Kuwait:  Leads the Way in Disability Rights Legislation and Empowerment Initiatives

Arab Times, 3 December 2024: Kuwait has emerged as a pioneer in enacting legislation to protect the rights of individuals with disabilities.

The country has established specialised schools and provides comprehensive care, acknowledging both the rights and potential of this community.

During a recent regional consultative session for the Middle East and North Africa, organised under the theme “Women and Disability,” the importance of local, regional, and international collaboration was emphasised to support individuals with disabilities.

The session has highlighted Kuwait’s welcoming environment, which has facilitated discussions among experts from various countries on disability-related issues.

The role of civil society in raising awareness and addressing barriers to implementing legal frameworks was also underscored.

Kuwait’s initiatives to integrate people with disabilities into society aim to ensure they can lead fulfilling lives and access their rights without discrimination.

The United Nations Special Rapporteur on the Rights of Persons with Disabilities commended Kuwait for its leadership on the international stage.

The session served as a platform for governments, civil society, and regional organisations to discuss challenges, share best practices, and collaborate on solutions.

It focused on raising awareness about the Convention on the Rights of Persons with Disabilities and addressing barriers to full inclusion in the MENA region.

The need for enhanced regional cooperation among governments, civil society, and international stakeholders was emphasised, along with a call for NGOs and human rights defenders to advocate for the rights of women with disabilities.

A field study presented during the session examined the impact of Kuwaiti legislation in empowering women with disabilities, highlighting the country’s commitment to gender equality and justice as enshrined in its constitution and international agreements.

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Kuwait: To End Conversion of Sick Leave to Regular Leave or Cash

Arab Times, 3 December 2024: Kuwait’s government is considering a policy shift on replacing unused sick leave with regular leave, aiming to promote fairness and reduce financial costs.

The proposed change would prevent employees from converting unused sick leave into regular (annual) leave or receiving financial compensation for unused days.

Sick leave would only be used for rest and recovery.

The potential suspension of the replacement policy is reportedly intended to curtail financial costs and encourage employees to use sick leave when necessary, rather than hoarding it for cash benefits.

Advocates argue this approach promotes better health and aligns with labour regulations, ensuring fairness for employees who genuinely need sick leave.

Critics, however, warn that stopping the replacement policy could demotivate employees who rely on it as a supplemental income source.

Some suggest that government agencies educate staff on the reasons for such a decision and explore alternative incentives to maintain morale.

While supporters emphasise that the policy fosters justice by ensuring equal treatment of all employees, detractors stress that removing this option could negatively impact employees’ income and financial stability.

They argue that sick leave, being a legitimate entitlement issued by government agencies, should remain a right that benefits employees fairly.

The debate highlights the need for a balanced approach, potentially regulating replacement policies to address both financial concerns and employee satisfaction.

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Kuwait: Introduces Strict New Residency Law

Arab Times, 25 November 2024: Kuwait’s Council of Ministers has approved a draft decree law addressing the residency of foreigners, introducing severe penalties for those involved in residency trafficking and violations.

The new decree law repeals Kuwait Emiri Decree No. 17/1959, along with any provisions that contradict the current Decree-Law (Article 35).

The new legislation comprises seven chapters and 36 articles, detailing specific provisions for the entry, residency, and regulation of foreigners in Kuwait.

The law prohibits residency trafficking through the exploitation of recruitment in exchange for money or benefits, employment violations where a foreign worker is employed for purposes other than what they were originally brought in for, unjust refusal to pay a foreigner’s wages or benefits, unauthorised work, housing or employing a foreigner without a valid residency permit, and allowing shelter for a foreigner who does not possess a valid residency permit.

Penalties for residency trafficking violations include imprisonment for three to five years and a fine ranging from 5,000 to 10,000 dinars, subject to escalation depending on the number of foreign violators involved.

Public employees who engage in residency trafficking will face a double penalty, and recidivism will lead to a further doubling of the penalty.

Legal entities found guilty of residency trafficking will face a fine between 5,000 to 10,000 dinars per violator, and their license to operate will be revoked.

The responsible individual within the entity will face penalties similar to those of an individual violator.

