VZCZCXYZ0004
PP RUEHWEB

DE RUEHKU #1208/01 3570845
ZNR UUUUU ZZH (CCY AD010FA2 MSI8828-695)
P 230845Z DEC 09
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 4370
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS KUWAIT 001208 
 
SENSITIVE 
SIPDIS 
 
C O R R E C T E D COPY CAPTION 
NEA/ARP, NEA/RA, S/CT, EEB/ESC, TREASURY FOR U/S LEVEY 
 
E.O. 12958: N/A 
TAGS: EFIN KU PGOV PINR PTER KTFN
SUBJECT: PRELIMINARY DRAFT OF AMENDED AML LAW IN PARLIAMENT 
 
REF: A. KUWAIT 1178 
     ¶B. KUWAIT 1021 
 
 ¶1. (SBU) Summary. GoK officials formally announced at the 
December Anti-Money Laundering Conference (ref. b) that in 
accordance with decree No. 328, an amended version of law 
number 35/2002 has been passed to parliament for review and 
ratification.  Embassy Kuwait received an Arabic copy of the 
draft amendment for review and has done an informal 
translation.  The amended law specifically criminalizes 
terrorist financing, provides for cash export declarations, 
and further clarifies how Suspicious Transaction Reports are 
managed.  The Director of the Ministry of Commerce,s 
Anti-Money Laundering Unit has told U.S. customs advisors 
that he would welcome their comments.  End Summary. 
 
¶2. (SBU) Following is the text of the amended law as 
translated by Embassy Kuwait. 
 
¶3. (SBU) Begin text.  Section One - Definitions 
 
Article (1) 
 
In implementing the provisions of the law herein, 
each of the following words and phrases will have 
the meaning assigned to it, unless otherwise provided: 
 
A) Monies: 
Assets whether material, immaterial, movable, immovable, 
tangible or intangible, and legal instruments in all 
forms supporting the above mentioned, and any interest, 
profit or income derived from such assets. 
 
B) Money Laundering: 
Any act to acquire, possess, use, dispose, manage, keep, 
exchange, deposit, guarantee, invest, transfer money or 
manipulate its value if it was derived from a crime 
provided in article (3) herein, if the intention of this 
act was to conceal the money, or cover up its nature or 
source. 
 
C) Financial institutions, its branches and subsidiaries 
working in the state of Kuwait and abroad, and 
non-financial institutions working in the state of Kuwait 
include: 
 
1- National banks and branches of foreign banks working in 
the state of Kuwait 
2- Money exchange companies and institutions 
3- Investment companies 
4- Investment funds in all forms 
5- Insurance agents and companies 
6- Money brokerage companies and institutions 
7- Companies and institutions dealing with negotiable 
instruments 
8- Companies entrusted for keeping, collecting or 
managing monies 
9- Companies and institutions owned by individuals 
working in gold, precious stones and valuable minerals 
10- Charitable or non-profitable institutions, 
authorities or organizations 
11- Other bodies as determined by the competent minister 
 
The above-mentioned activities will apply whether being 
practiced by a natural person or a body corporate. 
 
(D) Proceeds: 
Money originating or derived, directly or indirectly, 
from any crime as provided in article (3) herein. 
 
(E) Terrorism: 
Any act of violence or threat for whatever reason or 
purpose committed to execute a criminal action, by an 
individual or collectively, with the intention of 
frightening people, endangering their lives, freedom or 
security, or damaging the environment or public or 
private properties, or occupying the same, take hold 
of them or endangering a national resource. 
 
(F) Terrorism Financing: 
Any action of gathering, collecting, delivering, 
allocating, transporting, providing or transferring 
money or its proceeds to any terrorist activity inside 
or outside the country, or perform any banking or 
financial legitimate or commercial operations for the 
interest of this activity, or its aspects, or acquire 
money, directly or indirectly, or through brokerage, 
to use for its interest or seek to promote its 
principles or set up places for training or 
 
accommodating its agents, provide weapons, documents 
or any another sort of assistance to support and 
finance the same, knowingly, whether the terrorist 
action has actually occurred or otherwise. 
 
