Summary
- Three people familiar with the matter told Reuters that Saudi Arabia’s central bank earlier this year instructed major banks to apply additional scrutiny to transactions involving the UAE.
- The official stressed that Saudi Arabia and the UAE continue to maintain strong economic and commercial relations, supported by significant trade and investment flows.
- According to Reuters, the UAE is now facing a level of additional scrutiny that Saudi regulators apply to a group of jurisdictions considered higher risk for financial crimes.
Saudi Arabia has increased regulatory checks on financial transfers sent to the United Arab Emirates, according to a Reuters report.
Three people familiar with the matter told Reuters that Saudi Arabia’s central bank earlier this year instructed major banks to apply additional scrutiny to transactions involving the UAE.
The move has reportedly affected several companies. Some transactions have been delayed, while others have been returned by Saudi banks without an official explanation. Several businesses have also faced difficulties in making routine cross-border payments.
The additional checks are reportedly being applied to transactions considered more exposed to risks such as money laundering, terrorism financing and other financial crimes.
Saudi Arabia’s central bank, however, denied imposing direct restrictions on any particular country. It said banks operate under a strong regulatory framework and take preventive measures based on their own assessment of financial and geographical risks.
A UAE official also rejected reports of widespread problems. The official said the UAE’s economy ministry had not received reports from private-sector companies about unusual delays in bank transfers between the two countries.
The official stressed that Saudi Arabia and the UAE continue to maintain strong economic and commercial relations, supported by significant trade and investment flows.
According to Reuters, the UAE is now facing a level of additional scrutiny that Saudi regulators apply to a group of jurisdictions considered higher risk for financial crimes.
The development comes amid growing differences between Riyadh and Abu Dhabi. The two Gulf powers remain close economic partners, but their interests have increasingly diverged over regional politics, oil policy and economic competition.
Sources cited by Reuters described the enhanced financial scrutiny as a possible diplomatic signal. One Saudi source reportedly viewed the measures as a subtle message to the UAE leadership about maintaining strong relations.
The impact is already being felt by some businesses. Reuters reported that some companies have experienced payment delays lasting weeks. Others have reportedly started routing payments through third countries to avoid disruptions.
The two countries remain heavily connected through trade, investment and logistics. Analysts therefore believe a complete economic breakdown between Saudi Arabia and the UAE is unlikely.
Saudi Arabia is the UAE’s largest Arab trading partner. The UAE is also an important destination for Saudi exports and a major source of imports for the kingdom.
The latest development is particularly significant because the UAE was removed from the Financial Action Task Force’s grey list in 2024 after making improvements to its anti-money-laundering framework.
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