An update follows on official coronavirus protective directives as these may affect your movements, activities, and business.

News:

  • Curfew: The Ministry of Interior on March 23 imposed a 21-day 3 pm - 6 am curfew for Riyadh, Makkah, and Medina, extended on March 29 to Jeddah. Violators face fines in increments of up to SR10,000 and 20 days detention, more for repeat violations. Exceptions apply for healthcare, hospitality, food, health insurance payments and approvals, Najm accident services, media, security, and transportation, essential utilities such as telecom, water, and energy, and online food and medicine delivery services. Travel between provinces or outside major cities is also prohibited (https://bit.ly/3988RHy).

  • Work suspension: On March 28 the Ministry of Interior extended indefinitely the suspension of activity at public and private workplaces while allowing branch offices to operate at 40% of normal workforce, while either extending or applying a ban on service for all international and domestic flights, public buses, trains, and taxis (https://bit.ly/2UIll3s).

  • Tax and fine extensions: The General Authority for Zakat and Tax (GAZT) has announced extensions for various tax declarations and payments (https://bit.ly/3aheHaK).

    • SAMA: The Saudi Arabian Monetary Authority (SAMA) has exempted retail stores from e-commerce fees and points of sales for three months beginning March 14 (https://bit.ly/33FGYFC).

    • GOSI: Deadlines for payment of General Organisation for Social Insurance (GOSI) fines for payment delays for March and April have been extended to May 15 (https://bit.ly/2Uwo3ca).

  • Visas/Iqamas:

    • The Saudi General Directorate of Passports (Jawazat) has permitted Umrah pilgrims with expired visas to apply for waiver of penalties on the Ministry website (https://bit.ly/3agMGA7).

    • The Jawazat has called on all residents inside the Kingdom holding final exit visas and exit / reentry visas to cancel before expiry, to avoid fines (https://bit.ly/3drDH12).

      • Business professionals whose residency permits/iqamas expired between March 18 and June 30 are entitled to a 3-month extension (https://bit.ly/2WJ9vsv). 

      • Jawazat will extend residency permits/iqamas for employees issued final-exit visas scheduled to leave between March 18 to June 30 (https://bit.ly/3bpahin), and employers must cancel final-exit visas issued previously to these employees online via muqueem or absher (https://bit.ly/2WJ9vsv).

      • Unused exit re-entry visas for commercial professionals for February 25 and March 20 may be automatically extended for three months online (https://bit.ly/3dpJYdP).

      • All (including expired) visit visas may be extended, preferably electronically through muqueem or absher (https://bit.ly/2WCJz1s), or by visiting Jawazat offices. Extensions up to 180 days maximum are limited to original duration. Application must be made within 7 days of the original expiration date, and no more than 3 days after expiry (gdp.gov.sa@992 for inquiries).

  • Repatriation: Embassies are working with the Saudi government to repatriate citizens seeking to return to their home countries. Saudia’s airline alliance, Sky Team, has announced that tickets purchased for flights during the curfew are refundable.

  • Labor: Many companies are considering reduction in force, salary and benefit adjustments, and policies of paid or unpaid leave. GOSI and the Ministry of Labor continue to process registrations online (https://bit.ly/2vQGAaU).

  • Oil prices: In addition to the COVID-19 crisis, the Saudi government and economy have also been buffeted by sharp declines in oil prices and revenues, with 60% price declines since the beginning of the year and announced production increases from 9.7 million to 12.3 million bbd.  Expect stresses and delays in infrastructure and gigaprojects, stimulus initiatives and Vision 2030 deadlines. 

    • Expenditure cuts: The Minister of Finance has announced a SR50 billion ($13 billion) reduction in government spending, i.e. 5% of 2020 budget, designed to minimize adverse social and economic impact (https://arab.news/5jjy3).

 

Further guidance:

  • Force Majeure: For a summary of force majeure issues addressing termination, performance, and contract administration issues, please see https://bit.ly/2Jp3hGo.

  • FAQs on COVID-19: For a summary of frequently asked legal questions, please see https://bit.ly/3dwT2xz.

  • Cybersecurity: Widespread telework dictates review and updating of cybersecurity practices and policies, notably risks from use of personal emails and unsecured networks. State-sponsored attacks have targeted Saudi agencies and companies (including Saudi ARAMCO), while non-state actors seek to exploit vulnerabilities for financial gain. For further discussion, please see https://bit.ly/2wzqrah.

  • Operation Reboot: In the context of recent suspensions in land, sea and air transportation, logistics have in many cases ground to a halt; companies in this sector are however preparing to make up for lost time as soon as restrictions are lifted.

  • Construction: The order to suspend work has not yet been applied to construction sites, though best if in doubt to seek guidance from the client or regulator. 

  • Workforce Transportation: Companies relying on transportation of workers to worksites on public transport, now suspended, may arrange private transportation.  

  • Supply Chain: Companies may face challenges in performing normal supplier due diligence, and increased legal and reputational risk for supplier default or malfeasance.

  • Office Closures: In case of doubt regarding the applicability of exceptions to the suspension in work, consult government customers or regulatory agencies for guidance.

  • Corporate Governance: The Capital Market Authority now allows board meetings to be held online.

 

We will be happy to provide more specific advice and guidance in the context of individual circumstances, concerns, and priorities; please let us know.

Christopher H. Johnson, Managing Attorney

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