(G) Supervisory Authorities: 
The supervisory authorities are government authorities 
entrusted by law to grant work license for financial 
institutions and non-financial institutions, as 
mentioned in article (C), they are responsible to 
supervise and observe these institutions. 
 
(H) Unit: 
Kuwait Financial Investigations Unit established 
according to the provisions of the law herein. 
 
(I) Competent Authorities: 
Government authorities assigned by this law, its 
ministerial resolutions or other laws in the 
country to combat crimes. 
 
(J) National Committee: 
The National Committee for Combating Money 
Laundering and Terrorism Financing. 
 
(K) Beneficiary Owner: 
Any person who owns or controls, wholly, the 
monies or properties of an agent or a person of 
which behalf transactions are made, in addition, 
persons who practice actual control on the monies 
or properties of a corporate body. 
 
(L) Competent Minister: 
Minister of Finance 
 
 
Section Two - The National Committee for 
Combating Money Laundering and Terrorism 
Financing 
 
Article (2) 
 
Establish the National Committee for Combating 
Money Laundering and Terrorism Financing; 
the competent minister will issue a resolution 
determining its authorities, structure, and work 
system. 
 
 
Section Three - Money Laundering Crimes 
 
Article (3): Money Laundering Crimes 
 
It is prohibited to launder money derived from 
the following crimes: 
- Assault on the state security internally or 
externally 
- Crimes for the purpose of terrorism or 
financing terrorism, or crimes executed by 
terrorism 
- Planting, manufacturing, importing, 
exporting and the trafficking of narcotics 
- Procuring, importing, possessing and 
manufacturing alcohol for trafficking 
- Importing, trafficking, and manufacturing 
weapons, ammunition and explosives illegally 
- Seizing transportation means, detaining 
people, premeditated murder and assault on 
people 
- Human trafficking or smuggling immigrants 
- Bribe, exploit influence and make profit 
out of a public post 
- Embezzlement, taking possession of public 
monies, or facilitating this action to others 
- Cause intentional damage to public monies 
- Counterfeiting money and coins, deception 
and fraud 
- Violation to intellectual property rights 
- Robbing by the use of violence and 
extortion 
- Swindling and breach of trust 
- Pornography, prostitution and gambling 
- Tax evasion 
- Customs evasion 
- Crimes concerning the environment, in 
relation to hazardous materials and debris 
 
The money laundering, terrorism financing, 
the above-mentioned crimes and/or any part, 
 
shall be subject to punishment if so provided 
by Kuwait law and the foreign country's law. 
 
 
Section Four - Kuwait Financial Investigation Unit 
 
Article (4) 
 
An independent financial investigations unit 
will be established to undertake the responsibilities 
as provided by the law hereunder. The Council of 
Ministers will issue a resolution to determine its 
subordination, form and work system. 
 
Article (5) 
 
The Financial Investigations Unit (FIU) 
is responsible to do the following: 
 
1- Receive reports from financial institutions, 
their branches and subsidiaries, working in 
the state of Kuwait and abroad, and from 
non-financial institutions working in the state 
of Kuwait regarding suspicious operations in 
relation to money laundering and terrorism financing. 
 
2- Gather and analyze information and data in 
relation to suspicious transactions notifications. 
 
3- Exchange information received from suspicious 
transactions notifications with all other the 
supervisory authorities, competent bodies and 
counterpart FIU's in other countries, in 
accordance with international agreements in 
which Kuwait is part of, or in implementing 
the reciprocity principle. 
 
4- Create database for the available information, 
which will be confidential. 
 
5- Issue instructions to the financial and 
non-financial institutions, their branches and 
subsidiaries in Kuwait directing them to hold 
suspicious transactions concerning money 
laundering or terrorism financing for no more 
than a maximum of three working days. 
 
6- Issue statistical reports or bulletins 
concerning their activities. 
 
Article (6) 
 
The FIU is responsible to investigate and 
verify the notifications and information 
of a suspicious money laundering and terrorism 
financing operation. It will report to the 
public prosecution of the results of its 
investigations concerning any evidence of a 
crime as provided by the law herein. 
 
The FIU may request the public prosecution to 
have access to the banking accounts, statements, 
and necessary information, as it deems necessary 
to perform its tasks. 
 
