Financial Crime World

Title: Kuwait’s Anti-Money Laundering Regulations: A MENAFATF Evaluation

Introduction

The Middle East & North Africa Financial Action Task Force (MENAFATF) completed an evaluation of Kuwait’s Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulatory framework in 2011. This article discusses the key findings of the evaluation report and the deficiencies identified in Kuwait’s AML/CFT regime.

Background

  • Kuwait is a member of both MENAFATF and the Gulf Cooperation Council (GCC)
  • Introduced its AML law in 2002
  • Growing financial sector raised concerns about money laundering and terrorist financing

Key Findings

  • No evidence of significant money laundering or terrorist financing in Kuwait
  • Several deficiencies in Kuwait’s AML/CFT regime

Main Deficiencies

Criminalization of Predicate Offenses and Terrorism Financing

  • Lack of adequate criminalization of predicate offenses
  • Insufficient measures against terrorism financing

Preventive Measures for Financial Institutions and DNFBPs

  • Inadequate measures for financial institutions
  • Absence of regulations for designated non-financial businesses and professions (DNFBPs)

Absence of an Independent Kuwait Financial Intelligence Unit (KFIU)

  • KFIU is not established as an independent national center
  • Lack of necessary powers for some supervisors

Conclusion

  • Lack of a comprehensive regulatory framework and resources
  • Importance of addressing politically-exposed persons (PEPs)
  • Kuwait authorities have committed to addressing these issues

Significant Improvements Needed

  • Effective implementation and compliance with international standards on anti-money laundering and countering the financing of terrorism
  • Strengthen the AML/CFT regulatory framework

References