FIU issues ‘guidelines’ for exchange companies to detect suspicious transactions
The Financial Intelligence Unit (FIU), through a guideline circulated by the Central Bank of Kuwait, outlined warning signs for exchange companies to strengthen oversight and detect possible cases of money laundering or terrorist financing.
The guideline emphasized monitoring high-value or recurring transactions that do not align with a customer’s income, profession, or declared activity.
It also stressed the need for customers to clearly explain the source of funds in large or repeated transfers. Refusal to disclose information, vague answers, or sudden increases in transaction volume and frequency without commercial justification were cited as key indicators of suspicious behavior.
Exchange companies were urged to be alert to transactions involving high-risk or sanctioned jurisdictions, conflict zones, and offshore centers known for secrecy.
Other signs include frequent use of multiple agents or locations for transfers, three-party transactions without a clear legal relationship, and unusually large cash exchanges without legitimate purposes.
The FIU also warned against practices such as converting large sums of money into foreign currency and then back into local currency within a short period without a clear economic rationale.
Attention was drawn to clients whose declared profile does not match their financial activity, such as domestic workers or inactive clients making high-value transfers to multiple recipients abroad.
Regarding terrorist financing, the guide highlighted risks linked to transfers to border areas, regions with limited financial infrastructure, or areas associated with terrorist activity.
It also cautioned against the misuse of charities and non-profit organizations to channel funds under the guise of humanitarian or religious purposes without transparency.
The FIU summarized seven common warning signs: sudden increases in transaction volume, use of multiple agents or websites, transfers to secrecy jurisdictions, unexplained three-party transactions, large cash exchanges without justification, round-trip currency conversions, and suspicious activity involving charities.
Follow The Times Kuwait on
X, Instagram and Facebook for the latest news updates