The law outlines conditions for the deportation of foreigners, such as having no legitimate source of income, working without a licence or approval, or for reasons of public interest, security, or morals.

A deportation order may extend to the foreigner’s family members, and the foreigner may be detained for up to 30 days during the deportation process, with extensions granted as necessary.

The Interior Ministry may waive fines for deported individuals, provided they leave the country promptly.

The employer or any individual who illegally sheltered or employed the foreigner will be responsible for the expenses related to deportation.

The law also addresses entry requirements, notification of competent authorities, residency of foreigners (including domestic workers, government and non-governmental employees), sponsor responsibilities, fees and exemptions, exit regulations for foreigners, and general provisions and penalties for residency trafficking.

It outlines procedures for obtaining visas, residency permits, and their renewals, as well as exemptions for certain groups, such as GCC nationals and diplomatic personnel.

The law also allows for settlement processes for certain violations by paying fines.

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Kuwait: Communications Ministry To Block Transactions for Debt Defaulters

Arab Times, 18 November 2024: The Kuwaiti Communications Ministry has announced its ongoing efforts to collect outstanding financial dues for services provided to subscribers.

The ministry has emphasised that it is coordinating with state institutions to restrict transactions of individuals and companies who are in arrears until their debts are fully settled.

The ministry has confirmed that the ban on transactions would remain in effect until all outstanding payments for its services have been cleared.

Over the past few days, the ministry has sent notifications to subscribers via the government application ‘Sahel’, urging them to promptly settle their financial obligations.

The ministry has also stated that an automated disconnection program will be activated in early December 2024.

This program will target both residential and commercial accounts with unpaid dues.

A second notification will be sent through the ‘Sahel’ application in the coming days, informing subscribers of the exact amounts owed.

Subscribers are urged to pay their dues promptly to ensure uninterrupted services and to avoid being included in the disconnection program or facing restrictions on government transactions.

Payments can be made through the ministry’s official website or at regional service centers using the K-Net payment service.

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Kuwait: Biometrics Deadline

Arab Times, 10 November 2024: As the 31 December 2024, deadline for biometric submissions approaches, expats are urged to ensure their biometric data is completed to maintain access to essential governmental and banking services.

The requirement for biometric verification is part of a wider effort to enhance security and streamline identity verification processes in various sectors.

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Kuwait: Capital Markets Authority Imposes Disciplinary Action

Mubasher, 3 November 2024: The Kuwaiti Capital Markets Authority has announced the issuance of Kuwait Ministerial Kuwait Capital Markets Authority Decision No. 29/2024 imposing a financial penalty against ASICO Industries Company and its board members, and Kuwait Finance Center Company.

According to the Authority’s statement, the number of board members is three members, a former board member, the former chairman of the company’s board of directors, Al-Bazai and Partners Office, and the company’s auditor; for violating the listing rules, market conduct, corporate governance, market ethics, securities activities, and registered persons.

The Authority has clarified that it was conclusively proven that the transactions carried out by ASICO Industries during 2018 and 2019, specifically the sale of a substantial stake in a (subsidiary) company, which resulted in profits of around 40 million Kuwaiti dinars, within the financial statements ending in 2018, were fictitious and not real.

It became clear that the purpose was to revalue the (subsidiary) company to improve and enhance the financial position of ASICO Industries.

Additionally, the transaction carried out by the company was essentially a financing transaction and not a sale transaction, as the final outcome of this transaction became clear during 2019 after ASICO Industries exercised the right to repurchase the sold stake without complying with the application of International Accounting Standards.

The three board members were proven to have violated Article 3-7(5) of Book Fifteen (Corporate Governance) of the Executive Bylaws of Kuwait Law No. 7/2010 and its amendments, for failing to fulfil their role in complying with International Accounting Standards following the transactions carried out by ASICO Industries during 2018 and 2019, specifically the sale of a substantial stake on 8 July 2018, of 30.23 million shares of its ownership in a (subsidiary) company to (the Buyer).

This resulted in profits of around 40 million Kuwaiti dinars within the financial statements ending in 2018, which was proven to be a fictitious and not a real transaction aimed at revaluing the (subsidiary) company to improve and enhance the financial position of ASICO Industries.

