Saudi Arabia has issued a new Enforcement Law under Royal Decree No. M/237 dated 3/11/1447H (20 April 2026), following Council of Ministers Resolution No. 746 dated 26/10/1447H (14 April 2026). The law will replace the current Enforcement Law and its Implementing Regulations once it becomes effective.
The law was published in the Official Gazette on 1 May 2026. The law is expected to come into force on 28 October 2026, being 180 days from publication.
The law will take effect 180 days after its publication in the Official Gazette. The Implementing Regulations must be issued within 180 days from the issuance of the law and will apply from the date the law comes into force. Until then, the current Enforcement Law and its Implementing Regulations remain the operative framework, subject to the transitional provisions.
For banks and creditors, the reform is important because it changes key recovery timelines, documentation requirements, digital enforcement rules, asset disclosure procedures, and enforcement risk controls.
The new law affects:
- Banks and financial institutions enforcing financing documents, guarantees, cheques, promissory notes, and security documents.
- Creditors, secured lenders, leasing companies, and corporate lenders.
- Borrowers and debtors subject to attachment, execution, travel bans, or asset disclosure.
- Legal, compliance, risk, litigation, recovery, and collections teams.
- Corporate clients operating in Saudi Arabia, especially in finance, real estate, commercial lending, leasing, and secured transactions.
The key issue is what will change once the new law becomes effective.
Key updates for banks and financial institutions include:
- Effective date and transition: the new law becomes effective 180 days after publication in the Official Gazette. Current enforcement rules will remain relevant only during the transition and for specific preserved matters.
- Promissory notes and bills of exchange: these instruments will need to be registered through national electronic platforms to qualify as enforcement instruments. Pre-existing promissory notes and bills of exchange may remain enforceable for one year after the new law takes effect, if they meet the legal requirements other than electronic registration. This does not extend limitation periods under the Negotiable Instruments Law.
- 10-year enforcement limit: enforcement applications may not be accepted if more than 10 years have passed from the maturity date of the enforcement instrument, subject to any shorter special limitation periods under other laws.
- Faster response obligations: competent authorities and entities supervising or registering assets must respond to enforcement-related court orders within three working days, unless a special rule applies.
- Incomplete applications: applicants may have only 10 working days to cure deficiencies in an enforcement application. Banks should ensure files are complete before filing.
- Coercive enforcement: if the debtor does not comply within five working days from notification or announcement, coercive enforcement may begin. A bank guarantee may give the debtor an additional 10 working days.
- Travel bans: travel bans are more structured. They require a request, are time-limited, and may not exceed specified maximum periods.
- Asset tracing: the law strengthens asset tracing, disclosure, questioning, and access to information, which may assist banks in high-value recovery cases.
- Expanded asset disclosure regime: disclosure obligations now extend to the debtor’s agents, employment-linked counterparties, financial counterparties, debtors of the debtor, those suspected of preferential treatment, and any third party holding the debtor’s assets. The new questioning power explicitly extends to relatives — closing a long-standing loophole in family asset shielding.
- Attachment limits: systems must correctly distinguish salaries, pensions, government allowances, deposits, investment accounts, and other assets.
- No automatic stay: disputes, objections, or grievances do not stop enforcement unless the competent authority orders a stay.
- Private sector enforcement service providers: The law opens new categories of licensed private services, including asset recovery service providers and asset tracing service providers — creating both opportunities and procurement choices for banks.
- Digital enforcement: electronic procedures, notices, records, and platform-based processes will become central.
Immediate Priorities for Banks
Three actions warrant immediate attention before the law enters into force:
- Inventory and register existing promissory notes and bills of exchange in Nafith during the one-year transitional window, prioritised by maturity date and credit risk.
- Audit legacy NPL portfolios against the new ten-year enforcement limitation, identifying instruments at risk of expiry and accelerating action where appropriate.
- Retrain legal and recovery teams on the new asset tracing and avoidance action toolkit — and update internal protocols to ensure timely closure of enforcement applications to avoid liability under Article 53(1).
How can Al Tamimi help?
They can support banks and financial institutions by:
- Assessing the impact of the new Enforcement Law.
- Reviewing recovery and enforcement strategies.
- Updating financing, guarantee, security, settlement, and promissory note documentation.
- Representation in enforcement proceedings before Saudi courts and authorities.
- Training legal, risk, compliance, litigation, and recovery teams.
- Supporting disputes, execution matters, asset tracing, and urgent enforcement actions.
Key Contacts
Rafiq Jaffer, Partner, r.jaffer@tamimi.com
Mohammed Negm, Partner, m.negm@tamimi.com