Key changes in the new implementation system
(Appeal – Petition for Reconsideration – Cassation) according to the latest amendments
The new enforcement system has undergone a number of fundamental amendments aimed at balancing the rights of creditors with ensuring that debtors are not harmed, while also developing procedures in line with modern justice and digital transformation. The most prominent of these changes are as follows:
Firstly: Disclosure of funds
The system requires everyone against whom enforcement is carried out to disclose their funds related to the enforcement.
The debtor can no longer hide his money or evade enforcement, as he is now legally obligated to disclose it, which enhances transparency and helps in the speed of fulfilling rights.
Regulations regarding the obligation to disclose funds:
- Timing and Compliance: If the debtor does not comply or disclose his assets within 5 days of being notified of the enforcement order (Decision 34), he is considered to be in default.
- Consequences of non-disclosure: Failure to disclose results in the enforcement judge issuing strict decisions (Decision 46) that include travel bans, suspension of government services, and forced disclosure and seizure of funds.
- Comprehensiveness of disclosure: It is not limited to current funds, but also includes funds that will accrue to the debtor in the future, up to the amount of the debt.
- Disclosure of funds by others: The judge has the right to compel anyone suspected of receiving funds (such as relatives) to disclose those funds.
- Criminal penalty: Refusal to disclose or providing misleading information is a crime punishable under Article 87 of the law by imprisonment for up to 7 years.
These measures aim to overcome practical obstacles in implementation and guarantee creditors’ rights by revealing the true financial standing of the debtor.
secondly: Regulating visitation matters in family cases
Visitation procedures in family cases have been organized, taking into account the best interests of the children and the humanitarian aspect.
This amendment focuses on protecting the child’s best interests, reducing conflicts between parties, and ensuring that visitation provisions are implemented in an orderly and humane manner.
Third: Requirement to register executive bonds
It has become necessary to register all executive bonds on official platforms such as Nafez in order for them to acquire executive status.
This change aims to document bonds, prevent disputes over their validity, and expedite enforcement procedures electronically.
Key details regarding the requirement to register executive bonds:
- Registration is mandatory: In order for a promissory note or bill of exchange to acquire executive force, it must be registered through “Nafeth”.
- Nafith platform: It is the approved entity for issuing, managing, and archiving executive bonds electronically, which ensures the validity of the bond and its enforceability.
- Documentation steps: The process requires logging in via the National Access portal, entering the data of both parties, and documenting the debtor’s consent.
- Expiry of the bond: The enforceable bond expires if it is not executed within 10 years from its due date.
Failure to register bonds on these platforms makes it difficult or impossible to enforce them directly before the enforcement court, which underscores the need for digital transformation in financial transactions.
Fourth: Granting a grace period for selling assets
The debtor was given a specific grace period to sell his assets himself, instead of a direct forced sale. The debtor is given an opportunity to sell, which may affect the details of granting the grace period to sell the assets:
- The objective is to strike a balance between speed of execution and protecting the debtor’s financial standing, while avoiding the sale of assets below their value at public auction.
- The terms of the deadline are: conditional upon the existence of a legal interest, the creditor’s consent, and the provision of sufficient guarantees.
- Change in the system: Before the amendment, the sale was immediate and forced. Now, the debtor is given the opportunity to sell his real estate or assets himself.
- Application via Najiz: The party against whom enforcement is sought can submit a “respite” request through the enforcement services in Najiz using their National Access account.
This measure contributes to improving the beneficiary experience and reducing losses resulting from the rapid sale of assets.
Fifth: Separating the debtor's liability from his person
- Execution is limited to money: Execution now only applies to the debtor’s money (real estate, movable property, bank accounts) that constitute his financial liability, excluding personal and non-financial rights.
- Protecting the person of the debtor: Preventing harm to the debtor’s body or freedom, as enforcement does not affect his dignity or private life.
- Exception in cases of concealment: In cases of the enforcement system in the Kingdom of Saudi Arabia, if the debtor claims insolvency and evidence is found that he has concealed his money, his situation may be revealed by imprisonment.
- Execution against owned funds: The money subject to execution must be owned by the debtor or his guarantor.
- Promoting fairness of procedures: This chapter aims to balance the creditor’s right to collect his due, and the debtor’s right to protect his person.
- This approach is in line with modern international legal principles that make civil enforcement financial rather than personal.
Sixth: Abolishing imprisonment for debt
The imprisonment of debtors in financial cases has been officially abolished. Imprisonment is no longer a means of enforcing debts, and other regulatory procedures such as seizing funds, suspending some services, and preventing travel according to regulations are sufficient. This reflects the system’s direction towards abolishing penalties that deprive individuals of their freedom in financial debts.
Cases in which imprisonment of the debtor is permissible (after amendments):
- Procrastination and evasion: If it is proven that the debtor refuses to pay despite having apparent financial ability, or evades payment
- Excluded debts: Government debt cases, alimony, labor obligations, and rentals.
- Criminal offenses: Compensation resulting from crimes (damage and loss)
- Non-disclosure: Refusal to provide accurate information about funds
Seventh: The executive bond expires after 10 years
- The limitation period: The claim to the writ of execution expires after 10 years from the date of its due date (theoretically), unless the creditor requests execution during this period.
- Implementation Decision No. 34 Once the execution request is registered, the judge issues an order to notify the debtor.
- Execution deadline: The debtor is given a deadline of 5 days from the date of notification to pay or fulfill his obligation.
- Documentation obligations: It is required that bonds be registered on approved electronic platforms (such as Nafith) in order for them to be considered enforceable bonds.
- New procedures: The person against whom enforcement is sought is obligated to disclose his assets, and the debtor’s liability and person are separated (enforcement is on the money, not the person).
Eighth: Regulating travel ban procedures
The travel ban procedures have been reorganized after being widely applied. Previously, the ban was imposed almost automatically, but now it is restricted by controls and is carried out according to organized procedures and aims to prevent evasion of implementation and not as a punishment.
- Duration determination: A time period for the validity of the travel ban decision is determined based on the creditor’s request and the court’s decision.
- Regulations for travel bans: Travel bans are not imposed as an automatic measure, but rather according to specific regulations that balance the rights of the creditor and the freedom of the debtor.
- Substantive cancellations: The enforcement of imprisonment for a debtor who is in default on financial obligations has been cancelled.
- Lifting the ban: The ban is lifted in the event of payment of the debt, settlement, expiry of the specified period, or by a decision of the execution judge.
- Humanitarian cases: The debtor has the right to request the temporary lifting of the travel ban for humanitarian reasons or exceptional necessity, with the approval of the execution judge and the provision of guarantees.
Summary:
The new amendments to the enforcement system aim to enhance fairness and flexibility, reduce procedures that restrict freedom, focus on financial enforcement rather than personal enforcement, in addition to supporting digital transformation and regulating procedures.
At Abdullah Al-Dawood & Hassan Al-Hammad Law Firm, we assist companies in organizing their labor relations and drafting contracts and internal regulations in accordance with the laws of the Kingdom.
Book a legal consultation.
You can also view the Saudi labor system through the official website of the Ministry of Human Resources and Social Development.