RIYADH — The use of a trade name, by a merchant, that was reserved or registered earlier for another merchant, is a serious violation for which a fine amounting to SR10,000 will be slapped. Similarly, those merchants who use a trade name, which is prohibited from being registered or reserved, will be slapped with a fine of SR15,000. These punitive measures for committing serious violations are among the draft executive regulations of the Saudi Trade Name Law. The Ministry of Commerce has published the executive regulations on the Istila'a public survey platform, seeking the opinions and viewpoints of the public before framing the final shape of the regulations. The Council of Ministers approved the new Trade Name Law on Sept. 17, 2024. The law obliges every merchant to adopt a trade name and register it in the commercial register. The law, which consists of 23 articles, stipulates that it is prohibited the use of a trade name that contains a political, military or religious meaning, connotation or content. It is not allowed to use a trade name that resembles a name, honorary badge or specific symbol of any local, regional or international organization or one of its institutions. It is also prohibited to reserve or register a trade name that violates public order or public morals or that results in misleading. The law stipulates that it is not permissible for the reservation or registration of a trade name if it resembles a world-famous trade name or trademark, or resembles a registered or famous trademark in the Kingdom The draft regulations permit the reservation or registration of the name of Saudi Arabia and the names of cities, regions and public places, and their registration in the commercial registry according to a number of controls, the most prominent of which is that the name should not be identical or similar to the name of a government agency or the like. According to the draft regulations, the merchant is obligated, when reserving or registering a name, not to harm, distort or offend the reputation of Saudi Arabia as well as its cities, regions or public places. The regulations classified violations into serious and non-serious ones. Fines for non-serious violations range between SR1000 and SR5000. The non-serious violations included the merchant's failure to display his trade name in his documents, correspondence or publications; the merchant's failure to display his trade name on the facade of his place of business; the merchant's failure to register a trade name within the statutory period as an alternative to his deleted trade name; or the merchant's use of his trade name in a manner that violates the provisions of the law or causing to misleading. The executive regulations fixed a fee for services related to trade names as follows: SR200 to reserve a trade name in Arabic, SR500 to reserve a trade name in English, and SR100 to extend the period of reserving a trade name or disposing of the trade name. It was stated in the regulations that the review committee is responsible for violations and imposing penalties, and it has the right to reduce or increase the fine according to the circumstances of the violation, its effects, and the size of the facility. The regulation stipulated that an approval from the Royal Commission for Makkah City and the Holy Sites or the Madinah Region Development Authority is required to reserve or register the name of the cities of Makkah or Madinah as a trade name.
