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Sanctions:
November 28, 2011 - The Arab League (comprising 22 Arab
member states), of which this country is a member, has approved
imposing sanctions on Syria. These include: -
* Cutting off transactions with the Syrian central bank
* Halting funding by Arab governments for projects in Syria
* A ban on senior Syrian officials travelling to other Arab countries
* A freeze on assets related to President Bashar al-Assad's
government
The declaration also calls on Arab central banks to monitor
transfers to Syria, with the exception of remittances from Syrians
abroad.
For further information, click here
Occupied Kuwait was subject to UN sanctions from 1992 to 2003
as a result of the Iraq invasion.
The Arab League (comprising 22 Arab member states), of which
this country is a member, has boycotted Israel in a systematic
effort to isolate Israel economically in support of the Palestinians,
however, the implementation of the boycott has varied over time
among member states..
There are three tiers to the boycott. The primary boycott prohibits
the importation of Israeli-origin goods and services into boycotting
countries. The secondary boycott prohibits individuals, as well as
private and public sector firms and organizations, in member
countries from engaging in business with any entity that does
business in Israel. The Arab League maintains a blacklist of such
firms. The tertiary boycott prohibits any
entity in a member country from doing business with a company or
individual that has business dealings with U.S. or other firms on
the Arab League blacklist.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2011
Financial crimes such as money laundering and terrorist financing
are a concern in Kuwait. The Government of Kuwait (GOK) holds
financial crimes public awareness campaigns, including through
annual money laundering training conferences. The Central Bank
of Kuwait (CBK) reported total banking sector assets of $142
billion as of December 2010. Kuwait has 21 banks: six
conventional (commercial) banks, six Islamic banks, eight
branches of foreign banks, and one government-owned bank.
The current AML law does not specifically cite terrorist financing
as a crime, therefore, terrorist financing criminal cases are
handled under ‘crimes against the state’ statutes.
On September 16, 2010, the Minister of Interior decided to
transfer the responsibility for money laundering crimes from the
CID at the Ministry of Interior to Kuwait State Security.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes approach
Legal persons covered: criminally: YES civilly: YES
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
(Please refer to the Department of State’s Country Reports on
Terrorism, which can be found here: http://www.state.
gov/s/ct/rls/crt/)
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Banks, other financial institutions, insurance
agents, insurance brokers and companies; investment
companies; exchange bureaus; jewelry establishments including
gold, metal and other precious commodity traders; real estate
establishments and agents; and auditing firms
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, other financial institutions, insurance
agents, insurance brokers and companies; investment
companies; exchange bureaus; jewelry establishments including
gold, metal and other precious commodity traders; real estate
establishments and agents; and auditing firms
Number of STRs received and time frame: Not available
Number of CTRs received and time frame: Not available
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: 0
Convictions: 0
Assets forfeited: criminally: Not available civilly: Not available
RECORDS EXCHANGE MECHANISM:
With U.S.: NO
With other governments/jurisdictions: YES
Kuwait is a member of the Middle East and North Africa Financial
Action Task Force (MENAFATF), a FATF-style regional body.
Kuwait’s on-site mutual evaluation took place in October 2010,
and is expected to be adopted in mid-2011. Once available, the
report will be found here: http://www.menafatf.org/
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
Kuwait has had difficulty implementing the current anti-money
laundering law due in part to structural inconsistencies within the
law itself. Law No. 35 does not mandate that the FIU act as the
central or sole unit for the receipt, analysis, and dissemination of
STRs. The FIU that is in place operates under the CBK and is not
an independent, autonomous competent authority. Law No. 35
requires banks to file STRs with the Office of Public Prosecution
(OPP), who, in accordance with an MOU with the Central Bank, will
in turn refer the STRs to the CBK’s FIU for analysis. The FIU
conducts analysis and reports any findings to the OPP for the
initiation of a criminal case. There is no clear criteria for a
suspicious transaction thus STRs are interpreted widely. The FIU
analysis is limited due to its inability to effectively analyze STRs
and its inability to share information without prior approval from
the OPP. The vague delineations of the roles and responsibilities
of the FIU, CBK, and OPP continue to hinder the overall
effectiveness of Kuwait’s anti-money laundering regime.
Kuwait’s FIU should be made the national authority for the receipt,
analysis and dissemination of STRs and other reports, and given
true operational independence. Kuwait customs, police and
prosecutors should be made aware of money laundering
methodologies and should initiate inquiries and investigations
without waiting for the filing and dissemination of a STR.
The Ministry of Social Affairs and Labor (MoSAL) monitors and
audits charitable giving in Kuwait. The Ministry of Foreign Affairs
and MoSAL monitor and regulate funds transfers by authorized
charities abroad. MoSAL uses a coupon tracking system as well
as electronic bank transfers which creates a formal paper trail for
all donations. Despite increased regulations, MoSAL reports the
amount of donations continues to rise in Kuwait.
Kuwait’s financial crimes enforcement and investigative capacity is
weak. Provisions of Law No. 35 require travelers to disclose to
customs authorities upon entry if they are carrying any national or
foreign currency, gold bullion, or other precious materials. The
law does not require individuals to file declaration forms when
carrying cash or precious metals when exiting Kuwait. Currency
smuggling into Kuwait is criminalized; however cash reporting
requirements are not uniformly enforced at ports of entry (except
at Kuwait International Airport and the Al-Abdali Border point).
