Regulation Organizing Nazara (Beholding) Activities

1.Regulating and organizing beholding activities in a manner that fulfills the intent of the Endower and enhances the developmental role of Awqaf.

2.Raising the professional competence of beholders in order to protect the Waqf and the rights associated therewith.

3.Strengthening the principles of transparency and oversight over beholding activities and regulating the rights and obligations of the beholder.

4.Protecting Awqaf, developing them, and enhancing their developmental role in accordance with the conditions of Endowers and the relevant laws and regulation.

1.The Endower may assume the beholding of his Waqf and may appoint a beholder by name or by description in accordance with the provisions of Article (5) of this Regulation..

2.The Endower may designate the person who shall assume beholding after the appointed beholder, whether by name or description, and such designation shall be recorded in the Waqf instrument.

3.The Endower may assign the task of appointing the beholder to any person of his descendants or others. The person entrusted with appointing the beholder shall comply with the condition of the Endower and this Regulation and shall document the appointment with the competent authority immediately.

4.The Endower, or the person entrusted with appointing the beholder, must obtain the consent of the person prior to appointing him as beholder.

5.If the position of beholder becomes vacant and the Endower’s designation ceases or it becomes impossible for him to designate a beholder, the Authority or any person having standing may complete the process for appointing a beholder before the competent authority, provided that the beholder is selected from among those registered in the Register of Beholders and in a manner that does not conflict with the condition of the Endower.

6.Without prejudice to the applicable laws, regulation, rules, controls, instructions, and circulars, the decision appointing the beholder shall specify his powers, remuneration, and responsibilities.

1.The beholder may be a natural or legal person, as detailed below:

A.Islam

B.Legal capacity

C.Possession of appropriate knowledge and qualifications to manage the Waqf and care for its affairs.

D.Good conduct and reputation and not having been convicted by a final judgment of a crime involving dishonesty, integrity, or honor.

e.Not having previously been removed from beholding by a final judicial ruling due to lack of integrity.

f.Saudi nationality, where the Endower is a foreigner and the endowed asset is real property.

2.For appointing a legal person, the legal person must be licensed by the Authority.

1.A register shall be established at the Authority in which the names of beholders qualified to carry out beholding activities shall be recorded in accordance with the registration conditions.

2.Without prejudice to the conditions for appointing beholders stipulated in the condition of the Endower or in this Regulation, the following conditions shall be met by beholders registered in the Register of Beholders:

3.Within a period not exceeding two years from the entry into force of this Regulation, a committee shall be formed at the Authority by a decision of the Chairman of the Board, to be named the "Committee for the Registration of Awqaf Beholders", which shall operate in accordance with the controls and procedures approved by the Board. It shall consider registration applications submitted by applicants in accordance with the process determined by the Authority.

1.Submission of his resignation to the competent authority and its acceptance, with notification to the Authority of the decision issued in this regard after following the statutory procedures.

2.Issuance of a final decision or judgment removing the beholder.

3.If one or more of the conditions for appointment set out in Article (5) are no longer met.

4.Death, whether actual or legally presumed.

5.Other cases of termination of the beholder’s mandate as stipulated in the Waqf Deed or its internal regulation.

1.The beholder shall register the Waqf and all related endowed assets with the Authority within a period not exceeding (30) business days from the date of its documentation before the competent authority or from the effective date of this Regulation, through the Authority’s website.

2.The beholder shall update the Waqf’s data and information with the Authority within a period not exceeding (15) business days from the occurrence of any of the following cases:

3.For the purposes of applying the provisions of this Regulation, the Authority shall classify Awqaf as follows:

1.Implement the Endower’s conditions and refrain from violating them, in accordance with Sharia and statutory considerations.

2.Verify and understand the Endower’s conditions in accordance with established principles of textual interpretation linguistically, Sharia-wise, and customarily. The beholder may submit a written request for interpretation of the Endower’s condition to the Endower during their lifetime, or to the competent authority where the meaning is unclear.

3.Implement all Endower’s conditions. Where conditions conflict, they shall be reconciled where possible; where reconciliation is not possible, priority shall be given to what is closest to the Endower’s objectives. In all cases, the beholder may not refrain from implementing any condition of the Endower except after obtaining permission from the competent authority.

4.Prepare internal bylaws for the Waqf in a manner consistent with the Endower’s conditions and the regulation and instructions issued by the Authority, applicable to large and medium-sized Awqaf.

5.Not to violate the Endower’s conditions except where the interest of the Waqf so requires and after obtaining permission from the competent authority.

1.Comply with the duties associated with his functions as prescribed by Islamic Sharia, applicable laws, regulation, rules, controls, and instructions, and any instructions issued by the Authority.

2.Comply with the laws and regulation governing the collection of donations and refrain from undertaking any such activity except after obtaining approval from the competent authorities in the Kingdom.

3.Make information and data available to beneficiaries where it relates to their interests or upon request.

4.Exercise due care in a manner that achieves the best interest and benefit of the Waqf.

5.Establish a mechanism for communication with Waqf stakeholders, including beneficiaries, for the purpose of receiving and addressing inquiries, suggestions, and complaints.

