KUWAIT CITY, Aug 6: Experts have estimated that real estate exhibition cases involving money laundering amount to two billion dinars. Despite the government’s proactive measures to combat this issue and its efforts to dismantle many corruption networks, significant challenges remain. The ongoing reform campaign and strict enforcement of laws have led to the exposure of many individuals and groups exploiting legal loopholes for financial crimes.

The government is committed to uncovering the remaining corrupt entities and their associates, who often disguise their activities under various legal and political facades. Experts and legal analysts have highlighted the severe impact of money laundering on public funds and private sector victims. They have called for tighter control over both suspicious and non-suspicious companies to curb this rampant corruption.

The role of Prime Minister Sheikh Ahmad Al-Abdullah Al-Sabah has been praised for effectively implementing the vision of His Highness the Amir Sheikh Mishaal Al-Ahmad Al-Sabah and Crown Prince Sheikh Sabah Al-Khaled in addressing corruption, theft of public funds, and money laundering in Kuwait. Ali Al-Attar, a lawyer specializing in money laundering cases, highlighted ongoing challenges in enforcing judicial rulings related to tracking and recovering funds. He pointed to significant cases like the insurance fraud involving laundering money to the relatives of the accused and the Malaysian Fund case, along with recent issues such as fraud in Iraqi taxes by individuals with dual nationality.

Al-Attar emphasized that major thefts, including those of Kuwaiti oil tankers, occurred even before the enactment of the Money Laundering Law, raising questions about the effectiveness of legal measures in preventing and addressing such crimes. Al-Attar highlighted that while the Ministry of Commerce and Industry permits Kuwaiti citizens to establish private companies, some individuals with malicious intentions have exploited this opportunity.

They have turned these companies into tools for embezzling funds through fictitious entities, which serve as fronts for money laundering in Kuwait. Many of those convicted in money laundering cases were involved with such fictitious companies, which facilitated their evasion of accountability. Al-Attar noted a concerning trend where fraudsters use legal loopholes to defraud citizens in real estate deals. Kuwaiti laws require that citizens own at least 51% of a company at its inception, with a non-Kuwaiti often appointed as the company’s manager. When these companies open bank accounts, they are managed by the actual beneficiaries, who later exploit the funds.

Once fraud is discovered, the non-Kuwaiti managers flee the country, leaving the Kuwaiti owner to face the consequences As a result, when legal actions are taken, the company’s bank balance often turns out to be empty. Al-Attar mentioned that funds obtained from victims were often concealed through money laundering. This pattern of fraud extended to real estate investments in London and Turkey. The fraudsters used similar methods, leading to the term “real estate fraud mafia” being used to describe their operations. Unfortunately, there has been a significant delay in enforcing judicial rulings and recovering the stolen funds. Al-Attar estimated the amount defrauded through real estate exhibitions at around two billion dinars.

Fraud often involves active companies in contracting, where legal actions reveal that the company’s assets have been depleted. Manal Al-Kandari, former Secretary-General of the Kuwaiti Transparency Association and an expert in integrity and transparency highlighted Kuwait’s robust legislative framework for combating money laundering and terrorist financing, established by Law No. 106 of 2013.

This law is considered strong and essential, with clear provisions to address illicit financial activities that threaten the country’s economic stability, both locally and internationally. Al-Kandari cited the case involving the “Shamiya Fund” and its fraudulent transactions and forged contracts as an example of the need for vigilance. She emphasized that recovering stolen assets and funds, as seen in the case involving the former director of the Kuwait Social Security Fund, is a positive step in the fight against corruption. The embezzlement at the Social Security Fund was one of the most significant corruption cases in Kuwait’s history.

Al-Kandari praised the government’s ongoing efforts to tackle money laundering, bribery, and other illicit activities that harm the public interest. She stressed the need for continued vigilance to prevent future incidents similar to the Social Security embezzlement, highlighting the importance of public awareness about the dangers of money laundering and understanding legal consequences. She also emphasized Kuwait’s commitment as a member of the Financial Action Task Force (FATF) to implement its recommendations to enhance regulatory systems and improve anti-money laundering and anti-terrorist financing measures.

Al-Kandari underscored that laws must be applied equally to all, without selectivity. Economic and administrative advisor Dr. Abdullah Al-Abduljader observed that corruption and money laundering are global issues, not confined to Kuwait. Their persistence worldwide indicates shortcomings in managing and monitoring national budgets and financial systems. Dr. Al-Abduljader noted that the establishment of the Anti-Corruption Authority in Kuwait in 2016 aimed to combat corruption and money laundering, ensuring that those found guilty face appropriate legal consequences and that stolen funds are recovered. Despite these efforts, corruption remains prevalent, with cases of money laundering and bribery continuing. He commended the Anti-Corruption Authority’s role in encouraging whistleblowers and providing them with protection and emphasized the need to strengthen oversight and control over individuals and entities involved in corruption, especially those within government institutions. He highlighted the importance of enhancing transparency and governance to protect public funds from misuse.

The Key Recommendations in terms of transparency and accountability include government agencies issuing periodic reports detailing their financial and administrative activities and achievements. This practice will enhance transparency strengthen oversight and accountability establish independent oversight bodies to monitor these activities, and ensure that laws and regulations promoting transparency and combating corruption and money laundering are strictly enforced. Dr. Al-Abdul-Jader’s recommendations aim to build trust between the government and citizens, promote collaboration, and support effective implementation of government policies

By Najeh Bilal
Al-Seyassah/Arab Times Staff