There were no court cases of currency smuggling in 2010. The
last case on record was reportedly in 2008 which has yet to be
prosecuted. Kuwait should take steps to implement and enforce a
uniform cash declaration policy for both inbound and outbound
travelers at all its ports.
In December 2009 the Kuwaiti Government passed a draft
amended anti-money laundering law to parliament intended to
bring Kuwait into compliance with international standards,
including the restructuring of the FIU and inclusion of definitions of
roles and responsibilities. In November 2010, the Kuwaiti
parliament passed the law back to the government with a request
to consider placing provisions for the criminalization of terrorist
financing into a separate law.
Kuwait does not have legislation outlawing the funding of
terrorism, and financial support to terrorist groups, both by
charities and by individuals continues to be a major concern.
Kuwait should criminalize terrorist financing and ratify and
implement fully the United Nations International Convention for the
Suppression of the Financing of Terrorism.
____________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 3)
Kuwait is a destination country for men and women who are
subjected to forced labor and to a lesser degree forced
prostitution. Men and women migrate from India, Egypt,
Bangladesh, Syria, Pakistan, the Philippines, Sri Lanka,
Indonesia, Nepal, Iran, Jordan, Ethiopia, and Iraq to work in
Kuwait, most of them in the domestic service, construction, and
sanitation sectors. Although most of these migrants enter Kuwait
voluntarily, upon arrival some are subjected to conditions of
forced labor by their sponsors and labor agents, including
nonpayment of wages, long working hours without rest,
deprivation of food, threats, physical or sexual abuse, and
restrictions on movement, such as the withholding of passports or
confinement to the workplace. Although Kuwait has a standard
contract for domestic workers delineating their rights, many
workers report work conditions that are substantially different from
those described in the contract; some workers never see the
contract at all. Many of the migrant workers arriving for work in
Kuwait have paid exorbitant fees to recruiters in their home
countries or are coerced into paying recruitment fees in Kuwait
that, by Kuwaiti law, should be paid for by the employer – a
practice that makes workers highly vulnerable to forced labor
once in Kuwait. Due to provisions of Kuwait’s sponsorship law that
restrict workers’ movements and penalize workers for running
away from abusive workplaces, domestic workers are particularly
vulnerable to forced labor inside private homes. In addition, media
sources report that runaway domestic workers fall prey to forced
prostitution by agents who exploit their illegal status.
The Government of Kuwait does not fully comply with the minimum
standards for the elimination of trafficking and is not making
sufficient efforts to do so. The government did not enact its draft
comprehensive anti-trafficking law, though a subcommittee-
approved bill has been on the parliament’s agenda since
November 2009 without being debated. Kuwait’s victim protection
measures remain weak, particularly due to its lack of proactive
victim identification procedure and continued reliance on the
sponsorship system, which causes victims of trafficking to be
punished for immigration violations rather than protected.
However, government officials participated in training on
trafficking issues. The government also did not make significant
progress in fulfilling other commitments made since 2007, such as
enacting the draft domestic workers’ bill to provide domestic
workers with the same rights as other workers or establishing a
large-capacity permanent shelter for victims of trafficking. The
government similarly made only minimal efforts to prevent
trafficking in persons during the reporting period. For these
reasons, Kuwait is placed on Tier 3 for a fifth consecutive year.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: Despite a lack of legal provisions that deal specifically
with terrorism and terrorist financing, the Government of Kuwait
maintained its efforts to counter terrorism, notably in the
prosecutions of terrorists and terrorism facilitators for other
offenses throughout the year.
Legislation and Law Enforcement: The Government of Kuwait
lacks a clear legal framework for prosecuting terrorism-related
crimes, often having to resort to other legal statues to try
suspected terrorists, which hampers enforcement efforts. In
February, Kuwait City's head prosecutor commented in al-Qabas
newspaper that Kuwait needed stronger counterterrorism
legislation and a clearer definition of what constituted a terrorist
act.
On October 28, an appeals court upheld the May 10 acquittal of
eight individuals accused of illegal weapons possession and
planning to perform a hostile act against a foreign government,
stemming from a plot to carry out attacks on U.S. and Kuwaiti
installations at Camp Arifjan in southern Kuwait.
On June 28, a criminal court sentenced 11 defendants to three-
year prison terms for a variety of terrorism-related charges,
including acts of aggression committed in Afghanistan and
possession of weapons training materials. Seven of the convicted
were tried in absentia. The disposition of their cases was not
known at the end of the reporting period.
On April 26, an appeals court overturned the December 2009
conviction of terrorist facilitator Nasser Ali Snaitan al-Otaibi on
charges of collecting funds to commit hostile acts against coalition
forces in Afghanistan, and vacated a seven-year prison sentence.
The Court of Appeals found that the prosecution had not
sufficiently linked funds collected at al-Otaibi's mosque to
financing terrorist activity in Afghanistan.
