Kuwait’s Central Bank has intensified supervision of exchange companies to ensure strict adherence to anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. The regulatory measures focus on verifying the actual beneficiary of financial transactions, even for small amounts under 50 dinars, and preventing transfers executed by representatives on behalf of others.
Key Regulatory Measures
- Strict Monitoring of Transactions: Authorities will scrutinize periodic transfers, especially those of the same value, to confirm the legitimacy of the sender-receiver relationship.
- Retention of Transaction Records: Exchange companies must store transaction documents for at least five years, ensuring full traceability.
- Enhanced Customer Due Diligence (CDD): Institutions must verify customer identities, assess associated risk levels, and keep records updated throughout the transaction period.
- Automated Name Verification: Financial institutions must use automated systems to cross-check sanctioned individuals and entities against international and local watchlists.
- Mandatory External Audits: Exchange companies must engage internationally affiliated audit firms to review compliance with Law 106 of 2013 every six months.
Crackdown on Unverified Transfers
Individuals accustomed to sending money on behalf of friends, family, or employees must be prepared for increased scrutiny. Transactions lacking a clear economic purpose or conducted on behalf of others may be denied or flagged for investigation.
Additionally, financial transfers equal to or exceeding 3,000 dinars in a single day will be closely monitored, and exchange companies must ensure effective reporting of suspicious activities to prevent potential financial crimes.
These regulatory enhancements align with Financial Action Task Force (FATF) recommendations and reinforce Kuwait’s commitment to combating money laundering and terrorist financing.
