Anti-Money Laundering, Counter-Terrorist Financing and Client Due Diligence
What this domain tests
This domain tests the AML/CFT obligations of CMA-licensed persons under Kuwait's AML law and CMA rules. It covers risk assessment, customer due diligence, beneficial ownership, monitoring, reporting and record-keeping.
Core rules and concepts
- Firms must adopt a risk-based approach, with Board-approved policies, a compliance officer, staff training and independent testing.
- Customer due diligence requires identifying the customer, verifying identity, identifying beneficial owners and understanding the business relationship and source of funds or wealth where risk requires.
- Enhanced due diligence applies to higher-risk relationships, including politically exposed persons, complex offshore structures and higher-risk jurisdictions.
- Ongoing monitoring must be appropriate to risk. Suspicious transactions or attempted transactions must be reported promptly to the Kuwait Financial Intelligence Unit; tipping off is prohibited.
- Records must be retained for the period required by law, and reliance on third parties does not necessarily transfer regulatory responsibility.
Worked example
A client invests through a chain of offshore companies with nominee directors. The firm cannot identify the ultimate beneficial owner from the documents provided. It should not simply accept the nominee. It should request ownership and control information, verify the beneficial owner, assess the risk and consider enhanced measures or refusal. If suspicion remains, an STR should be considered.
Traps that cost marks
Do not treat CDD as a one-time onboarding step. Do not assume a corporate client has no beneficial owner. Do not disclose an STR to the client or others outside permitted channels.