UNSCR 1267 designee Mubarak al-Bathali was detained and
released twice during the year. According to press reports, Kuwait
State Security detained al-Bathali after he called the Yemeni
Ambassador to Kuwait, offering to mediate between the
Government of Yemen and al-Qa'ida in the Arabian Peninsula
(AQAP). In an alleged recording of the phone call available on
YouTube, al-Bathali threatened that AQAP’s efforts in Yemen
would escalate unless Yemen "stopped following American
orders." Al-Bathali was detained on September 13 because of a
video he posted to YouTube on September 11, threatening to "cut
the neck" of Shia Member of Parliament Hussain al-Qallaf in
response to incendiary comments made by exiled Shia cleric
Yasser al-Habib. Al-Bathali was released four days later after
making a public apology.
Countering Terrorist Finance: The Kuwaiti government lacked
comprehensive legislation that criminalizes terrorist financing.
Draft comprehensive anti-money laundering/counterterrorist
finance (AML/CTF) legislation was first submitted to the National
Assembly in December 2009. Kuwait's parliament rejected the
combined bill in November 2010, sending it back to the Council of
Ministers with a request to separate terrorist finance from the AML
law. By separating terrorist financing from money laundering,
Kuwait made measured progress over the past year on its draft
AML legislation, which remained under consideration by the
Parliament. Despite the lack of adequate legislation, authorities
have continued efforts to combat financial crimes, including
holding an annual AML/CTF conference to educate government
and private sector officials on the issues.
The Ministry of Social Affairs and Labor (MoSAL) and the Ministry
of Foreign Affairs (MFA) continued their monitoring and
supervision of charities, including enforcing the ban on cash
donations except during Ramadan, implementing an enhanced
receipt system for Ramadan cash donations, and coordinating
closely with the Ministry of Islamic Affairs to monitor and prosecute
fraudulent charitable operators. MoSAL reported a continued
decline in the number of violations during its 2010 Ramadan audit
and an increase in donations, despite more stringent collection
regulations. MoSAL added an electronic bank debit option in
2010, allowing charitable funds to move through formal financial
channels that can be more easily tracked. MFA and MoSAL
officials also worked closely with recipient foreign governments,
conducting foreign site visits and audits of selected foreign
projects funded by Kuwaiti charities.
Kuwait is a member of MENAFATF, a Financial Action Task Force-
style regional body. In late 2010, Kuwait had its on-site visit as
part of its mutual evaluation. The report of the evaluation will be
discussed in 2011. Kuwait is also a member of the Gulf
Cooperation Council, which is a member of the Financial Action
Task Force.
Regional and International Cooperation: As in previous years, the
Kuwaiti Armed Forces, National Guard, and Ministry of Interior
conducted a number of exercises aimed at responding to terrorist
attacks, including joint exercises with regional and international
partners.
Countering Radicalization and Violent Extremism: Government
officials routinely made statements denouncing violent extremism.
In his opening remarks to the 31st Gulf Cooperation Council
Summit on December 4, the Amir strongly condemned terrorist
acts, expressing support for regional and international efforts in
the fight against terrorism in all its forms. Kuwaiti television
stations ran advertisements discouraging youth from engaging in
terrorist activity, emphasizing the negative effects that extremism
has on the families and social groups of radicalized youth.
The al-Salam Center, opened by the Government of Kuwait in
2009 – is a treatment facility modeled after the Kingdom of Saudi
Arabia's rehabilitation center – to rehabilitate religious extremists,
including Kuwaitis repatriated from Guantanamo Bay Detention
Center. The facility is located in a secured area within Kuwait's
Central Prison and is governed by a board of government
officials, medical experts, and a religious scholar.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
November 28, 2011 - The Arab League (comprising 22 Arab
member states), of which this country is a member, has approved
imposing sanctions on Syria. These include: -
* Cutting off transactions with the Syrian central bank
* Halting funding by Arab governments for projects in Syria
* A ban on senior Syrian officials travelling to other Arab countries
* A freeze on assets related to President Bashar al-Assad's
government
The declaration also calls on Arab central banks to monitor
transfers to Syria, with the exception of remittances from Syrians
abroad.
For further information, click here
Occupied Kuwait was subject to UN sanctions from 1992 to 2003
as a result of the Iraq invasion.
The Arab League (comprising 22 Arab member states), of which
this country is a member, has boycotted Israel in a systematic
effort to isolate Israel economically in support of the Palestinians,
however, the implementation of the boycott has varied over time
among member states..
There are three tiers to the boycott. The primary boycott prohibits
the importation of Israeli-origin goods and services into boycotting
countries. The secondary boycott prohibits individuals, as well as
private and public sector firms and organizations, in member
countries from engaging in business with any entity that does
business in Israel. The Arab League maintains a blacklist of such
firms. The tertiary boycott prohibits any
entity in a member country from doing business with a company or
individual that has business dealings with U.S. or other firms on
the Arab League blacklist.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2011
Financial crimes such as money laundering and terrorist financing
are a concern in Kuwait. The Government of Kuwait (GOK) holds
financial crimes public awareness campaigns, including through
annual money laundering training conferences. The Central Bank
of Kuwait (CBK) reported total banking sector assets of $142
billion as of December 2010. Kuwait has 21 banks: six
conventional (commercial) banks, six Islamic banks, eight
branches of foreign banks, and one government-owned bank.
The current AML law does not specifically cite terrorist financing
as a crime, therefore, terrorist financing criminal cases are
handled under ‘crimes against the state’ statutes.
