Some key points regarding the procedures developed for identifying the actual beneficiary’s identity.
The Actual Beneficiary Resolution was issued to protect companies and institutions’ data against exploitation or abuse by others and to help state regulatory agencies, financial institutions and designated non-financial businesses and professions verify, identify and obtain accurate data and information about the legal person conducting financial or commercial operations directly or indirectly.
The Resolution enhances the implementation and fulfillment of the requirements of the Anti-Money Laundering and Combating the Financing of Terrorism Law No. (106) of 2013.
Provided actual beneficiary data shall be audited and verified until a complete, correct and reliable database in this regard is created, where legal action shall be taken if such data is proved to be incorrect.
Compiling and creating a database shall strengthen anti-money laundering and terrorist financing systems and shall contribute to monitoring suspicious practices.
Competent authorities in the State, relevant financial institutions and designated non-financial businesses and professions shall be authorized to inquire about the database of the Ministry of Commerce and Industry to achieve the goal of verifying the real beneficiary and the person controlling the legal person.
The Resolution helps implement and achieve the principle of transparency to help assess the risks of misusing legal persons in money laundering or terrorist financing and to ensure that the competent authorities are able to obtain or access sufficient, accurate and updated information about the real beneficiary, thus helping them to take the necessary measures to prevent legal persons from exploiting the same to carry out any suspicious operations.
Date: 17 JUL 2023
Ministerial Circular No. 1 of the Year 2023
Regarding the Procedures Required Concerning Transactions related to Virtual Assets
The Minister of Commerce and Industry and Minister of State for Youth Affairs
Law No. (16) of 1960 promulgating the Penal Law and its amending laws;
Law No. (106) of 2013 regarding combating money laundering and terrorist financing, as amended by Law No. (24) of 2016;
Law No. (111) of 2013 regarding commercial stores licenses and its executive regulations and their amendments;
Law No. (1) of 2016 regarding issuance of the Companies Law and its amending laws and its executive regulations and their amendments;
Law No. (18) of 2018 regarding the Commercial Register and its executive regulations;
Decree No. (191) of 2015 regarding the organization of the Ministry of Commerce and Industry;
The Council of Ministers Resolution No. (1532) of 2013 regarding the Kuwait Financial Intelligence Unit;
Resolution of the Minister of Finance No. (37) of 2013 issuing the executive regulations of Law No. (106) of 2013 regarding Combating Money Laundering and Terrorist Financing, as amended by Ministerial Resolution No. (51) of 2016 and Ministerial Resolution No. (5) of 2021;
Ministerial Resolution No. (139) of 2021 regarding the rules and procedures for the matrix of violations, penalties, and measures established regarding financial institutions and designated non-financial businesses and professions subject to the supervision of the Ministry of Commerce and Industry with regard to combating money laundering and terrorist financing;
Based on what has been presented by the Undersecretary;
And based on what the public interest requires,
Has issued the following circular
To all financial institutions and designated non-financial businesses and professions
Within the scope of strengthening efforts to combat money laundering and terrorist financing, and the conclusions of the National Committee for Combating Money Laundering and Terrorist Financing regarding the required obligation in the field of implementing Recommendation (15) of the international requirements issued by the Financial Action Task Force (FATF) related to dealing in virtual assets, defined as assets that have a digital representation of their value, that can be traded or transferred digitally and can be used for payment or investment purposes, as Recommendation (15) requires that virtual assets be considered as “property,” “revenue,” “money,” “money or other assets,” or “other equivalent value,” while noting that virtual assets do not include digital representations of banknotes, securities, and other financial assets that were addressed in another part of the Financial Action Task Force (FATF) recommendations, we affirm our commitment to the following:
The absolute prohibition of using virtual assets as a payment instrument/means or recognizing them as a non-centralized currency in the State of Kuwait. Therefore, you must refrain from conducting transactions in which virtual currencies are used as a payment instrument/means within the scope of this prohibition.
It is prohibited to deal in virtual assets as a means of investment, and therefore, it is required to refrain from providing this type of service to any customers.
It is prohibited to issue or grant to any natural or legal person within the State of Kuwait a license to provide virtual asset services as a business for himself or on behalf of others (in addition, no licenses in this regard have been previously issued).
The securities regulated by the Central Bank of Kuwait and other securities and financial instruments regulated by the Capital Markets Authority are exempted from this prohibition.
Absolute prohibition of all virtual assets/currencies mining activities.
This also requires that you make customers constantly aware of the risks that may result from dealing in virtual assets (which are carried out through transactions carried out outside the State of Kuwait by customers), especially cryptocurrencies, because they do not have a legal status and are not issued or supported by any government, as they are not linked to any asset or issuer, and the prices of these assets are always driven by speculation, which exposes them to a sharp decline.
The measures and penalties stipulated in Article (15) of Law No. 106 of 2013 regarding Combating Money Laundering and Terrorist Financing apply to anyone who violates this circular, without prejudice to the penalties stipulated in each regulatory authority.
Mohammad Othman Al-Aiban
Minister of Commerce and Industry and Minister of State for Youth Affairs