Law No. 106 of 2013 on Combating Money Laundering and Terrorist Financing

Law No. 106 of 2013
on Combating Money Laundering and Terrorist Financing

Article 1

For the purposes of applying the provisions of this Law, the following words and expressions shall have the meanings assigned opposite each of them:
Funds: Assets or property of any kind, whether cash, securities or commercial papers, or fixed or movable, tangible or intangible assets, and all rights relating thereto, however acquired, as well as legal documents and instruments in any form, including electronic or digital form, and banking facilities, cheques, payment orders, shares, bonds, bills of exchange and letters of guarantee, whether located inside or outside the State of Kuwait.
Person: A natural or legal person.
Transaction: Any purchase, sale, loan, mortgage, gift, financing, transfer, delivery, deposit or withdrawal of funds, transfer by remittance or disposal thereof in any manner, in any currency, whether in cash or by cheques, payment orders, shares, bonds or any other financial instruments, or any use of safe deposit boxes and other forms of safe deposit, or any other disposal of funds specified by the Executive Regulations.
Financial Institution: Any person who conducts as a business one or more of the following activities or operations for or on behalf of a customer, as follows:
(a) Acceptance of deposits and other repayable funds from the public, including private banking.
(b) Lending.
(c) Financial leasing.
(d) Money or value transfer services.
(e) Issuing and managing means of payment (such as credit cards, debit cards, traveller’s cheques, financial leasing, payment orders, bank drafts and electronic money).
(f) Financial guarantees and commitments.
(g) Trading in:
1. Money market instruments, including cheques, bills of exchange and certificates of deposit.
2. Foreign exchange.
3. Exchange rate, interest rate and index instruments.
4. Transferable securities and financial derivatives.
5. Commodity futures.
(h) Foreign exchange transactions.
(i) Participation in securities issues and the provision of financial services related to such issues.
(j) Individual and collective portfolio management.
(k) Safekeeping and administration of cash or liquid securities on behalf of other persons.
(l) Underwriting and placement of life insurance and other investment-related insurance, as insurer or as insurance intermediary.
(m) Investing, administering or managing funds on behalf of other persons.
(n) Any other activities or transactions specified by the Executive Regulations of this Law.
Designated non-financial businesses and professions, which include the following:
(a) Real estate brokers.
(b) Sole proprietorships and companies engaged in trading in gold, gemstones and precious metals when they engage in cash transactions, as specified by the Executive Regulations of this Law.
(c) Lawyers, independent legal professionals and independent accountants, when they prepare for, carry out or conduct transactions for clients concerning any of the following activities:
1. Buying or selling real estate.
2. Managing client funds, including the client’s securities, bank accounts or other assets.
3. Creating, operating or managing legal persons or legal arrangements, and organising the related subscriptions.
4. Selling or buying companies.
(d) Trust and company service providers, when they prepare for or carry out transactions for a client concerning the following activities:
1. Acting as a formation agent of a legal person.
2. Acting as, or arranging for another person to act as, a director, trustee or partner of a company, or in a similar position in relation to other legal persons.
3. Providing a registered office, premises, business offices, a postal address or an administrative address for a legal person or a legal arrangement.
4. Acting as, or arranging for another person to act as, a trustee of a trust fund, or performing an equivalent function for a legal arrangement.
5. Acting as, or arranging for another person to act as, a nominee shareholder.
(e) Any other activity or profession provided for by the Executive Regulations of this Law.
Business Relationship: Any business, professional or commercial relationship connected with the professional activities of a financial institution or of designated non-financial businesses and professions, which is expected to have an element of duration.
Account: Any facility or arrangement by which a financial institution accepts deposits, cash or negotiable instruments, permits withdrawals or transfers, pays cheques or payment orders drawn on a financial institution or another person, collects cheques, payment orders, bank drafts, traveller’s cheques or electronic money on behalf of a person, or provides facilities or arrangements for the rental of safe deposit boxes or any other form of safe deposit.
Customer: Any person who carries out any of the following with a financial institution or with designated non-financial businesses and professions:
(a) The person for whom a transaction, business relationship or account is arranged, opened or carried out.
(b) The person or the co-signatory to a transaction, business relationship or account.
(c) Any person to whom an account, rights or obligations under a transaction have been assigned or transferred.
(d) Any person who is authorised to conduct a transaction or to control a business relationship or an account.
(e) Any person who has commenced taking any of the actions referred to above.
Beneficial Owner: Any natural person who ultimately owns or exercises control, directly or indirectly, over the customer or the person on whose behalf a transaction is conducted, as well as the person who exercises ultimate effective control over a legal person or legal arrangement.
The Unit: The Kuwait Financial Intelligence Unit.
Supervisory Authorities: The authorities responsible for ensuring that financial institutions and designated non-financial businesses and professions comply with the provisions of this Law. They include the Central Bank of Kuwait, the Capital Markets Authority and the Ministry of Commerce and Industry, or any other authority specified by the Executive Regulations of this Law.