On September 16, 2010, the Minister of Interior decided to
transfer the responsibility for money laundering crimes from the
CID at the Ministry of Interior to Kuwait State Security.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes approach
Legal persons covered: criminally: YES civilly: YES
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: YES
(Please refer to the Department of State’s Country Reports on
Terrorism, which can be found here: http://www.state.
gov/s/ct/rls/crt/)
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Banks, other financial institutions, insurance
agents, insurance brokers and companies; investment
companies; exchange bureaus; jewelry establishments including
gold, metal and other precious commodity traders; real estate
establishments and agents; and auditing firms
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, other financial institutions, insurance
agents, insurance brokers and companies; investment
companies; exchange bureaus; jewelry establishments including
gold, metal and other precious commodity traders; real estate
establishments and agents; and auditing firms
Number of STRs received and time frame: Not available
Number of CTRs received and time frame: Not available
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: 0
Convictions: 0
Assets forfeited: criminally: Not available civilly: Not available
RECORDS EXCHANGE MECHANISM:
With U.S.: NO
With other governments/jurisdictions: YES
Kuwait is a member of the Middle East and North Africa Financial
Action Task Force (MENAFATF), a FATF-style regional body.
Kuwait’s on-site mutual evaluation took place in October 2010,
and is expected to be adopted in mid-2011. Once available, the
report will be found here: http://www.menafatf.org/
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
Kuwait has had difficulty implementing the current anti-money
laundering law due in part to structural inconsistencies within the
law itself. Law No. 35 does not mandate that the FIU act as the
central or sole unit for the receipt, analysis, and dissemination of
STRs. The FIU that is in place operates under the CBK and is not
an independent, autonomous competent authority. Law No. 35
requires banks to file STRs with the Office of Public Prosecution
(OPP), who, in accordance with an MOU with the Central Bank, will
in turn refer the STRs to the CBK’s FIU for analysis. The FIU
conducts analysis and reports any findings to the OPP for the
initiation of a criminal case. There is no clear criteria for a
suspicious transaction thus STRs are interpreted widely. The FIU
analysis is limited due to its inability to effectively analyze STRs
and its inability to share information without prior approval from
the OPP. The vague delineations of the roles and responsibilities
of the FIU, CBK, and OPP continue to hinder the overall
effectiveness of Kuwait’s anti-money laundering regime.
Kuwait’s FIU should be made the national authority for the receipt,
analysis and dissemination of STRs and other reports, and given
true operational independence. Kuwait customs, police and
prosecutors should be made aware of money laundering
methodologies and should initiate inquiries and investigations
without waiting for the filing and dissemination of a STR.
The Ministry of Social Affairs and Labor (MoSAL) monitors and
audits charitable giving in Kuwait. The Ministry of Foreign Affairs
and MoSAL monitor and regulate funds transfers by authorized
charities abroad. MoSAL uses a coupon tracking system as well
as electronic bank transfers which creates a formal paper trail for
all donations. Despite increased regulations, MoSAL reports the
amount of donations continues to rise in Kuwait.
Kuwait’s financial crimes enforcement and investigative capacity is
weak. Provisions of Law No. 35 require travelers to disclose to
customs authorities upon entry if they are carrying any national or
foreign currency, gold bullion, or other precious materials. The
law does not require individuals to file declaration forms when
carrying cash or precious metals when exiting Kuwait. Currency
smuggling into Kuwait is criminalized; however cash reporting
requirements are not uniformly enforced at ports of entry (except
at Kuwait International Airport and the Al-Abdali Border point).
There were no court cases of currency smuggling in 2010. The
last case on record was reportedly in 2008 which has yet to be
prosecuted. Kuwait should take steps to implement and enforce a
uniform cash declaration policy for both inbound and outbound
travelers at all its ports.
In December 2009 the Kuwaiti Government passed a draft
amended anti-money laundering law to parliament intended to
bring Kuwait into compliance with international standards,
including the restructuring of the FIU and inclusion of definitions of
roles and responsibilities. In November 2010, the Kuwaiti
parliament passed the law back to the government with a request
to consider placing provisions for the criminalization of terrorist
financing into a separate law.
Kuwait does not have legislation outlawing the funding of
terrorism, and financial support to terrorist groups, both by
charities and by individuals continues to be a major concern.
Kuwait should criminalize terrorist financing and ratify and
implement fully the United Nations International Convention for the
Suppression of the Financing of Terrorism.
____________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 3)
Kuwait is a destination country for men and women who are
subjected to forced labor and to a lesser degree forced
prostitution. Men and women migrate from India, Egypt,
Bangladesh, Syria, Pakistan, the Philippines, Sri Lanka,
Indonesia, Nepal, Iran, Jordan, Ethiopia, and Iraq to work in
Kuwait, most of them in the domestic service, construction, and
sanitation sectors. Although most of these migrants enter Kuwait
voluntarily, upon arrival some are subjected to conditions of
forced labor by their sponsors and labor agents, including
nonpayment of wages, long working hours without rest,
deprivation of food, threats, physical or sexual abuse, and
restrictions on movement, such as the withholding of passports or
confinement to the workplace. Although Kuwait has a standard
contract for domestic workers delineating their rights, many
workers report work conditions that are substantially different from
those described in the contract; some workers never see the
contract at all. Many of the migrant workers arriving for work in
Kuwait have paid exorbitant fees to recruiters in their home
countries or are coerced into paying recruitment fees in Kuwait
that, by Kuwaiti law, should be paid for by the employer – a
practice that makes workers highly vulnerable to forced labor
once in Kuwait. Due to provisions of Kuwait’s sponsorship law that
restrict workers’ movements and penalize workers for running
away from abusive workplaces, domestic workers are particularly
vulnerable to forced labor inside private homes. In addition, media
sources report that runaway domestic workers fall prey to forced
prostitution by agents who exploit their illegal status.
