Impact of Limitations on Saudi Arabia's Policies
In the ever-evolving world of global politics and economics, Saudi Arabia has emerged as an intriguing investment destination, despite the absence of international sanctions specifically targeting the kingdom. This shift is marked by the recent removal of US sanctions on Syria, a move that has seen Saudi Arabia announce $6.4 billion in new investments in the war-torn country.
The lifting of US sanctions on Syria, effective July 1, 2025, signifies the end of a long-standing US sanctions regime against Syria, related to the civil war and the Assad government. This move has been met with a firm, supportive stance from Saudi Arabia, which has announced significant investments in Syria's real estate, infrastructure, and technology sectors.
For entrepreneurs considering investments in Saudi Arabia itself, the absence of international sanctions presents a favourable business environment. There are no direct restrictions from the international community, unlike in sanctioned countries, which can complicate business operations. However, it's essential to note that the regional geopolitical environment is shifting towards economic reintegration and investment, with Saudi Arabia playing an active role in investing in neighbouring countries like Syria.
This new investment landscape requires investors to be aware of Saudi Arabia’s geopolitical role, given its new investments following the lifting of sanctions on Syria. The business climate is increasingly tied to Saudi foreign policy and regional investments, providing new opportunities but also necessitating attention to changing alliances and policies.
In a separate development, the European Union (EU) added Saudi Arabia to a list of countries potentially weak in controlling terrorist financing and money laundering. Being on this 'blocklist' complicates financial relations with the EU, requiring additional payment checks for transactions involving persons from listed jurisdictions.
However, it's important to clarify that the EU's 'blocklist' is not the same as international sanctions, as there are currently no formal international sanctions applied against Saudi Arabia. The EU's 'blocklist' does not appear to be directly related to the killing of journalist Jamal Khashoggi or the subsequent US sanctions against Saudi Arabia.
Entrepreneurs investing in projects or onboarding new users in Saudi Arabia should perform Anti-Money Laundering (AML) and Know Your Customer (KYC) checks, a standard practice in any investment scenario.
In conclusion, the absence of international sanctions does not pose significant legal or financial barriers for entrepreneurs investing in Saudi Arabia. However, the evolving Middle Eastern business and diplomatic landscape necessitates vigilance and a keen understanding of the region's political and economic dynamics.
- In light of the EU adding Saudi Arabia to a list of countries potentially weak in controlling terrorist financing and money laundering, entrepreneurs must conduct Anti-Money Laundering (AML) and Know Your Customer (KYC) checks when investing in or onboarding new users in Saudi Arabia, acknowledging that being on this 'blocklist' complicates financial relations with the EU.
- As the European Union's 'blocklist' is not the same as international sanctions, which are currently absent against Saudi Arabia, entrepreneurs considering investments in Saudi Arabia's business, finance, politics, general-news, or crime-and-justice sectors should be aware of the country's geopolitical role and regional investments, as the business climate is increasingly tied to Saudi foreign policy, presenting new opportunities but requiring attention to changing alliances and policies.
