The Central Bank of Kuwait has asked banks, finance, and exchange companies to determine how they classify non-profit organizations and the extent to which the information they maintain about charity societies is given to the competent authorities when asked for.
In this regard, Al-Rai quoting sources said the open discussion with banks, finance, and exchange companies ensure the ability of these bodies to give an assessment that the Financial Action Task Force (FATF) will conduct next May, about the extent to which Kuwait and its financial institutions comply with the requirements of combating money laundering and terrorist financing and to ensure that the correspondent bank used for remittances is not operated by persons on the prohibited lists.
The sources stated that the Central Bank wants answers to 35 questions it has submitted to the financial institutions that were received from the National Committee for Combating Money Laundering and Terrorism Financing, which are expected to be looked into by the FATF team during their field visit to some units of banks, finance and exchange companies, according to their choice, as part of their efforts to assess the extent of compliance with anti-money laundering requirements and terrorism financing, stressing the importance of demonstrating the effectiveness of the required commitment to the incoming combating requirements.
Among the expected questions is the inquiry about the mechanism applied by it to verify the basic information of legal persons and the information obtained to ascertain the identity of the real beneficiaries. It also came within the supervisory expectations, the inquiry about the cases that are used to verify the identities of the real beneficiaries of legal persons and the periodicity of verification work. In addition to whether banks finance and exchange companies have direct access to the commercial registry database to verify the basic information of customers and true beneficiaries, and the number of cases in which the commercial registry database was used to verify basic information and information about the true beneficiaries.
Moreover, the CBK suggested that the “FATF” team would ask local financial institutions whether they discovered suspicious cases in which the information kept about the real beneficiaries did not match the updated information about them, in addition to the procedures for verifying the identity of the real beneficiary when there is a foreign element.
It is worth noting that the FATF’s mission is to set standards and promote 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.
It also works, in cooperation with other relevant international bodies, to identify weaknesses at the national level with the aim of protecting the international financial system from exploitation through mutual evaluation processes.
The FATF issues guidelines, best practices papers, and other guiding means aimed at assisting countries in implementing its standards, bearing in mind that it is an intergovernmental organization established in 1989 by the ministers of its member states.
The group’s membership currently consists of 37 countries and two regional organizations, namely the European Commission and the Gulf Cooperation Council, and it has many observer bodies from international organizations, in addition to regional financial action groups that enjoy the status of a co-member, including the ‘Minaavatif’ group.
Among the questions expected to be asked of the banks and finance and exchange companies from FATF to assess their efficiency in combating money laundering operations, are the following:
1 – If there are systems used to detect congruence, what are the applicable scenarios for issuing an alarm, what is the percentage of similarity set in the system for issuing an alarm, and what are the bases for building this percentage?
2 – At what stage of accepting and dealing with the customer is the extent to which his name matches the ban lists? Is the match verified before, during, or upon closing the account?
3 – What is the mechanism used to compare nouns?
4 – Do you use the same technology or method to deal with terrorist persons and entities?
5. Have there ever been notifications of a match or a possible (false positive) match with UN or local lists?
6 – Have you ever reported a suspicious operation that led to the placement of a name on the local terrorist lists?
7 – When examining bills of lading and bank credit, what are the things that are verified?
8 – When providing bank credit services, how to verify the nature of the goods and their connection to the dual-use goods?
