Recent developments in 2013 with respect to the banking and financing sector saw the Kuwait Government pass Law No. 106 of 2013 Regarding the Combating of Money Laundering and Financing of Terrorism (the “AML Law”), which supersedes the previous Law No. 35 of 2002 and establishes new and improved governing principles and standards to protect local financial institutions from being used to launder money and finance terrorism.
Additionally, the Central Bank of Kuwait has supplemented the AML Law by issuing circulars and instructions to local financial institutions, instructing them on measures that should be taken to ensure that customer due diligence practices are adhered to. The Kuwait Government also created a fully independent Financial Intelligence Unit, which will serve as the main investigative body and will be responsible for receiving, analyzing and transferring information related to what is suspected of being monies used to finance terrorism or the proceeds of terrorism.
The Central Bank of Kuwait also issued regulations regarding private housing finance. The regulations cover the financing of private homes and the development of real estate in residential areas. The new regulations put limits on loan to value ratio and create greater transparency in the lending process. The regulations are Kuwait’s latest attempt to bring the country’s private housing finance standards in line with international standards.