Kuwait Country Summary

FATF Status

Kuwait is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies.

Latest FATF Statement - 25 February 2015

The FATF welcomes Kuwait’s significant progress in improving its AML/CFT regime and notes that Kuwait has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2012. Kuwait is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. Kuwait will work with MENAFATF as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report, in particular, fully implementing UNSC Resolution 1373.

Compliance with FATF Recommendations

The latest Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Kuwait was undertaken in 2024. According to the follow-up Evaluation, Kuwaitwas deemed Compliant for 9 and Largely Compliant for 20 of the FATF 40 Recommendations. It was deemed Highly effective for 0 and Substantially Effective 0 of the Effectiveness ratings.

Kuwaiti authorities have intensified efforts to combat corruption in response to public dissatisfaction, leading to prosecutions of government officials and the establishment of the Anti-Corruption Authority, Nazaha. Despite these measures, issues such as human trafficking, counterfeit goods, and financial crimes persist, with significant involvement from private sector actors and the elite in illicit activities. Governance challenges, including limited transparency and executive pressure on the justice system, further complicate the fight against corruption and organized crime.

Kuwait's economy is heavily reliant on oil, with the energy sector accounting for over half of its GDP and more than 90% of government revenue. The country holds six percent of the world's proven oil reserves, and despite high oil prices benefiting the economy, there are challenges in diversifying the workforce and private sector growth due to government control and a complicated bureaucracy.

Kuwait's investment climate has seen recent reforms aimed at attracting foreign investment, including the 2023 amendment allowing foreign companies to open branch offices without a local agent. The Kuwait Direct Investment Promotion Authority (KDIPA) offers incentives such as tax benefits and customs duties relief, while emphasizing job creation and technology transfer. However, challenges remain due to a slow bureaucracy, inconsistent legal practices, and government control over key sectors.