Competent Authorities: All public bodies in Kuwait entrusted with responsibilities for combating money laundering and terrorist financing, including the Unit, the supervisory authorities, the General Administration of Customs and the Ministry of Interior.
Freezing: The temporary restraint of funds in the hands of their holder and the prohibition of their transfer, conversion, disposal, movement or transportation, pursuant to a decision issued by the Attorney General or whomever he delegates from among the Advocates General.
Seizure: The taking into custody and temporary retention of funds with the Public Prosecution or any other authority, pursuant to a decision issued by the Attorney General or whomever he delegates from among the Advocates General.
Legal Arrangements: Trusts or other similar arrangements.
Politically Exposed Person: A natural person who is or has been entrusted with prominent public functions in the State of Kuwait or in a foreign country, or with senior management positions in international organisations, and the members of his family. The Executive Regulations shall specify the persons covered by this definition in a manner that does not conflict with the provisions of the laws.
Money Laundering: Any of the acts provided for in Article (2) of this Law.
Terrorist Financing: Any of the acts provided for in Article (3) of this Law.
Predicate Offence: Any act that constitutes an offence under the laws of the State of Kuwait, and it also includes any act committed outside the State of Kuwait if it constitutes an offence under the laws of the State in which it was committed and under the laws of the State of Kuwait.
Proceeds of Crime: Any funds derived or obtained, directly or indirectly, from the commission of a predicate offence, including any profits, interest, revenues or other output generated by such funds, whether they remain in their original form or have been converted, in whole or in part, into other funds.
Instrumentalities: Anything used or intended to be used in any manner, wholly or partly, in the commission of money laundering or terrorist financing offences or predicate offences.
Terrorist Act: Any act, or attempt to commit it, in the State of Kuwait or anywhere else, committed in the following cases:
(a) If the act is intended to cause death of a civilian or any other person, or serious bodily injury to such person, when that person is not taking part in hostilities in a situation of armed conflict, and the purpose of such act is to intimidate a population or to compel a government or an international organisation to do or to abstain from doing any act.
(b) If the act constitutes an offence within the definitions set out in the following international conventions or protocols:
1. The Convention for the Suppression of Unlawful Seizure of Aircraft (1970), approved by Decree-Law No. (19) of 1979.
2. The Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation (1975), approved by Decree-Law No. (62) of 1979.
3. The Convention on the Prevention and Punishment of Crimes against Internationally Protected Persons, including Diplomatic Agents (1973), approved by Decree-Law No. (72) of 1988.
4. The International Convention against the Taking of Hostages (1971), approved by Decree-Law No. (73) of 1988.
5. The Protocol for the Suppression of Unlawful Acts of Violence at Airports Serving International Civil Aviation, approved by Decree-Law No. (71) of 1988, supplementary to the Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation (1988), approved by Law No. (6) of 1994.
6. The Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation (1988), approved by Law No. (15) of 2003.
7. The Protocol for the Suppression of Unlawful Acts against the Safety of Fixed Platforms Located on the Continental Shelf (1988), approved by Law No. (16) of 2003.
8. The International Convention on the Physical Protection of Nuclear Material (1980), approved by Law No. (12) of 2004.
9. The International Convention for the Suppression of Terrorist Bombings (1977), approved by Law No. (27) of 2004.
10. Any other international convention or international protocol relating to terrorism or its financing that has been ratified by the State of Kuwait and whose law has been published in the Official Gazette.
Terrorist: Any natural person, whether in Kuwait or abroad, who does the following:
(a) Commits a terrorist act, directly or indirectly, in accordance with the provisions of this Law.
(b) Participates in a terrorist act.
(c) Organises the commission of a terrorist act or directs others to commit it.
(d) Intentionally contributes to the commission of a terrorist act by a person or a group of persons acting with a common purpose, either with the aim of furthering the terrorist act or with knowledge of the intention of the person or group of persons to commit the terrorist act.
Terrorist Organisation: Any group of terrorists, whether in Kuwait or abroad, who carry out any of the acts mentioned in the preceding definition.
Bearer Negotiable Instrument:
Monetary instruments in bearer form, such as traveller’s cheques, and negotiable instruments, including cheques, promissory notes and payment orders, that are either in bearer form, endorsed to the bearer without restriction, made out to a fictitious payee, or otherwise in such form that title thereto passes to the bearer upon delivery, as well as incomplete instruments that are signed but with the payee’s name omitted.
Wire Transfer: A financial transaction carried out by a financial institution by electronic means on behalf of the originator, through which an amount of money is made available to a beneficiary person at another financial institution, irrespective of whether the originator and the beneficiary are the same person.
Shell Bank: A bank that is registered or licensed in a country or territory in which it has no physical presence, and that is not affiliated with a financial group subject to effective banking regulation and supervision.
* As published in the Official Gazette. The year of the convention is 1971 in Clause (2) of paragraph (b) of the definition of “Terrorist Act”, 1979 in Clause (4), and 1997 in Clause (9).