Article (7) 
 
According to a resolution by the competent minister, 
members of the FIU and the concerned ministries will 
be authorized for a legal seizure for crimes 
provided herein, in relation to their jobs. 
 
Article (8) 
 
Personnel of the FIU are prohibited to reveal any 
available information or data concerning their 
work nature whether during or after their 
employment term. 
 
 
Section Five - Precaution Procedures 
 
Article (9) 
 
The prosecutor, or his appointed attorney general, 
may issue an order to prevent the accused from 
disposing all of or part of his money until the 
settlement of the case. Claiming against this 
order to the competent court is not accepted except 
 
after three months from the date of this order. 
The court shall settle this claim in a summary 
matter, by rejecting, canceling the order or 
amending it, and will determine the necessary 
guarantees, if demands. Re-submitting the claim 
shall not be allowed except after six months 
from the date of the first claim. 
 
The prosecutor, or his appointed attorney general, 
may change or amend the order according to his own 
considerations. 
 
 
Section Six - Obligations of the Supervisory 
Bodies and Authorities 
 
Article (10) 
 
The supervisory bodies are obliged to establish 
and set up all measures to ensure the commitments 
of financial and non-financial institutions to 
the regulations and rules prescribed by law 
concerning money laundering and terrorism 
financing. 
 
 
Section Seven - Obligations of Financial and 
Non-Financial Institutions 
 
Article (11) 
 
Financial institutions, branches and 
subsidiaries working in the state of Kuwait 
and abroad, and non-financial institutions 
working in the state of Kuwait, shall abide by 
the following: 
 
1- Notify the FIU of any suspicious financial 
transaction involving money laundering or 
terrorism financing as referred in article 
(1) herein, upon discovery. 
 
2- Adopt written polices and internal supervisory 
regulations which enable institutions authority to 
investigate any financial operation involving money 
laundering or terrorism financing, and prevent 
them from using these operations to cover suspicious 
transactions. 
 
3- Not to allow transactions that hold anonymous, 
false or factious names. 
 
4- Set the necessary procedures to obtain data 
concerning the identity and the legal status of 
their clients, based on official documents, 
this will apply to natural person and body corporate. 
 
5- Comply with the instructions and ministerial 
resolutions issued by the supervisory bodies in 
respect of combating money laundering and 
terrorism financing. 
 
6- Refrain from executing any suspicious 
transactionin relation to money laundering or 
terrorism financinguntil reporting these 
suspicious operations to the FIU.If this was 
not possible, or it may result in revealing 
these suspicions to the transaction's parties, 
the financial and the non-financial institutions, 
branches and subsidiaries working in the state 
of Kuwait, can execute the transaction and 
report immediately to the FIU. 
 
7- Provide the FIU with the necessary information 
and data to perform its tasks, without prejudice 
to the provisions of the second paragraph of 
article 6. 
 
The rules of implementation shall determine the 
standards that the financial institutions, branches, 
and subsidiaries working in the state of Kuwait 
and abroad and non-financial institutions working 
in the state of Kuwait must observe to execute 
their commitments. 
 
Article (12) 
 
The financial institutions, branches and 
subsidiaries working in the state of Kuwait 
 
and abroad, and non-financial institutions 
workingin the state of Kuwait, should maintain 
records and documents for the local and 
international financial transactions including 
sufficient data to identify these transactions 
and related data. Institutions must keep 
records and documents for atleast five years 
from the expiration date of the transaction 
or closing the account, as the case may be. 
Those records and documents should be at the 
disposal of the judicial authorities and 
competent bodies upon their request during 
investigation, examination, evidence gathering, 
interviewing, or prosecuting any crime subject 
to the provisions herein. 
 
 
Section Eight - Crimes & Punishment 
 
Article (13) 
 
Any one who, with good faith, notifies of 
suspicious operation subject to the 
provisions of the law herein, or provides 
information or data violating the rules of 
confidentiality, will not be under any criminal, 
civil or administrative liability. 
 
Article (14) 
 
It is prohibited to disclose any procedure of 
notifying, investigating or examining a 
suspicious financial transaction involved in 
money laundering or terrorist financing or data 
in relation, except to the competent bodies 
and concerned authorities. 
 
