Real Estate Brokers Instructed to Bolster Anti-Money Laundering and Counter-Terrorist Financing Measures by MCI
In a bid to strengthen its fight against money laundering and terrorist financing, the Ministry of Commerce in Kuwait has issued new guidelines for real estate brokers. According to reports by Al-Rai daily, these guidelines emphasize the importance of verifying the purpose of real estate deals and the source of funds involved.
The new regulations mandate real estate brokers to conduct customer due diligence, report suspicious activities immediately, identify beneficial owners, and comply with freezing orders issued by authorities under the new law. Non-compliance can incur hefty fines ranging from 10,000 to 500,000 Kuwaiti dinars per violation.
Real estate professionals are encouraged to actively contribute to national efforts in combating financial crimes. They are required to conduct risk assessments for all clients engaging in transactions of 3,000 Kuwaiti dinars or more, whether in a single deal or through multiple related transactions.
The Ministry has identified real estate activity as carrying a medium to high risk for money laundering and terrorist financing. Nine key indicators of suspicious activity in the real estate sector have been outlined. These include complex ownership structures, engagement of intermediaries, large one-time transactions, cash purchases, quick turnover of properties, suspicious financing, lack of cooperation during due diligence, and high-risk client profiles such as politically exposed persons (PEPs), individuals from countries under international sanctions, and non-resident legal entities, among others.
Closely monitoring client behavior during due diligence is crucial, with refusal to provide documentation or cooperate being a red flag. The ministry urges real estate professionals to adopt a risk-based approach and increase their awareness of illicit activity.
For complex or high-value deals, brokers should thoroughly investigate the background and purpose of the transaction, evaluating both business-level and client-level risks. Brokers are also required to maintain detailed records and supporting documents related to reported transactions.
In such cases, brokers are obligated to file a Suspicious Transaction Report (STR) with the Kuwait Financial Intelligence Unit (KWFIU) discreetly and without alerting the client. Ongoing monitoring of the business relationship is essential to detect anomalies that could suggest money laundering or terrorist financing.
The guidelines also require companies, including those involved in real estate, to identify the beneficial owner—the person who exercises ultimate control over the firm—to ensure transparency and prevent misuse of companies for laundering or financing terrorism.
The newly amended Kuwaiti laws, via Decree Law No. (76) of 2025 amending Law No. (106) of 2013, have broadened the powers of regulatory bodies. Brokers must adhere to these enhanced legal requirements that empower authorities to freeze funds and assets suspected of links to money laundering or terrorist financing without a court order. They are also expected to follow government decisions related to the implementation of UN Security Council resolutions on terrorism financing and proliferation of weapons.
In summary, the enhanced anti-money laundering and counter-terrorism financing framework in Kuwait mandates real estate brokers to conduct customer due diligence, report suspicious activities immediately, identify beneficial owners, and comply with freezing orders issued by authorities under the new law, with significant fines imposed for violations.
- The new regulations in Kuwait, under the amended laws, emphasize the significance of finance in the real estate sector, as brokers are mandated to comply with freezing orders issued by authorities and report suspicious financial activities immediately.
- Compliance with the enhanced anti-money laundering and counter-terrorism financing framework in Kuwait requires real estate professionals to conduct thorough financial investigations for complex or high-value deals, identifying the beneficial owner and maintaining detailed records of supported transactions.