6.Comply with laws and regulation governing inward and outward financial transfers to and from outside the Kingdom, in particular the banking account rules issued by the Saudi Central Bank.

7.Establish a mechanism for disbursing waqf proceeds in cases where beneficiaries are located outside the Kingdom and notify the Authority accordingly.

8.Collect sufficient information on the beneficial owners of the waqf’s proceeds, verify such information using all possible and reliable means, retain it, and keep it up to date.

9.Periodically inform beneficiaries of the waqf’s financial statements, particularly in the case of large and medium-sized Awqaf.

10.Immediately notify the General Department of Financial Intelligence at the Presidency of State Security upon suspicion, or where reasonable grounds for suspicion exist, that Waqf funds, in whole or in part, constitute proceeds of crime or are linked or related to money laundering or terrorist financing operations, or are intended to be used for such operations, including attempted transactions, subject to the following:

1.Receive remuneration commensurate with the nature of his duties unless waived by the beholder.

2.Acquire legal standing to initiate legal actions and submit applications before competent authorities and the Authority, represent the Waqf before all entities, and defend its rights and interests.

3.Access Waqf documents held by the Authority and competent authorities and request any documents related to the Waqf.

4.Delegate certain acts of the beholder’s functions—without violating the Endower’s conditions—to another person. The delegated person shall be subject to the provisions of Article (5) of this Regulation, and both the beholder and the delegated manager shall be jointly and severally liable for compliance with the provisions of this Regulation, related instructions, and for any consequences incurred by the Waqf as a result of such delegation.

5.Supervise the activities of entities affiliated with the Waqf, request their information, data, and reports, and take the necessary decisions in the interest of the Waqf and in a manner that achieves its benefit.

6.Provide adequate guarantees when confronted with the commission of a violation attributed to him

1.Protect the Waqf, its interests, and its rights, and represent the Waqf personally or by supervising those entrusted with representing the Waqf before the competent judicial authority.

2.Comply with the maintenance and repair of the Waqf, and for this purpose take all measures that ensure such maintenance, including deducting an amount from the Waqf proceeds prior to their disbursement and distribution to cover the costs of maintaining and operating the endowed asset and other costs necessary for the operation and management of the Waqf to the extent appropriate for that purpose.

3.Without prejudice to the Endower’s conditions, the beholder shall not substitute any Waqf asset except after obtaining permission from the competent authority. The beholder shall notify the Authority of any substitution of an endowed asset immediately upon completion thereof, and such notification shall include detailed data regarding the substitute asset. Such notification shall be submitted within a period not exceeding (10) business days from the date of completion of the substitution.

1.The beholder shall disburse waqf proceeds in accordance with the purposes specified in the waqf deed and within the designated disbursement schedules through bank accounts dedicated to the waqf. Where the endower has not specified a disbursement date, proceeds must be disbursed within a period not exceeding three months from the end of the waqf’s financial year.

2.The beholder shall document all disbursements of waqf proceeds to beneficiaries. Where disbursement is carried out through a legal entity, such entity must be licensed in accordance with the regulation in force in the Kingdom.

3.Where the Endower has not specified a beneficiary by name or description; where the designation of the beneficiary has ceased, or where the Endower’s condition is of a general charitable nature, the beholder shall ensure that Waqf proceeds are disbursed in accordance with the Endower’s intent, in a manner that is of greater benefit, yields greater reward, enhances the role of the Waqf in economic and social development and social solidarity, and maximizes impact. In all cases, the beholder shall refer to the competent authority to determine the Endower’s intent.

1.Preparing internal regulation, policies, and procedures necessary for the management of the Waqf, including those related to the collection, disbursement, and investment of Waqf proceeds, and reviewing and updating them periodically in a manner consistent with the Waqf’s circumstances, applicable to large and medium-sized Awqaf.

2.Establishing regulatory systems and internal controls over Waqf funds to ensure their protection, proper disbursement, and optimal utilization in accordance with best standards.

3.Ensuring that all persons appointed to manage the Waqf possess competence and integrity, comply with their functional duties and apply best practices in their management.

4.Attending awareness and training programs related to Awqaf, including training programs on combating money laundering and terrorist financing for Waqf personnel, according to the nature of duties of each position and in accordance with best practices.

1.Opening one or more bank accounts in the name of the waqf with banks operating in the Kingdom, through which all financial transactions related to the waqf, and its management shall be conducted, ensuring that waqf funds are not commingled with personal funds.

2.Recording all financial transactions of the waqf in Arabic.

3.Maintaining waqf documents and correspondence in an orderly manner.

4.For large and medium-sized Awqaf, preparing a budget estimate for all waqf activities, taking into account current and future needs, and preparing audited financial statements approved by accountants and auditors accredited by the Saudi Organization for Chartered and Professional Accountants.

5.Preparing an annual financial statement detailing the waqf’s revenues and expenditures for small Awqaf, and for Awqaf with direct utilization where revenues and expenditures exist.

1.Ensure that all investments are compliant with the provisions of Islamic Sharia.