Additionally, the transaction carried out by the company was essentially a financing transaction and not a sale transaction, as the final outcome of this transaction became clear during 2019 after ASICO Industries exercised the right to repurchase the sold stake in the (subsidiary) company’s shares, without complying with the application of International Accounting Standards.

Regarding Kuwait Finance Center Company, it was proven to have violated Article 3-2(4) of Book Eight (Work Ethics) of the Executive Bylaws of Kuwait Law No. 7/2010 and its amendments, as the company arranged a transaction for its client ASICO Industries (the Seller), and the other party in that transaction was a subsidiary of Kuwait Finance Center Company.

It also violated Article 8-2(2) of Book Eight (Work Ethics) of the Executive Bylaws of Kuwait Law No. 7/2010 and its amendments.

As it was conclusively proven that Kuwait Finance Centre Company, in its capacity as an investment advisor to ASICO Industries, arranged the sale of a stake in a (subsidiary) company to (the Buyer), with one of the conditions for its execution being the opening of a portfolio with Kuwait Finance Centre Company and the collection of a management fee of 50,000 Kuwaiti dinars annually.

Obtaining a fee is considered obtaining a benefit by the licensed person from arranging the transaction through which profits and benefits are achieved other than the basic advisory fees.

Al-Bazai and Partners Office was found to have violated Article 3-4-5 of Book Five (Securities Activities and Registered Persons) of the Executive Bylaws of Kuwait Law No. 7/2010 and its amendments.

The violation occurred due to the firm’s failure, as the auditor of ASICO Industries, to report any observations in its review of the company’s financial statements for the years ending in 2018 and 2019.

Specifically, the auditor did not address the improper recording of the financial impact of a transaction in which a stake in a subsidiary was sold on July 8, 2018, to a buyer. Despite the sale, ASICO Industries continued to control the sold stake after the transaction was completed, given the company’s retained right to repurchase the stake as specified in Article Four of the contract dated July 8, 2018.

The decision included imposing a financial penalty on ASICO Industries of 50,000 Kuwaiti dinars for the first violation, and 5,000 Kuwaiti dinars for each of the four board members and the former chairman of the board for the violation attributed to them.

A financial penalty of 50,000 Kuwaiti dinars was imposed on Kuwait Finance Center Company for the first and second related violations, and Al-Bazai and Partners Office, as the auditor of ASICO Industries, was fined 20,000 Kuwaiti dinars for the violation attributed to it.

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Kuwait: Income Tax on Multinational Companies on the Horizon

Emarat Al Youm, 26 October 2024: The Finance Ministry has accelerated steps to diversify sources of income by replenishing the state’s public finances with non-oil revenues.

The first of which is taxes on the income of local multinational companies, which are expected to be implemented next year after completing the executive formulas, as shown by the Ministry’s activities in external meetings or at the level of internal circulars addressed to companies within the country, a copy of which was obtained by “Al-Siyasa”.

On the international front, the Ministry has revealed that it had passed the first stage of the international assessment to which Kuwait was subjected for the Exchange of Tax Information on Request (EOIR) by the Peer Review Group (PRG), which it described as a “great achievement” to move to the second stage of the assessment.

Simultaneously, the Finance Ministry has issued an executive circular to companies operating in Kuwait regarding the mechanism of “destruction of fixed assets” for companies, considering that the text of Kuwait Decree No. 3/1955, as amended by Kuwait Law No. 2/2008 and its executive regulations, stipulates that capital gains resulting from the disposal of assets must be treated as ordinary commercial profits and subject to tax to prevent any future tax evasion operations.

The circular has included notifying the Ministry of any destruction of assets 30 days before their destruction and the presence of the Ministry’s inspectors during the destruction process, otherwise, it will not be counted, amid expectations that these companies, whether local or foreign, will be subject to the income tax umbrella within 24 months.

Expectations suggest that there will be 30 local multinational companies, while it is likely that the tax revenue from these companies, in addition to the companies listed on the Kuwait Stock Exchange with income exceeding 750 million euros, will be around 405 million dinars.

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