CBK directs banks to update its programs to combat money laundering

The Central Bank of Kuwait directed banks and entities subject to its supervision, which include exchange companies, to develop advanced technical programs and systems that automatically issue alerts regarding operations and transactions executed on customer accounts according to multiple scenarios, for the purpose of following them up and ensuring their consistency with the information available about these clients, as part of its efforts to combat money laundering and terrorist financing operations.

The sources added that the supervisory regulatory body stresses the need for banks to notify the Kuwaiti Financial Investigation Unit of any transaction or any attempt to conduct a transaction as soon as sufficient evidence is available to suspect it, reports Al-Rai daily.

The source pointed out that the Central Bank’s instructions to banks stress the necessity of updating the procedures and systems followed by them in this regard on an ongoing basis, in a way that ensures that their programs are in line with the latest international requirements in accordance with the recommendations issued in this regard.

The sources stated that, within the limits of the responsibilities and obligations stipulated in Law No. 106 of 2013 regarding combating money laundering and terrorist financing, the Central Bank, through field inspection missions, verifies the extent of banks’ commitment to implementing the provisions of the aforementioned law, its executive regulations, and related decisions, as well as the requirements contained in the instructions issued in this regard.

The sources stressed that the Central Bank does not hesitate to impose strict financial penalties in the event of any violation, which reach a maximum of 500 thousand dinars, as well as administrative penalties stipulated in the law, while the penalties applied are presented at the general assembly meeting of the violating bank.

The sources said that the Central Bank is fully carrying out the role assigned to it according to the law, and continues to be absolutely keen on combating money laundering and terrorist financing operations and is closely following up on the entities subject to its supervision to verify their full commitment to implementing all the requirements stipulated in the law, as well as the instructions and decisions issued by the bank in this regard.

The sources pointed out that the Central Bank does not hesitate to take all measures that would enhance the strength and integrity of the banking and financial sector, while it continues its approach based on permanent and full cooperation with all concerned parties and institutions, including the “Investigation Unit” and the judicial authorities.

As for the role assigned to the banking and financial sector regarding suspicious operations, and whether banks inform the “Central Bank” of suspicious operations, the sources pointed out that Article (12) of the law requires all financial institutions, including banks, to notify the “Investigation Unit,” and not the “Central Bank.” without delaying any transaction or attempt to conduct a transaction, if it has sufficient evidence to suspect that the funds with which the transaction is being conducted are derived from a crime or are linked to a money laundering or terrorist financing operation.

The sources added that the entities subject to the supervision of the Central Bank are performing their duties in this regard as stipulated in the law, as well as the decisions issued by the sanctions committees of the Security Council, based on Chapter Seven of the United Nations Charter, and the relevant decisions issued by the Security Council Resolutions Implementation Committee formed in Ministry of Foreign Affairs.

The sources confirmed that banks completely refrain from dealing with any of the names listed on the lists of the Office of Foreign Assets Management at the US Treasury Department (OFAC), and are committed to implementing other instructions regarding anti-money laundering and terrorist financing requirements.

Moreover, the “Investigations Unit” has an independent legal personality that is not affiliated with the Central Bank, and the law has assigned it responsibility for receiving reports, requesting information related to what is suspected to be proceeds from a crime, or funds linked to money laundering operations or terrorist financing, and then analyzing that information. If sufficient evidence is available, the unit will inform the Public Prosecution and refer the relevant information to the competent authorities, so that the necessary measures can be taken regarding it.