Saudi Arabia and Kuwait Advance Regional AML Defenses with New Partnership

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Saudi Arabia and Kuwait have taken a significant step forward in the fight against financial crime with the signing of a new memorandum of understanding (MoU) dedicated to advancing anti-money laundering (AML) and counter-terrorism financing (CFT) efforts. This milestone reflects the countries’ commitment to protecting the Gulf’s financial integrity, promoting international compliance, and driving closer cooperation across the region.

Both nations recognize the escalating threats posed by cross-border money laundering, terrorist financing, and the misuse of financial channels, especially in a globalized economy. As the regulatory landscape evolves, countries in the Gulf Cooperation Council (GCC) are working to align their efforts, reinforcing intelligence sharing and operational frameworks to counter illicit financial activities effectively.

Anti-Money Laundering Cooperation in the Gulf Region

Saudi Arabia and Kuwait’s decision to formalize their cooperation on anti-money laundering demonstrates the growing urgency to address sophisticated financial crime threats within the Gulf region. The new MoU brings together Saudi Arabia’s General Department of Financial Investigations and the Financial Intelligence Unit (FIU) of Kuwait. Both organizations serve as national authorities charged with detecting, reporting, and investigating suspicious financial activities, and play a critical role in supporting law enforcement and supervisory agencies.

This agreement was finalized alongside the second official gathering of the GCC Committee of Financial Intelligence Units, a collaborative forum aimed at aligning strategies, sharing experiences, and building best practices among member states. The Committee is responsible for harmonizing AML/CFT approaches across Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

Strengthening regional cooperation is a core component of effective AML policy. Criminal organizations increasingly exploit cross-border vulnerabilities, leveraging global banking and non-banking channels to move illicit funds, obscure transaction origins, and fund illegal operations. The MoU is designed to enable more effective intelligence sharing, accelerate the exchange of operational information, and drive the development of joint responses to new typologies and emerging risks.

Both Saudi Arabia and Kuwait are members of the Middle East and North Africa Financial Action Task Force (MENAFATF), a regional body established to promote FATF standards, coordinate regional AML/CFT activities, and evaluate member compliance. The new partnership is intended to help both countries remain aligned with evolving international best practices and the recommendations issued by the Financial Action Task Force (FATF).

Driving Enhanced Financial Intelligence and Regulatory Alignment

One of the central objectives of the MoU is to facilitate the sharing of financial intelligence and improve the overall effectiveness of the two countries’ AML/CFT frameworks. Financial intelligence units are tasked with collecting, analyzing, and disseminating information related to suspicious or unusual transactions that may involve money laundering or terrorist financing.

Under the new agreement, the FIUs of Saudi Arabia and Kuwait will be able to:

  • Share strategic and operational intelligence to support domestic and cross-border investigations.
  • Coordinate training and capacity-building initiatives to upskill financial crime professionals.
  • Develop common procedures for the detection and reporting of suspicious transactions.
  • Launch joint studies and typology reviews to stay ahead of evolving financial crime tactics.

Such efforts are vital for keeping pace with a rapidly changing threat environment. According to the FATF, the GCC region continues to face challenges in addressing abuse of legal entities, trade-based money laundering, and the misuse of new payment technologies. The MoU aims to equip authorities with better tools and collaborative mechanisms to detect, disrupt, and deter criminal activity.

Both countries’ FIUs are also required to operate in line with the Egmont Group’s principles, which guide the secure and efficient exchange of information internationally. The Egmont Group provides a global platform for FIUs to collaborate on sensitive casework while maintaining confidentiality and data protection standards.

The recent agreement also supports broader regulatory alignment between Saudi Arabia and Kuwait. Both countries have established robust AML/CFT legislative frameworks:

  • Saudi Arabia: The Anti-Money Laundering Law (Royal Decree No. M/39, 2017) and Implementing Regulations provide the legal basis for AML enforcement, with supervision by the Saudi Arabian Monetary Authority (SAMA) and the Capital Market Authority (CMA).
  • Kuwait: Law No. 106 of 2013 on Combating Money Laundering and Terrorism Financing and its amendments establish the requirements for financial institutions, DNFBPs, and reporting entities.

