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Saudi Arabia Aims to Boost National Automotive Industry

The Saudi Minister of Industry and Mineral Resources, Bandar al-Khorayef, and the Minister of Economy and Planning, Faisal al-Ibrahim, signed the agreement with Hyundai Motor Company (Asharq Al-Awsat)
The Saudi Minister of Industry and Mineral Resources, Bandar al-Khorayef, and the Minister of Economy and Planning, Faisal al-Ibrahim, signed the agreement with Hyundai Motor Company (Asharq Al-Awsat)
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Saudi Arabia Aims to Boost National Automotive Industry

The Saudi Minister of Industry and Mineral Resources, Bandar al-Khorayef, and the Minister of Economy and Planning, Faisal al-Ibrahim, signed the agreement with Hyundai Motor Company (Asharq Al-Awsat)
The Saudi Minister of Industry and Mineral Resources, Bandar al-Khorayef, and the Minister of Economy and Planning, Faisal al-Ibrahim, signed the agreement with Hyundai Motor Company (Asharq Al-Awsat)

The Saudi Ministry of Industry and Mineral Resources signed a memorandum of understanding with Hyundai Motor Company to promote the automotive industry in the Kingdom.

The MoU was signed in the presence of the Minister of Industry and Mineral Resources, Bandar al-Khorayef, and the Minister of Economy and Planning, Faisal al-Ibrahim.

The MoU aimed to enhance cooperation in vehicle manufacturing in the region to realize the national strategic goals for the industry in developing local manufacturing capabilities and is in line with the targets of the Saudi Vision 2030 that seeks to diversify the economic base in Saudi Arabia.

The agreement stipulated planning for building a Saudi Arabia-based assembly plant with the CKD system for electric and internal combustion engine cars after Hyundai showed high interest.

It also sought to explore joint investment opportunities with Saudi Arabia to achieve entrepreneurship in businesses and projects that guarantee environmental safety and sustainability.

The approach came as part of a government strategy to support the transition to clean energy in the automotive industry.

In early November, Saudi Crown Prince Mohammed bin Salman launched the "Ceer" company, branded as the first Saudi electric vehicle brand.

The new company would contribute to attracting local and international investments and create many job opportunities for local competencies.

Last May, the Ministry of Investment announced a significant investment from Lucid Group as the firm began constructing an advanced automotive manufacturing plant that targets 150,000 vehicles per year with more than $3.2 billion in assets.

The facility is also expected to contribute significantly to job creation and development of the skill base of the Saudi automotive manufacturing sector.

Investment Minister Khalid al-Falih stated that the development of the electric car industry in Saudi Arabia reflected the strong commitment to attracting qualitative investments that contribute to diversifying the economy, transferring technology, and developing skills among Saudi youth.

It also reflected the Kingdom's global commitment to promoting a green economy and reducing carbon emissions.

Falih added that the development of the electric car manufacturing sector is part of the Kingdom's broader efforts to advance the industrial sector and advanced industries.

The sector would also play an essential role in the Kingdom's transition to a greener economy and in the Kingdom's efforts to realize its commitment to reach net zero by 2060.

The Lucid factory will produce four electric cars from 2023, reaching total capacity in 2028.

The planned factory in the Kingdom would produce two exclusive models. The facility will export nearly 95 percent of its production, supporting the Kingdom's balance of payments. It would also back supply chains and open new investment opportunities.

Lucid's electric vehicle factory would be located in the Industrial Valley of King Abdullah Economic City, on the Red Sea coast in the west of the Kingdom, to meet energy needs, local supply chains, and a location that facilitates access to global logistics.

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US Treasury Targets Russia's Gazprombank with New Sanctions

FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
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US Treasury Targets Russia's Gazprombank with New Sanctions

FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo
FILE PHOTO: A bronze seal for the Department of the Treasury is shown at the US Treasury building in Washington, US, January 20, 2023. REUTERS/Kevin Lamarque/File Photo

The United States imposed new sanctions on Russia's Gazprombank on Thursday, the Treasury Department said, as President Joe Biden steps up actions to punish Moscow for its invasion of Ukraine before he leaves office in January.
The move, which wields the department's most powerful sanctions tool, effectively kicks Gazprombank out of the US banking system, bans its trade with Americans and freezes its US assets, Reuters reported.
Gazprombank is one of Russia's largest banks and is partially owned by Kremlin-owned gas company Gazprom. Since Russia's invasion in February 2022, Ukraine has been urging the US to impose more sanctions on the bank, which receives payments for natural gas from Gazprom's customers in Europe.
The fresh sanctions come days after the Biden administration allowed Kyiv to use US ATACMS missiles to strike Russian territory. On Tuesday, Ukraine fired the weapons, the longest range missiles Washington has supplied for such attacks on Russia, on the war's 1,000th day.
The Treasury also imposed sanctions on 50 small-to-medium Russian banks to curtail the country's connections to the international financial system and prevent it from abusing it to pay for technology and equipment needed for the war. It warned that foreign financial institutions that maintain correspondent relationships with the targeted banks "entails significant sanctions risk."
"This sweeping action will make it harder for the Kremlin to evade US sanctions and fund and equip its military," Treasury Secretary Janet Yellen said. "We will continue to take decisive steps against any financial channels Russia uses to support its illegal and unprovoked war in Ukraine."
Gazprombank said Washington's latest move would not affect its operations. The Russian embassy in Washington did not respond to requests for comment.
Along with the sanctions, Treasury also issued two new general licenses authorizing US entities to wind down transactions involving Gazprombank, among other financial institutions, and to take steps to divest from debt or equity issued by Gazprombank.
Gazprombank is a conduit for Russia to purchase military materiel in its war against Ukraine, the Treasury said. The Russian government also uses the bank to pay its soldiers, including for combat bonuses, and to compensate the families of its soldiers killed in the war.
The administration believes the new sanctions improve Ukraine's position on the battlefield and ability to achieve a just peace, a source familiar with the matter said.
COLLATERAL IMPACT
While Gazprombank has been on the administration's radar for years, it has been seen as a last resort because of its focus on energy and the desire to avoid collateral impact on Europe, a Washington-based trade lawyer said.
"I think that the current administration is trying to put as much pressure and add as many sanctions as possible prior to January 20th to make it harder for the next administration to unwind," said the lawyer, Douglas Jacobson.
Officials in Slovakia and Hungary said they were studying the impacts of the new US sanctions.
Trump would have the power to remove the sanctions, which were imposed under an executive order by Biden, if he wants to take a different stance, Jacobson said.
After Russia's invasion in 2022, the Treasury placed debt and equity restrictions on 13 Russian firms, including Gazprombank, Sberbank and the Russian Agricultural Bank.
The US Treasury has also worked to provide Ukraine with funds from windfall proceeds of frozen Russian assets.