2.Comply with applicable laws, regulation, and instructions in force in the Kingdom.

3.Ensure that investments fall within an acceptable risk threshold, that returns are proportionate to the risks assumed, and that the Waqf is not exposed to excessive risk.

4.Develop and maintain the endowed real estate asset for the purpose of increasing Waqf proceeds.

5.Exercise due care in all investment operations to ensure the sustainability and growth of the Waqf in accordance with the Endower’s conditions.

1.The beholder shall allocate sufficient and appropriate time and effort to perform his duties.

2.The beholder may combine the exercise of beholding with other professional activities, provided that such activities do not conflict with the interests or sustainability of the Waqf. Where the Endower’s condition requires full-time dedication to beholding, the beholder shall be prohibited from combining beholding with any other occupation.

1.Contracting for or executing Waqf-related activities with himself or with any of his relatives up to the second degree, whether directly or indirectly.

2.Using any information or data relating to the Waqf, its activities, or operations to achieve personal benefits.

1.The beholder shall be prohibited from pledging the Waqf except after obtaining permission from the competent authority and notifying the Authority thereof. The beholder shall comply with the Endower’s conditions and take into account the interests of the Waqf and its beneficiaries.

1.The beholder shall retain all waqf records securely, including records of local and international financial transactions related to the waqf, for a period of not less than (10) years after each transaction, and establishing appropriate mechanisms to ensure rapid access to such information by the competent authorities upon request.

1.Provide the Authority with the requirements set forth in paragraphs (4) and (5) of Article (15) of this Regulation, in accordance with the mechanisms and means specified by the Authority.

2.Provide the Authority with the information and reports it requests and respond to any inquiries relating to the Waqf within the prescribed time.

3.Fully cooperate with the Authority’s employees and those entrusted with examining the Waqf, its records, and its bank accounts, facilitate their tasks, and provide all required data and information without delay.

1.The Authority shall consider violations committed by the beholder of the provisions of this Regulation and the relevant laws, regulation, and instructions, and shall apply the penalties set forth in Article (24).

2.The Authority shall issue rules for addressing violations, specifying the procedures for considering violations and the mechanism for imposing sanctions.

3.The Authority shall form one or more committees to consider violations committed by the beholder of the provisions of this Regulation and the relevant laws, regulation, rules, controls, and instructions. The Board shall determine the committee’s operating rules and procedures.

4.Where the Authority finds that a violation is connected to any of the crimes set forth in the laws and regulation in force in the Kingdom, the matter shall be referred to the competent authorities to complete the necessary procedures.

5.The Authority shall receive reports of violations through its official channels.

6.Categories and severity levels of violations shall be classified according to the size of the Waqf, the type of violation, the consequences thereof, and the associated risks.

7.The Authority shall consider grievances submitted against its decisions imposing penalties on the violating beholder within (60) days from the date of knowledge thereof and shall specify the rules for addressing violations and the grievance mechanism applicable to such decisions.

1.Without prejudice to civil and criminal liability, where the Authority finds that a beholder or any person delegated with the administration of the Waqf has violated any provision of this Regulation or any instructions issued by the Authority, it may impose one or more of the following penalties, taking into account the gravity of the violation, its effects, and the circumstances of its commission:

2.Taking into account the gravity and repetition of the violation, its effects, and the circumstances of its commission, the Authority may impose the penalty of dismissal of the beholder in the following cases:

3.Without prejudice to the provisions of this Article, the committee shall, when imposing penalties, take into account the Schedule of Violations and Sanctions issued by the Authority.

1.The decision of the Committee referred to in Article (23) shall be subject to objection before the Administrative Court, in accordance with the statutory provisions governing such objections, where the penalty decided is one of the following:

2.The decision of the Committee referred to in Article (23) shall be subject to objection before the competent divisions for the dismissal of the beholder within (30) days from the date of issuance of the decision, where the decision includes any of the following penalties:

3.The judgment of the competent division in respect of the objection referred to in paragraph (2) of this Article shall itself be subject to objection in accordance with the statutory procedures for challenging judgments.

1.Removing the violation and the effects resulting therefrom.

2.Increasing the number of specialized staff.

3.Contracting specialized technical offices to rectify deficiencies.

4.Appointing one or more advisers to provide consultation.

5.Requiring the beholder to remedy the committed violation and restore the rights of entitled persons arising from such violations.

6.Requiring the beholder to attend one or more qualification or training courses related to the committed violation.

1.The Authority shall notify the competent authority, the removed beholder, and all stakeholders dealing with the Waqf of the decision removing the beholder.

2.The competent authority shall take the following measures, while notifying the Authority;

a.Amend all documents related to the Waqf in accordance with the decision removing the beholder.

b.Notify the Saudi Central Bank and the Capital Market Authority to revoke authorization to operate bank accounts and investment accounts belonging to the Waqf from the person against whom the removal decision has been issued.

c.Appoint an alternative beholder in accordance with the procedures for appointing beholders set out in this Regulation, following nomination by the Authority, selection from among those registered in the Register of Beholders, and documentation of the appointment.

3.The removed beholder shall be obliged to: