Saudi Arabia has imposed stricter scrutiny and tighter controls on money transfers made via banks to the United Arab Emirates (UAE). Businesspeople report that, as a result, some fund transfers between the two nations are facing delays, while other transactions are being returned.
The Saudi Central Bank has instructed several key banks to conduct enhanced due diligence on financial transactions destined for the UAE. However, the central bank stated that no direct ban has been imposed on any specific country.
Several businesspeople have noted that their fund transfers to the UAE have been stalled or delayed in recent months. Transactions that previously took a few days to complete are now taking weeks.
Sources indicate that Saudi banks are required to exercise heightened caution regarding high-risk countries or regions to prevent money laundering, terrorist financing, and other financial crimes. They claim that similar enhanced monitoring measures have been implemented for transactions involving the UAE.
However, a UAE official stated that they have not received any complaints from the private sector regarding unusual delays in banking transactions between the two countries. He noted the long-standing, robust trade and investment relationship shared by Saudi Arabia and the UAE.
In recent years, economic and political rivalry between the two Gulf nations has intensified. Competition between Riyadh and Abu Dhabi spans areas such as oil production, regional influence, foreign investment, and the establishment of regional headquarters by international companies.
According to sources in the regional financial sector, the increased scrutiny of transactions to the UAE could also signal rising tensions between the two nations. Nevertheless, analysts believe that a major economic rift is unlikely, given the close commercial ties between Saudi Arabia and the UAE.
