CBK enforces annual integrity and competence review for e-payment sector leadership

As part of its ongoing efforts to strengthen governance and uphold international standards on anti-money laundering and counter-terrorism financing, the Central Bank of Kuwait (CBK) has mandated that all electronic payment service providers, electronic money institutions, and electronic payment system operators conduct annual reviews to verify the integrity and competence of their board members and key personnel.

This regulatory directive aligns with the framework governing corporate governance policies, internal procedures, and the Code of Business Conduct. The CBK emphasized that these measures are essential to maintaining a robust and transparent financial environment, reports Al-Rai daily.

Unit managers in the sector have been instructed to retain supporting documentation for these assessments and to immediately address any instances of compromised integrity or diminished technical qualifications.
Any changes must be promptly reported in writing to the Central Bank in accordance with supervisory regulations.

In addition to the integrity review, the CBK outlined several procedural requirements for electronic payment firms, including:

• Immediate Notification of Resignations — Providers must notify the Central Bank without delay if any authorized system user resigns.
• Timely Cancellation Requests — Requests to cancel powers or access must follow the designated mechanisms.
• Document Submission Protocols — Documents must be submitted by the company’s legal representative (CEO or General Manager), or an authorized delegate such as a compliance officer or manager. Authorization must first be communicated to the CBK, including any changes.
• Retention of Official Documents — Companies must retain original copies of all official documents—particularly those from government agencies—such as certificates from the Criminal Enforcement Prosecution regarding shareholders or candidates for executive roles. These documents must be available upon request.
• Verification of Document Integrity — Companies are fully accountable for the authenticity and accuracy of the information submitted via the electronic payment gateway. Any discrepancies or violations may lead to penalties under Article 85 of Law No. 32 of 1968 concerning currency, the CBK, and the regulation of banking activities.

The CBK clarified that these measures aim to enhance oversight and improve the governance of electronic payment systems. They are rooted in Article 33 of the Instructions for Regulating Electronic Money Payment Businesses, which requires service providers to adopt governance procedures. Furthermore, the measures support compliance with Article 27, which outlines AML/CTF obligations under Law No. 106 of 2013 and associated ministerial decisions, as well as international FATF standards.

Additionally, these efforts underscore the CBK’s focus on tightening appointment controls for leadership positions within the digital financial services sector and ensuring comprehensive due diligence for partners and board members involved in licensing and operations.

These supervisory requirements reflect the Central Bank’s broader commitment to fostering a secure, transparent, and internationally compliant financial system in Kuwait.