Article (15) 
 
Every passenger departing or entering the 
country shall report to customs authorities 
of any national or foreign currency, 
negotiable instruments, in his/her possession, 
subject to the rules and regulations issued by 
the competent minister. 
 
Article (16) 
 
Without prejudice to other stronger punishment 
stipulated by criminal law or other law, 
the crimes set forth will have the punishment 
as provided therein. 
 
Article (17) 
 
Any person that commits or attempts to commit 
a money laundering crime as provided herein, 
shall be imprisoned for seven years maximum 
and will be subject to a fine of half of the 
amount of monies in question at least, and the 
whole amount of such monies maximum. 
 
In all cases, the monies, properties, proceeds 
and means used to commit the crime or the 
proceeds of the crime will be confiscated, 
or additional fine equal to its value will 
be imposed, in case of the inability to seize 
such or disposing to others with good faith. 
 
The termination of a criminal case, for any case 
whatsoever, will not prevent from confiscating 
the monies originated from the money laundering 
operation. 
 
Article (18) 
 
Any person who commits or attempts to commit 
a terrorist financing crime, shall be imprisoned 
for a period not exceeding ten years, and will 
be subject to a fine of three thousand dinars 
minimum and twenty thousand dinars maximum. 
In all cases, the monies or proceeds, weapons, 
documents or other support and finance means, 
will be confiscated. 
 
Article (19) 
 
Without prejudice to the criminal liability 
of the natural person as provided by law herein, 
 
financial institutions, branches and 
subsidiaries and non-financial institutions 
working in Kuwait will be legally responsible 
for money laundering crime as provided by 
the law herein. 
 
Financial institutions, branches and 
subsidiaries and non-financial institutions 
working in Kuwait will be subject to a 
fine of one million dinars maximum, if the 
crime was committed in its name, for its 
interest, or though its equipments, managers, 
representatives or workers. The court will 
cancel the company's work license for practicing 
activity, if the company was established for 
committing a crime as provided by article three 
of the law herein. 
 
In all cases, and without prejudice to the 
rights of others with good faith, monies, 
properties, proceeds and means used to commit 
the crime will be confiscated, and the verdict 
will be published in the official gazette and in 
two daily newspapers at the expense of 
the convicted. 
 
Article (20) 
 
The imprisonment term provided in article (17) 
herein will be doubled, and the fine will be 
in the amount of the monies subject matter, 
at least, and not exceeding double its value, 
with the confiscation of monies, properties, 
proceeds and means used in committing the crime, 
without prejudice to the others with good faith, 
in case any of the following cases occur: 
 
1- The crime was committed through an 
organized group 
2- The crime was committed to execute a 
terrorist objective 
or finance it 
3- The perpetrator committed the crime by 
exploiting his job authority or influence 
4- The crime was committed through a public 
utility association 
5- The perpetrator was convicted of a crime 
previously 
 
Article (21) 
 
Any one who intentionally breaches articles 
8, 11, 12, 14 herein, or destroys or conceals 
documents or tools in relation to this crime, 
will be subject to imprisonment for three years 
maximum, and a fine of not less than five 
thousand dinars or twenty thousand dinars 
maximum,or either one, besides termination 
from post. 
 
Any one who is proved to fail in observing any 
of the obligations provided in articles 8,11, 
12, 14 of the law herein will be subject to a 
fine that does not exceed twenty thousand dinars. 
 
Article (22) 
 
In case of breaching article (15) herein, 
customs authorities will hold national or 
foreign currency, negotiable financial 
instruments subject matter, until being 
released by the public prosecution after 
verifying its connection to another crime, 
as provided by the law herein. 
 
Article (23) 
 
In case of having more than one perpetrator 
in a money laundering and terrorism 
financing crime, and if one of them report 
to the competent authorities about the crime 
and other perpetrators before the authorities 
becomes aware of it, or if he notifies the 
authorities after their awareness of the 
crime, and this resulted in seizing the 
perpetrators or monies subject matter, 
the court, according to its discretion, 
will dispense the informant from imprisonment 
and penalty as prescribed in the first paragraph 
 
of article (17) herein, without prejudice to any 
penalties provided in the second paragraph of 
the same article. 
 
