Financial Crime World

Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Regime in Kuwait

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General Observations

The AML/CFT framework in Kuwait has several shortcomings, including:

  • Inadequate criminalization of Money Laundering (ML) and Terrorist Financing (TF): The existing laws do not comprehensively cover all serious predicate offenses.
  • Lack of comprehensive preventive measures for Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs): There is a need for more effective customer due diligence requirements, regular monitoring, and reporting obligations.
  • Insufficient powers for supervisors to monitor and ensure AML/CFT compliance: Supervisors require adequate powers to enforce compliance and sufficient sanctioning mechanisms for non-compliance.

Recommendations

Based on the provided information, here are some potential recommendations:

1. Amend the AML Law to Criminalize Terrorist Financing

  • Update the law to include TF as a separate offense.
  • Ensure that it covers all serious predicate offenses.

2. Establish an Independent National Center for Financial Intelligence

  • Set up an independent national center responsible for receiving, analyzing, and disseminating Suspicious Transaction Reports (STRs) and other information regarding potential ML or TF.

3. Improve Preventive Measures for FIs and DNFBPs

  • Enhance customer due diligence requirements.
  • Ensure that all relevant entities are subject to regular monitoring and reporting obligations.

4. Strengthen Supervisory Powers and Sanctioning Mechanisms

  • Provide supervisors with adequate powers to monitor and enforce AML/CFT compliance.
  • Include sufficient sanctioning powers for non-compliance.

5. Enhance Licensing Requirements and Ownership Controls

  • Implement comprehensive licensing requirements for FIs and DNFBPs.
  • Introduce laws or regulations that impose controls on the ownership structure of FIs.

Please note that these recommendations are based on an incomplete analysis and may not be accurate or comprehensive. A complete assessment would require reviewing the entire report.