Saudi Gazette report
RIYADH — The General Authority for Awqaf has approved the regulations for establishing or financing endowments through fundraising. These regulations stipulate several conditions for anyone submitting an application to obtain a license to establish or finance endowments. These conditions include not having been convicted of a crime that violates trustworthiness, integrity, or honor, and not being listed on any one of the United Nations’ categories of crimes, including those concerned with combating terrorism.
The regulations also require that the applicant not be listed on the Unified National List (1373). This refers to Saudi Arabia's designation of individuals and entities under United Nations Security Council Resolution 1373, which targets those who provide or collect funds for terrorist purposes. Saudi Arabia, in cooperation with international partners like the Terrorist Financing Targeting Center (TFTC), designates these individuals and entities to freeze their assets and prohibit transactions with them.
The applicant should not also have been previously dismissed from office by a final judgment for reasons related to integrity, trustworthiness, incompetence, or inadequacy. Those who have obtained previously fundraising license for at least six months are also not qualified for applying for a license to establish or finance endowments through fundraising. Similar is the case with those who do have any other fundraising application pending before the authority.
According to the regulations published in Umm Al-Qura newspaper on Friday, endowment funds for which donations are collected must be charitable or public benefit funds within the Kingdom. They must be compliant with the provisions of Islamic Shariah and applicable regulations, as well as with the terms and conditions required of the beneficiary legally. They must also be within the scope of the purposes stipulated in the bylaws or the donor's conditions for the applicant.
The authority will issue a reasoned decision within 30 working days from the date of submitting the license application to reject the license application if the applicant fails to complete the required procedures and provision of information, or does not meet the necessary conditions.
The GAA must decide on the license application within a maximum period of 30 business days from the date of submission of the application. If the authority required an additional period, it must notify the applicant of that period, provided that the additional period does not exceed 30 business days. If the authority approves the license application, it will issue the license to the applicant. The license must include the license number, date of issuance, the name of the licensee, their legal information, the endowment and disbursement conditions, the targeted amount of donations collected, and the duration of disbursement for the purposes of collecting donations.
The regulations stipulate that the license shall be granted for a period not exceeding one year. The licensee may submit a reasoned request to the authority to extend the license period at least 15 business days before the end of the period specified in the license, provided the license application conditions are met.
The licensee is bound by seven obligations: They must contract with a chartered accountant licensed by the competent authority and a licensed consulting firm, if real estate construction is being undertaken for the purposes specified in the license. They must also open a single bank account with a licensed bank designated for collecting donations for the licensed purpose, in accordance with bank account rules, and provide the authority with the account details.
The licensee is also obligated to submit a periodic statement, after the end of the collection period, including supporting documentation for expenditures for the purposes specified in the license. They must also notify the authority of any material changes to the collection process immediately. They must also maintain records and data on financial expenditures for collection purposes, supporting documents for the disbursement process, and data and documents for the supply of materials or provision of services, for a period of no less than 10 years after each transaction.
They must also establish appropriate mechanisms to ensure that the authority or the competent authorities obtain the information and data required by the authority within the period specified in the application.
If there is a surplus in the fundraising account after spending on the purposes specified in the license application, the licensee must submit a request to the authority within 30 working days specifying the surplus amount and its proposals. The authority will review the submitted request and may approve, amend, or dispose of the amount.
The authority may revoke a license under the following circumstances: the licensee's violation of the provisions of the regulations; the discovery of any fraudulent activity or concealment thereof; the licensee's procrastination in implementing the regulations; the violation of a license condition during the fundraising period or the period of spending on the purposes specified in the license; in addition to the licensee's request to revoke the license.
The provisions of the regulations apply to the establishment of new endowments or the financing of existing endowments through fundraising for the purposes of sustaining, developing, operating, or repairing them.