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Sunday , October 20 2019

Central Bank orders compliance with UN resolutions to combat finance of terrorism

Implementation ordered within 3 days

KUWAIT CITY, Sept 9: The Central Bank of Kuwait (CBK) has issued instructions to all banks, financial institutions and exchange companies to immediately comply with and implement the resolutions issued by the United Nations Security Council Sanctions Committee on combating and financing terrorism under Chapter VII of the UN Charter, reports Al-Rai daily quoting highly reliable sources.

The same sources said the CBK has stressed on the immediate implementation of the UN resolutions in accordance with Resolution No. 1373/2001, pointing out that the regulator will inform all those institutions which are affiliated to the CBK for immediate implementation within a maximum of 3 working days after receiving the same from the Sanctions Committee.

The Central Bank warned banks, the finance institutions and exchange companies not to violate the order saying under the new resolution; the CBK will apply measures and adopt sanctions provided for in Article (15) of the Law No. 106/2013. It is worth mentioning that a heated debate took place during a recent UNSC session between Kuwait’s Permanent Representative to the UN Ambassador Mansour Al-Otaibi and Syrian delegate Bashar Al-Ja’afari after the latter accused Kuwaitis of supporting terrorism. Al-Otaibi stressed before the Security Council that Kuwait’s laws to fight terrorism are crystal clear and are applied on everyone.

He also told the UNSC that Kuwait is committed to uphold all resolutions that are issued by the Security Council in this regard. On the other hand, related sources said the Central Bank of Kuwait has given banks operating in Kuwait until the end of this month to activate the listing of commercial credit data and information for borrowing companies on the network of Credit Information Company (CYNet), stressing that starting from Oct 1, 2019, the CBK will not provide banks with any credit information in respect of companies as the case was before. According to the new CBK circular, credit data for bank customers and financing donors at CYNet starting from next month will not be limited to individual consumer credit and installment loans, but will also include corporate customers.

CYNet will provide all credit information for its corporate customers, in preparation for the benefit between the banks and various funding bodies in the future. Sources noted that according to the executive regulations that have issued, credit information may be obtained in the event of a judgment or a court order, granting, renewing or rescheduling loans, financing operations and credit facilities, in addition to accepting a guarantee or evaluation of creditworthiness and determining the credit rating. The Central Bank has the right at any time to access the credit reporting system of the company for the purpose of obtaining credit data and information, and to examine the system to determine its efficiency and reliability and not to violate the law and the executive regulations and instructions issued in this regard.

The sources said that the CBK believes that the provisions of the new law were aimed at enhancing and developing the legislative environment for credit operations in Kuwait, and to establish a regulatory framework for financial and banking institutions in the field of reporting credit information to individuals and legal persons (companies).

The sources pointed out that CYNet has recently developed its automated system of centralization of risks in addition to a new credit database for the commercial sector and companies, which requires the local and foreign banks and financial institutions to provide the company with all the commercial credit information and information for borrowers registered with them in accordance with the systems and mechanisms established In this regard.

The development of CYNET related to customer credit report and digital credit rating is a prelude to the establishment of a credit information exchange company, which is stipulated in the Credit Information Exchange Regulation Act. In accordance with the law and its implementing regulations, an alternative emergency center should be established for the company to cope with any potential risks or disasters, with backup systems in place and data recovery plans in place.

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