Article (24) 
 
Prescription will not affect the criminal 
case of a money laundering or terrorism 
financing crime as provided herein and 
which occur after enforcing this law. 
 
Prescription will not affect the 
punishment imposed on the crimes provided 
herein, after enforcing this law. 
 
The provisions of the criminal law no. (81) 
& (82) do not apply to money laundering and 
terrorist financing crime. 
 
 
Section Nine - International Judiciary Cooperation 
 
Article (25) 
 
The public prosecution will exchange with the 
foreign judiciary authorities judicial 
assistance concerning money laundering or 
terrorist financing crimes, in terms of delivering 
accused or convicted persons and requests to 
hold money, this will be according to the rules 
provided in mutual or multi-party agreements 
endorsed by Kuwait or according to the reciprocity 
principle. 
 
Article (26) 
 
The public prosecution, upon the request of a 
foreign judiciary authority in another country, 
may order to pursue or detain properties, 
proceeds or means involved in crimes provided in 
the law herein, if such crimes were committed in 
violation to the laws of the other country. 
This will be in accordance of mutual agreements 
endorsed by Kuwait in this regard or according to 
the reciprocity principle, without prejudice to 
the rights of others in good faith. 
 
Article (27) 
 
The criminal court shall order to execute the 
final criminal judgments issued by foreign 
competent jurisdiction regarding the confiscation 
of money derived from money laundering or 
terrorism financing crimes and proceeds. All of 
this will be according to the regulations and 
procedures provided in the mutual agreements 
and multi-party agreements endorsed by Kuwait 
or according to the reciprocity principal. 
 
Article (28) 
 
Kuwaiti jurisdiction bodies' can dispose 
of the proceeds of which final verdict has 
been issued for confiscation in money 
laundering or terrorism financing crimes 
according to the rules that regulate the 
disposal of the proceeds according to the 
agreements endorsed by Kuwait or the 
reciprocity principal. 
 
 
Section Ten - Final Provisions 
 
Article (29) 
 
The public prosecution, excluding other 
bodies, is responsible to investigate, 
dispose and prosecute crimes provided in 
the law herein; the criminal court is 
responsible to review these crimes. 
 
Article (30) 
 
The competent minister will issue the 
rules of implementation for the law during 
three months from the date of issuing 
this law. 
 
Article (31) 
E 
 
 
Law no. 35 for the year 2002 regarding combating money 
laundering and any provision contradicting the provisions 
herein will be void. Regulations and resolutions currently 
practiced will remain valid until issuing the rules of 
implementation of this law. 
 
Article (32) 
 
The ministers, according to their responsibilities 
respectively, will enforce this law which will be published 
in the official gazette.  End Text. 
 
¶4.  (SBU) Comment.  Our initial review suggests the new 
amended law is a significant improvement over Law No. 35/2002 
and seems to address many of the more glaring concerns raised 
by FATF.  The most noteworthy addition is the specific 
statute which outlaws terrorism financing in section one, 
article one, (E).  The amendment also significantly expands 
definitions and authorities, better defines how suspicious 
transaction reports (STR) are managed, and adds a provision 
for declaration of goods upon exiting the country.  Post 
would welcome any immediate analysis about the proposed draft 
law, which we can pass on to the GoK.  Absent major 
omissions, however, we recommend against adopting an overly 
critical approach to the draft law.  The law as drafted is 
currently with the Kuwaiti parliament, and there appears to 
be some momentum for passage.  Should we seek, and the GoK 
concur, to pursue major revisions of the law, it would have 
to be pulled back from parliament and redrafted, then 
approved through the various and time-consuming layers of 
Kuwaiti bureaucracy (where time for full clearance of draft 
laws is usually measured in years, not months). 
Consequently, it may be wiser to urge passage of the law as 
drafted in order to get a substantially better statute on the 
books, and then work with the Gok to look at a process down 
the road for potential revision (to include looking at 
available administrative or interpretive fixes).  End Comment. 
 
********************************************* ********* 
For more reporting from Embassy Kuwait, visit: 
visit Kuwait's Classified Website at: 
 
http://www.intelink.sgov.gov/wiki/Portal:Kuwa it 
********************************************* ********* 
WILLIAMS