The world was shocked in October 2018 by the horrific murder of Washington Post journalist Jamal Khashoggi, a lawful permanent resident of the United States, in the Saudi Arabian Consulate in Istanbul. Seemingly overnight, international attention turned to the kingdom’s extensive and troubling human rights record, including abuse of migrant workers, discrimination against women, domestic and transnational surveillance and repression, and war crimes in Yemen.

Initial responses to the Khashoggi murder included an unprecedented US Senate war powers resolution to end American support for the Saudi-led war in Yemen, business leaders and government officials withdrawing from Saudi Arabia’s investment conference, the Future Investment Initiative (also known as “Davos in the Desert”), and foreign investors selling more than $1 billion in Saudi stocks. 

In January 2021, the Biden Administration paused arms sales and transfers to Saudi Arabia and is considering the cancellation of arms deals that pose human rights risks and limiting future military sales to “defensive” weapons, while it “recalibrates” America’s relationship with the kingdom. The administration released an unclassified report to Congress on the Khashoggi murder, directly linking the crime to Saudi Crown Prince Mohammed bin Salman (MbS), Saudi Arabia’s de-facto ruler. Additionally, the US State Department announced the “Khashoggi Ban,” which can be used to impose visa restrictions on individuals who, acting on behalf of a foreign government, have engaged in “counter-dissident activities.” As a first step, the State Department levied restrictions against 76 Saudi individuals, including those involved with the murder of Mr. Khashoggi. 

In March 2021, Saudi Arabia was again named in Freedom House’s “Worst of the Worst” list due to its near total absence of political rights and civil liberties. According to the organization, Saudi Arabia is a case study in the growing threat to global democracy posed by transnational repression as it is “perhaps the best known in the world for targeting its nationals abroad.” In addition to kidnapping human rights activists Loujain al-Hathloul from the United Arab Emirates in 2018, the government has “extensively used spyware, family intimidation, detentions, assaults, and renditions against exiles in the Middle East, North America, Europe, and Asia.” 

In addition to risks to individual rights and liberties, there are direct risks to businesses operating in the kingdom. In November 2017, nearly 400 Saudi royals, officials and business executives were detained in the Ritz-Carlton hotel. The detainees endured psychological abuse and torture and were forced to sign away substantial assets to secure release. Among the detainees was Prince Alwaleed bin Talal, a high-profile investor in Citigroup, Twitter, Apple, and News Corp, and Sky Prime Aviation CEO Salem Almuzaini. 

According to a recent legal complaint, after being kidnapped in Dubai, forcibly rendered back to Saudi Arabia, tortured and abused (including by a top MBS aide implicated in the murder of Mr. Khashoggi), and moved to the Ritz-Carlton, Almuzaini transferred Sky Prime Aviation in December 2017 to the $400 billion Public Investment Fund of Saudi Arabia, which is headed by MbS. Less than a year later, two Gulfstream jets owned by Sky Prime Aviation shuttled Mr. Khashoggi’s assassins in and out of Istanbul. Almuzaini’s current whereabouts are unknown at this time. 

To deflect attention from the kingdom’s record of pervasive human rights violations, the Saudi government has spent billions of dollars hosting financial, entertainment, cultural, and sporting events. The “image laundering” through investment in these events is tied to Vision 2030, a plan to overhaul the country’s economy and attract foreign investors and tourists. Prompted by a multi-billion dollar public relations campaign, states and multinational companies are eagerly re-engaging with the kingdom, notably through the recent B20 and G20 summits. Following this trend, several financial services companies, banks, and credit card companies signed on as “Strategic” or “Knowledge” partners for the Future Investment Initiative 2021, designed to attract additional foreign investment to the kingdom.

Taken individually and collectively, these wide-ranging rights-violating behaviors reinforce concerns for businesses looking at the Saudi market. In the days following the Ritz-Carlton detentions, Phillip Cornell, a senior fellow at the Atlantic Council and former adviser to Saudi Aramco, stated: “The takeaway was if you get on the wrong side of [MbS], then your investments and your deal could be at risk. That's a chilling message.”