- The Ministry of Commerce and Industry has introduced new anti-money laundering (AML) guidelines requiring real estate brokers to report suspicious transactions to the Financial Intelligence Unit within two working days, as part of efforts to strengthen oversight of the property sector and align with international standards.
The Ministry of Commerce and Industry has issued a new compliance guide requiring real estate brokers to report suspected money laundering or terrorist financing activities to Kuwait’s Financial Intelligence Unit (FIU) within two working days of identifying a suspicious transaction.
The measure, introduced under Law No. 106 of 2013 on combating money laundering and terrorist financing, is part of broader efforts to strengthen oversight of Kuwait’s real estate sector, which authorities consider vulnerable to financial crimes because of the high value of property transactions.
According to the ministry, the new guidance supports Kuwait’s ongoing efforts to comply with the recommendations of the Financial Action Task Force (FATF) and improve the country’s performance in future international mutual evaluations.
The guide cites Kuwait’s 2022 National Risk Assessment, which classified the real estate sector as carrying a medium-high money laundering risk. The assessment recorded 25 money laundering investigations, 12 prosecutions and seven convictions linked to the sector.
It also noted that the FATF’s 2024 mutual evaluation report found that no suspicious transaction reports had been submitted by the real estate sector since 2019, despite documented cases in which illicit funds were allegedly used to purchase property. The ministry said this highlighted the need for clearer reporting obligations and stronger due diligence by real estate brokers.
Under the new guidance, brokers are required to apply enhanced scrutiny whenever suspicious indicators arise. These include customers refusing to disclose the source of their funds, providing false or incomplete information, attempting to complete transactions unusually quickly, or purchasing property without regard to its market value.
Other warning signs include property purchases that appear inconsistent with a client’s declared income or business activity, repeated changes to customer information, refusal to provide required identification or financial documents, and credible reports linking a client or beneficial owner to money laundering, corruption, fraud or terrorist financing.
The guide also places significant emphasis on identifying the beneficial owner of a transaction. Brokers are advised to be alert to attempts to purchase property through nominees, relatives, shell companies or complex ownership structures designed to conceal the identity of the true owner.
Transactions involving newly established companies with little or no business activity, or companies operating outside the real estate sector without a clear commercial purpose, are also identified as potential risk indicators.
In addition, the ministry highlighted several transaction-related red flags, including rapid resale of properties without an economic justification, repeated buying and selling of the same property, transactions conducted significantly above or below market value, payments made by unrelated third parties, transfers of sale proceeds to unrelated entities, and multiple unexplained funding sources.
The guidance also identifies geographical risk factors, including transactions involving individuals or companies from high-risk jurisdictions, countries with weak anti-money laundering controls, offshore financial accounts or complex cross-border ownership arrangements.
The ministry said the new guide is intended to strengthen compliance among real estate professionals, improve the reporting of suspicious transactions and safeguard Kuwait’s property market from being exploited for money laundering or terrorist financing, while reinforcing the country’s commitment to international anti-financial crime standards.
