Financial Crime World

Title: Kuwait’s Anti-Money Laundering Evaluation by FATF in 2023: Preparations and Improvements

Background

  • Kuwait, a significant financial hub in the Middle East, is undergoing an assessment of its Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) measures by the Financial Action Task Force (FATF) in late 2023.
  • The evaluation is crucial for strengthening Kuwait’s financial systems and maintaining its reputation as a reputable business destination.

Challenges Identified in thePrevious Evaluation (2017)

  1. Limited understanding and implementation of customer due diligence measures, such as:

    • Customer identification
    • Verification
    • Ongoing monitoring

  2. Vulnerability to money laundering and terrorist financing risks

  3. Heightened scrutiny from FATF due to the muted response in the 2017 evaluation

Response and Progress

Internal Systems and Controls

  • Kuwaiti institutions are enhancing internal systems and controls
  • New regulations requiring financial institutions to adopt more stringent customer risk assessment and due diligence procedures
    • Modernizing compliance programs with cutting-edge technology

Technological Advancements

  • Kuwait Financial Centre Markaz collaboration with an international AML technology provider
    • Investing in machine learning and artificial intelligence tools
    • Automating risk assessment and monitoring processes for transactions

Regional and International Cooperation

  • Strengthened ties with international organizations
    • Gulf Cooperation Council (GCC)
    • Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG)
  • Enhancing coordination in monitoring cross-border transactions involving potential money laundering or terrorist financing activities

Conclusion

  • The upcoming assessment will determine the progress of Kuwait’s financial sector
  • The efforts demonstrate a significant commitment to combat financial crimes in a global context.