The government of Kuwait has enacted significant amendments to its anti–money laundering and counter‑terror financing (AML/CFT) law Decree‑Law No. 76 of 2025 whose goals include reinforcing compliance with UN Security Council resolutions and elevating Kuwait’s standing in global finance.
Legislative Transformations
A core revision is to Article 25, now empowering Kuwait’s Cabinet (Council of Ministers) to directly implement UN Security Council sanctions under Chapter VII of the UN Charter. This includes the ability to:
- List or delist individuals and entities linked to terrorism or proliferation
- Impose asset freezes and ban transactions
- Immediately activate these measures on issuance
Safeguards are spelt out to protect the rights of legitimate third parties, ensuring fair treatment and procedural transparency.
Humongous Fines for Non‑Compliance
For the first time, Kuwait has introduced a dedicated penalty which imposes fines ranging from KWD 10,000 to 500,000 on anyone who breaches the newly empowered sanctions’ orders. These fines are additional to existing legal sanctions under Kuwait’s AML law. The fines highlight Kuwait’s intent to introduce real consequences for violations, closing a key enforcement gap previously identified by FATF.
The Need of the Reforms
Meeting FATF Standards
The October 2024 FATF mutual evaluation gave Kuwait high marks for its legal framework but also put forth weak enforcement outcomes, particularly regarding terrorism financing investigations, asset freezes, and beneficial ownership transparency. In retaliation, these new amendments anchor sanctions authority within domestic law and improve Kuwait’s ability to comply with global AML/CFT benchmarks.
Emphasizing Executive Enforcement
Previously, decisions to freeze assets or impose sanctions required slower legislative or bureaucratic procedures. Now, Cabinet can act swiftly, with clear delegated powers and mechanisms to issue binding decisions effectively, reflecting Kuwait’s commitment to urgent compliance.
Institutional Reinforcement: FIU Upgrades & International MoUs
Beyond the legal text, Kuwait has revamped its Financial Intelligence Unit (FIU) and expanded international partnerships:
Regional MoUs
Kuwait’s FIU has signed new agreements with India’s and Iraq’s anti-money laundering authorities, improving cross-border data sharing and training via the Egmont Group framework.
Modernized FIU Capability
Investments in training, IT systems, and awareness-raising aspire to improve doubtful transaction reports and investigative follow-up. These institutional moves support the improved legal infrastructure to produce tangible enforcement results.
Futuristic Context
Beneficial Ownership Transparency
Complementing AML law reforms, Kuwait issued a circular requiring all companies (except government-owned entities) to maintain and submit Ultimate Beneficial Owner (UBO) registers. These registers must be made publicly available and updated regularly. Enforcement includes the suspension or revocation of business licenses for non-compliance, sending a clear signal of Kuwait’s commitment to corporate transparency.
FATF & MENAFATF Review Cycle
The FATF/MENAFATF process requires countries to go through mutual evaluation periodically. Kuwait is preparing for such review, with these much-needed reforms intended to correct vulnerabilities identified in its last evaluation.
Implications: Stakeholders & Geopolitical Messaging
For Businesses and Financial Institutions
- Sharper Compliance Obligations
- Risk of Significant Fines
For Government and Regional Partners
- Diplomatic Credibility
- Regional Model
Crucial Perspectives & Challenges Ahead
In spite of praise for structural improvements, critics point to continuing enforcement loopholes:
Effectiveness vs Structure
FATF’s prior review stressed that having laws is not enough. Kuwait must demonstrate real cases, prosecutions, confiscations, and convictions to meet global standards.
Non‑Financial Sector Oversight
The FATF report noted weak regulation of DNFBPs, virtual assets, and non-profit organizations all potential vulnerabilities in misuse risk. These remain areas where enhanced legal powers must translate into rigorous frontline enforcement.
What Next?
Kuwait’s Decree‑Law No. 76 of 2025 marks a substantive change in its legal architecture to mitigate financial crime and terrorism financing. By granting Cabinet direct authority to enforce UN sanctions and attaching rigid financial penalties for non-compliance, Kuwait is clearly pursuing international credibility and regulatory alignment.
Success now rests on implementation that should be demonstrating enforcement, securing asset seizures, pursuing convictions, and closing systemic gaps in non‑financial sectors. The upgraded FIU, MoUs with partner agencies, and profitable ownership transparency are critical pieces but active enforcement and public data will determine whether Kuwait’s AML/CFT regime matches its upgraded laws.
As Kuwait prepares for its next FATF/MENAFATF mutual evaluation, the globe will be watching whether these reforms deliver in practice what they promise on paper.
