FinCrime Central - Latest AML/CFT News & Vendor Directory

Kuwait Steps Up Inspections of Money Exchange Offices to Boost FATF Compliance

This image is AI-generated.

Kuwait has launched an extensive initiative to bolster its Anti-Money Laundering (AML) compliance efforts. The Ministry of Commerce and Industry, led by Minister Khalifa Al-Ajeel, began inspecting money exchange offices across the country as part of a broader strategy to meet international financial standards, particularly those set by the Financial Action Task Force (FATF). This move is a key step in the nation’s ongoing commitment to combat money laundering and terrorism financing.

The inspection campaign, announced on April 1, 2025, aims to ensure that money exchange businesses are fully compliant with the regulations set forth by Kuwait’s Central Bank. The initiative comes after a recent Cabinet decision to intensify government cooperation in enforcing these regulations. Minister Al-Ajeel explained that the goal is to safeguard the national economy and protect Kuwait’s reputation in the global financial community.

The Financial Action Task Force (FATF) plays a central role in Kuwait’s economic strategies related to combating financial crime. As an international body, FATF sets standards for Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) laws that help nations strengthen their financial systems.

For Kuwait, compliance with FATF’s regulations is not only about preventing financial crimes but also about enhancing transparency in the financial sector. In his statement, Minister Al-Ajeel emphasized that this initiative aligns with the country’s broader economic objectives and its need to uphold its international standing.

FATF’s evaluations help determine whether nations are effectively implementing policies to prevent money laundering and terrorism financing. Kuwait has recognized the urgency of meeting these standards to maintain credibility in the global financial ecosystem.

Key Areas of Focus in the Inspection Campaign

The Ministry’s inspection teams are focusing on money exchange offices located in high-traffic areas throughout Kuwait. These locations are chosen because they are more likely to engage in large volumes of transactions, which can sometimes create opportunities for money laundering and terrorism financing activities. The inspections are not random; they are targeted at businesses that hold licenses from the Central Bank of Kuwait and have shown to be operating in high-risk environments.

Kuwait’s push for compliance includes an emphasis on businesses adhering to new Central Bank regulations. The Ministry of Commerce and Industry is conducting these inspections as part of the ongoing effort to ensure that money exchange offices are operating according to the rules and regulations established under Cabinet Resolution No. 552. This resolution mandates that the Central Bank of Kuwait take over the regulation of exchange shops from the Ministry, transferring more responsibility to the Central Bank for enforcement and monitoring.

Actions Taken During the First Round of Inspections

On the first day of inspections, the Ministry’s teams visited 138 exchange offices throughout the country. The results were mixed, with many exchange offices closed for the day. However, one violation was detected during the inspections, which highlighted that there are still areas of non-compliance that need attention. The Ministry of Commerce and Industry assured the public that its inspection teams would continue monitoring the situation closely to ensure full compliance across the sector.

The findings from the initial round of inspections are seen as a positive first step. They show that the government is serious about enforcing regulatory standards, even though only a small number of violations were found initially. The campaign is expected to expand in the coming weeks, with more inspections set to take place in the coming months.

The Legal Framework Behind Kuwait’s Inspections

Kuwait’s efforts to improve its AML compliance are grounded in several legal frameworks. One of the most significant regulations is Cabinet Resolution No. 552, which was issued on June 11, 2024. This resolution called for the oversight of exchange shops to be transferred from the Ministry of Commerce and Industry to the Central Bank of Kuwait. This transfer is a major part of the country’s long-term strategy to strengthen its financial oversight and better align with international standards.

Additionally, the Ministry is enforcing Ministerial Resolution No. 233 of 2024, which regulates the operations of exchange companies. This regulation requires all businesses involved in currency exchange activities to comply with the standards set by the Central Bank, particularly in relation to anti-money laundering practices and reporting procedures.

Together, these legal measures form a robust regulatory framework that aims to protect Kuwait’s financial system from illicit activities while ensuring businesses operate within the boundaries of the law.

How Kuwait Plans to Meet International Financial Standards

Kuwait is working hard to align its financial institutions with international best practices to address global concerns about money laundering and terrorism financing. The inspections of money exchange offices are part of a broader strategy to ensure that all sectors of Kuwait’s financial services are operating in compliance with international regulations.

The FATF evaluates countries based on the strength and effectiveness of their financial crime prevention measures. By strengthening its inspection processes and ensuring that money exchange offices comply with strict regulations, Kuwait is positioning itself as a country that takes its financial oversight responsibilities seriously.

The Minister of Commerce and Industry stressed that the ongoing inspections are essential not just for meeting FATF requirements but for reinforcing the credibility of Kuwait’s financial institutions. This is a key step in maintaining confidence among international investors and the global financial community.

Conclusion: A Commitment to AML/CFT Compliance

Kuwait’s intensified inspections of money exchange offices mark a significant step in the country’s commitment to meeting international standards on money laundering and terrorism financing. With the backing of key legal frameworks and a clear focus on regulatory compliance, Kuwait is reinforcing its financial sector’s credibility on the global stage.

By addressing the concerns raised by international bodies like the FATF, Kuwait aims to enhance its standing in global financial assessments and safeguard its economy against illicit activities. The inspection campaign is an essential part of this broader effort, which reflects Kuwait’s dedication to ensuring that its financial institutions operate transparently and in accordance with international AML and CFT standards.