Part One
Offences and Preventive Measures

Chapter One – Money Laundering and Terrorist Financing Offences

Article 2

Any person who knows that funds are proceeds of crime and who intentionally commits any of the following acts shall be deemed to have committed the offence of money laundering:
(a) Converting, transferring or exchanging such funds for the purpose of concealing or disguising the illicit origin of those funds, or of assisting any person involved in the commission of the predicate offence from which the funds were derived to evade the legal consequences of his act.
(b) Concealing or disguising the true nature, source, location, disposition, movement or ownership of the funds, or the rights relating thereto.
(c) Acquiring, possessing or using the funds.
A legal person shall be liable for any offence provided for in this Article if it is committed in its name or for its account.
The punishment of the perpetrator of the predicate offence shall not preclude his punishment for any other money laundering offence.
When proving that funds are proceeds of crime, it shall not be necessary that a person has been convicted of committing the predicate offence.

Article 3

Any person who, directly or indirectly, wilfully and unlawfully, provides or collects funds, or attempts to do so, with the intention that they be used to commit a terrorist act, or with the knowledge that they will be used, in whole or in part, for such act, or for the benefit of a terrorist organisation or a terrorist person, shall be deemed to have committed the offence of terrorist financing.
Any of the acts set out in the preceding paragraph shall be deemed a terrorist financing offence even if the terrorist act does not occur, or the funds are not actually used to carry out or attempt such act, or the funds are not linked to a specific terrorist act, regardless of the country in which the attempted terrorist act occurred.

Chapter Two – Preventive Measures

Article 4

Financial institutions and designated non-financial businesses and professions shall assess the money laundering and terrorist financing risks relating to them, including those relating to the development of new products and technologies. They shall also keep the risk assessment study and the information relating thereto in writing, update it periodically and make it available to the supervisory authorities upon request.
Financial institutions and designated non-financial businesses and professions shall apply enhanced due diligence measures where the money laundering and terrorist financing risks are considered high, and financial institutions and designated non-financial businesses and professions may apply simplified due diligence measures where the money laundering and terrorist financing risks are considered low.
Simplified measures may not be applied where there is a suspicion of money laundering or terrorist financing.

Article 5

Financial institutions shall be prohibited from opening any anonymous account or any account in fictitious names, or from maintaining such accounts.
Financial institutions and designated non-financial businesses and professions shall take into account the results of the risk assessment in accordance with the provisions of the preceding Article and shall take the following due diligence measures:
(a) Identifying and verifying the identity of the customer and the beneficial owner using reliable and independent documents, data or information.
(b) Understanding the purpose and nature of the business relationship; additional information may be requested in this regard.
(c) Ongoing monitoring of all matters relating to the business relationship and scrutiny of any transactions conducted, to ensure that they are consistent with the information available on the customer, his business activities and risk profile and, where necessary, the sources of his funds.
(d) Understanding the ownership and control structure of the customer.
They shall implement the due diligence measures specified in the second paragraph of this Article as follows:
(a) Before and during the opening of the account or the establishment of the business relationship with the customer.
(b) Before carrying out a transaction exceeding the threshold prescribed by the Executive Regulations of this Law for a customer with whom they have no business relationship, whether such transaction is a single transaction or takes the form of several transactions that appear to be linked.
(c) Before carrying out a domestic or international wire transfer for a customer.
(d) Where there is a suspicion of money laundering or terrorist financing.
(e) Where there is doubt about the veracity or adequacy of previously obtained customer identification data.
The supervisory authorities may determine the cases in which financial institutions and designated non-financial businesses and professions may postpone verification of the identity of the customer or the beneficial owner until after the establishment of the business relationship.
Financial institutions and designated non-financial businesses and professions shall refrain from opening the account, commencing the business relationship or carrying out the transaction, or shall terminate the relationship, if it is not possible to comply with the provisions of the second paragraph of this Article; they shall also consider reporting to the Unit in accordance with the provisions of Article (12) of this Law.
Financial institutions and designated non-financial businesses and professions shall apply specific and adequate measures to address the risks of money laundering and terrorist financing when opening an account, entering into business relationships or carrying out transactions with a customer who is not physically present for the purposes of identification.
Financial institutions and designated non-financial businesses and professions shall put in place appropriate risk management systems to determine whether the customer or the beneficial owner is a politically exposed person.
Where this is found to be the case, they shall apply additional measures, in addition to those provided for in the second paragraph of this Article, and the Executive Regulations shall specify such measures.
Financial institutions and designated non-financial businesses and professions shall apply enhanced due diligence to all complex and unusually large transactions, and to unusual patterns of transactions that have no apparent and lawful economic purpose or objective; they shall examine the background and purpose of such transactions, document all information relating to them and to the identity of all the parties involved in them, and keep such records in accordance with the provisions of Article (11) of this Law; such information shall be made available to the competent authorities upon their request.
Financial institutions and designated non-financial businesses and professions shall apply enhanced due diligence measures to business relationships and transactions with persons or financial institutions in countries identified as high-risk in accordance with Article (4).
Existing accounts and customers, existing at the time this Law enters into force, shall be subject to due diligence measures under the provisions of this Article within an appropriate period, on the basis of materiality and the degree of risk, or as determined by the supervisory authorities.
Financial institutions and designated non-financial businesses and professions shall carry out periodic reviews to verify the validity of the data, information and documents obtained and shall update them.
Financial institutions and designated non-financial businesses and professions may rely on third parties to perform certain elements of the due diligence process in accordance with what is specified by the Executive Regulations.

