المملكة: Prohibiting foreign donations and international transactions for family funds without approval – urgent

The National Center for the Development of the Non-Profit Sector launched the first version of the Family Funds Governance Standard, which imposes a strict regulatory framework through 103 verification questions and 28 administrative practices to control the financial and legal performance of these social entities.

The new standard aims to institutionalize work within family funds through three main indicators based on compliance and commitment at a rate of 70%, financial soundness at a rate of 20%, and transparency and disclosure at a rate of 10% to ensure the sustainability of the entities and protect them. Its origins.

The Center obligated the funds to form a Board of Trustees whose members shall not be less than three fully qualified Saudi persons, with the requirement that their records be free of any judgments prejudicial to honor and honesty, and that the Center obtain prior approval of their appointment to ensure the efficiency of senior management.

The new controls stressed the necessity of appointing a full-time executive director or one in charge of an official decision, precisely defining his powers and responsibilities, and sending a copy of his appointment decision and identity to the Center to ensure a clear administrative reference.

/>The regulations categorically prohibited family funds from participating in any events outside the Kingdom, or providing external services, or obtaining international memberships, or receiving money from outside the family except with the express and prior written approval of the Center.

The new regulatory rules required the segregation of Zakat funds into independent bank accounts and the creation of special records for their banks, with an emphasis on disbursing them in legitimate aspects compatible with the fund’s objectives and documenting this with extreme precision.

The standard imposed strict measures to combat laundering. Funds and terrorist financing crimes, obligating funds to identify and understand the risks associated with clients and geographical areas, and to document assessment procedures and update them on an ongoing basis.

The controls obligated fund officials to immediately and directly report to the General Department of Financial Investigations any suspicious or complex transactions, while prohibiting alerting the client or any third party of the existence of a report or ongoing investigation to ensure the confidentiality of security procedures.

Financial safety standards included the necessity of adopting a separate financial regulation and procedures manual, specifying receipt and payment policies, and budgets. Estimations, and mechanisms for dealing with fixed and movable assets to control cash flows.

The Center required the presence of a licensed external auditor to review the financial statements, and obliged the Fund to submit its financial and administrative reports and approved estimated budgets to the Center during the first quarter of the fiscal year to enhance oversight.

The regulations stipulated the necessity of keeping administrative and accounting records, financial documents, and copies of customers’ identities at the Fund’s headquarters for a period of not less than ten years from the date of the end of the transaction, to ensure the ability to refer to them when The need.

The rules set strict restrictions on banking transactions, restricting the authority to sign to the Chairman of the Board of Trustees or his deputy, with the permissibility of authorization to two Saudi members or leaders only after the Centre’s official approval.

The indicators confirmed the right of stakeholders to submit inquiries and complaints through a dedicated electronic window, with the Fund obligated to respond to them and provide feedback, to enhance the principle of transparency and societal accountability.

The new evaluation mechanism relies on two paths.