Banker's Academy AML Training by Country

Anti Money Laundering (AML) By Country: Kuwait

Anti Money Laundering (AML) in Kuwait

Money laundering in Kuwait is not a widespread problem. Nevertheless, Kuwait has made significant efforts to maintain a strong Anti Money Laundering (AML) system.

On March 10, 2002, the Emir of Kuwait signed Law No. 35 criminalizing money laundering. Additionally, the law prohibits banks and financial institutions from keeping or opening any anonymous accounts or accounts in fictitious or symbolic names. The law also requires banks to verify the identity of regular and occasional clients, maintain all records of transactions and customer identification information for a minimum of five years, conduct training and establish internal control systems, and report any suspicious transactions.

On June 23, 2003, the Central Bank of Kuwait (CBK) issued Resolution No. 1/191/2003, establishing the Kuwaiti Financial Inquiries Unit (KFIU) whose responsibilities include receiving and analyzing reports of suspected money laundering, establishing a database of suspicious transactions, conducting anti-money laundering training, and carrying out domestic and international exchanges of information.

According to the U.S. State Department, Kuwait is making progress in enforcing its anti-money laundering program; however, certain aspects require improvement. For example, Kuwait should significantly accelerate its ongoing efforts to revise its 2002 anti-money laundering law, improve the sharing of financial information, strengthen the structure and responsibilities of the KFIU, secure Egmont Group membership for the KFIU, and criminalize terrorist financing.

AML Training in Kuwait

The Instructions issued by the Central Bank of Kuwait Regarding Money Laundering require institutions to develop internal policies and training programs for AML operations and for handling suspicious transactions. Training should be up-to-date with the latest developments and must evaluate employees' competence of policies and procedures.

The Economy of Kuwait

Kuwait is a highly industrialized country with a GDP (PPP) of US$138.6 billion and a per capita income of US$39,300, making it the fourth richest country in the world. Kuwait's human development index (HDI) stands at 0.871, the second highest in Middle East, after Israel and the highest in the Arab world. With a GDP growth rate of 5.7%, Kuwait has one of the fastest growing economies in the region. According to the 2008 Index of Economic Freedom, Kuwait has the second-most free economy in the Middle East. In March 2007, Kuwait's foreign exchange reserves stood at US$213 billion. The Kuwait Stock Exchange, which has about 200 firms listed, is the second-largest stock exchange in the Arab world with a total market capitalization of US$235 billion. In 2007, the Kuwaiti government posted a budget surplus of US$43 billion.

Banking In Kuwait

The five largest banks in Kuwait are:

The first bank in Kuwait was established in 1941 by British investors. Subsequent laws prohibited foreign banks from conducting business in the country. When the British bank's concession ended in 1971, the government bought 51 percent ownership. In 1952 another bank, the National Bank of Kuwait, the largest commercial bank, was founded. The establishment of several other banks, all under Kuwaiti ownership, followed. Some specialized financial institutions also emerged: the Credit and Savings Bank, established in 1965 by the government to channel funds into domestic projects in industry, agriculture, and housing; the Industrial Bank of Kuwait, established in 1974 to fill the gap in medium- and long-term industrial financing; and the private Real Estate Bank of Kuwait. By the 1980s, Kuwait's banks were among the region's largest and most active financial institutions.

Kuwaiti Currency

In 1960 the Indian Rupee was replaced by the Kuwaiti Dinar, which continues to be the currency in Kuwait. Since 1960, five series of Dinar have been issued. It is divided into units of 1000 fils. The Kuwaiti Dinar is one of the highest valued currencies in the world.