Usury
The laws governing the business environment in Saudi Arabia are both made by the country and international ones. The basic meaning of usury is interest charging more than what the law has allowed. In other words, there is a maximum amount of interest that is allowed on the diverse loans and other types of transactions (Bixby, Caryn & Patrick 250). However, there are certain exceptions and provisions to the laws on usury. The Islamic religion, which is practiced in Saudi Arabia, does not allow Riba in business transactions. However, Saudi Arabia has found a way of ensuring the smooth flow of business just like other countries.
In order to avoid usury Saudi Arabia has integrated some methods of ensuring that business runs smoothly. One of the financing facilities used in the banking industry is the Bai’ al ‘inah facility. In this kind of financing, the financing institution buys a commodity from a third party, and then later sells the commodity to the customer, who can pay it in agreed installments. However, the customer has nothing to do with the third party, unless he/she goes there to pick the commodity of their choice. Another facility used in the Bai’ bithaman ajil. This means that goods are sold on a deferred payment and then the profit margin is shared according to how the two parties have agreed.
Even with the incorporation of these methods, the law is still strict. There are profit margins that can be found to be ridiculous or exploitative. It is also strict on nay other ways that can be used to introduce usury indirectly. For example, in early January this year, a debate held in parliament about the traffic camera system. This debate brought the issue of usury as the parliamentarians argued that the motorists were being fined on no solid grounds. The mode of collecting money was argued to be usury (Cassel & Rebecca 1058). If one with the crime of committing usury, they are the exposal of either attracting huge fines or spending a long time in jail.
Gambling
Like in many other countries, gambling in Saudi Arabia is illegal. This is mostly because it is an Islamic country. This means that such facilities as casinos, bingo halls, poker rooms, sports betting areas, and so on, are no where to be found in Saudi Arabia. If there are any, they are very hidden and operating on very dangerous grounds. The only way the Saudis get to gamble is through the internet. However, the companies owning these sites are not in Saudi so the Saudi law does not bind them.
Gambling is defined as “any scheme that involves a distribution of property by chance among persons who have paid a valuable consideration for the opportunity (chance) to receive the property” (Cross & Miller 215). Te sentences imposed on those found involving themselves on gambling activities are quite harsh in Saudi Arabia. Some of these sentences include flogging, being caned as many as eighty lashes, and so. Some punishments are carried out publicly or in secret. Those carried out publicly are meant to instill fear on the others so that they do not repeat the same mistake.
As much as there is internet gambling in Saudi Arabia, the people are not allowed to participate. Those who do so do it in secret as being caught also attracts punishment. The Saudi government tries to stop gambling in two major ways. The first way is that it does not offer licenses to any gambling companies wanting to offer the internet services to the Saudis. The other way is that it aggressively filters the internet. This means that there are only very few sites accessible in Saudi. The good thing about internet gambling is that one cannot be easily caught and they must be caught in the very act if they are to be prosecuted.
Contracts to Commit a Crime
Any contract that is present based on a crime is considered null and void. These include contracts on drug trafficking, human trafficking, sale of illegal firearms, amongst others.
Saudi Arabia deals with these crimes like the way most of the other countries deal with it. If the court finds that the grounds on which the crime was formed on were of illegal nature, then the contract is discharged by the court. However, in most cases, contracts based on activities of illegal nature do not appear in court (Bixby et al. 265).
If persons are found carrying out these illegal activities, then they are prone to facing very tough punishments. These crimes attract sentences that go to as high as life sentences and death sentences. In other words, any contract based on activities that are contrary to the statutes, they are considered as void contracts. However, if the companies performing these activities are not registered in Saudi Arabia, then the Saudi laws do not bind them. On the other hand, it becomes very hard for them to access Saudi Arabia’s territories, as the government does not offer them licenses.
The laws of Saudi Arabia are mostly based on the Islamic book call the Quran. This religious book offers guidance to the people of the Muslim faith (Cassell & Rebecca 1060). Although most of the activities considered as illegal are also considered as illegal in other countries, the punishments offered are quite harsh as compared to the other countries. For example, the caning done on the gamblers is quite harsh as compared to other countries that mostly impose fines or a short-term imprisonment.
Works Cited
Bixby, Michael, Caryn Beck-Dudley & Patrick Cihon. The Legal Environment of Business. New Jersey, Prentice Hall, 2008. Print.
Cassell, Macgorine & Rebecca Blake. “Analysis of Hofstede’s 5-D Model: The Implications of Conducting business in Saudi Arabia.” The 2011 New Orleans International academic conference, 2011:1054-1062. Print.
Use the order calculator below and get started! Contact our live support team for any assistance or inquiry.
[order_calculator]