Strict Saudi regulatory measures on financial transfers to the UAE

These measures, which have not been officially announced, come at a time when companies and financial institutions are facing increasing difficulties in transferring money from their accounts in Saudi Arabia to the Emirates, as six businessmen confirmed to Reuters that their transfers in various currencies witnessed delays or were rejected by Saudi banks without providing official explanations.

Three people with direct knowledge of the matter explained that the Saudi Central Bank informed the main banks in the country, earlier this year, to implement strict supervisory measures when dealing with financial settlements with the UAE, which now faces additional scrutiny similar to the supervision imposed on countries such as Lebanon, Iraq and South Sudan, which are included in the gray list of the Financial Action Task Force, although the UAE was removed from this list in 2024 after improving its system to combat money laundering.

Although the Saudi Central Bank denied the existence of direct restrictions on specific countries, and stressed that the measures aim to comply with international standards for combating money laundering and terrorist financing, informed sources described this step as a “delicate message” to Emirati leaders about the importance of maintaining good relations, amid escalating tensions between the two countries against the backdrop of disagreements over oil shares, geopolitical influence, and competition to attract investments and capital.

Reports indicate that the differences between Riyadh and Abu Dhabi came to light late last year, due to their support for two opposing sides in the war in Yemen, in addition to the difference of views on how to respond to the Iranian war with the United States and Israel, despite their attempts to present a united front against Iranian threats to the Gulf states.

In a related context, bankers reported that tight control led to a delay in transfers to the Emirates, as they pass through more compliance departments and take weeks instead of days, which prompted some companies to transfer their payments through third countries to circumvent the procedures, at a time when observers confirm that the deep economic entanglement between the two countries makes a complete economic rupture unlikely, especially with continued coordination on vital files such as reopening the Strait of Hormuz, despite the intense economic competition between them.