Customer screening in Saudi Arabia is essential for compliance and crime prevention, requiring careful verification, risk assessment, and ongoing monitoring tailored to the Kingdom’s regulatory environment.

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This process helps banks and other financial institutions comply with Saudi Arabian laws and international standards such as those set by the Financial Action Task Force (FATF).

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What is Customer Screening in Saudi Arabia?

‍According to Saudi Arabia AML law,
“ The financial institution shall develop a policy for acceptance of new customers and business relationships, which includes due diligence measures to identify and verify a customer, a person acting on his behalf, or a beneficial owner. The policy shall be consistent with the risk assessment results and shall be documented and approved at the level of the board of directors.”
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This means a financial institution (like a bank or other regulated company) must create a formal policy for how it accepts new customers and starts new business relationships. This policy should include:

• Due diligence measures: Steps to properly identify and verify who the customer is. This also applies to anyone acting on the customer’s behalf (like an agent) or the ultimate beneficial owner (the person who ultimately owns or controls the customer).
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The policy should be aligned with the risk assessment results, meaning it must reflect how risky the customer or relationship might be (for example, some customers might pose higher risks for money laundering or fraud).Finally, the policy must be documented clearly and approved by the board of directors, ensuring top-level oversight and accountability.
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In simple terms, the bank or financial company needs to have clear rules for checking new customers carefully, especially to prevent fraud or illegal activities. These rules should match how risky each customer is and must be officially written down and approved by the company’s leadership.

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The Regulatory Framework of Customer Screening in Saudi Arabia

Saudi Arabia’s commitment to global AML/CTF standards is demonstrated by its membership in the Financial Action Task Force (FATF) since 2019. The Kingdom continually updates its laws and practices to align with FATF recommendations, including enhanced customer screening protocols.

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Moreover, in June 2025,Saudi Arabia has signed a Memorandum of Understanding (MoU) with Kuwait to boost regional collaboration on AML/CTF efforts, facilitating information sharing and joint investigations.

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‍Key Regulatory Authorities‍

1. Saudi Central Bank (SAMA): As the primary regulator for banks and financial institutions, the Saudi Central Bank issues AML/CFT regulations, supervises compliance, and enforces penalties. The Saudi Central Bank’s guidelines require institutions to maintain effective customer screening processes and conduct periodic risk assessments.
2. Saudi Financial Intelligence Unit (SAFIU): SAFIU oversees suspicious transaction reporting and coordinates investigations with other government agencies.
3. Capital Market Authority (CMA): Responsible for regulating the securities sector, the CMA also imposes AML/CTF compliance requirements on capital market participants.

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‍Key Takeaway:

‍Customer screening in Saudi Arabia is governed by stringent AML and CTF laws enforced by the Saudi Central Bank and other bodies, with ongoing alignment to FATF standards and increasing regional cooperation to enhance financial crime prevention.

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Read more: Key Aspects of Customer Screening in Kuwait for AML Compliance