The Capital Markets Authority, along with many other concerned parties, faces an uphill task in the next stage — mutual evaluation process that the State of Kuwait will undergo in the field of combating money laundering and terrorist financing by the Financial Action Task Force (FATF), which is expected at the end of 2023.
The Regulatory Authority sources confirmed that the CMA is ready to meet all the requirements of the FATF to assess the State of Kuwait regarding combating money laundering and terrorist financing in the year 2023, as it is one of the regulatory authorities concerned with implementing the Anti-Money Laundering and Terrorist Financing Law, pointing out the importance of this assessment for the future economic situation for the state, reports a local Arabic daily.
The sources indicated that the authority carries out regulatory, control and supervision work in relation to the compliance of authorized persons with the relevant rules related to combating money laundering and terrorist financing stipulated in Law No. 106 of 2013 and its executive regulations, ministerial decisions, and the authority’s instructions issued in this regard.
The sources pointed out that the authority has sought, since the beginning of the issuance of its law, and the issuance of Law 106 of 2013 on combating money laundering and terrorist financing, to issue the necessary legislation for the entities subject to it in the field of combating money laundering and terrorist financing, which passed through multiple stages aimed at reaching the highest levels of compliance and compatibility with laws.
The local and global recommendations represented by the recommendations of the FATF and the legislative framework of the authority in this area.
The sources indicated that the Authority then moved to the stage of establishing the regulatory framework, and it is represented at the present time by the supervision sector, which carries out the work of regulation, control and supervision with regard to the compliance of authorized persons with the rules related to combating money laundering and terrorist financing, and the supervision sector supports other sectors of the authority in its tasks.
The sourced explained that the supervision sector relies in carrying out these works on the Field Supervision Department and its organizational units — the Anti-Money Laundering and Terrorist Financing Department, the Comprehensive Field Supervision Department, and the Field Supervision Department with a specific purpose and follow-up.
The sources continued saying the three departments carry out the work of desk oversight through, for example, the awareness role in the field of combating money laundering, reviewing periodic reports sent by the entities subject to the control of the CMA, preparing responses to the inquiries of the subject entities in the field of combating money laundering and terrorist financing, preparing circulars issued by the authority in this regard, etc. (which are carried out by the Anti-Money Laundering and Terrorist Financing Department).
It also carries out field monitoring work through field inspection tasks to ensure the compliance of the subject entities with the rules related to combating money laundering and terrorist financing.
The sources stated that the authority annually carries out about 45 field inspection missions on companies, and to date the number of field inspection tasks has reached more than 200 missions, and during those tasks nearly 200 procedural violations were monitored, which were dealt with in accordance with the legal procedures in force in the authority.
The sources confirmed that transactions and information suspected of being linked to money laundering, terrorism financing or predicate crimes, through which the authority’s supervisory activities were revealed, have been referred to the Kuwait Financial Intelligence Unit, in order to activate Clause No. 7 of Article No. 14 of Law No. 106 of 2013 regarding combating money laundering the financing of terrorism and its amendments.
The sources revealed that the Authority is preparing to start implementing the periodic field inspection plan after the Eid Al-Fitr holiday, which mainly targets more than 50 licensed persons between investment companies and financial brokerage companies.
The sources stated that the authority’s supervisory role continued during the recent Covid-19 crisis after the partial return of business in the country, as field inspection tasks continued on companies, which confirms the authority’s ability to activate the business management strategy and its continuity.
The following are the most prominent efforts of the Authority in the field of cooperation and coordination between it and the competent authorities in the State of Kuwait in the field of combating money laundering and terrorist financing within the framework of local cooperation and coordination, the Capital Markets Authority participates with other entities in the State of Kuwait participating in the membership of:
1 – The National Anti-Money Laundering and Terrorist Financing Committee and its working groups.
2 – The Committee for the Implementation of Security Council Resolutions Related to Combating Terrorism and Financing Weapons of Mass Destruction.
3 – The Special Committee to follow up on decisions regarding the implementation of sanctions imposed by the Security Council on North Korea.
Within the framework of local cooperation regarding the exchange of information and data, the Capital Markets Authority has done the following:
1 – Signing a memorandum of understanding with the Ministry of Commerce and Industry.
2 – Signing a memorandum of understanding with the Central Bank of Kuwait.
3- Signing a memorandum of understanding with the Kuwaiti Financial Intelligence Unit in the field of combating money laundering and related predicate crimes and terrorist financing.
Within the framework of international cooperation regarding the exchange of information and data, the Capital Markets Authority has signed a multilateral memorandum of understanding (MMoU) to coordinate cooperation and information exchange between members of the International Organization of Securities Commissions (IOSCO).