Saudi Arabia Cracks Down on UAE-Focused Fund Transfers

Saudi Arabia has implemented enhanced oversight on financial transfers to the United Arab Emirates (UAE), placing them under stricter regulatory scrutiny reserved for high-risk countries, according to sources.

The measures are aimed at combating money laundering and terrorism financing, with Saudi banks requiring additional checks when dealing with customers or jurisdictions that pose greater risks. This move has caused difficulties in transferring funds between the two nations, with companies reporting delays or rejected transactions without official explanation.

The UAE is considered a high-risk country due to its history of illicit activities, including real estate investment and trade of precious metals and stones. In 2024, the Financial Action Task Force (FATF) delisted the UAE after it made improvements to its anti-money laundering regime, but some argue this was premature.

A Saudi insider described the enhanced oversight as a 'subtle message' to Emirati leaders about maintaining good relations following escalating tensions between the two Gulf heavyweights. The rift stems from disagreements on oil quotas, geopolitical influence, and foreign talent and capital.