Saudi Arabia has placed financial transfers to the United Arab Emirates under enhanced regulatory scrutiny normally used for jurisdictions seen as carrying higher money-laundering and terrorism-financing risk, according to people with direct knowledge of the matter. The previously unreported measures were not announced publicly, but they may help explain why companies have faced delays or returned payments when sending money from Saudi accounts to the UAE in recent months. Reuters cited six businesspeople who said transfers in various currencies had been delayed or sent back by Saudi banks without an official explanation. Three people with direct knowledge said Saudi Arabia’s central bank told key banks earlier this year to apply extra checks to settlements involving the UAE. A Western executive with operations in Saudi Arabia said a bank gave the same explanation for transaction delays. The Saudi central bank denied imposing direct country-specific restrictions, saying banks in the kingdom apply controls based on internal risk assessments and standards aligned with the Financial Action Task Force (FATF), a Paris-based global watchdog on illicit finance. A UAE official said the economy ministry had not received reports of unusual problems with transfers and stressed that trade and investment ties between the two countries remain deep. Two sources said the additional scrutiny places the UAE alongside more than half a dozen regional jurisdictions Saudi Arabia considers high risk for financial crime. They said that group includes Lebanon, South Sudan and Iraq, which are on the FATF grey list (jurisdictions under increased monitoring). The UAE was removed from that list in 2024 after reforms to its anti-money-laundering regime, though some anti-corruption groups said the decision came too soon. Several sources linked the move to worsening political and economic frictions between the Gulf neighbors. A Saudi insider described the oversight as a "subtle message" to Emirati leaders after disputes over Yemen, oil policy, regional influence and responses to the Iran war with the United States and Israel. Analysts still see a full economic break as unlikely because the two economies are tightly interconnected. Businesspeople told Reuters the payment problems began in the weeks after the UAE announced on April 28 that it was leaving OPEC, and some firms have since rerouted payments through third countries.