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We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
Also . . . Are there any women trail blazers in Saudi Arabia you can name? We’ll help you with that. We cover how the Middle East has been making strides in empowering women in the entrepreneurial space,most notably in STEM fields.Read the full edition
On 3 July 2022, Law No.4 of 2022 concerning the regulation of the use of cash in transactions (the “Cash Transactions Law”) was published in the Official Gazette No. 7 of 2022 which is effective from the date of its publication. In our client alert on this topic issued earlier this month, we had mentioned that the types of transaction expected to be covered under the Cash Transactions Law was to be determined by the Council of Ministers.
The purpose of this client alert is to update our readers that the Council of Ministers has now issued a list of transactions that would fall under the ambit of the Cash Transactions Law.
The Council of Ministers has issued Decision No. 10 of 2022 (the “Decision”) identifying certain categories of transactions in which use of cash exceeding QAR 50,000 (approximately US$ 13,732.5) is prohibited. These are as follows:
Following the issuance of the Decision, the Qatar Central Bank has also issued a formal statement on its official social media platform confirming that it would be prohibited to use cash in transactions that exceed the value of QR50,000 in respect of the abovementioned transaction categories and relevant outlets.
As previously mentioned in our client alert, it would not be possible to use cash to pay for or in connection with the abovementioned transactions if the overall value of the transaction exceeds QAR 50,000. Instead, alternate payment methods such as cheques, bank transfers and bank cards must be used.
As a reminder, the Cash Transactions Law imposes stringent penalties for non-compliance, including financial penalties of up to 60% of the total value paid in cash if the transactions are intentionally split and up to QAR 1,000,000 if the relevant trading outlets fail to maintain record of all receipts and documents supporting the non-cash modes of payment.
Our recommendation to the relevant business and trading outlets would be to start an awareness campaign to inform their on-ground staff about this prohibition and to implement proper record keeping (if not already in place) for non-cash transactions undertaken at the outlet. The Cash Transactions Law allows for a period of six (6) months (from 3 July 2022) to ensure compliance with the law.
If you have any questions about this announcement or would like our advice on any implementation steps, please contact us.
Partner, Head of Office, Head of Banking & Finance - Qatarm.email@example.com
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