Financial Crime World

Financial Crime Prevention Measures in Kuwait Take a New Stance

Strengthening Anti-Financial Crime Laws

In an effort to combat the growing threat of money laundering and terrorism financing, Kuwait has taken significant steps towards strengthening its anti-financial crime laws. The introduction of Law No. 106 of 2013 Regarding the Combating of Money Laundering and Financing of Terrorism marks a major shift in the country’s approach to addressing these issues.

Key Provisions of the New Law

The new law supersedes the previous legislation and establishes new governing principles and standards aimed at protecting local financial institutions from being used for illicit activities. The key provisions of the new law include:

  • Criminalizing Terrorist Financing: Article 3 states that anyone who has directly or indirectly, willingly and illicitly, collected funds with the intention to use these funds for committing a terrorist act is liable.
  • Empowering Financial Institutions: The public prosecutor or his authorized public lawyers can freeze or confiscate funds or instruments if sufficient evidence exists to suggest they were obtained or used with regards money laundering or terrorism financing.
  • New Customer Due Diligence Measures: Article 5 details specific requirements for banks and financial institutions in Kuwait.

Creation of a Fully Independent Financial Intelligence Unit (FIU)

The creation of a fully independent FIU is another significant development. The FIU will serve as the main investigative body responsible for receiving, applying for, analyzing and transferring information related to suspected money laundering or terrorist financing activities.

Sanctions and Penalties

With new laws come new sanctions and penalties, something the New Law has covered quite thoroughly. Article 28 refers to the punishment for a breach of Article 2, providing for a prison sentence not exceeding ten years and a financial penalty not exceeding the funds laundered in breach of Article 2. The punishment for breach of Article 3 (financing of terrorism) is not dissimilar and is provided for by Article 29.

Kuwait’s Commitment to Combating Financial Crime

The Kuwaiti Government’s commitment to combating money laundering and terrorism financing is evident in its efforts to address these issues through new laws and regulations. While the effectiveness of the new law can only be evaluated over time, it is clear that the country is taking a proactive approach to addressing financial crime.