Three years in prison and deportation for 'the crime of guarantee'
Promulgation of the "Commercial Concealment" Law and Fines Up to 100,000 Dinars
The Official Gazette, "Kuwait Al-Yawm," published yesterday, 2026, Decree-Law No. 78 of 2026 Concerning the Combating of Commercial Concealment, comprising 14 articles, with its provisions to take effect six months after the date of its publication.
The law aims to regulate economic activities and formalize the business environment, thereby enhancing transparency, justice, and equal opportunity, while curbing the conduct of activities without licenses or through concealing individuals who engage in economic activities in violation of the law.
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The decree-law prohibits any natural or legal person from conducting an economic activity on their own behalf or in partnership with others without obtaining the necessary license, or from exceeding the scope of the granted license. It also prohibits enabling any person to conduct an economic activity in violation of the law, whether directly or indirectly.
Article 3 imposes a penalty of imprisonment for a term not less than one year and not exceeding three years, and a fine not less than 10,000 dinars and not exceeding 100,000 dinars, or an amount equivalent to the total profits obtained, whichever is greater, or one of these two penalties. Fines are multiplied according to the number of violating persons or violating activities.
The law does not limit liability to the direct perpetrator. Article 5 holds the person responsible for the actual management of a legal entity accountable if it is proven that they were aware of the violation or that it occurred due to their failure to fulfill their administrative duties. It also establishes the joint liability of the legal entity with its employees if the violation was committed in its name or for its benefit.
Article 6 obligates the court, upon conviction, to order the confiscation of funds and profits derived from the crime of commercial concealment, in addition to closing the establishment, revoking the license, and deporting the foreigner, while respecting the rights of bona fide third parties.
The law intensifies the penalty in case of reoffending with the crime of commercial concealment within five years from the date the final conviction judgment becomes final. Article 7 mandates doubling the prescribed penalty, a step aimed at enhancing deterrence and preventing the recurrence of violations.
The law allows for settlement of the prescribed crimes under specific conditions, before initiating legal proceedings or during their consideration and before a final judgment is issued, in exchange for paying an amount not less than half of the maximum fine, provided that the violation is rectified and the legal status is corrected. Settlement is not accepted in cases of recidivism.
Article 9 allocates a financial reward for anyone who, other than the perpetrators, contributes to discovering and reporting a commercial concealment crime. The reward shall not exceed 10% of the total fines collected, subject to providing credible evidence and the issuance of a final conviction judgment.
The law grants employees designated by the competent minister the status of judicial police officers. It prohibits obstructing their work, preventing them from conducting inspections and supervision, refusing to provide required documents and information, or submitting misleading data. Penalties for such violations include imprisonment of up to six months and a fine not exceeding 10,000 dinars.
Finally, the decree-law specifies a period of six months from the date of its publication in the Official Gazette before its provisions take effect, allowing relevant authorities and parties subject to the law to prepare for its implementation and rectify their legal status.
