Kuwait: MoUs on Money Laundering Signed

Kuwait Times, 20 July 2025: The Kuwait Interior Ministry Department for combatting money laundering and terrorist financing and the customs office have signed a memorandum of understanding to enhance cooperation on the fight against financial crimes.

The two departments will increase mutual operation and sharing of information in line with international standards set by the UN Financial Action Task Force (FATF). The MOU also aims to intensify regulatory procedures to support the national system for reducing financial crime. In addition, the Kuwait Capital Markets Authority (CMA) and the Financial Intelligence Unit (FIU) have also signed a separate MOU on cooperation and information exchange on money laundering. This will impact the scope of information the FIU and CMA can provide to each other.

Amendments to Kuwait Law No. 106/2013 (the money laundering law) in June 2025 now allow the Kuwaiti Cabinet to issue decisions to implement resolutions passed by the UN Security Council on financing terrorism and freezing assets, and to impose hefty fines on violators. In a report in June 2025, FATF had stated gaps in the legal system in Kuwait did make it difficult to free assets in these situations.

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Kuwait: Launches New Phase of Capital Market Reforms

Kuwait Times, 12 July 2025: Kuwait’s Capital Markets Authority (CMA) has implemented the second part of phase three of its Capital Market System Development Program, introducing significant changes to the country’s financial infrastructure.

Under Kuwait Decision No. 101/2025, Kuwait Clearing Company has become the country’s first licensed central broker, marking a key milestone in implementing Kuwait Law No. 7/2010.

Ten brokerage firms have been upgraded to “Qualified Broker” status, expanding their capacity to offer financial services. The CMA has also developed and tested new technical systems for bonds, sukuk, and ETF indices trading.

The reforms include the introduction of sub-account numbers within consolidated accounts for both investment and electronic portfolios, enhancing market supervision capabilities at Boursa Kuwait.

The authority has completed preparations for cash settlements through the Central Bank of Kuwait system and settlement banks, while establishing a financial collateral chain.

These changes follow Kuwait Decision No. 101/2025, which required the CMA to issue new licenses and implement regulatory adjustments. Draft amendments to the executive regulations of Kuwait Law No. 7/2010 have been prepared to accommodate new financial products in the market.

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Kuwait: Systematic Risk Assessments for Money Laundering in Financial Institutions

Al Rai Media, 7 July 2025: The Kuwaiti regulatory authorities, represented by the Central Bank of Kuwait, the Capital Markets Authority, and the Insurance Regulatory Unit, have developed guidelines for assessing business risks.

Issued as a directive, it requires all supervised financial and banking institutions to systematically evaluate risks related to money laundering, terrorist financing, and the proliferation of weapons of mass destruction based on their activities, customer base, monitoring services, and geographic exposure.

The guideline is divided into eight key sections, obliging institutions to periodically assess business risks and initiate immediate reviews in response to significant developments. The aim is to empower institutions to make informed decisions regarding risk acceptance and adopt proactive measures to prevent financial crimes.

Affected parties, primarily financial and banking institutions, must regularly follow a systematic risk assessment process. This includes the evaluation of inherent business risks, categorising them into various levels such as high, medium-high, or medium-low, and developing strategies for resource allocation and risk mitigation which are aligned with guidelines from the Financial Action Task Force (FATF).

The guideline suggests effective customer due diligence measures, record retention practices to meet regulatory obligations, and internal risk management controls. Institutions must set policies on client acceptance, conduct risk evaluations, operate compliance frameworks, independently test controls, monitor transactions, and deploy stringent staff training programs.

Key risk categories identified include structural risks arising from ownership and governance complexity, customer risks related to client types and transaction patterns, product and service transaction risks, service delivery channel risks, geographical risks, and technology-related risks.

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Kuwait: Executive Regulations for Multinational Entity Tax

Mubasher, 29 June 2025: The Kuwaiti Ministry of Finance has issued Kuwait Ministerial Decree No. 55/2025 on the implementing of Kuwait Decree-Law No. 157/2024, on the tax of Multinational Entities (MNEs).

This covers the introduction of a Domestic Minimum Top-up Tax (DMTT), and aligns with OECD requirements under the Global Minimum Tax Pillar Two project. The new regulations clarify the provisions of the law, outlining procedures and mechanisms for implementation.

Preliminary estimates suggested the tax could generate annual revenues of approximately 250 million Kuwaiti dinars.

The Ministry plans to conduct several educational workshops to explain the details of the executive regulations, with dates to be announced in due course.

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Kuwait: Central Bank Enhances Oversight on E-Payment Providers

Arab Times, 16 June 2025: The Central Bank of Kuwait (CBK) issued a comprehensive directive, tightening rules for electronic payment service providers to strengthen oversight and governance within the digital payments sector.

The regulatory circular, referring specifically to the existing framework supported by Article 85 of Kuwait Law No. 32/1968, aimed to increase operational oversight and enhance risk management for electronic payment service providers, electronic money institutions, and payment system operators in Kuwait.

The impacted parties include all entities involved in the provision of electronic payment services in Kuwait. Providers must ensure the accuracy and validity of documentation processed via the Electronic Payment Services Gateway System, with violations potentially incurring penalties under the law. Legal representatives or officially authorised personnel must manage submissions, with the CBK pre-emptively informed of any changes or authorisations.

Key legal requirements of the CBK’s Electronic Payment Business Regulations include adopting strict governance policies and enhanced oversight mechanisms. Providers must comply with Anti-Money Laundering and Counter-Terrorist Financing measures. Firms must inform the CBK of authorised user resignations and conduct annual reviews to ensure board members meet solvency and competence standards.

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Kuwait: Law to Enforce Payment of Public Service Fees

Arab Times, 8 June 2025: Kuwait’s government issued Kuwait Decree-Law No. 75/2025, aimed at enforcing the collection of fees for public services such as electricity, water, telecommunications, and transport.

The law introduced mechanisms to ensure timely payment and prevent fee evasion, reinforcing the principle that public utilities must be paid for under regulatory mandates.

Key provisions included automatic service suspension for debtors failing to pay within 30 days of notification, with services restored upon full payment. The law allowed installment-based repayments for those unable to pay in full, subject to creditor approval. Failure to adhere to the installment plan led to its cancellation and immediate debt recovery procedures.

Article 2 of Kuwait Decree-Law No. 75/2025 mandated a grievance process before legal action, requiring debtors to file a written complaint with the concerned authority, which must respond within 30 days. Article 3 of Kuwait Decree-Law No. 75/2025 granted government creditors a statutory lien over all debtor assets, ensuring priority in recovering dues. Article 4 of Kuwait Decree-Law No. 75/2025 elevated official debt documents to “executive instrument” status, allowing direct enforcement without lengthy court proceedings.

The law introduced a 10-year statute of limitations for fee collection, with interruptions possible through official notices from creditors. Judicial fees were exempted from the law’s provisions.

The legislation aimed to address widespread abuse of the existing system, where many beneficiaries delayed or avoided payments, burdening the state financially. It sought to restore financial discipline and ensure efficient management of public utilities, offering structured payment plans to balance enforcement with recognition of genuine financial hardship.

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