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KUWAIT CITY, Nov 17: While banks are fighting suspicious bank accounts, for fear of their involvement in money laundering or terrorist financing operations, they still face some procedural challenges, such as they cannot, by law, ban suspect bank transfers, unless they obtain prior permission from the Public Prosecution, according to the concerns of some banks, which leads to the implementation of suspicious operations, before issuing directives to stop them, reports Al-Rai daily. In this regard, informed banking sources revealed told the daily that bank officials are discussing the possibility of submitting to the concerned authorities a request to study the possibility of amending the law regulating the right to move personal funds, in a way that authorizes banks to block suspicious funds early in accounts, before informing the Financial Investigation Unit.
The second scenario for the move, the proponents of this proposal explored an alternative option, is to obtain a regulatory permission, i.e. from the Central Bank of Kuwait, if possible, that gives them the power to reverse the movement of suspicious funds in bank accounts if the law cannot be amended. However, bank officials in general know very well that it is difficult for them to reach any of the two proposals, given that the legal and general approach in this regard pushes to enhance the freedom of movement of funds in personal accounts in a manner that does not violate the law, while giving banks the power to directly freeze funds impedes this freedom and violates the requirements of protectionism to be carried out by a supervisory body.
The sources indicated that it would be more appropriate to grant the Investigation Unit the authority to freeze suspicious funds, not the Public Prosecution Office, as stipulated in a law in Saudi Arabia. To simplify further, it must be clarified that there are two types of bank transfers, the first is external, and it relates to funds that enter banking systems from abroad, as local banks can seize them if they suspect their safety, before informing the Investigation Unit. As for the second type of transfers, which is the basis of the discussion, it is related to internal banking operations, which include making transfers from one account to another within the bank itself, or from one bank to another locally.
In this regard, the banks have no choice but to inform the “Investigation Unit” of their suspicions of these operations to take the necessary action and open an investigation regarding them and direct later to freeze the accounts of their owners by order of the prosecution, or to confirm their safety after examining them. Until this happens, no party has the right to ban suspicious funds, as their owners can dispose of them by withdrawing them in accordance with the applicable banking procedures, and if it is later confirmed to the judicial authorities that they are not safe, the suspects can be referred to court.