Kuwait bans non-bank cash transfers in laundering fight

• Cash transfers banned outside system
• Targets expats sending wages home
• Offenders face prison and company closure

Kuwait has banned cash transfers outside the banking system and warned offenders will be jailed and have their companies shut down.

The move apparently targets expatriates who account for nearly two thirds of the 4.8 million population and send a large part of their monthly wages to their home countries.

The commerce and industry ministry said the new law, which has just been endorsed by the cabinet, criminalises violators as such practices pose serious threats to the Gulf country’s financial and economic system.

The ministry said in an announcement published by the state news agency Kuna on Thursday that people found to be involved in such practices without official permission would be jailed for six months and fined KD3,000 ($10,000).

Companies violating the ban will be shut down, fined KD20,000 and have their remittance systems and money confiscated, the ministry said.

“The new law aims to criminalise what is known as the ‘alternative remittance system’, which is one of the most dangerous illegal financial practices and the most threatening to the financial and economic security of the country,” it added.

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Kuwait has embarked on a drive to combat money laundering and terror funding following mounting pressure from Western governments and organisations.

Last month, authorities reported that a two-year inspection drive has resulted in the closure of more than 73,000 companies which have failed to disclose their real owners.

The Gulf emirate issued its first comprehensive anti-laundering and terror funding law in 2013. The law criminalised such offences and included heavy financial penalties and prison terms of up to 10 years.