‘Serious money laundering shortcomings in Kuwait’, says watchdog

Alamy/Jane Sweeney/Robert Harding

• Kuwait warned but not on grey list
• 133 countries reviewed by FATF
• 84 nations have made reforms

Kuwait faces “serious shortcomings” in delivering effective measures to combat money laundering and terrorist financing, the world anti-money laundering watchdog has warned.

The Paris-based Financial Action Taskforce (FATF) is a global body dedicated to setting standards to prevent money laundering and terrorist financing.

On Tuesday it said: “Kuwait has an adequate legal and supervisory framework to address illicit finance, but has serious shortcomings delivering effective outcomes, including its understanding, investigation and prosecution of money laundering and terrorist financing.”

FATF said: “Kuwait is a high-income country with low levels of violent crime but that nevertheless faces money laundering risks from crimes that include fraud, corruption, forgery and offences committed abroad.

“The country is exposed to terrorist financing risks from terrorist acts and groups operating outside of the country.”

Two FATF public documents are issued three times a year, the “black” and “grey” lists, which identify jurisdictions with weak measures to combat money laundering and terrorist financing.

Kuwait does not feature on either list.

After a political crisis added to economic uncertainty there earlier this year, the country recently overhauled its tax system and signed a tax treaty with the UAE.

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As of June 2024, FATF had reviewed 133 countries and jurisdictions and publicly identified 108 of them.

Of these, 84 have since made the necessary reforms to address their anti-money laundering and counter terrorism financing weaknesses and have been removed from the process.

The UAE and Turkey, both of whom are no longer listed, are among jurisdictions to feature on FATF’s lists in the past.

Syria and Yemen are both on the grey list, which means they are under increased monitoring and working with FATF to remedy their deficiencies.

Iran is one of just three countries on the black list, which means the jurisdiction has “serious strategic deficiencies to counter money laundering, terrorist financing, and financing of proliferation.”

Inclusion or removal from FATF’s lists can change the economic fate of a country by encouraging — or preventing — investment.

Turkey revised up its estimates for FDI after its removal from the “grey” list.

The country expects to reach $12 to 14 billion in FDI in 2024, up from $10 billion in 2023.

Banks have been known to close the accounts of their overseas citizens if they live in a “grey list” country.