The Government of Kuwait does not fully comply with the minimum
standards for the elimination of trafficking and is not making
sufficient efforts to do so. The government did not enact its draft
comprehensive anti-trafficking law, though a subcommittee-
approved bill has been on the parliament’s agenda since
November 2009 without being debated. Kuwait’s victim protection
measures remain weak, particularly due to its lack of proactive
victim identification procedure and continued reliance on the
sponsorship system, which causes victims of trafficking to be
punished for immigration violations rather than protected.
However, government officials participated in training on
trafficking issues. The government also did not make significant
progress in fulfilling other commitments made since 2007, such as
enacting the draft domestic workers’ bill to provide domestic
workers with the same rights as other workers or establishing a
large-capacity permanent shelter for victims of trafficking. The
government similarly made only minimal efforts to prevent
trafficking in persons during the reporting period. For these
reasons, Kuwait is placed on Tier 3 for a fifth consecutive year.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: Despite a lack of legal provisions that deal specifically
with terrorism and terrorist financing, the Government of Kuwait
maintained its efforts to counter terrorism, notably in the
prosecutions of terrorists and terrorism facilitators for other
offenses throughout the year.
Legislation and Law Enforcement: The Government of Kuwait
lacks a clear legal framework for prosecuting terrorism-related
crimes, often having to resort to other legal statues to try
suspected terrorists, which hampers enforcement efforts. In
February, Kuwait City's head prosecutor commented in al-Qabas
newspaper that Kuwait needed stronger counterterrorism
legislation and a clearer definition of what constituted a terrorist
act.
On October 28, an appeals court upheld the May 10 acquittal of
eight individuals accused of illegal weapons possession and
planning to perform a hostile act against a foreign government,
stemming from a plot to carry out attacks on U.S. and Kuwaiti
installations at Camp Arifjan in southern Kuwait.
On June 28, a criminal court sentenced 11 defendants to three-
year prison terms for a variety of terrorism-related charges,
including acts of aggression committed in Afghanistan and
possession of weapons training materials. Seven of the convicted
were tried in absentia. The disposition of their cases was not
known at the end of the reporting period.
On April 26, an appeals court overturned the December 2009
conviction of terrorist facilitator Nasser Ali Snaitan al-Otaibi on
charges of collecting funds to commit hostile acts against coalition
forces in Afghanistan, and vacated a seven-year prison sentence.
The Court of Appeals found that the prosecution had not
sufficiently linked funds collected at al-Otaibi's mosque to
financing terrorist activity in Afghanistan.
UNSCR 1267 designee Mubarak al-Bathali was detained and
released twice during the year. According to press reports, Kuwait
State Security detained al-Bathali after he called the Yemeni
Ambassador to Kuwait, offering to mediate between the
Government of Yemen and al-Qa'ida in the Arabian Peninsula
(AQAP). In an alleged recording of the phone call available on
YouTube, al-Bathali threatened that AQAP’s efforts in Yemen
would escalate unless Yemen "stopped following American
orders." Al-Bathali was detained on September 13 because of a
video he posted to YouTube on September 11, threatening to "cut
the neck" of Shia Member of Parliament Hussain al-Qallaf in
response to incendiary comments made by exiled Shia cleric
Yasser al-Habib. Al-Bathali was released four days later after
making a public apology.
Countering Terrorist Finance: The Kuwaiti government lacked
comprehensive legislation that criminalizes terrorist financing.
Draft comprehensive anti-money laundering/counterterrorist
finance (AML/CTF) legislation was first submitted to the National
Assembly in December 2009. Kuwait's parliament rejected the
combined bill in November 2010, sending it back to the Council of
Ministers with a request to separate terrorist finance from the AML
law. By separating terrorist financing from money laundering,
Kuwait made measured progress over the past year on its draft
AML legislation, which remained under consideration by the
Parliament. Despite the lack of adequate legislation, authorities
have continued efforts to combat financial crimes, including
holding an annual AML/CTF conference to educate government
and private sector officials on the issues.
The Ministry of Social Affairs and Labor (MoSAL) and the Ministry
of Foreign Affairs (MFA) continued their monitoring and
supervision of charities, including enforcing the ban on cash
donations except during Ramadan, implementing an enhanced
receipt system for Ramadan cash donations, and coordinating
closely with the Ministry of Islamic Affairs to monitor and prosecute
fraudulent charitable operators. MoSAL reported a continued
decline in the number of violations during its 2010 Ramadan audit
and an increase in donations, despite more stringent collection
regulations. MoSAL added an electronic bank debit option in
2010, allowing charitable funds to move through formal financial
channels that can be more easily tracked. MFA and MoSAL
officials also worked closely with recipient foreign governments,
conducting foreign site visits and audits of selected foreign
projects funded by Kuwaiti charities.
