Money Laundering And Terror Financing Increased During Covid-19

Kuwait received about 2,413 notifications regarding suspicions of money laundering and terrorism financing during the COVID-19 period, according to the Financial Investigation Unit (FIU's latest report). In the 2020/2021 year, Kuwait received 1,354 additional notifications, compared to the 1,059 notifications it received last year. This represents a 128 percent increase compared to the previous year. In total, 1,623 notifications of money laundering and terrorism financing were received from banks, accounting for 67 percent of the total. With 910 notifications, this is an increase of 128 percent over 713 notifications in the previous year.

With 776 notifications, the money exchange companies sector came in second with the most notifications. In third place is investment companies with 14 notifications. While the unit’s report showed that it had received 2,413 notifications during the year, a classified and preliminary study was prepared in this regard. The number of communications to the Public Prosecution Office and referrals to the competent authorities reached about 102 notifications and referrals, which is an increase of 16 percent and includes 14 new referrals, compared to about 88 referrals during the previous year.

The report or referral issued by the unit usually includes more than one suspicion report, not to mention that a single suspicion report usually includes more than one notification. The Financial Investigation Unit requested information, data and documents about 198 times from five governments, and it notified agencies to provide more of the information it receives from those authorities in order to reach a decision, considering the information received as reasonable evidence of suspicion.

The entities that received most requests from the unit to provide information were the Ministry of Interior, which received 73 requests in 2018, the Ministry of Commerce and Industry, which was requested 46 times to provide information, the Ministry of Justice, which received 42 requests to provide information, the General Administration of Customs, which was requested to provide information 22 times, and then the Kuwait Clearing Company, from which information was requested 13 times. Kuwait requested information from counterpart financial investigation units in other countries 53 times during the year (incoming information).

The unit coordinates with local authorities concerned with money laundering and terrorism financing to request information from counterpart units according to the Kuwaiti unit’s relationship with its counterparts through its membership in the Egmont Group. The Egmont Group of Financial Intelligence Units is an international organization that facilitates cooperation and intelligence sharing between national financial intelligence units to investigate and prevent money laundering and terrorism financing. In accordance with the standards for the exchange and use of information, the number of information requests received from counterpart units is divided into two types.

The first is the number of information requests, which amounted to 42 requests, and then the number of information availability which reached 11. Information was requested from Kuwait 12 times during the same year. The Financial Investigation Unit’s data revealed that the total number of referrals to the Public Prosecution and the authorities concerned with money laundering suspicions during the last three years was about 322 referrals, with 132 referrals in the 2018/2019 fiscal year and 88 referrals in the 2019/2020 fiscal year, as well as 102 referrals in the 2020/2021 fiscal year.

During the reporting period, no money laundering suspicions were reported by financial brokerage firms, precious metal and precious stone dealers, or real estate agents, according to the Financial Investigation Unit's latest report, and only three parties submitted notifications, namely banks, exchanges, and investment firms. Based on the figures, the Financial Investigation Unit received about 5,159 notifications of suspected money laundering and terrorism financing between April 2018 and March 2021, or within 3 years. Approximately 65 percent of those notifications came from banks, with 3,332 notifications, including 996 notifications during the 2018/2019 fiscal year, 713 notifications during the 2019/2020 fiscal year, and 1,623 notifications during the 2020/2021 fiscal year.

 

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