Article 6

The provisions of Articles (4), (5) and (11) of this Law shall apply to real estate agents and brokers where they are involved in transactions for their customers concerning the purchase or sale of real estate.

Article 7

The Executive Regulations shall specify the measures that financial institutions shall take before entering into a correspondent banking relationship with foreign correspondent banks or other similar relationships, in addition to the normal due diligence measures they apply in accordance with Article (5).

Article 8

A shell bank may not be licensed or permitted to conduct its business within the State of Kuwait, and financial institutions shall refrain from entering into or continuing correspondent relationships or business relationships with shell banks or with a correspondent financial institution in a foreign country that permits its accounts to be used by a shell bank.

Article 9

Financial institutions engaged in wire transfer activity shall, when carrying out transactions, obtain the information relating to the originator and the beneficiary of the transfer, and shall ensure that such information remains with the transfer orders or related messages throughout the payment chain; the ordering financial institution shall be prohibited from executing the wire transfer if it is unable to obtain such information.

Article 10

Financial institutions and designated non-financial businesses and professions shall:
(a) Establish internal policies, procedures, systems and controls, including appropriate compliance management arrangements and adequate screening procedures to ensure high standards when hiring employees.
(b) Implement an ongoing employee training programme to ensure that employees are familiar with the requirements of combating money laundering and terrorist financing and new developments, the prevailing techniques, methods and trends in money laundering and terrorist financing, the requirements relating to due diligence, and the reporting of any suspicious transactions.
(c) Establish independent internal audit functions to verify compliance with the internal policies, procedures, systems and controls and to ensure their effectiveness and their consistency with the provisions of this Law.
(d) Develop mechanisms for exchanging available information and maintaining its confidentiality, in accordance with Articles (4) and (5), with financial institutions and their domestic and foreign branches and subsidiaries.
(e) Appoint a compliance officer at senior management level who shall be responsible for implementing the requirements of this Law.
The provisions of this Article shall, where possible, apply to all their domestic and foreign branches and subsidiaries.

Article 11

Financial institutions and designated non-financial businesses and professions shall keep the following records and information, which the competent authorities may access:
(a) Copies of all records obtained through the due diligence process in verifying transactions in accordance with the provisions of Article (5), including documents evidencing the identities of customers and beneficial owners, accounting files and business correspondence, for at least five years after the termination of the business relationship or the date of carrying out the transaction in accordance with Clause (b) of the third paragraph of Article (5).
(b) All records of domestic and international transactions, whether actually carried out or attempted, for at least five years after the transaction was carried out or attempted; such records shall be sufficiently detailed to permit the reconstruction of each individual transaction.
(c) Copies of the reports sent in accordance with the provisions of Article (12) and the documents related thereto, for at least five years after the date on which the report was submitted to the Unit.
(d) The risk assessment under Article (4) and any prescribed information, for a period of five years from the date on which it was conducted or updated.
The competent authorities may, in specific cases, require records to be kept for a period longer than the periods provided for in this Article.

Chapter Three – Obligations to Report Suspicious Transactions

Article 12

Financial institutions and designated non-financial businesses and professions shall report to the Unit, without delay, any transaction or any attempted transaction, regardless of its value, if they suspect, or have reasonable grounds to suspect, that such transactions involve funds that are proceeds of crime, or funds linked or related thereto, or funds that may be used to carry out money laundering or terrorist financing operations.
Lawyers, other legal professionals and independent accountants shall not be obliged to report a transaction in accordance with the preceding paragraph if the information relating to such transactions was obtained in circumstances in which they are subject to professional secrecy.