Kuwait is a member of MENAFATF, a Financial Action Task Force-
style regional body. In late 2010, Kuwait had its on-site visit as
part of its mutual evaluation. The report of the evaluation will be
discussed in 2011. Kuwait is also a member of the Gulf
Cooperation Council, which is a member of the Financial Action
Task Force.
Regional and International Cooperation: As in previous years, the
Kuwaiti Armed Forces, National Guard, and Ministry of Interior
conducted a number of exercises aimed at responding to terrorist
attacks, including joint exercises with regional and international
partners.
Countering Radicalization and Violent Extremism: Government
officials routinely made statements denouncing violent extremism.
In his opening remarks to the 31st Gulf Cooperation Council
Summit on December 4, the Amir strongly condemned terrorist
acts, expressing support for regional and international efforts in
the fight against terrorism in all its forms. Kuwaiti television
stations ran advertisements discouraging youth from engaging in
terrorist activity, emphasizing the negative effects that extremism
has on the families and social groups of radicalized youth.
The al-Salam Center, opened by the Government of Kuwait in
2009 – is a treatment facility modeled after the Kingdom of Saudi
Arabia's rehabilitation center – to rehabilitate religious extremists,
including Kuwaitis repatriated from Guantanamo Bay Detention
Center. The facility is located in a secured area within Kuwait's
Central Prison and is governed by a board of government
officials, medical experts, and a religious scholar.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
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| KUWAIT |
| KnowYourCountry |
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*Please note that FATF deems that a country has significant aml
deficiencies if any of the 'Core' Recommendations, R1, R5, R10, R13,
SRII, or SRIV are rated either Partially of Non-Compliant. These are
marked in red.
For FATF to remove a country from the regular follow-up process, it
has to be rated Compliant or Largely Compliant in the above
mentioned Core Recommendations and the following Key
Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into
consideration all follow-up reports.
Click here to view full report
deficiencies if any of the 'Core' Recommendations, R1, R5, R10, R13,
SRII, or SRIV are rated either Partially of Non-Compliant. These are
marked in red.
For FATF to remove a country from the regular follow-up process, it
has to be rated Compliant or Largely Compliant in the above
mentioned Core Recommendations and the following Key
Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into
consideration all follow-up reports.
Click here to view full report
________________________________________________________
Executive Summary extracted from IMF Report - Kuwait:
Detailed Assessment Report on Anti-Money Laundering and
Combating the Financing of Terrorism (September 2011)
1. The anti-money laundering law (the AML Law), containing the
core elements of the AML regime, was introduced in 2002. It imposes
customer due diligence (CDD) obligations on a range of
financial institutions (FIs), and requires these FIs to submit suspicious
transaction reports (STRs) to the Public Prosecutor’s Office (PPO).
However, the AML Law did not criminalize the financing of terrorism
(FT) and did not put in place a mechanism to implement the United
Nations Security Council Resolutions (UNSCRs). Kuwait has initiated a
relatively small number of prosecutions for money laundering (ML) and
of orders to confiscate assets. The AML Law was never amended;
however, a new draft law was sent before the National Assembly in
2007.
2. Several indicators suggest that ML and FT operations do not
pose a serious threat to the Kuwaiti economy. Although there is
currently no evidence of significant ML in the country, Kuwait’s
financial sector is growing rapidly in terms of banking sector assets.
This development has the potential of creating a suitable environment
for money launderers and terrorist financers to exploit. No major
terrorist activity has been recorded in the country. Less serious
terrorist activity has been noted.
3. The AML/CFT framework has many shortcomings. The main
deficiencies of the regime are:
The ML criminalization does not cover all serious predicate
offenses, and TF is not criminalized;
The preventive measures for FIs and designated non-financial
businesses and professions (DNFBPs) are not comprehensive;
The Kuwait financial intelligence unit (KFIU) is not established as an
independent national center
responsible for the receipt, analysis, and dissemination of STRs and
other information regarding
potential ML or FT.
Some supervisors are not provided with adequate powers to monitor
and ensure AML/CFT compliance by FIs and DNFBPs, and do not have
sufficient sanctioning powers;
The licensing requirements for FIs are not comprehensive. In
addition, there are no laws or regulations that impose controls on the
ownership structure of FIs. Supervisors only apply fit and proper
requirements on directors and senior management of banks; there are
no such requirements on other FIs; and
Statistics are not collected and guidance and feedback are not
adequately provided to FIs and DNFBPs.
Legal Systems and Related Institutional Measures
4. ML is criminalized under the AML Law. This law was
complemented by Resolution 9 of 2005 which contains detailed
regulations relating to its implementation. The ML offense is in line with
the material elements of the Vienna and Palermo Conventions.
5. The offense of ML extends to any type of property, regardless
of its value, that directly or indirectly represents the proceeds of crime.
Kuwaiti criminal legislation does not require that a person be convicted
of a predicate offense to establish the illicit origin of proceeds.
However, the authorities acknowledged that, in practice, a prior
conviction for the predicate crime is used as a basis for bringing
charges for ML. In the absence of a conviction for the predicate
offense, prosecutors would sometimes be hesitant to bring charges for
a stand-alone ML offense.
