is worth noting that provisions of sections 211, 212, 213 and 214 of Companies Law 2015 (Nizam Asharaikaat / ^Uaj) (CL’15)^[679] deal

with certain types of corporate misconduct. Moreover, there are other set of rules dealing with such cases - for instance, the Anti Bribery Law 1992 (Nizam Mukafahat Arashwah / ^Uij) (ABL’92).^[680]

Although the KSA has not, to date, had a written penal code, companies can be held liable for wrongful misconduct, under criminal laws and regulations such as the ABL’92.

Sections 19, 20 and 21 of the ABL’92 provide for a fine of an amount 10 times the value of the bribe for any company or artificial person, where employees are found guilty and where it is proven that the crime was committed in the interest of the corporation. There are also some consequential penalties that may be applied to the corporation under sections 19 and 21, as follows:

i. The company will be deprived of government procurement contracts, if its directors or any of its representatives are convicted of bribery.

ii. The Cabinet may take any further appropriate measure regarding the company.

iii. The conviction shall be made public in a daily newspaper.

This approach is illustrated at the criminal judgment of the Board of Grievance (Diwan Al-Mazalim /^^1 J'j^):^[681] the financial and adminis­trative manager in a company offered an amount of SAR 150,000 (approximately USD 40,000)^[682] to a public official in one of the Minis­tries. The objective was to induce him to issue an illegal permit to operate a business to the said company. The public official refused to accept this bribe and informed the authority concerned of the matter. The accused, who appeared before the Board of Grievance, confessed that he had offered this amount to the public official in accordance with a verbal order from the manager of the said company. The Board of Grievance convicted him and passed its judgment based on sections 9, 15 and 19 of the ABL’92 as follows.

First, the financial and administrative manager of the company involved was found guilty of the charge filed against him, and sentenced to one year’s imprisonment in addition to a fine of SAR 50,000 (approximately USD 13,000). Second, the amount of the bribe was to be confiscated. Third, the company was fined SAR 300,000 (approximately USD 80,000), because the employee who offered the bribe was acting in the interest of the company, since his aim was to obtain the permit requested by the company. The employee involved was also a member and representative of the company. This case demonstrates that the court held the company - as a legal person in the KSA - vicariously liable under the ABL’92 for the commission of a criminal offence, for the following reasons: (i) the company had an interest in obtaining the certificate requested; (ii) the said employee was a mere representative of the company and executing its will in offering the bribe to obtain the said certificate; and (iii) the said employee had no personal interest in the matter and that the sole party who had an interest was the company. Therefore, the company deserved to be punished by application of the ABL’92.

Further offending conducts may be punished, if they fall under the regulatory field of laws that regulate environment, such as the General Environmental Law 2001^[683] and the Labour Law 2005.^[684]

Corporate Crime Rate in the Kingdom of Saudi Arabia (KSA)

There are no exact statistics that reflect corporate crimes rate in the KSA. Even without exact statistics, however, corporate crime (such as embez­zlement of funds, drug trafficking, business fraud and bribery) is of serious concern to the KSA.^[685] In addition, the country faces a problem difficult to combat with regards to money-laundering used to finance terrorism, and other corporate crimes.^[686] Moreover, the KSA itself has acknowledged that the country has also become a transit centre for organised arms smuggling.^[687]

It is important to point out that there are companies in the KSA that commit corporate crimes. For example, Saudi Arabia-based Tamimi Global Company Ltd (TAFGA) paid a fine on account of its corporate criminal activity.^[688] As result of corporate crimes, the KSA has closely worked with many countries to combat them. Furthermore, the country established programs to deal with the problems associated with organised crime. Therefore, there seem to be a tentative acceptance of corporate criminal liability for illegal act such as money laundering and bribery in the KSA. With a view to better combating forms of corporate crime, according to this writer’s view, there is a need for strict liability offences.^[689]

Is a Penalty Justifiable for Corporate Crime?

The criminal sanctions for a corporate crime can be on both individuals and corporate entities. The penalties include imprisonment, fines and denial of certain legal privileges (such as a licence) and so forth.^[690] Hence legal sanctions may terminate the business.^[691] However, the penalties should depend on the type of illicit activity committed.^[692]

Many corporations like Costain Coal Inc, C R Bard Inc and Odwalla Inc have caused deaths, yet the penalties that have been imposed on them were limited to a fine.^[693] Although corporate crime has continuously been increasing, governments have not been taking drastic steps to combat such crimes.

Instead of complying with the relevant laws and supporting the legislators’ and governments’ recommendations, policies and solutions that attempt to ensure the support and protection of people’s rights,^[694] many companies either in the KSA or overseas have committed corporate crimes such as bribery, false advertising, fraud, use of unsafe manufac­turing processes and adopted practices that comprise an abuse of human rights.^[695]

In order to protect their own advantage around the world, governments may ignore human rights, preferring instead to maintain trade advan­tages. This naturally means the presence of less government support to address corporate crime.^[696] It is evidenced that many corporate crimes are compensated by fines alone, depending on many factors such as strength of evidence, seriousness of the crime, and the availability of other types of penalties, while criminal sanctions may be last resort for serious violations of corporate regulations.^[697]

III.