A decade of continuous Saudi Arabian legal reforms
Basel Barakat and Zaid Mahayni
Law Office of Hassan Mahassni
Jeddah
Basel Barakat (Bio)
Zaid Mahayni (Bio)
In preparation for, and since its accession to the World Trade Organisation in 2005, The Kingdom of Saudi Arabia has engaged in a series of large scale legal reforms including the enactment or overhaul of a number of significant laws and regulations, the creation of various new regulatory authorities as well as taking active steps to alleviate administrative burdens.
Promulgation of significant legislation
Landmark legislation promulgated over the last few years include: the Judiciary Law and the Board of Grievances Law issued pursuant to Royal Decree M/78 dated 19/9/1428 H. (corresponding to 1/10/2007); the Government Tenders and Procurement Law issued pursuant to Royal Decree M/58 dated 4/9/1427 H. (corresponding to 27/9/2006); the Labour Law issued pursuant to Royal Decree M/51 dated 23/8/1426 H. (corresponding to 27/9/2005); the Electricity Law issued pursuant to Royal Decree M/56 dated 20/10/1426 H (corresponding to 22/11/2005); the Income Tax Regulations issued under Royal Decree M/1 dated 15/1/1425 H. (corresponding to 7/3/2004); the Commercial Mortgage Law issued pursuant to Royal Decree M/75 dated 21/11/1424 H. (corresponding to 13/1/2004); and the Cooperative Insurance Companies Regulations issued pursuant to Royal Decree M/32 dated 2/6/1424 H. (corresponding to 31/7/2003).
Although legislative reforms in 2011 are less extensive than in previous years, some delays in anticipated legislation have been reported as being intentional. As an example, the issuance of the long-awaited real estate mortgage law was purposely placed on hold for various reasons including, as indicated by the Saudi Arabian Monetary Agency, the need to introduce the law under appropriate market conditions and only when market prices are not unreasonably inflated.
Increased role of regulatory bodies
In less than a decade, The Kingdom of Saudi Arabia has also established various major regulatory bodies, such as the Capital Market Authority, the Electricity and Cogeneration Regulatory Authority and the Council of Competition Protection. Saudi Arabian regulatory bodies have been increasingly active in the issuance of implementing regulations and similar rules, pursuant to the powers delegated to them under applicable laws, as well as the enforcement of the same. As an example, the Capital Market Authority has, since its establishment, issued eleven major regulatory instruments on diverse matters such as mergers and acquisitions, corporate governance, investment and real estate funds and anti-money laundering, which have taken into consideration internationally recognised regulatory standards such as those proposed by the International Organisation of Securities Commissions. Other notable examples include the approval of the Saudi Arabian Grid Code and the Saudi Arabian Distribution Code by the Electricity and Cogeneration Regulatory Authority and the issuance of the implementing regulations to the Commercial Mortgage Law by the Saudi Arabian Ministry of Commerce and Industry.
Other administrative improvements
The Kingdom of Saudi Arabia has also taken numerous steps for the alleviation of administrative burdens. As an example, the Saudi Arabian Ministry of Commerce and Industry has simplified incorporation processes by having recently created a one-stop Unified Office comprising representatives from: the Companies Department; the Commercial Names Department; the Commercial Registration Department; the Chamber of Commerce; the Publication Office; and the Notaries Public. Moreover, most ministries have launched detailed online portals, which include bilingual electronic databases, searchable registers and virtual application desks. A centralised portal has also been created under the name 'Saudi e-Government National Portal' (http://www.saudi.gov.sa) including links to various governmental departments and important e-services. Examples of e-services now available include online applications for the reservation of commercial names, the issuance of visas, commercial registration licenses for personal establishments, industrial licenses and chamber of commerce membership certificates. Searches may also be made without charge in the commercial agency and patent databases and in one's own civil affairs and traffic violation records. Additionally, in implementation of Council of Ministers Resolution No. 129 dated 6/4/1428 H. (corresponding to 24/4/2007), internal audit units have also been established in governmental agencies and public institutions to monitor administrative efficiency and adherence to rules, regulations, instructions and financial procedures.
Anticipated reforms
There have also been recent announcements by Saudi Arabian officials relating to several reforms that are expected to be implemented in the near future. Currently, the decisions of the various Saudi Arabian adjudicatory bodies are not generally or consistently indexed and collected in a central place or made publicly available. However, as recently announced by the Saudi Arabian Minister of Justice, judicial decisions relating to criminal cases, particularly terrorism and state security cases, issued by the first instance and appeal-level criminal courts are expected to be published soon. Additionally, the Saudi Arabian Minister of Justice has recently announced that, as part of ongoing judicial reforms, female law graduates will be able to obtain licenses for legal practice and will be allowed to make court representations in family-related matters.
Conclusion
The Kingdom of Saudi Arabia's reform efforts over the past few years have been significant and their impact has been recognised at the international level. It is therefore not surprising that The Kingdom of Saudi Arabia has been ranked eleventh in the World Bank's 2011 Ease of Doing Business Report, having been ranked 23rd in 2008, and is consistently ranked first in the Middle East and North Africa therein.