Kuwait is intensifying efforts to combat money laundering and terror financing, urging local jewellers to enhance their vigilance as part of a broader strategy to remove the nation from an international grey list.
The Financial Action Task Force (FATF) designated Kuwait to its grey list in February, indicating deficiencies in the country’s anti-money laundering and counter-terrorism funding regulations.
At a meeting in June, the FATF reaffirmed Kuwait’s position on this list, prompting a response from the government.
New Regulations for Jewellers
In a recent announcement, the Ministry of Commerce and Industry unveiled new guidelines aimed at assisting jewellery retailers in identifying potential money laundering activities.
These guidelines promote a risk-based approach for monitoring and assessing irregular activities, thereby bolstering compliance with regulatory requirements.
In November last year, Kuwait’s Ministry of Commerce and Industry said that it had shut down 73,700 companies which had failed to disclose their real owners.
Indicators of suspicion outlined by the ministry include unusual concealment of fund sources, the provision of incomplete or inaccurate information, delays in documentation submission, the use of forged identities, and unexplained transaction purposes.
Kuwait Intensifies Crackdown
Over the past two years, Kuwait has intensified its crackdown on financial crimes, particularly in sectors where cash transactions are prevalent. This includes implementing stricter penalties for bankers who neglect to report suspicious activities and conducting random inspections of jewellery shops and other entities.
Jewellers are the Focus
Kuwait holds the sixth-largest recoverable oil reserves globally and first enacted anti-money laundering legislation in 2013 under pressure from Western nations. This law criminalises such activities and stipulates severe penalties, including lengthy prison terms.
Recent statistics indicate that jewellery businesses are the primary violators of these regulations, with a significant number of companies closed for failing to disclose their beneficial owners. Authorities have reported substantial enforcement actions, including the seizure of numerous companies for non-compliance with established anti-money laundering laws.
Industry analysts contend that the focus on jewellers in anti-money laundering initiatives is driven by the appeal of precious metals and gemstones, which are perceived as liquid assets that can facilitate discreet transactions outside conventional financial systems.
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