Saudi Arabia tightens rules on financial transfers to UAE

Saudi Arabia has implemented stricter regulations on financial transfers to the United Arab Emirates (UAE), according to recent reports. This move follows growing tensions between the two Gulf nations. The enhanced oversight is typically reserved for countries deemed high-risk for illicit money flows, according to Reuters. Three sources with direct knowledge of the situation told Reuters that the UAE had been placed in a group of over half a dozen regional countries considered high risk for financial crimes.

Businesspeople have reported experiencing difficulties with transactions, with their transfers being delayed or returned by Saudi banks without any official explanation. The Saudi central bank denied implementing any direct restrictions on specific countries, while a UAE official stated that its economy ministry has not received any reports from private-sector companies about such issues.

Relations between Saudi Arabia and the UAE have increasingly diverged in recent years, particularly in the oil sector, the Yemen war, and the US-Israeli conflict on Iran. The rift was highlighted by Saudi Arabia's December air strike on a shipment of UAE military equipment to Yemen. Since then, social media feuds and heated debates between the two nations have further escalated.

The UAE's exit from Opec last month and Saudi Arabia's hedging position on the Iran conflict have also contributed to the strain on their relationship.