Saudi Arabia tightens oversight of UAE-bound bank transfers

Saudi Arabia has placed financial transfers to the United Arab Emirates under additional regulatory scrutiny, delaying or returning some payments, according to three people with direct knowledge of the measures who spoke to Reuters.

Saudi Arabia’s central bank notified key banks earlier this year to apply enhanced checks to settlements with the UAE, the sources said. Six businesspeople told Reuters that Saudi banks had delayed or returned transfers in several currencies without providing an official explanation.

Some transfers now take weeks to clear, while others do not go through, according to three bankers familiar with the process. Three businesspeople said their companies had begun routing payments through third countries to avoid the delays.

The Saudi central bank said there are “no direct restrictions on specific countries.” It said banks apply controls based on internal risk assessments, including country and geographic risk, within a framework aligned with Financial Action Task Force standards.

A UAE official said the country’s economy ministry had not received reports from private-sector companies about unusual delays in transfers between the two countries. The official said Saudi Arabia and the UAE retain deep economic and commercial ties.

According to two of the sources, the additional scrutiny places the UAE among more than half a dozen jurisdictions Saudi Arabia treats as high risk for financial crimes. The UAE was removed from the FATF’s monitoring list in 2024 after improving its anti-money-laundering regime.

A Saudi insider described the measures as a “subtle message” to Emirati leaders after months of tension. The two countries have disagreed over oil policy, geopolitical influence and competition for foreign investment and talent, although authorities in both countries did not say what prompted the move.

The economic ties between the countries remain extensive. Saudi Arabia is the UAE’s largest trading partner in the Arab world, while the UAE was Saudi Arabia’s fifth-largest export destination and fourth-largest import source in 2024, according to the Observatory of Economic Complexity.

Businesses told Reuters that payment problems began in the weeks after the UAE announced in April that it would leave OPEC. One investor said companies were waiting weeks for payments, including some below 1 million dirhams ($272,257), compared with processing times of a few days previously.