Kuwait improves FATF compliance rating across seven key recommendations
. . . boosts global compliance, makes significant progress in evaluation through regulatory reforms
- The progress coincides with ongoing government efforts to enhance Kuwait’s financial crime prevention framework.
Kuwait has strengthened its compliance with international standards on combating money laundering, terrorist financing and the financing of weapons proliferation after improving its technical ratings across seven key recommendations of the Financial Action Task Force (FATF), reflecting extensive legislative, regulatory and supervisory reforms implemented by government agencies.
The progress coincides with ongoing government efforts to enhance Kuwait’s financial crime prevention framework.
During its latest meeting, the Cabinet reviewed a presentation by Minister of Finance Dr. Yaqoub Al-Rifai on national efforts to strengthen the country’s anti-money laundering (AML), counter-terrorist financing (CTF) and counter-proliferation financing systems as part of preparations for Kuwait’s first follow-up report on implementing the FATF action plan.
The improved ratings were announced in the Second Enhanced Follow-up Report on Kuwait, issued in May 2026 by the Middle East and North Africa Financial Action Task Force (MENAFATF).
The report assessed measures adopted since Kuwait’s mutual evaluation in 2024 and approved the country’s request for the technical reassessment of seven recommendations.
Seven recommendations upgraded
According to the report, Kuwait successfully addressed previously identified shortcomings, resulting in all seven recommendations being upgraded to “Largely Compliant.”
The upgraded areas include:
- Targeted financial sanctions related to terrorism
- Financing of weapons proliferation
- Oversight of non-profit organizations
- Transparency of legal entities and beneficial ownership
- Supervision of financial institutions
- Oversight of designated non-financial businesses and professions
- International legal cooperation
- Stronger legal framework
Kuwait’s rating under Recommendation 6, covering targeted financial sanctions against terrorism and terrorist financing, was raised from “Non-Compliant” to “Largely Compliant.”
The FATF cited the issuance of Ministerial Resolution No. 8 of 2025, which established executive regulations for the committee responsible for implementing UN Security Council resolutions under Chapter VII.
The reforms strengthened procedures for listing designated individuals and entities, freezing assets and enforcing international sanctions within specified timeframes.
Similarly, Recommendation 7, relating to sanctions against the financing of weapons proliferation, was upgraded following the introduction of enhanced mechanisms to implement Security Council resolutions and freeze the assets and economic resources of designated entities.
Risk-based supervision
Kuwait also improved its rating under Recommendation 8 on non-profit organisations by adopting a risk-based supervisory approach.
Authorities conducted a national assessment covering 155 organizations, including 84 charities and 71 foundations, classifying them according to risk levels and applying enhanced monitoring to higher-risk entities.
Greater transparency
The country’s rating under Recommendation 24, covering transparency of legal entities and beneficial ownership, also improved after authorities strengthened disclosure requirements and enhanced the beneficial ownership framework to increase corporate transparency.
Meanwhile, Recommendation 26, relating to the regulation and supervision of financial institutions, was upgraded following improvements in risk-based supervision, inspection programs and institutional risk classification by the Central Bank of Kuwait, Capital Markets Authority, Insurance Regulatory Unit and the Ministry of Commerce and Industry.
Enhanced oversight and international cooperation
Kuwait also improved compliance under Recommendation 28, which governs designated non-financial businesses and professions, including real estate brokers, lawyers, accountants and dealers in precious metals and gemstones. The upgrade followed strengthened inspection procedures, awareness programs and customer due diligence requirements.
In addition, Recommendation 38, concerning international legal cooperation on freezing and confiscation of assets, was upgraded after Kuwait enhanced its ability to process mutual legal assistance requests and exchange financial and judicial information with international partners.
Despite the progress, the report noted that Kuwait will remain under the FATF’s enhanced follow-up process and is scheduled to submit its third follow-up report during the organization’s 43rd Plenary Meeting in November 2026.
