FATF Urges Kuwait To Strengthen Measures Against Money Laundering And Terrorist Financing

The Financial Action Task Force (FATF) has identified crucial areas for improvement in Kuwait’s fight against money laundering and terrorist financing. The international watchdog has called on Kuwait to deepen its understanding of the risks associated with these crimes, bolster its investigative and prosecutorial capabilities, and ensure the prompt freezing of assets tied to terrorist financing or the financing of weapons of mass destruction.

These issues were brought to light during FATF’s sixth and final general session, which concluded yesterday. Observers noted that the existing shortcomings place Kuwait under enhanced monitoring for these crimes. FATF underscored the necessity of preventing the misuse of legal entities and implementing safeguards to protect the non-profit sector from exploitation for terrorist financing.

FATF, which includes over 200 jurisdictions and international organization observers, recognized Kuwait’s current legal and supervisory framework as suitable for combating money laundering and terrorist financing. However, it also highlighted several deficiencies in the country's evaluations.

Dr. Mohammed Bouzbar, a Professor of Criminal Law at the Faculty of Law at Kuwait University, discussed FATF’s recommendations with Al-Jarida. He explained that enhanced monitoring is a mechanism used by FATF to oversee countries with strategic weaknesses in their systems for combating money laundering and terrorist financing. This process ensures that the concerned countries take timely steps to address these issues.

Dr. Bouzbar emphasized that countries under enhanced monitoring must submit periodic reports to FATF, detailing their progress in implementing an agreed-upon action plan. These reports should include information on improvements made to policies, legislation, and regulations related to combating these financial crimes.

“If a country fails to take the necessary measures within the specified time frame, it may face additional actions from FATF, including being placed on the grey or black list,” Dr. Bouzbar noted. “This could significantly impact the country’s reputation and its ability to engage with the international financial system.”

The joint assessment of Kuwait by FATF and the Middle East and North Africa Financial Action Task Force (MENAFATF) highlights the urgent need for Kuwait to enhance its efforts in tackling money laundering and terrorist financing to maintain its standing in the global financial community.

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