The Central Bank of Kuwait has issued a circular to local banks mandating tighter monitoring of accounts held by expatriate workers whose work permits have expired, as part of efforts to curb financial misuse and enhance regulatory compliance.

In coordination with the Public Authority for Civil Information (PACI), the Central Bank has introduced an automated linkage system that provides banks with updated data, including civil ID numbers and names of affected persons.

This step aims to address gaps where banks previously lacked sufficient information, leading to some accounts remaining active despite the termination of employment.

The Central Bank warned that such gaps could expose the banking system to risks, including potential fraud and illegal financial activities. It stressed the importance of banks subscribing to the new system and regularly updating customer data in line with “Know Your Customer” (KYC) requirements, as well as taking appropriate action on non-compliant accounts.

In a related move, the Central Bank had also directed exchange companies, finance firms, electronic payment providers, and e-money institutions to strengthen compliance reporting frameworks starting April 1.

The regulator emphasized aligning reports with international best practices and enhancing oversight of anti-money laundering (AML), counter-terrorism financing (CFT), and sanctions compliance.

Institutions are now required to submit comprehensive compliance reports to senior management, including an executive summary, risk assessment of AML/CFT programs, actionable improvement plans, and clear recommendations. These reports must also document approval by top management and will be reviewed during Central Bank inspections.

Additional reporting requirements include detailed data on high-risk clients, beneficial ownership, suspicious transaction reports submitted to the Kuwaiti Financial Intelligence Unit, internal audit findings, staff training programs, and updates to compliance systems and policies.

The measures reflect Kuwait’s broader push to strengthen financial transparency, mitigate risks related to money laundering and terrorism financing, and ensure full adherence to Law No. 106 of 2013 and related regulations.