Minister of Commerce and Industry Osama Boodai has updated anti-money laundering and counter-terrorist financing controls for businesses dealing in gold, precious stones and precious metals, as well as real estate brokers and intermediaries.
The updated rules require companies and institutions in the two sectors to assess customer and transaction risks, identify and verify customers and beneficial owners, determine whether customers are politically exposed persons, maintain detailed records and apply enhanced due diligence to high-risk customers and transactions.
The measures also require businesses to align their internal policies, procedures, systems and controls with those of their respective regulatory authorities and to report suspicious transactions to the Kuwaiti Financial Intelligence Unit.
Stronger customer verification
Businesses are prohibited from establishing relationships with anonymous customers or those using fictitious names. Customer and beneficial-owner identities must be verified before transactions are conducted, when money laundering or terrorist financing is suspected, or when there are doubts about the validity or adequacy of previously obtained identification data.
For transactions exceeding 3,000 dinars, supporting documents must be attached, including civil identification documents for citizens and residents and passports or travel documents for non-residents, along with commercial licenses and official documents relating to companies and institutions.
Companies must also determine whether a customer or beneficial owner is a politically exposed person and apply enhanced due diligence. This includes senior management approval before establishing or continuing a business relationship, determining the source of funds and assets, and subjecting the relationship to continuous monitoring.
Suspicious transactions to be reported within two working days
The rules require continuous monitoring of customer transactions, transaction patterns and sources of funds according to the level of risk. Any transaction or attempted transaction suspected of being linked to criminal proceeds, money laundering or terrorist financing must be reported to the Kuwaiti Financial Intelligence Unit within a maximum of two working days, regardless of its value.
Companies, directors and employees are prohibited from informing customers or third parties about reports submitted or to be submitted to the Financial Intelligence Unit or about related investigations.
Cash payments prohibited
The updated controls prohibit businesses from accepting, receiving or delivering cash amounts connected to transactions, including deposits and advance payments, directly or indirectly. Payments must instead be made through non-cash methods approved by the Central Bank of Kuwait.
Five-year record retention
Businesses must retain due diligence records, customer and beneficial-owner identification documents, accounting records and business correspondence for at least five years after the end of a business relationship or completion of a transaction.
The same retention period applies to records of local and international transactions, attempted transactions, reports submitted to the Financial Intelligence Unit, risk assessments, and policies and procedures related to combating money laundering, terrorist financing and the proliferation of weapons.
The Ministry of Commerce or the competent authority may require records to be retained for longer periods when necessary for examination or investigation.
Electronic inventory and compliance officers
The rules require sales and annual inventory processes to be conducted through an approved electronic system designed to ensure data integrity, prevent unauthorized alteration, maintain backups and allow records to be retrieved in paper or electronic form when requested.
Businesses must also appoint a compliance officer at senior management level to oversee implementation of anti-money laundering and counter-terrorist financing requirements. The officer must have direct access to customer data, transaction records and related information, operate independently and report to senior management.
The updated framework expands risk-assessment requirements to cover new products and technologies, countries and geographical areas, and service-delivery channels. Policies and internal controls approved by senior management must apply across both local and foreign branches.
Businesses are prohibited from carrying out transactions or continuing business relationships when they cannot verify the identity of the customer or beneficial owner, or document the required beneficial-owner information. Violations remain subject to the measures and penalties prescribed under Kuwait’s Anti-Money Laundering and Counter-Terrorist Financing Law and relevant ministerial decisions.
