Al-Mukhayyal to "Al-Anba": "Charitable Work" is a new phase of governance and oversight

Sultan Al-Abdan

Abdulmohsen Al-Mukhayyal, Director of the Department of Charitable Associations and Endowments at the Ministry of Social Affairs, affirmed that the issuance of the new law regulating charitable and humanitarian work represents a significant milestone in the trajectory of charitable efforts. He noted that the law includes provisions and regulations that enhance the organization of the sector and entrench principles of transparency and oversight, thereby contributing to preserving Kuwait’s standing and humanitarian role, and ensuring that donations reach their rightful beneficiaries within clear legal frameworks.

In an interview with Al-Anba, Al-Mukhayyal stated that the law aims to develop the charitable work system and elevate the tools of oversight and regulation, keeping pace with the evolution of charitable activities while safeguarding the societal and humanitarian roles of associations and endowments.

Al-Mukhayyal outlined the key new developments introduced by the law and their practical implications for the operations of associations and endowments. He also detailed the mechanisms for regulating donation collection, oversight of electronic campaigns, controls on expenditures and foreign transfers, and the role of the National Center for Charitable and Humanitarian Work in the coming phase. Details follow:

With the new Charitable Work Law entering into force, what will actually change for charitable associations and endowments?

The fundamental change is the shift from a fragmented regulatory framework to a more comprehensive and clear legislative system that covers the establishment of associations and endowments, their governance, financial resources, fundraising, spending and transfer mechanisms, oversight, and accountability. Existing entities will be required to align their status and amend their bylaws to comply with the law and its executive regulations within the timelines specified by the decree. Furthermore, financial transactions will become more closely tied to official channels, banking systems, and regulatory controls.

Regulating Charitable Work

Are we witnessing a new phase of governance and transparency in Kuwait’s charitable sector?

Yes, we are entering a new phase. The law does not aim to restrict charitable work, but rather to regulate, protect, and enhance trust in it by clarifying responsibilities, controlling financial resources, regulating fundraising, strengthening disclosure and oversight, and protecting donors’ funds and beneficiaries’ rights. The law also introduces a code of ethics for charitable and humanitarian work, which enhances integrity and transparency and limits conflicts of interest or the misuse of resources.

Regulation and Oversight

What is the operational mechanism of the National Center for Charitable and Humanitarian Work? Will it replace some of the Ministry of Social Affairs’ competencies, or will there be a complementary mechanism between the two entities?

The National Center for Charitable and Humanitarian Work will be the specialized body responsible for regulating and overseeing all aspects of charitable and humanitarian work, including licensing, registration, oversight, and setting the policies and regulations governing the sector. However, the transition to the Center will not occur immediately. The decree explicitly states that the Ministry of Social Affairs will assume the Center’s competencies until its board of directors is formed and the necessary regulations and decisions for its operation are issued. Therefore, we are facing an organized transfer of competencies, not a separation between the two entities.

Licensing Fundraising Campaigns

How will the Ministry handle individual campaigns that spread across social media platforms?

The law establishes a clear rule: fundraising campaigns may not be conducted without obtaining the necessary license, with exceptions for government legal entities as specified in the law. Consequently, the use of social media does not exempt any individual or entity from the licensing requirement. The determining factor is the act of fundraising itself, not the medium used for advertising or collection.

Has any fundraising from the public, regardless of the amount or method, become conditional on obtaining a license?

The law’s principle is that fundraising campaigns are subject to licensing, and no campaign targeting the public may be conducted without a license. The law also regulates electronic and cash fundraising methods, with detailed controls to be specified in the executive regulations and relevant decisions. Therefore, it is important not to interpret the law as requiring a license for every personal assistance between individuals. The intent is to regulate the activity of fundraising from the public as an organized charitable campaign or activity.

Judicial Enforcement Powers

How will social media platforms be monitored and unlicensed fundraising campaigns detected?

Electronic campaigns will be treated as part of the fundraising system subject to licensing and oversight. Therefore, electronic advertising does not exempt a campaign from the law’s scope. The law also strengthens oversight and accountability tools and grants certain specialized employees judicial enforcement powers, enabling the detection of violations and the taking of legal action in coordination with relevant authorities.

Cash Donations

The emphasis on depositing donations into bank accounts and the prohibition of cash donations—does this mean greater restrictions on traditional cash donations?

The goal is not to restrict donations, but to enhance the security and transparency of charitable fund flows. The law gives clear priority to official financial channels, allowing for the tracking of funds and verification of their sources and uses. For donors, official channels designated by licensed entities remain available, including electronic means, transfers, and approved bank accounts. Cash donations, however, are subject to the controls and permits established by law.

How will the Ministry ensure that donation funds are used for the purposes for which they were collected? Will there be periodic reports or a mechanism to inform donors about how funds are spent?

The law obligates charitable entities to spend their funds on the purposes for which they were established. It also regulates bank accounts, financial transfers, oversight, and financial disclosure. Donors’ data is legally protected, and licensed entities are required to retain it for the period specified by law. Details regarding the format of reports and periodic disclosure mechanisms will be determined by the executive regulations and the controls issued to implement the law.

Money Laundering Risks

To what extent will the new law affect associations’ transfers to charitable projects outside Kuwait?

The impact will be clear in raising the level of scrutiny and compliance before executing foreign transfers. In particular, the law links the regulation of external fundraising campaigns to the money laundering and terrorism financing risk levels in beneficiary countries. It also requires associations to conduct their financial transfers through banks operating in Kuwait and exchange companies subject to the supervision of the Central Bank of Kuwait. Transfers for projects outside Kuwait will be subject to the controls determined by the Ministry of Foreign Affairs in coordination with the Central Bank of Kuwait.

Will donations coming from abroad be subject to additional oversight, and how will countries and sources be assessed in terms of risk?

Yes, the law establishes a clearer framework for dealing with funding sources and external donations, linking certain procedures to money laundering and terrorism financing risk levels. The law also requires the Center’s approval for accepting domestic and foreign donations in accordance with applicable legislation. This means that the source of funds, the nature of the donation, and the donor entity will all be part of the verification and compliance elements. The most important message here is that the new law does not aim to reduce Kuwaiti charitable work, but to protect it from exploitation, safeguard donors’ funds, ensure donations reach their rightful recipients, and preserve Kuwait’s established reputation in humanitarian work.