Both countries routinely update their regulations to stay in line with FATF recommendations and address new threats, such as virtual asset service providers, non-profit organizations, and third-party facilitators.

Regional Integration and the Role of Financial Intelligence Units

Deepening collaboration between financial intelligence units is critical for enhancing regional integration and strengthening collective resilience to money laundering. GCC countries have made substantial progress in recent years, setting up specialized FIUs, enacting risk-based AML/CFT frameworks, and joining international networks.

The Gulf region’s reliance on cross-border finance, complex corporate structures, and high-value trade flows makes it vulnerable to sophisticated financial crime. International organizations such as FATF, MENAFATF, and the Egmont Group have repeatedly underscored the need for closer cooperation, transparent information exchange, and harmonized supervision.

The new MoU supports a number of best practices for effective regional AML/CFT:

  • Timely exchange of information between competent authorities and FIUs to identify and trace illicit funds.
  • Joint development of risk indicators and red flag typologies for high-risk sectors, such as real estate, gold and precious metals, and emerging digital assets.
  • Coordinated investigations and asset recovery actions in cases involving cross-border financial crime.
  • Ongoing capacity building, peer learning, and technical assistance to ensure sustained effectiveness.

Saudi Arabia and Kuwait have each taken steps to implement national risk assessments, adopt risk-based customer due diligence measures, and promote public-private partnership in the fight against illicit finance. The new MoU is set to accelerate these efforts, while serving as a model for other GCC states seeking to bolster financial sector resilience.

Broader Economic Context and the Importance of AML/CFT Cooperation

Enhanced anti-money laundering cooperation brings significant economic and reputational benefits for Saudi Arabia and Kuwait. Both countries are working to diversify their economies, attract foreign investment, and position themselves as international financial hubs. Demonstrating robust AML/CFT compliance is essential for building trust with global markets, maintaining correspondent banking relationships, and minimizing exposure to regulatory or reputational risk.

Saudi Arabia’s Vision 2030 underscores the importance of transparency, integrity, and the rule of law in driving economic transformation. The mining and industrial sectors, in particular, have been identified as high-growth areas with significant potential to attract foreign capital. AML/CFT controls play a key role in safeguarding investment, promoting responsible business, and reducing vulnerability to financial crime.

Kuwait, likewise, is seeking to grow its role in regional trade and investment, with exports to Saudi Arabia reaching over $36 million in early 2025. Strengthened compliance mechanisms, cross-border intelligence sharing, and regulatory coordination help support a safe, stable, and attractive financial environment for business.

Both countries also recognize the need to protect the non-profit sector from abuse. Criminal groups and terrorist financiers may seek to exploit charitable organizations and foundations to channel or disguise illicit funds. The agreement follows recent GCC-level workshops dedicated to enhancing AML/CFT awareness and risk management in the non-profit space, reflecting the evolving priorities of regional regulators.

Conclusion: A Strategic Step Forward for Gulf AML Defenses

The new anti-money laundering memorandum of understanding between Saudi Arabia and Kuwait represents a powerful step forward for regional financial security. By formalizing intelligence sharing, regulatory alignment, and joint action, both countries are sending a strong message of zero tolerance for financial crime.

This partnership strengthens their collective ability to detect, investigate, and disrupt money laundering and terrorist financing operations, while promoting compliance with international standards. As criminal networks adapt and evolve, so too must the region’s financial intelligence, legal frameworks, and enforcement strategies.

The agreement serves as a blueprint for other GCC nations and emerging markets aiming to build resilient, integrated defenses against global illicit finance. Ultimately, closer cooperation between financial intelligence units will be key to ensuring financial sector integrity, fostering investor confidence, and securing long-term economic growth for the Gulf.


Source: Arab News

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