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Thursday , August 6 2020

Kuwait confirms it has absolute desire to fight money laundering and terror financing

KUWAIT, May 30: The Central Bank of Kuwait affirmed on Saturday its absolute desire to combat money laundering and terror financing operations and its close follow-up to the bodies subject to its control to verify its full commitment to implement all the requirements stipulated in the law.

The bank also stressed in a press statement that it does not hesitate to impose severe sanctions in the event of any violation, and that it does not hesitate to take all measures that would enhance the strength and integrity of the banking and financial sector.

The bank confirmed its continuation of its approach based on permanent and full cooperation with all concerned authorities and institutions, including the Kuwait Financial Investigation Unit and the judicial authorities.

In light of what was recently circulated through the media about issues related to money laundering operations, it confirms that the necessary measures have been taken in time and performed all the responsibilities entrusted in this regard, and has absolute eagerness to verify the compliance of the bodies subject to his control with legal requirements and their full compliance with all the requirements mentioned in the instructions Issued by the (Central) within the framework of Law No. (106) of 2013 regarding combating money laundering and terrorist financing.

This law was prepared taking into account the requirements of international standards and specified the roles assigned to all concerned parties, including the (central) and other oversight bodies, which must also verify the compliance of the bodies subject to its control with the requirements of the law in order to ensure the reputation of the State of Kuwait in this regard.

Article (14) of the law defines the role entrusted to the Central Bank of Kuwait, which is based on issuing instructions to the bodies subject to its control and determining the measures that these bodies must take in line with the degree of risk and the size of the activity in addition to the field examination and verification of compliance with the requirements of the law and the application of the prescribed sanctions On it in the event of any violation.

The statement said that after the issuance of the law, the Central Bank of Kuwait initiated the issuance of instructions on combating money laundering and terrorist financing to banks in July 2013, and the bank updated them in May 2019 in line with developments in international standards, whereby according to these instructions, banks should establish procedures to fully implement all Requirements for the required control and commitment to continuously follow up the operations carried out by clients, according to the requirements of due diligence required in this regard.

With regard to the role assigned to the banking and financial sector towards suspicious operations, the statement said that Article (12) of the law obliges all financial institutions “including banks” to notify the Kuwaiti Financial Investigation Unit and not the Central Bank of Kuwait without delay in any transaction or attempt to conduct a transaction if it has sufficient evidence On suspicion that the funds involved in the transaction are obtained from a crime or linked to a money laundering or terrorist financing operation.

The bodies subject to the Central Bank of Kuwait’s control are performing their duties in this regard as stated in the law as well as the decisions issued by the Security Council sanctions committees based on Chapter VII of the Charter of the United Nations and the relevant decisions issued by the Security Council Resolutions Committee formed in the Ministry of Foreign Affairs State of Kuwait.

The banks totally refrain from dealing with any of the names on the lists of the Office of Foreign Assets Management at the US Treasury (OFAC) and other requirements to combat money laundering and terrorist financing.


According to Article (16) of Law 106 of 2013, the Kuwait Financial Investigation Unit was established. “It is a unit with an independent legal personality – not affiliated with the Central Bank of Kuwait – and the law has designated it with responsibility for receiving these communications and requesting information related to what is suspected of being the proceeds of the crime.” Or funds related to money laundering or terrorist financing operations, and then analyzing that information to take over the unit in the event that sufficient evidence is available to inform the Public Prosecution and refer the relevant information to the competent authorities in order to take the necessary measures in this regard.

Due to the concern of the Central Bank of Kuwait to combat money laundering and terrorist financing operations, the banks were directed to develop advanced technical programs and systems that automatically provide alerts on operations and transactions executed on clients ’accounts in accordance with multiple scenarios for the purpose of follow-up and to ensure consistency with the information available on those clients with Stressing the need for banks to notify the Kuwait Financial Investigation Unit of any transaction or any attempt to conduct a transaction as soon as there is sufficient evidence to suspect it.

The instructions of the Central Bank of Kuwait confirmed the need for banks to update their procedures and systems in this regard in a continuous manner to ensure their conformity with the latest international requirements in accordance with the recommendations issued in this regard.

Within the limits of the responsibilities and obligations stipulated by the law, the (Central) through the field inspection tasks verify the extent of the banks’ commitment to implement the provisions of the aforementioned law and its executive regulations and related decisions, as well as the requirements contained in the instructions issued by it in this regard.

Any of the banks violates these instructions in signing financial sanctions that reach a maximum limit of 500,000 Kuwaiti dinars (about $ 1.6 million), as well as the administrative penalties stipulated in the law, and those applied sanctions are presented at the general assembly meeting of the violating bank.

In light of the foregoing, the (Central) confirms that it exists in the role assigned to it according to the law in full.

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