Hike in money-laundering, terror financing during COVID-19 period

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FIU received 2,413 notifications

KUWAIT CITY, Feb 5: According to the latest report issued by the Financial Investigation Unit (FIU), the number of notifications received by Kuwait regarding suspicions of money laundering and terrorism financing had doubled during the COVID-19 period, reaching about 2,413 notifications during the 2020/2021 year, which is an increase of 128 percent, including an additional 1,354 notifications, compared to about 1,059 notification during the previous year, reports Al-Anba daily. The highest percentage of notifications of money laundering and terrorism financing came from banks, which accounted for 67 percent of the total notifications during the year, with 1,623 notifications. This is an increase of 128 percent, with 910 notifications, compared to the previous year, in which bank notifications amounted to 713 notifications.

The money exchange companies sector came second with the highest number of notifications, as it was served with 776 notifications. In third place is investment companies with 14 notifications. While the unit’s report showed that it had received 2,413 notifications during the year, a classified and a preliminary study was prepared in this regard. The number of communications to the Public Prosecution Office and referrals to the competent authorities reached about 102 notifications and referrals, which is an increase of 16 percent and includes 14 new referrals, compared to about 88 referrals during the previous year.

The report or referral issued by the unit usually includes more than one suspicion report, not to mention that a single suspicion report usually includes more than one notification. The Financial Investigation Unit requested information, data and documents about 198 times from five governments, and it notified agencies to provide more of the information it receives from those authorities in order to reach a decision, considering the information received as reasonable evidence of suspicion.

Requests

The entities that received most requests from the unit to provide information was the Ministry of Interior, which received 73 requests in 2018, the Ministry of Commerce and Industry, which was requested 46 times to provide information, the Ministry of Justice, which received 42 requests to provide information, the General Administration of Customs, which was requested to provide information 22 times, and then the Kuwait Clearing Company, from which information was requested 13 times. Kuwait requested information from counterpart financial investigation units in other countries 53 times during the year (incoming information).

The unit coordinates with local authorities concerned with money laundering and terrorism financing to request information from counterpart units according to the Kuwaiti unit’s relationship with its counterparts through its membership in the Egmont Group. Egmont Group of Financial Intelligence Units is an international organization that facilitates cooperation and intelligence sharing between national financial intelligence units to investigate and prevent money laundering and terrorism financing. In accordance with the standards for the exchange and use of information, the number of information requests received from counterpart units is divided into two types.

The first is the number of information requests, which amounted to 42 requests, and then the number of information availability which reached 11. Information was requested from Kuwait 12 times during the same year. The Financial Investigation Unit’s data revealed that the total number of referrals to the Public Prosecution and the authorities concerned with money laundering suspicions during the last three years was about 322 referrals, including 132 referrals in the 2018/2019 fiscal year and 88 referrals during 2019/2020 fiscal year, in addition to the last 102 referrals in 2020/2021 fiscal year.

The latest report of the Financial Investigation Unit showed that financial brokerage firms, dealers in precious metals and precious stones, and real estate agents did not submit any notifications of money laundering suspicions during the reporting period, and that the notifications came from only three parties, namely banks, exchange companies, and investment companies. The figures revealed that the Financial Investigation Unit received from April 2018 until the end of March 2021, that is within 3 years, about 5,159 notifications of money laundering and terrorism financing suspicions, 65 percent of which came from banks at a rate of 3,332 notifications, including 996 notifications in 2018/2019 fiscal year, 713 notifications in 2019/2020 fiscal year, and 1,623 notifications in 2020/2021 fiscal year.

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