Litigation & Enforcement
New Enforcement Law (4): Penalties
Chapter Six of the new Enforcement Law sets out offenses that obstruct enforcement and their penalties, the competent authority, enhanced penalties, and liability extending to applicants, public officials and enforcement service providers.
As part of the general overview series on the provisions of the New Enforcement Law, Chapter Six, entitled "Penalties," addresses offenses and violations related to enforcement proceedings, the applicable penalties, and the competent authority responsible for adjudicating them.
The significance of this Chapter lies in the fact that liability is not limited to the enforcement debtor. Depending on the circumstances, it may also extend to the enforcement applicant, public officials, enforcement service providers, valuers, sale agents, and others involved in enforcement proceedings.
Who Has Jurisdiction over Enforcement Offenses?
The Law identifies the competent court responsible for adjudicating cases arising from the offenses set out in this Chapter and assigns the investigation and prosecution of such offenses to the competent authority.
Article 48 provides as follows:
Except as provided in paragraph (1) of Article 57 of the Law, the competent court shall adjudicate cases arising from the application of the provisions of this Chapter and impose the penalties prescribed therein.
The competent investigation and prosecution authority shall undertake the investigation and prosecution before the competent court in respect of the offenses stipulated in this Chapter.
Key Offenses Related to Obstruction of Enforcement
The Law provides for a penalty of imprisonment for up to three years, a fine of up to SAR 1 million, or either penalty, for a number of acts that interfere with enforcement proceedings or prevent satisfaction of the right under an enforcement instrument. These include:
- Concealing or transferring assets with the intent to prevent satisfaction of the right.
- Deliberately obstructing enforcement, including refusing to comply with an enforcement order or disclose assets, filing a claim for the purpose of delaying enforcement, disposing of assets after they have been attached, or failing to respond to questioning.
- Resisting enforcement through threats, assault, or any other unlawful act.
- Deliberately providing misleading or inaccurate data or information.
The Law also provides for the same penalty for an accomplice where participation takes the form of agreement, incitement, or assistance, subject to the requirements stipulated in Article 50.
Enhanced Penalties in Certain Cases
The Law imposes more severe penalties in certain cases based on the nature of the act or the capacity of the offender. A public official or a person treated as such may be imprisoned for up to five years if they prevent or obstruct enforcement, and such conduct is classified as an offense involving breach of trust.
Article 51 provides:
A public official or a person treated as such who prevents or obstructs enforcement shall be punished by imprisonment for a term not exceeding five years, and such act shall be deemed an offense involving breach of trust.
In addition, a debtor who is proven to have dissipated assets, where such assets are substantial, may face imprisonment for up to fifteen years, even if the debtor's insolvency has been established. The offense is also classified as a serious crime warranting detention, pursuant to Article 52(1).
Are Penalties Limited to the Enforcement Debtor?
No. The scope of penalties extends to various parties involved in enforcement proceedings. Under Article 53, a penalty of imprisonment for up to three years, a fine of up to SAR 100,000, or either penalty may apply in cases including:
- An enforcement applicant requesting an enforcement measure with the intent to harm the enforcement debtor, or deliberately delaying closure of the enforcement application after receiving the right due.
- Disclosing information or data concerning the enforcement debtor's assets without lawful justification, or accessing such information without a court order.
- An enforcement service provider or its personnel breaching their duties in connection with the delivery or receipt of funds.
- A valuer, sale agent, or auction participant deliberately influencing the price or misleading others as to the fairness of prices.
What If the Act Is Also Punishable under Another Law?
Article 55 expressly addresses this issue:
If any act constituting an offense under this Chapter also constitutes an offense under another law, the more severe penalty shall apply.
The Law also permits the penalty imposed to be doubled in cases of recidivism, provided that it does not exceed twice the prescribed maximum. A person is considered a repeat offender if they commit any of the offenses under this Chapter within three years from the date on which a previous judgment against them became final, as provided under Article 56.
Specific Penalties for Enforcement Service Providers
Article 57 establishes specific penalties for enforcement service providers that violate the Law or its regulations, including:
- A warning.
- A fine not exceeding SAR 300,000.
- Suspension of the license for a period not exceeding one year.
- Revocation of the license.
Such violations are considered by a committee formed by a decision of the Minister. Decisions of the committee may be challenged before the Administrative Court.
Conclusion
Taken together, these provisions establish protections covering the various stages and participants of enforcement proceedings, with penalties varying according to the nature and seriousness of the violation and the capacity of the offender, thereby reinforcing the effectiveness and integrity of enforcement proceedings and protecting them against misuse.
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