Kuwait is set to introduce specialist court divisions aimed at managing commercial and financial disputes, a move intended to enhance the nation’s attractiveness to foreign investors by accelerating contract enforcement.
The move follows Kuwait’s placement on the FATF ‘grey list’ earlier this year as the Gulf state initiates a series of economic and political reforms to improve AML and CTF compliance.
The economic courts add to a broader AML/CFT push despite being introduced as a separate legal measure.
Establishment of Courts
Following the cabinet’s approval of the law on Tuesday, Kuwait’s justice minister, Nasser Al-Sumait, described the establishment of economic courts as a significant advancement in the country’s economic justice framework through the creation of a dedicated judicial body.
The legislation is expected to facilitate more efficient resolution of business disputes, improve enforcement protocols and promote electronic litigation.
Kuwait Reforms
The move comes as Kuwait was put on the FATF ‘grey list’ in February this year. Kuwait’s parliament has since introduced a series of political and economic reforms to curb money laundering.
Former Commerce Minister Fahd Al-Shuraian said that the reform would also help Kuwait keep pace with international requirements and standards, including anti-money laundering legislation and international commercial laws.
The Central Bank of Kuwait issues specific guidelines and instructions to banks and financial institutions covering AML and CFT compliance.
Measures require the implementation of robust internal controls, monitoring systems and employee training programs to identify and prevent money laundering as well as mandates regular reporting to the CBK and the KWFIU regarding any suspicious financial activity.
Meaning of New Law
The new law will feature an electronic platform housing a database of published rulings and judicial principles.
It is designed to protect the rights of foreign investors, who will benefit from specialised units aimed at ensuring equitable decisions and the enforcement of judgments rendered by foreign courts outside Kuwait.
This initiative aligns with Kuwait’s broader efforts to enhance its investment environment, part of the Vision 2035 agenda focused on economic stimulation and diversification.
Strengthening Regulatory Enforcement
The establishment of business courts represents the latest facet of Kuwait’s strategy to strengthen regulatory enforcement.
Earlier this month, authorities issued warnings of stringent penalties for individuals involved in unlicensed enterprises, which include the deportation of foreign nationals.
Kuwait’s commitment to combating financial crimes has intensified, as evidenced by its attempts to be removed from the ‘grey list’ of the Paris-based Financial Action Task Force.
Over the past two years, the country has closed more than 73,000 companies and last week paused the issuance of new freelance business licences to address commercial permit violations.
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