Breach of Trust in Saudi Law: Penalty and Difference from Fraud

You gave your partner SAR 300,000 to buy goods for the shop, and he transferred it to his own account and bought land in his name. Or you gave an employee SAR 20,000 to buy a device for the business, and neither the device nor the money came back. You were not deceived when you handed over the money; you gave it willingly. So is what he did a crime?

Usually yes, if it is proved that he took the money for himself or dealt with it in bad faith. This is breach of trust (khiyanat al-amanah) under Article 2 of the Anti-Fraud and Breach of Trust Law, punished by up to 5 years in prison and a fine of up to SAR 3 million, or one of them. But the transfer alone does not decide the case; what matters is why the money was handed over, what he was allowed to do with it, and where it went.

When is an act a breach of trust under Saudi law?

In breach of trust, the offender does not need to lie to get the money, because it reached him with the owner's consent and because of a relationship between them. The crime happens when he betrays that trust. Article 2 lists the reasons through which the money comes into his hands:

• Because of his work, such as an employee who holds company property in his custody (uhda) or collects money for the employer.
• As a trust or deposit, such as a person you leave money with for safekeeping.
• Partnership, such as a partner who manages the company's money.
• Lending or leasing, such as a person who borrows or rents a car.
• Pledge, such as a person who holds something as security for a debt.
• Agency, such as an agent who sells or collects money for his principal.

The article then sets out three forms of the act, and any one of them is enough: taking the money without right, dealing with it in bad faith, or deliberately causing harm with it. “Money” here is not limited to cash; a rented car, deposited goods and equipment handed over in custody are all included. The article ends with the words “except for public money”, because attacks on public money are governed by other laws.

What is the penalty for breach of trust in Saudi Arabia?

The basic penalty is imprisonment of up to 5 years and a fine of up to SAR 3 million, or one of them (Article 2). This is the ceiling, and the court decides within it according to the facts. The general rules of the same law also apply to this crime:

• Anyone who incites, agrees or assists, where the crime takes place as a result, is punished by up to the maximum; if the crime does not take place, by up to half of it (Article 3).
• An attempt is punished by up to half of the maximum (Article 4).
• For an organised gang or a repeat offence, the penalty is no less than half of the maximum and no more than double it (Article 5).
• The tools and proceeds are confiscated by court judgment without prejudice to the rights of third parties acting in good faith (Article 6), and a summary of the final judgment may be published at the convicted person's expense (Article 7).
• If the act is also a crime under another law, the harsher penalty applies (Article 9).

The Public Prosecution investigates and prosecutes before the competent court (Article 10).

What is the difference between breach of trust and fraud?

A person who offers you a car he does not own and collects the price got the money through a lie, which is closer to fraud. A person who rents a car from you under a valid contract and then sells it received it with your consent and then dealt with it in bad faith, which is closer to breach of trust. The final legal description is for the prosecution and the court.

Is not returning money, or losing it, a breach of trust?

Not always. A loan is not one of the forms listed in Article 2, and late repayment remains a money claim unless there are other facts. In a partnership, losing the project because of the market or poor judgment is not enough, unless it is proved that the partner took the money for himself, knowingly spent it on something other than what was agreed, or destroyed it intending to cause harm.

Many of these files are really disputes over accounts: the money was spent on the agreed purpose, but the owner disputes the expenses. Ask for a statement linking what was handed over to what was spent and what remains, with invoices and transfers. If the agreement allows a certain expense, do not present it as taking the money. Personal transfers or fake invoices, however, should be listed specifically in your complaint.

Separate the balance owed from the description of the crime. An amount that must be returned may be proved without all the elements of breach of trust being met, and the crime may be proved while the amount is still disputed. Do not count the same amount twice, once as money recovered and once as compensation.

A business owner gave his employee SAR 20,000 to buy a specific device, with a WhatsApp message stating the specifications.

A month later the device has not arrived, and the employee says he bought “a better alternative” but gives neither an invoice nor a device. The file here rests on the transfer, the instructions, the follow-up and the missing device.

But if the employee proves he bought an alternative with written permission and delivered it to the warehouse, the matter is a dispute over specifications, not taking the money.

Does returning the money end the case?

Returning the money or a settlement deals with the private right. The injured person's pardon ends his private case, but it does not stop the Public Prosecution from continuing with the public right case (Article 23 of the Law of Criminal Procedure). On the other hand, the injured person's complaint counts as a claim for his private right unless he tells the investigator that he gives it up (Article 29).

Exemption from punishment has a specific route in Article 8: the court may exempt an offender who reports to the competent authority before the crime is known and before harm occurs; if he reports after it is known, his report must lead to the arrest of the other offenders, if there are several. An apology and returning the money alone are not a legal exemption.

This is general information based on the official Arabic texts of Saudi laws, which prevail over any translation. It is not legal advice for your specific case.

Practical solutions for both sides

If you are the owner of the money entrusted to someone:

• Collect proof of handover and of the trust relationship: a partnership contract, a power of attorney, a deposit receipt, a lease, a custody handover record, or messages with instructions.
• Demand in writing that the money be returned or that he gives an account, within a reasonable deadline, and keep the request and the reply.
• Document any act that goes against the purpose, such as selling the rented item or moving company money to a personal account.
• File the report and state in it the amount you claim, and do not sign a waiver before you have actually received the money.
• Avoid publishing the accusation on social media before it is decided.

If you are accused of breach of trust:

• Explain the nature of the relationship with documents: a loan, a sale, a partnership with an open account, or custody for a specific purpose.
• Provide proof of permission to act, of spending on the agreed purpose, or of returning the money.
• If the dispute is about settling partnership accounts, ask for an accounting based on documents instead of trading accusations.
• Keep records of handovers and spending and copies of invoices, and give an account that is consistent with them.
• Do not admit to any legal description or sign a settlement before you understand its effect on the public right.

The line between breach of trust and an ordinary money dispute is fine, and it is usually decided by the papers. Send us on WhatsApp the contract or power of attorney and the transfers and messages you have, and we will read them with you before you decide your next step.