Article 13

Financial institutions and designated non-financial businesses and professions, and their directors and employees, shall be prohibited from disclosing to the customer or to third parties the reports made in accordance with the preceding Article, or any related information provided to the Unit, or anything relating to an investigation into money laundering or terrorist financing. This shall not preclude disclosures or communications among the directors, employees and staff of the financial institution or of the designated non-financial businesses and professions, lawyers, the competent authorities and the Public Prosecution.
No criminal, civil, disciplinary or administrative action may be brought against financial institutions and designated non-financial businesses and professions, or against their directors or employees, for breach of any restriction on the disclosure of information imposed by contract or by any law, where they, in good faith, submit a report in accordance with Article (12) or any other information to the Unit.
Financial institutions and designated non-financial businesses and professions shall provide information and documents to the competent authorities, each within its competence, upon request, and professional secrecy may not be invoked except by lawyers, legal professionals and independent accountants, as provided for in the second paragraph of Article (12).

Part Two
Competent Authorities

Chapter One – Powers of the Supervisory Authorities

Article 14

The supervisory authorities shall undertake the regulation, supervision and oversight of the compliance of financial institutions and designated non-financial businesses and professions with the requirements provided for in the Law, its Executive Regulations and the relevant ministerial resolutions and instructions, and shall have the following powers and duties:
1. Collecting information and data from financial institutions and designated non-financial businesses and professions and conducting on-site inspections; third parties may be engaged for this purpose.
2. Compelling financial institutions and designated non-financial businesses and professions to provide any information, and taking copies of documents, regardless of the manner in which they are stored, and of any documents outside their premises.
3. Applying measures and imposing sanctions on financial institutions and designated non-financial businesses and professions for failure to comply with the provisions of this Law, and notifying the Unit thereof.
4. Issuing ministerial resolutions and instructions to assist financial institutions and designated non-financial businesses and professions in implementing their obligations.
5. Cooperating and exchanging information with the competent authorities or the foreign authorities concerned with combating money laundering and terrorist financing.
6. Verifying that the foreign branches and subsidiaries of financial institutions and designated non-financial businesses and professions adopt and implement measures consistent with this Law, to the extent permitted by the local laws of the host country.
7. Promptly informing the Unit of information or transactions that may be related to money laundering, terrorist financing or predicate offences.
8. Establishing and applying fit and proper procedures and standards relating to the expertise and integrity of the members of the board of directors and members of the executive or supervisory management, or the managers, of financial institutions.
9. Establishing and applying standards for the ownership or control of significant interests in financial institutions and designated non-financial businesses and professions, including the beneficial owners of such interests, or with respect to participating, directly or indirectly, in their management, the conduct of their affairs or their operation.
10. Keeping statistics on the measures taken and the sanctions imposed, as determined by the supervisory authorities.
11. Determining the type and extent of the measures to be taken by financial institutions and designated non-financial businesses and professions under Article (10), commensurate with the degree of money laundering and terrorist financing risk and the size of the business activity.

Article 15

Where a violation of the provisions of this Law, its Executive Regulations, the ministerial resolutions or the instructions is established on the part of a financial institution, a designated non-financial business or profession, or any of the members of the board of directors, the members of the executive or supervisory management, or the managers thereof, the supervisory authorities may impose one or more of the following measures or sanctions:
1. Issuing written warnings of the violation.
2. Issuing an order requiring compliance with specific procedures.
3. Issuing an order to submit regular reports on the measures taken to remedy the violation concerned.
4. Imposing a financial penalty on the violating financial institution not exceeding five hundred thousand dinars for each violation.
5. Barring the perpetrator of the violation from working in the relevant sector for a period determined by the supervisory authorities.
6. Restricting the powers of the members of the board of directors, the members of the executive or supervisory management or the managers, and of the controlling owners, including the appointment of a temporary supervisor.
7. Removing, or requesting the replacement of, the members of the board of directors, the members of the executive or supervisory management or the managers.
8. Suspending, restricting or prohibiting the conduct of the activity, business or profession.
9. Suspending the licence.
10. Revoking the licence.
The Executive Regulations may include any other measures.

