Kuwait tightens financial oversight with law criminalizing unlicensed money exchange activities

• Unlicensed exchange practices go beyond administrative violations, posing direct risks to the integrity of the financial and economic system and undermining the ability of regulatory authorities to monitor cash flows and identify those involved.
• Under the new article, any natural person who engages in buying, selling, exchanging or transferring local or foreign currencies, inside or outside the country, without a license, shall face imprisonment for up to six months, a fine of up to 3,000 dinars, or both.
• For private legal entities, the law stipulates a fine ranging from 5,000 to 20,000 dinars, with the possibility of ordering the closure of the establishment or its branches used in committing the violation.

A decree-law was issued on Sunday criminalizing the practice of money exchange without obtaining an official license. The new legislation will come into force one month after its publication in the official gazette, in accordance with constitutional procedures.

Decree-Law No. 162 of 2025 provides for the addition of a new Article (12 bis) to the Law Regulating Commercial Shop Licenses issued under Law No. 111 of 2013, introducing clear penal provisions for unlicensed money exchange activities.

According to the explanatory memorandum, criminal penalties are a fundamental tool for maintaining public order and safeguarding economic stability, stressing that legal provisions lose their deterrent effect if they are not accompanied by enforceable sanctions, reports Al-Rai daily.

The memorandum emphasized that unlicensed exchange practices go beyond administrative violations, posing direct risks to the integrity of the financial and economic system and undermining the ability of regulatory authorities to monitor cash flows and identify those involved.

The memorandum noted that money exchange activities have a direct impact on the movement of funds into and out of the country, and that most countries regulate the profession under the supervision of their central banks.

Despite the long-standing presence of money exchange activities in Kuwait, there has been no independent legislation specifically regulating the profession.

It explained that the Ministry of Commerce and Industry is the competent authority for issuing licenses to practice money exchange under existing commercial licensing laws, yet many individuals and entities continue to engage in such activities without authorization, harming the economic interests of the State.

Under the new article, any natural person who engages in buying, selling, exchanging or transferring local or foreign currencies, inside or outside the country, without a license, shall face imprisonment for up to six months, a fine of up to 3,000 dinars, or both.

For private legal entities, the law stipulates a fine ranging from 5,000 to 20,000 dinars, with the possibility of ordering the closure of the establishment or its branches used in committing the violation.

The decree-law will take effect one month from the date of publication, in line with Article 178 of the Constitution, which requires laws to be published in the Official Gazette within two weeks of issuance and implemented one month thereafter.