The Central Bank of Kuwait has requested exchange companies to urgently provide it with a statement that includes “high-risk” customers, including those who conduct money transfers to countries included in the red list of high-risk countries classification as well as the number of suspected cases of money laundering or terrorist financing that it has monitored during the last 3 years.
Relevant sources told Al-Rai that the regulator’s moves in this regard come within a broader supervisory coordination, led by the Central Bank, to ensure the ability of exchange companies, banks and finance companies to bypass the expected assessment to be conducted by the Financial Action Task Force (FATF) next May, on the extent of compliance by Kuwait and its financial institutions with anti-money laundering and terrorist financing requirements.
The sources stated that, based on the provisions of Law No. (106) of 2013 regarding combating money laundering and terrorist financing, its executive regulations, and related decisions and instructions, the Central Bank requested exchange companies to provide it with the following data within 10 working days:
— A statement of the number of the company’s clients, divided according to the degree of risk specified for each of them (low – medium – high).
— A statement of the number of clients classified by the company under the “high risk” category, divided into the following category — politically exposed clients, broken down into current or former political office holders, associated persons, associated entities; clients classified under the category of high-risk clients according to the type of activity for each of them (an example of this is public benefit associations and charitable institutions); non-resident customers according to their frequent nationalities and the volume of transactions that took place with each of them during the year and customers making transfers to high-risk countries or countries that require enhanced due diligence procedures.
— A statement showing the names of the correspondents abroad with whom the company deals, the name of the country in which each correspondent is located, and the average value of the monthly transactions that take place with each of them.
— A statement of the systems used to follow up the various transactions, activities and products, with an indication of the minimum value of the amount based on which the transactions of each of them are followed up with the company.
— A statement of the number of transactions that may raise suspicions of money laundering or terrorist financing, which were revealed by the system in force with the company during the year, and the number of cases that were examined and those that are being investigated.
— A statement of the number of suspected cases of money laundering or terrorist financing that were presented to the company’s management within 3 years from its date, and what has been completed in submitting a notification in this regard to the Kuwaiti Financial Investigation Unit.
— A statement of the number of forms required to be updated regarding “know your customer” information, divided according to the type of risks associated with customers (low, medium, high) within a year.
— A statement of all the products and services provided by the company to its customers, the risks associated with which have previously been identified as high risks.
The CBK suggested to exchange companies and local financial institutions earlier that the “FATF” team would ask them if they had discovered suspicious cases in which the information kept about the real beneficiaries did not match the information updated about them, and their number, in addition to the procedures for verifying the identity of the real beneficiary.
Among the expected questions is to assess their efficiency in combating money laundering and terrorist financing operations is that if there are systems used to detect conformity, what are the applicable scenarios for issuing an alert, what is the percentage of similarity established in the system for issuing the alert and what are the bases for building this ratio?
When providing bank credit services, how is the identity of the goods and their relevance to dual-use goods ascertained?
It is noteworthy that the tasks of the “FATF” are to set standards and promote the effective implementation of legal, regulatory and operational measures to combat money laundering, terrorist financing, proliferation, and other threats related to the integrity of the international financial system.