Chapter Two – The Kuwait Financial Intelligence Unit

Article 16

A unit to be called the “Kuwait Financial Intelligence Unit” shall be established, having an independent legal personality, and shall act as the body responsible for receiving, requesting, analysing and referring information relating to what is suspected to be proceeds derived from a crime, or funds connected or related to it, or which may be used to carry out money laundering or terrorist financing operations, in accordance with the provisions of this Law.
The Unit shall have a budget, the draft of which shall be prepared by the Head of the Unit, and which shall be included under a special section of the general budget of the State. The provisions relating to the State budget shall apply to it and to the final account. The financial year of the Unit shall begin on 1 April of each year and end on 31 March of the following financial year, with the exception of the first year, which shall begin from the date on which this Law comes into force and end on 31 March of the following financial year.
A resolution of the Council of Ministers, upon the submission of the Minister of Finance, shall be issued on the formation of the Unit, the determination of its affiliation, and the organisation of its work and resources.
The employees of the Unit shall maintain the confidentiality of the information they obtain within the scope of performing their duties, even after they cease to perform those duties within the Unit, and such information may not be used except for the purposes provided for in this Law.
* Replaced by Law No. 24 of 2016 (Kuwait Al-Youm, Issue No. 1294, 26 June 2016).

Article 17

The Unit shall determine the countries considered high-risk and the measures to be taken in respect of them, and the supervisory authorities shall verify the compliance of financial institutions or designated non-financial businesses and professions with the application of these measures.

Article 18

With respect to any information it has obtained in accordance with its functions, the Unit shall have the power to obtain from any person subject to the reporting obligation provided for in Article (12) any additional information it deems necessary for the performance of its duties, such that the requested information is provided within the time limit set by the Unit and in the form specified by the Executive Regulations of this Law.
With respect to any report or information it receives, the Unit shall have the right to obtain from competent authorities and State agencies any information it deems necessary for the performance of its duties.

Article 19

If the Unit has reasonable grounds to suspect that funds are proceeds of a crime, or are funds connected or related to it, or which may be used to carry out money laundering or terrorist financing operations, it may report to the Public Prosecution and also refer the relevant information to the competent authorities.
The Unit shall notify the relevant supervisory authorities in the event that any financial institution or designated non-financial business or profession, or any employee thereof, violates the obligations set out in this Law.
The Unit may make information available to any foreign body, either spontaneously or upon request, on the basis of a reciprocity agreement or a mutual agreement based on cooperation arrangements entered into by the Unit with that body.

Chapter Three – Cross-Border Transportation of Currency and Bearer Negotiable Instruments

Article 20

Every person entering or leaving the State of Kuwait who is in possession of currency or bearer negotiable financial instruments, or who arranges for their transportation into or out of the State of Kuwait through a person, a postal service, a shipping service or any other means, shall, upon request, declare to the General Administration of Customs the value of such currency or bearer negotiable financial instruments.
The Unit may access this information whenever it so requests.
The General Administration of Customs may request information from carriers regarding the origin of such currency or bearer negotiable financial instruments and the purposes of their use, and it may also seize part or all of the amount of the currency or bearer negotiable financial instruments in either of the following two cases:
(a) If there is sufficient evidence to suspect that they are proceeds of a crime, or that they are funds or instrumentalities connected or related to, or to be used to carry out, money laundering or terrorist financing operations.
(b) In the event of refusal to make a declaration or failure to provide information upon request, or if the declaration or information is false.
A resolution of the Minister of Finance shall be issued on the rules and procedures relating to the implementation of this Article.

Part Three
General Provisions

Article 21

The Public Prosecution alone shall have the power of investigation, disposition and prosecution in the offences provided for in this Law, and the Criminal Court shall have jurisdiction to hear these offences.

Article 22

Without prejudice to the rights of bona fide third parties, the Attorney General, or whomever he delegates from among the Advocates General, may order the freezing or seizure of the funds and instrumentalities provided for in the first paragraph of Article (40) if he has sufficient evidence that they are connected with a money laundering or terrorist financing offence or a predicate offence.
The Public Prosecution shall manage and dispose of the affairs of the funds as it deems appropriate.
Any interested party may file a grievance before the competent court within one month from the date of issuance of this order, and the court shall decide the grievance expeditiously, either by rejecting the grievance or by cancelling or amending the order and determining the necessary guarantees, if warranted. A grievance may not be filed again except after the lapse of three months from the date of the decision on the first grievance.
The Attorney General, or whomever he delegates from among the Advocates General, may revoke or amend the order in accordance with the considerations he deems fit.

Article 23

The Public Prosecution shall exchange requests for international cooperation with competent foreign authorities in criminal matters in the field of money laundering offences, predicate offences or terrorist financing offences, with respect to judicial assistance and letters rogatory, the extradition of accused and convicted persons, and requests relating to the identification, tracing, freezing, seizure or confiscation of funds, all in accordance with the rules established by the bilateral or multilateral agreements ratified by the State of Kuwait or in accordance with the principle of reciprocity.

