Electronic Inquiry to Identify Commercially Banned Individuals... With Enforced Judgments

- The Ministry of Commerce seeks to automatically link with the Criminal Evidence Department for judicial and legal verification using specific codes.

- The disclosure includes partners, directors, and individuals associated with establishment.

- Avoid halting transactions for individuals who do not have an existing legal impediment.

- Automating the verification of eligibility for persons qualified to engage in commerce as part of the Ministry’s digitalization plan.

- Developing the workflow and accelerating transactions for companies and commercial entities.

- Gradually eliminating paper correspondence or manual search procedures.

- The linkage enables the Ministry of Commerce to obtain results immediately upon entering the civil ID number.

- The inquiry will extend to beneficial owner data if eligibility verification is required.

In a supervisory move aimed at raising the accuracy of data regarding owners of companies and commercial entities, preventing the issuance or modification of commercial entities for individuals against whom a final ruling legally prohibits them from practicing commerce, and developing and accelerating work mechanisms, the Ministry of Commerce and Industry seeks to complete and develop electronic linkage with the General Administration of Criminal Evidence at the Ministry of Interior. This will enable automatic inquiry and verification of associated rulings.

Officials at the Ministry of Commerce aim, through electronic linkage with the Criminal Evidence Department, to instantly verify prohibitive rulings against practicing commerce in accordance with Article (25) of the Commercial Law. This will be achieved by querying via technical codes for each crime that prohibits commerce, thereby facilitating procedures to prevent the issuance or modification of commercial entities for individuals against whom a final ruling legally prohibits them from practicing commerce.

Among the advantages of this linkage is the avoidance of halting transactions for individuals who do not have an existing legal impediment. Consequently, the traditional procedure involving reviewing the Criminal Evidence Department during the pendency of a case will be eliminated. The Ministry of Commerce will determine whether to approve or reject a procedure by automatically and directly verifying the existence of final rulings against the transaction’s applicant, relying on a set of specific codes for each crime that prohibits individuals from practicing commerce.

Notably, under the current inquiry mechanism, the Criminal Evidence Department is manually reviewed when inquiring in this regard. If active cases exist, even if no final rulings have been issued against the individuals involved, the relevant person is blocked, and the Ministry of Commerce is notified of the result. The Ministry then refers the matter to its legal sector for review, even if the violation is non-criminal and falls under the list covered by Article (25) of the Commercial Law. After review, it decides whether to request the lifting of the block if the ruling is not final. During this process, the applicant is not permitted to execute the transaction.

As a result, the linkage will accelerate procedures for establishing companies and amending their contracts, including the entry and exit of partners and the modification of ownership data. It will also support verification procedures related to beneficial owners, particularly as current inquiry procedures based on paper correspondence and reviews by interested parties will be discontinued.

The proposed procedure aligns with the Ministry of Commerce’s direction toward developing the Ministry’s electronic services, automating eligibility verification procedures for individuals to practice commerce, and accelerating the completion of transactions for companies and commercial entities through digitalization initiatives. These initiatives help gradually eliminate paper correspondence or manual search procedures whenever technically and legally feasible.

Based on the fact that the Ministry of Commerce, among other transactions, verifies the identities of individuals associated with companies and commercial entities to ensure that no legal rulings prohibit them from engaging in commerce—particularly in relation to company establishment and subsequent amendments—it seeks to complete and develop electronic integration with the Criminal Evidence Department. This integration would enable automatic verification of rulings linked to the Ministry’s codes during transactions, including:

2- Procedures for the entry and exit of a new partner to a company, to verify that no enforceable ruling prohibits them from engaging in commerce.

The proposed integration aims to enable the Commerce system to automatically and instantly obtain verification results via the civil ID number. The result would clarify whether the individual is subject to an existing and enforceable ruling that falls under the categories of rulings prohibiting engagement in commerce, as stipulated in Article (25) of the Commercial Law, without requiring disclosure of data or details not necessary for the transaction.

Given that the impact of a ruling on the ability to engage in commerce depends on the existence of a final or enforceable ruling and the continuity of its legal effect, the Ministry of Commerce proposed that the result of the electronic integration be clear and specific, limited, as agreed upon technically and legally, to indicating one of the following statuses:

• An existing ruling falls within the approved codes and prohibits engagement in commerce.

• The effect of the ruling has ended or does not apply, provided this is confirmed in the systems of the competent authority, including cases where rehabilitation has been granted in accordance with the law.

The Ministry of Commerce emphasized the importance that the codes used in the integration reflect the actual status of the ruling, and that the mere existence of an incident, case, or non-final accusation should not automatically halt the transaction. Rather, the prohibition should be linked to the ruling that carries the legal consequences stipulated in Article (25) of the Commercial Law, according to the data approved by the Ministry of Interior.

Regarding the Ministry of Commerce’s procedural handling of cases where the effect of a ruling has ended, a joint technical meeting is to be held between specialists from the Ministry and the Criminal Evidence Department to agree on a specific mechanism, inquiry fields, the format of the electronic response, approved codes, and procedures for handling cases of rehabilitation or the cessation of the ruling’s effect.

The Ministry of Commerce has identified a set of practices eligible for direct matching with the crimes listed in Article (25) of the Commercial Law, which prohibit their perpetrators from establishing or modifying commercial entities if it is established that they are subject to an enforceable ruling. These include: