Kuwait Law No. 106 of 2013 on Combating Money Laundering and Terrorist Financing — the core AML/CFT statute: offences, customer due diligence, suspicious-transaction reporting, the FIU and sanctions

The law was issued on 8 May 2013 (28 Jumada al-Akhira 1434) and has 45 articles. It repeals Law No. 35 of 2002 (Art. 44). Its executive regulations were issued by Ministerial Resolution No. 37 of 2013. Sector-specific ministerial resolutions have followed and were not reviewed for this entry.

OFFENCES. Money laundering is committed by anyone who, knowing that funds are proceeds of crime, intentionally does any of the following:
- converts, transfers or exchanges them to conceal or disguise their illicit origin or to help an offender evade the consequences;
- conceals or disguises their true nature, source, location, disposition, movement or ownership;
- acquires, possesses or uses them (Art. 2).

Terrorist financing is committed by anyone who provides or collects funds, directly or indirectly, intending or knowing that they will be used, wholly or partly, for a terrorist act or by a terrorist organisation or terrorist (Art. 3).

PREVENTIVE OBLIGATIONS. Financial institutions and designated non-financial businesses and professions must:
- assess their money-laundering and terrorist-financing risks, including those of new products and technologies (Art. 4);
- never open or keep anonymous or fictitious-name accounts, and apply customer due diligence calibrated to those risks (Art. 5);
- keep internal policies, controls, compliance management, staff screening, training and independent audit (Art. 10);
- keep records (Art. 11);
- report to the FIU "without delay" any transaction or attempted transaction, whatever its value, where they suspect or have sufficient grounds to suspect it involves proceeds of crime or funds linked to terrorism (Art. 12).

Tipping off is prohibited (Art. 13). The obligations extend to real-estate agents and brokers who act in purchases or sales (Art. 6). Correspondent relationships need additional measures (Art. 7). Shell banks may not be licensed, and relationships with them are prohibited (Art. 8). Wire transfers must carry originator and beneficiary information (Art. 9). Supervisors oversee compliance and impose sanctions on institutions and their directors and managers (Arts. 14–15).

THE FIU AND ENFORCEMENT. The Kuwait Financial Intelligence Unit has independent legal personality and receives, requests, analyses and refers information on suspected proceeds and terrorist funds (Art. 16). It designates high-risk countries and the countermeasures to apply to them (Art. 17). It may obtain further information from reporting entities (Art. 18) and refer cases to the Public Prosecution (Art. 19). Travellers must disclose to Customs, on request, currency and bearer negotiable instruments they carry or send across the border. Customs may seize them where there is suspicion or a false declaration (Art. 20). The Public Prosecution alone investigates and prosecutes these offences, before the Criminal Court (Art. 21). The Public Prosecutor may freeze or seize suspected funds (Art. 22) and exchanges requests for international cooperation, including legal assistance and extradition (Art. 23). The Council of Ministers, on the Foreign Minister's proposal, issues the decisions implementing UN Security Council Chapter VII resolutions on terrorism and proliferation financing (Art. 25).

PENALTIES. Money laundering: up to ten years' imprisonment and a fine of half to the full value of the funds (Art. 28). Terrorist financing: up to fifteen years and a fine of one to two times the value, with confiscation (Art. 29). Both rise to twenty years and a doubled fine in aggravated cases, such as commission through an organised criminal group or terrorist organisation (Art. 30). An offender whose information helps the authorities may be exempted (Art. 31). Legal persons face fines of KD 50,000 to KD 1,000,000, or the value of the funds if higher, and may be dissolved or suspended (Art. 32). Institutions and their board members and managers face KD 5,000–500,000 per wilful or grossly negligent breach (Art. 33). False reporting and tipping off carry up to three years (Art. 35), and breaches of the cross-border declaration duty up to one year (Art. 37). Confiscation of proceeds and instrumentalities is mandatory on conviction (Art. 40).

LIMITATION AND THE 2018 RULING. Proceedings and penalties under the law are not time-barred (Art. 42). Art. 42 also barred courts from applying Arts. 81–82 of the Penal Code to these offences. In judgment No. 1 of 2018 (4 November 2018) the Constitutional Court held that bar unconstitutional; the rest of Art. 42 stands.

USE IN A REPORT: this is the statute to cite for what Kuwaiti institutions are legally required to do: risk assessment, due diligence, reporting and freezing. The FATF grey-listing (BRF-F90517FF) concerns effectiveness in applying it: reporting by real-estate agents and dealers in precious metals and stones, accuracy of beneficial ownership information, and cross-border cash cases. It does not concern gaps in the statute's basic architecture.

SOURCE: the Arabic text was read in full on lawskw.com (Kuwait Laws Portal), a private publisher of consolidated Kuwaiti legislation. The authoritative text is the Official Gazette (Kuwait Al-Youm); gazette numbers and dates above are as shown by the source.

For due diligence on a Kuwait-connected counterparty, the law establishes a full AML/CFT framework on paper: FIU, risk-based due diligence, reporting without a value threshold, corporate liability and no limitation period. The 2026 grey-listing concerns how it is applied. For a compliance file that means the jurisdictional risk flag is about enforcement outcomes, and should be recorded as such alongside whatever is known about the specific customer.