6. The list of predicate offenses for ML covers most of the
designated categories of offenses listed in the FATF Glossary to the
40 Recommendations. However, the smuggling of migrants and
terrorism financing are not covered.
7. Self-laundering is criminalized in Kuwait. Article 2 of the AML
Law is indeed broad enough to allow for the prosecution of both the
predicate offense and the subsequent laundering of the proceeds of
the predicate offense.
8. The AML Law explicitly provides for the possibility of both
personal and corporate ML liability. However, the notion of “company”
contained in Article 12 of the AML Law does not include, for
instance, public stockholding companies or non-profit organizations
(NPOs) as required by the FATF standard, but only companies
licensed by the Ministry of Commerce and Industry (MOCI). As a result,
the PPO could not, for instance, charge an NPO for ML, but only the
individual persons acting as managers or administrators of that NPO.
This limits the scope of application of this provision.
9. TF is not criminalized in Kuwait. Kuwait is, however, a party to
all the conventions listed in the Annex to the International Convention
for the Suppression of the Financing of Terrorism (TF Convention).
All the offenses contained in the Annex to this convention are,
therefore, criminalized under Kuwaiti criminal law.
10. Kuwait has a comprehensive confiscation, freezing and seizing
framework. It applies to all offenses under Kuwaiti criminal legislation,
including felonies and misdemeanours, and covers all predicate
offenses for ML, as well as the ML offenses (as defined in the AML
Law). However, there is no provision in Kuwaiti law allowing for the
confiscation of property of corresponding value.
11. There is no law in Kuwait that provides for the freezing of
terrorist assets in the context of UNSCRs 1267 and 1373, and their
respective successor Resolutions. There is a process in place, which
is not formally articulated in any legal text, to communicate freezing
orders under UNSCRs 1267 and 1373. The Ministry of Foreign Affairs
(MFA) is entrusted with the task of receiving notifications under
UNSCRs 1267 and 1373, and of transmitting those to the relevant
agencies within Kuwait. There is no legal provision, however,
specifically entrusting the MFA with this role.
12. The KFIU does not have the legal and operational
independence to carry out its functions effectively. According to the
AML Law, the PPO is the sole body authorized to receive STRs. In
2003, a Ministerial Decree gave the Governor of the Central Bank of
Kuwait (CBK) the authority to establish the KFIU in the CBK. The
powers of the KFIU to collect information and analyze STRs are
derived solely from the powers extended to it from the PPO via “report-
by-report” memoranda. The on-site supervision department of the CBK
has assumed the duties of the KFIU Secretariat and, thus, provides
day-to-day support for the KFIU. The KFIU is not efficient in its
operation due to the central role of the PPO in receiving the STRs
directly from the FIs and in granting the KFIU specific powers to review
each STR.
13. Criminal financial investigations are directed and authorized by
the PPO and are carried out by a specialized division at the Ministry of
Interior (MOI), the general Directorate for Criminal Investigations (CID)
for ML cases and the State Security Bureau (SSB) for TF cases. It
appears that the CID concentrates its investigations solely on the
predicate crime and does not follow the proceeds and examine
potential ML activity. Furthermore, all the AML investigations
conducted by the CID were initiated based upon the request of the
PPO upon receiving STRs from the KFIU. Even though the SSB is
investigating TF cases as crimes against the State, in the absence of
an autonomous TF offense, there have been no convictions. Finally,
law enforcement and prosecution personnel would benefit from more
frequent and in-depth training.
14. Kuwait introduced a cross-border cash control regime in Article
4 of the AML Law that requires travellers coming into Kuwait, through
any port of entry, to report all currency and precious materials above
the value of KD 3,000 (around US$10,900). Implementation of the
reporting requirement began in February 2007. However, the AML Law
covers only inbound movements of currency and monetary
instruments, severely limiting the usefulness of this provision.
Click here to view full report
Executive Summary extracted from IMF Report - Kuwait:
Detailed Assessment Report on Anti-Money Laundering and
Combating the Financing of Terrorism (September 2011)
1. The anti-money laundering law (the AML Law), containing the
core elements of the AML regime, was introduced in 2002. It imposes
customer due diligence (CDD) obligations on a range of
financial institutions (FIs), and requires these FIs to submit suspicious
transaction reports (STRs) to the Public Prosecutor’s Office (PPO).
However, the AML Law did not criminalize the financing of terrorism
(FT) and did not put in place a mechanism to implement the United
Nations Security Council Resolutions (UNSCRs). Kuwait has initiated a
relatively small number of prosecutions for money laundering (ML) and
of orders to confiscate assets. The AML Law was never amended;
however, a new draft law was sent before the National Assembly in
2007.
2. Several indicators suggest that ML and FT operations do not
pose a serious threat to the Kuwaiti economy. Although there is
currently no evidence of significant ML in the country, Kuwait’s
financial sector is growing rapidly in terms of banking sector assets.
This development has the potential of creating a suitable environment
for money launderers and terrorist financers to exploit. No major
terrorist activity has been recorded in the country. Less serious
terrorist activity has been noted.
3. The AML/CFT framework has many shortcomings. The main
deficiencies of the regime are:
The ML criminalization does not cover all serious predicate
offenses, and TF is not criminalized;
The preventive measures for FIs and designated non-financial
businesses and professions (DNFBPs) are not comprehensive;
The Kuwait financial intelligence unit (KFIU) is not established as an
independent national center
responsible for the receipt, analysis, and dissemination of STRs and
other information regarding
potential ML or FT.
