CBK orders immediate asset freeze for sanctioned entities in line with AML/CFT protocols

The Central Bank of Kuwait (CBK) has issued a decisive directive to all banks, financing companies, and electronic payment service providers under its supervision, mandating the immediate freezing of all assets — including financial accounts, tangible and intangible property, securities, and shares — belonging to individuals, groups, or entities designated on international or domestic sanctions lists.

The CBK emphasized the urgency of full compliance with United Nations Security Council (UNSC) resolutions, particularly those issued under Chapter VII of the UN Charter relating to terrorism and its financing. This includes adherence to the decisions of the Sanctions Committees and Kuwait’s local Implementation Committee formed by the Ministry of Foreign Affairs, reports Al-Rai daily.

The circular reaffirms that institutions must immediately block the use or movement of frozen assets, prohibiting any form of transaction that may result in a change in ownership, location, size, or nature of the affected funds or economic resources. The directive covers all types of assets, whether movable or immovable, tangible or intangible, and includes legal documents and electronic instruments that establish ownership or control.

The freeze applies to both natural and legal persons, and extends to any group of individuals or corporate entities identified by the ‘sanctions’ authorities.

Institutions are required to utilize automated alert systems designed to screen names and trigger compliance actions immediately upon the issuance or update of a sanctions list. The Central Bank stressed that real-time execution of sanctions decisions is non-negotiable, with zero tolerance for delay or administrative procrastination.

Moreover, regulated entities are instructed to continuously monitor updates to the sanctions lists, including those published on official websites and international portals, and to implement any new instructions without exception.

The Central Bank has further directed all supervised institutions to provide available data and relevant information on sanctioned individuals or entities to the CBK. This data sharing is essential for the broader coordination of Kuwait’s national strategy to combat money laundering and terrorist financing.

Entities that fail to adhere to the sanctions obligations will be subject to penalties under Article 15 of Law No. 106 of 2013, which governs anti-money laundering and combating the financing of terrorism in Kuwait. These measures can include administrative and legal action, potentially impacting an institution’s license or operations.

In accordance with the executive regulations governing the implementation of UNSC resolutions, “funds and economic resources” are broadly defined to include — but are not limited to — bank deposits, checks, securities, digital assets, stocks, bonds, letters of credit, and any associated yields such as interest or dividends.

The regulations also forbid indirect assistance, such as enabling third-party access to funds or financial services on behalf of sanctioned parties.

The Central Bank’s latest directive underscores Kuwait’s ongoing commitment to uphold its international obligations and maintain the integrity of its financial system in line with global best practices in AML/CFT compliance. This aligns with the government’s wider strategy to enhance transparency, prevent illicit financial flows, and protect the country’s financial institutions from reputational and operational risks.