Saudi Arabia's Ministry of Finance has instructed officials in other ministries to authenticate bank guarantees submitted by private companies.

The instruction follows the discovery that false guarantee documents and documents without original copies have been presented in support of bids to win government contracts.

Verification

The instruction calls on officials in other ministries and government departments who receive a guarantee bearing the name of a bank to verify that that bank has genuinely endorsed that guarantee.

Government officials must also inform the Saudi Arabian Monetary Agency (SAMA) and the Control and Investigation Bureau of any suspected forgeries.

Revealed

The Ministry of Finance has reportedly been told by government departments that several seal-bearing guarantees have been received that later turned out to be forgeries.

The forgeries were only revealed after the banks named on them inspected the documents.

History of forgeries

The problem of forged bank guarantees is apparently not a new one.

Some companies have already been shown to use fake guarantees to earn mega project contracts in the Kingdom, which one Saudi banker says has already led to delays and complete halts in certain projects.

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