The meanings of the following words and phrases are as defined next to each, unless the context requires otherwise:

The Institution: The Saudi Arabian Monetary Authority.

The Evidence: The Anti-Fraud Evidence in banks and financial institutions operating in the Kingdom of Saudi Arabia.

Financial Fraud: Any act aimed at obtaining an unlawful benefit by exploiting technical means, documentation, relationships, social methods, or using job-related powers, or through intentional negligence or taking advantage of weaknesses in control systems or standards, either directly or indirectly.

The Bank: The bank or financial institution licensed to operate in the Kingdom.

Bank Employee: Any person who is in an employment relationship and is subject to the direct or indirect supervision and control of the bank.

Fraud Prevention Unit: The administrative unit in the bank responsible for combating financial fraud and dealing with related cases and issues.

Fraud Prevention: The means and procedures taken to limit or prevent the occurrence or spread of fraud cases.

Internal Financial Fraud: Financial fraud committed by bank employees or with their assistance.

A- This evidence aims to assist banks in establishing the minimum procedures and policies to combat cases of financial fraud that banks or their clients may face, and to enhance ways to mitigate the risks of financial fraud.

B- Without prejudice to the provisions of the relevant regulations or instructions, this evidence applies to banks and financial institutions operating in the Kingdom.

Banks shall establish an independent administrative unit for combating financial fraud, which shall be organizationally affiliated with the Compliance Department.

The Financial Fraud Prevention Unit is generally responsible for combating and addressing all matters related to financial fraud, and its main tasks include the following:

3-1 Proposing the bank's strategy for combating financial fraud and evaluating it periodically, at least every two years.

3-2 Proposing policies, guidelines, and procedures related to combating financial fraud and the unit's tasks to ensure its efficiency, which must include at least the following:

• A. A mechanism for exchanging information with other banks related to fraud operations, without conflicting with the principle of confidentiality.

• B. Procedures for dealing with accounts and amounts frozen due to suspicion of their relation to financial fraud operations.

• C. A mechanism for receiving reports of financial fraud cases from customers.

• D. The procedures taken before and during the investigation process with employees.

• E. A mechanism for preserving and securing evidence according to best practices.

• F. The necessary authorities for customer service employees (frontline staff) to ensure their ability to take

3-3 Necessary actions upon receiving any report of financial fraud. Utilizing recommendations and updates issued by international organizations and best practices related to combating financial fraud.

3-4 Participating in raising awareness about methods of financial fraud according to the provisions contained in this guide.

3-5 Using an automated monitoring system to detect and reduce internal and external fraud operations, and measuring the effectiveness of the system periodically, while committing to update scenarios in line with developments in the methods used in financial fraud operations, ensuring that the monitoring system includes at least the following:

• A. Scenarios based on clear procedures.

• B. Analyzing customer behavior across all available channels to detect unusual operations.

• C. Establishing specific scenarios to monitor employee accounts.

3-6 Implementing enhanced due diligence measures outlined in the guidance document for combating money laundering and terrorist financing, in accordance with the nature of financial fraud cases, to be executed in the following situations:

• A. Suspecting a case of fraud.

• B. Doubting the validity of the submitted documents.

• C. Receiving a report of financial fraud from employees, customers, or other financial institutions.

• D. An alert appearing in the automated monitoring system.

• E. Beneficiaries of amounts resulting from fraud operations.

3-7 Participating in assessing fraud risks for banking products and services with the relevant departments.

3-8 Establishing necessary procedures for continuously monitoring the parties contracted with the bank, especially those assigned sensitive tasks, and ensuring their compliance with the bank's policy for combating financial fraud.

3-9 Creating a database that includes all details about actual and suspected financial fraud cases according to classifications and categories that can be utilized in studying those cases and ways to combat them.

3-10 Conducting investigations into financial fraud cases committed by bank employees at all administrative levels, and the unit may seek assistance from experienced entities when necessary.

3-11 Immediately notifying security authorities upon confirming any financial fraud operation in which the bank is involved, whether it resulted in material losses or not.

3-12 Notifying the institution within a period not exceeding three working days about the following: A. Any new fraudulent method or phenomenon that resulted in or did not result in financial loss. B. Any internal fraud operation.

3-13 Preparing a separate report for each financial fraud case, whether the bank was involved or not, ensuring it includes at least (the origin of the fact, the parties involved, the relevant departments, corrective actions, losses if any, and the methods used).

3-14 Taking necessary actions in case the bank is subjected to any financial fraud operation, including but not limited to investigation, following up on reports submitted to security and investigative authorities, tracking operations, exchanging relevant information, reviewing policies, and identifying shortcomings.

3-15 When investigating a fraud case, submitting the results, recommendations, and corrective actions to a committee formed by the Board of Directors and authorized by it if necessary.

3-16 Upon discovering a fraudulent method or new fraud phenomenon, studying it and submitting the results and recommendations to a committee formed by the Board of Directors and authorized by it.

3-17 Preparing periodic reports on fraud operations and attempts of financial fraud, along with appropriate recommendations, and submitting them to a committee formed by the Board of Directors and authorized by it.

3-18 Submitting periodic statistical reports, as well as exceptional reports to the institution, and any other data requested by the institution.

3-19 Freezing amounts if there is suspicion that the financial transactions of one of the accounts are the result of a fraudulent operation until the integrity of their source is verified.

3-20 Cooperating with other banks in case of receiving a freeze request from one of the banks and justifications for suspicion exist, with the responsibility for the freeze and its consequences resting on the requesting bank.

The human element is considered one of the essential tools in the process of combating financial fraud. The bank's selection of competent human resources and the support of these resources with appropriate training programs contribute to the integration of the financial fraud combating process. In this regard, the bank must adhere to the following obligations:

4- 1- 1 Providing the necessary human resources to ensure that the Fraud Prevention Unit performs its tasks efficiently and effectively.

4- 1- 2 Establishing the requirements and standards that must be met by the employees of the Financial Fraud Prevention Unit to ensure the execution of the tasks assigned to the unit.