Article 24

The Executive Regulations shall specify the rules that enable the competent authorities to cooperate and coordinate nationally in developing and implementing policies and activities to combat money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction.

Article 25

The Council of Ministers, upon the recommendation of the Minister of Foreign Affairs, shall issue the resolutions necessary to implement the resolutions of the United Nations Security Council issued under Chapter VII of the Charter of the United Nations relating to combating terrorism, its financing and the financing of the proliferation of weapons of mass destruction, including resolutions relating to listing or delisting, the freezing of funds and other assets, and the prohibition of dealing with natural or legal persons, without prejudice to the rights of bona fide third parties. The resolutions issued in this regard shall take effect from the date of their issuance.
The Council of Ministers may delegate one of the Ministers to exercise its competence provided for in the preceding paragraph, and the delegated Minister may, unless otherwise provided in the delegation resolution, entrust the exercise of what has been delegated to him to a special committee, in accordance with what he determines in this regard.
The Executive Regulations issued in implementation of the provisions of this Article shall specify the rules for publishing the aforementioned resolutions or making them available, the provisions on grievances against them, the rules for managing frozen funds and assets, and the authorisation to release specified amounts or values thereof to cover necessary living expenses and other financial obligations, in a manner that ensures their use is restricted to their purposes, in addition to all other controls and procedures necessary to implement the provisions of this Article.
* Replaced by Decree-Law No. 76 of 2025 (Kuwait Al-Youm, Supplement to Issue No. 1745, 30 June 2025).

Article 26

Every contract or disposition shall be null and void if its parties, or any of them, knew, or had reason to believe, that the purpose of the contract or agreement was to prevent the taking of the confiscation measures provided for in Article (40) of this Law, without prejudice to the rights of bona fide third parties.

Part Four
Penalties

Article 27

Without prejudice to any more severe penalty provided for in the Penal Code or any other law, the offences set out in the articles of this Law shall be punished by the penalties prescribed for each of them.

Article 28

Any person who commits one of the money laundering offences provided for in Article (2) of this Law shall be punished by imprisonment for a term not exceeding ten years and a fine of not less than half the value of the funds subject of the offence and not exceeding their full value, if he knew that such funds and instrumentalities were proceeds of crime.
In all cases, the confiscation of the seized funds and instrumentalities shall be ordered.

Article 29

Any person who commits one of the terrorist financing offences provided for in Article (3) of this Law shall be punished by imprisonment for a term not exceeding fifteen years and a fine of not less than the value of the funds subject of the offence and not exceeding twice that value, and the seized funds and instrumentalities shall be confiscated.

Article 30

The penalties provided for in Articles (28) and (29) of this Law shall be aggravated to imprisonment for a term not exceeding twenty years and double the fine if any of the following circumstances is present:
(a) If the offence is committed through an organised criminal group or a terrorist organisation.
(b) If the offender commits it by exploiting the authority or influence of his office.
(c) If the offence is committed through clubs, public benefit associations or charitable foundations.
(d) If the offender reoffends.

Article 31

The court may exempt the offender from the penalty provided for in Articles (28) and (29) if he takes the initiative to provide the police, the Public Prosecution or the competent court with information they could not have obtained by any other means, in order to assist them in doing any of the following:
(a) Preventing the commission of a money laundering or terrorist financing offence.
(b) Enabling the authorities to arrest or prosecute the other perpetrators of the offence.
(c) Obtaining evidence.
(d) Avoiding or limiting the effects of the offence.
(e) Depriving the terrorist organisation or criminal groups of any funds over which the accused has no right or control.

Article 32

Without prejudice to the criminal liability of the natural person, any legal person that commits a money laundering or terrorist financing offence shall be punished by a fine of not less than fifty thousand dinars and not exceeding one million dinars, or the equivalent of the total value of the funds subject of the offence, whichever is higher.
The legal person may be punished by being prohibited, permanently or temporarily for a period of not less than five years, from carrying out certain commercial activities directly or indirectly, or by the closure, permanently or temporarily, of its offices used in committing the offence, or by the liquidation of its business, or by the appointment of a judicial receiver to manage the funds. The judgment of conviction shall be published in the Official Gazette.

Article 33

Financial institutions and designated non-financial businesses and professions, or any members of their executive or supervisory board of directors or their managers, shall be punished by a fine of not less than five thousand dinars and not exceeding five hundred thousand dinars for each violation of, or failure to comply with, the provisions of Articles (5), (9), (10) or (11) of this Law, committed wilfully or through gross negligence.

