Business & Money | Saturday 10 January, 2015 1:41 am |

The Commerce and Industry Ministry has intensified its campaign against illegal business ventures (tasattur) being conducted by expatriates in the name of Saudis as part of efforts to put an end to what it called “the most dangerous practice” affecting the Kingdom’s business community.

A high-level source at the ministry said it would launch a three-pronged campaign to combat tasattur, which he described as a crime against the state. “We will conduct raids on suspected firms, impose strict conditions while issuing or renewing licenses and control foreign money transfers,” he explained.
“We’ll impose stiff punishment on Saudis and expats involved in such illegal businesses, including jail up to two years and fine of SR1 million,” he said. Publishing photos of convicted individuals, closure of shops and cancellation of commercial registration are other punishments being mooted.

Referring to the anti-tasattur law, the source said it bans foreigners from investing in business activities for which they have not received any license. A Saudi who allows a foreigner to invest in such ventures by using his/her license or name would be punished under the law for covering up illegal business, he added.
Tasattur business transactions in the Kingdom are estimated at more than SR230 billion annually. The Council of Ministers has instructed relevant agencies to carry out inspections in the market and report tasattur businesses to the Commerce Ministry.
“By monitoring foreign transfers of expats, we can follow up cover-up businesses as about 60 percent of such transfers come from tasattur activities,” the source said. He urged companies and individuals not to cooperate with persons engaging in tasattur activities.

“If you support them, you will be questioned and punished,” the source warned. “Our aim is to make all business activities in the Kingdom legal and free form violations,” he added.
Recently, the Commerce Ministry with the support of police arrested two individuals — a Saudi and a Jordanian — in Dammam for their involvement in tasattur and fined them SR1 million. The ministry also published their photos in two newspapers at their expense, the source said.

Professor Abdul Aziz Diyab of King Abdulaziz University, who has done research on cover-up businesses, said about 30 percent of expatriate workers are involved in cover-up businesses in the Kingdom.
The majority of these businesses are small and medium scale enterprises earning a monthly revenue of between SR50,000 and SR1 million. According to a study by the Riyadh Chamber of Commerce and Industry, there are an estimated 200,000 such businesses in the country.