Some supervisors are not provided with adequate powers to monitor
and ensure AML/CFT compliance by FIs and DNFBPs, and do not have
sufficient sanctioning powers;
The licensing requirements for FIs are not comprehensive. In
addition, there are no laws or regulations that impose controls on the
ownership structure of FIs. Supervisors only apply fit and proper
requirements on directors and senior management of banks; there are
no such requirements on other FIs; and
Statistics are not collected and guidance and feedback are not
adequately provided to FIs and DNFBPs.
Legal Systems and Related Institutional Measures
4. ML is criminalized under the AML Law. This law was
complemented by Resolution 9 of 2005 which contains detailed
regulations relating to its implementation. The ML offense is in line with
the material elements of the Vienna and Palermo Conventions.
5. The offense of ML extends to any type of property, regardless
of its value, that directly or indirectly represents the proceeds of crime.
Kuwaiti criminal legislation does not require that a person be convicted
of a predicate offense to establish the illicit origin of proceeds.
However, the authorities acknowledged that, in practice, a prior
conviction for the predicate crime is used as a basis for bringing
charges for ML. In the absence of a conviction for the predicate
offense, prosecutors would sometimes be hesitant to bring charges for
a stand-alone ML offense.
6. The list of predicate offenses for ML covers most of the
designated categories of offenses listed in the FATF Glossary to the
40 Recommendations. However, the smuggling of migrants and
terrorism financing are not covered.
7. Self-laundering is criminalized in Kuwait. Article 2 of the AML
Law is indeed broad enough to allow for the prosecution of both the
predicate offense and the subsequent laundering of the proceeds of
the predicate offense.
8. The AML Law explicitly provides for the possibility of both
personal and corporate ML liability. However, the notion of “company”
contained in Article 12 of the AML Law does not include, for
instance, public stockholding companies or non-profit organizations
(NPOs) as required by the FATF standard, but only companies
licensed by the Ministry of Commerce and Industry (MOCI). As a result,
the PPO could not, for instance, charge an NPO for ML, but only the
individual persons acting as managers or administrators of that NPO.
This limits the scope of application of this provision.
9. TF is not criminalized in Kuwait. Kuwait is, however, a party to
all the conventions listed in the Annex to the International Convention
for the Suppression of the Financing of Terrorism (TF Convention).
All the offenses contained in the Annex to this convention are,
therefore, criminalized under Kuwaiti criminal law.
10. Kuwait has a comprehensive confiscation, freezing and seizing
framework. It applies to all offenses under Kuwaiti criminal legislation,
including felonies and misdemeanours, and covers all predicate
offenses for ML, as well as the ML offenses (as defined in the AML
Law). However, there is no provision in Kuwaiti law allowing for the
confiscation of property of corresponding value.
11. There is no law in Kuwait that provides for the freezing of
terrorist assets in the context of UNSCRs 1267 and 1373, and their
respective successor Resolutions. There is a process in place, which
is not formally articulated in any legal text, to communicate freezing
orders under UNSCRs 1267 and 1373. The Ministry of Foreign Affairs
(MFA) is entrusted with the task of receiving notifications under
UNSCRs 1267 and 1373, and of transmitting those to the relevant
agencies within Kuwait. There is no legal provision, however,
specifically entrusting the MFA with this role.
12. The KFIU does not have the legal and operational
independence to carry out its functions effectively. According to the
AML Law, the PPO is the sole body authorized to receive STRs. In
2003, a Ministerial Decree gave the Governor of the Central Bank of
Kuwait (CBK) the authority to establish the KFIU in the CBK. The
powers of the KFIU to collect information and analyze STRs are
derived solely from the powers extended to it from the PPO via “report-
by-report” memoranda. The on-site supervision department of the CBK
has assumed the duties of the KFIU Secretariat and, thus, provides
day-to-day support for the KFIU. The KFIU is not efficient in its
operation due to the central role of the PPO in receiving the STRs
directly from the FIs and in granting the KFIU specific powers to review
each STR.
13. Criminal financial investigations are directed and authorized by
the PPO and are carried out by a specialized division at the Ministry of
Interior (MOI), the general Directorate for Criminal Investigations (CID)
for ML cases and the State Security Bureau (SSB) for TF cases. It
appears that the CID concentrates its investigations solely on the
predicate crime and does not follow the proceeds and examine
potential ML activity. Furthermore, all the AML investigations
conducted by the CID were initiated based upon the request of the
PPO upon receiving STRs from the KFIU. Even though the SSB is
investigating TF cases as crimes against the State, in the absence of
an autonomous TF offense, there have been no convictions. Finally,
law enforcement and prosecution personnel would benefit from more
frequent and in-depth training.
14. Kuwait introduced a cross-border cash control regime in Article
4 of the AML Law that requires travellers coming into Kuwait, through
any port of entry, to report all currency and precious materials above
the value of KD 3,000 (around US$10,900). Implementation of the
reporting requirement began in February 2007. However, the AML Law
covers only inbound movements of currency and monetary
instruments, severely limiting the usefulness of this provision.
Click here to view full report
|
| Last Updated: 16 April 2012 |