"Capital Markets Authority": Stricter due diligence on clients linked to high-risk countries
The Capital Markets Authority issued a directive requiring enhanced due diligence on relationships with clients from countries that do not adequately implement FATF recommendations, classifying them as high-risk.
Translated by Qiyas from الراي — Original source
The Capital Markets Authority (CMA) has issued a circular concerning countries that do not apply or inadequately apply the recommendations of the Financial Action Task Force (FATF), urging all licensed persons to review the updated list of such countries, scrutinize business relationships and transactions associated with them, and classify them as high-risk, thereby requiring the implementation of prescribed anti-money laundering (AML) and counter-terrorist financing (CFT) measures.
The Authority clarified in its circular that this measure is based on Article 3-38 of Book Sixteen, “Combating Money Laundering and Terrorist Financing,” of the Executive Regulations of Law No. (7) of 2010 concerning the establishment of the Capital Markets Authority and the regulation of securities activities, and its amendments.
According to the circular, licensed persons must exercise due diligence in business relationships and transactions conducted with clients or financial institutions from countries that do not apply or inadequately apply FATF recommendations. The Authority emphasized that if it notifies a licensed person that a particular country does not adequately apply the recommendations, all business relationships and transactions originating from that country must be classified as high-risk, and the procedures stipulated in Article 3-18 of the same chapter must be applied.
The Authority noted that the FATF updated its list of countries that do not apply or inadequately apply its recommendations during its last meeting held in October 2026, urging licensed persons to visit the FATF’s official website to access the updated list and take necessary actions in accordance with applicable regulatory requirements.
It confirmed that the scope of the circular includes clients of licensed persons who are residents of Kuwait and hold the nationality of a country that does not apply or inadequately applies FATF recommendations, as well as Kuwaiti nationals who have business relationships with financial institutions belonging to those countries.
This circular comes within the framework of strengthening the commitment of entities supervised by the Authority to AML/CFT requirements and enhancing due diligence on relationships and transactions that may involve risks related to the weak implementation of relevant international standards.