Article 33 bis

Any person who violates a resolution issued pursuant to Article (25) of this Law shall be punished by a fine of not less than ten thousand dinars and not exceeding five hundred thousand dinars for each violation.
The penalty provided for in the preceding paragraph shall not prejudice the sanctions and measures that the supervisory authorities may impose on financial institutions or designated non-financial businesses and professions in accordance with the provisions of Article (15) of this Law.
* Added by Decree-Law No. 76 of 2025 (Kuwait Al-Youm, Supplement to Issue No. 1745, 30 June 2025).

Article 34

Any person who establishes or attempts to establish a shell bank in the State of Kuwait in violation of the first paragraph of Article (8), or who, wilfully or through gross negligence, enters into a business relationship with such a bank in violation of the second paragraph of Article (8), shall be punished by imprisonment for a term of not less than three years and a fine of not less than five thousand dinars and not exceeding five hundred thousand dinars, or either of these two penalties. If the perpetrator of the violation is a legal person, it shall be punished by a fine of not less than five thousand dinars and not exceeding one million dinars.

Article 35

Any person who, wilfully or through gross negligence, commits any of the following shall be punished by imprisonment for a term not exceeding three years and a fine of not less than five thousand dinars and not exceeding five hundred thousand dinars, or either of these two penalties:
(a) Violating the provisions of Article (12) by submitting a report, data or information that is incorrect, or concealing facts that ought to be reported.
(b) Any person who discloses information to third parties in violation of the first paragraph of Article (13). If a legal person commits any of the violations set out in the two preceding clauses, it shall be punished by a fine of not less than five thousand dinars and not exceeding one million dinars.

Article 36

Any person who violates the provisions of the third paragraph of Article (16) shall be punished by imprisonment for a term not exceeding three years and a fine of not less than one thousand dinars and not exceeding ten thousand dinars, or either of these two penalties, and by dismissal from office.

Article 37

Any person who violates the provisions of Article (20), or makes a false declaration regarding currency or bearer negotiable instruments, or wilfully or through gross negligence conceals facts that ought to be declared, shall be punished by imprisonment for a term not exceeding one year and a fine of not less than half the value of the funds subject of the offence and not exceeding their full value, or either of these two penalties. If the perpetrator of the violation is a legal person, it shall be punished by a fine of not less than the value of the funds subject of the offence and not exceeding twice that value.

Article 38

Without prejudice to the penalties provided for in this Part, the court may prohibit the perpetrator of any offence, permanently or temporarily, from continuing to practise any work or profession that gives him the opportunity to commit such offence.

Article 39

The imposition of penalties in accordance with the provisions of this Law shall not preclude the imposition of the sanctions and measures imposed by the supervisory authorities on financial institutions or designated non-financial businesses and professions in accordance with the provisions of Article (15).

Article 40

Without prejudice to the provisions of Articles (28) and (29) of this Law and to the rights of bona fide third parties, the court shall, in the event of conviction of any of the other offences provided for in this Law, order the confiscation of the following funds and instrumentalities:
(a) Proceeds of crime, including funds intermingled with such proceeds, derived from them or exchanged for them.
(b) Income and other benefits derived from the proceeds of the offences.
(c) Funds subject of the offence.
The court may order the equivalent of the value of the funds and instrumentalities set out in clauses (a), (b) and (c) whose location cannot be determined or which are unavailable for the purposes of confiscation.
The funds referred to in the first paragraph may not be confiscated if their owner proves his good faith, in that he obtained such funds for an appropriate price, or obtained them in return for providing services commensurate with their value, or on the basis of other lawful grounds, and that he was unaware of their unlawful origin.
The death of the accused shall not preclude ordering the confiscation of the funds and instrumentalities in accordance with the provision of Article (1).

Article 41

Unless a law provides otherwise, confiscated funds shall devolve to the Public Treasury. Such funds shall remain encumbered by any rights lawfully established in favour of bona fide persons.

Part Five
Final Provisions

Article 42

The criminal action and the penalty imposed for the offences provided for in this Law shall not lapse by prescription, and the provisions of Articles (81) or (82) of the Penal Code may not be applied with respect to these offences.
* The Constitutional Court, in Judgment No. 1 of 2018, ruled unconstitutional Article (42) insofar as it provides that “the provisions of Articles (81) or (82) of the Penal Code may not be applied with respect to these offences”.

Article 43

The Minister of Finance shall issue the Executive Regulations of this Law within six months from the date of its publication.

Article 44

The aforementioned Law No. (35) of 2002 is hereby repealed, and the resolutions in force shall continue to apply, insofar as they do not conflict with the provisions of this Law, until the Executive Regulations are issued.

Article 45

The Prime Minister and the Ministers, each within his own competence, shall implement this Law, which shall come into force from the date of its publication in the Official Gazette.

Issued on 8 May 2013 and published in the Official Gazette Kuwait Al-Youm on 26 May 2013.