KUWAIT CITY, Nov 19: A number of gold, legal and consumer protection experts have confirmed that the use of electronic payment methods in sale and purchase transactions in the local market played a major role in reducing money laundering operations in the country. They affirmed that such trends are consistent with the measures taken by the State to ensure transparency in financial and commercial transactions, especially after the Financial Action Task Force (FATF) threatened to put Kuwait on the gray list. In a special investigation conducted by the newspaper, these experts stated that the steps taken are in line with measures or decisions related to preventing the sale of gold in cash; as it must be in large quantities or by gold suppliers.

However, some think there is a need to leave a margin for cash sales like the decision regarding pharmacies; where cash sales of up to KD10 are allowed for medicines, while others think that selling gold through electronic payment only would lead to losses for gold shop traders, as buying and selling operations sometimes overlap.

They also said that the decisions and procedures of the government in the new reform era concerned with combating money laundering have started to bear fruit, as suspicious operations in financial transactions have decreased. An official of a major gold company in the country, Bader Al-Arbash, supported the proposal to ban the sale of gold in cash, especially since the government’s strict measures to combat money laundering contributed to the decline in gold sales in cash, as the percentage of its sale in cash did not exceed 10 percent. He noted that as a trader, he is fully prepared to dispense with that 10 percent, because it does not represent a great value for gold traders; as banning cash will eliminate any suspicious operations in the gold trade, wondering where is the supervision over these people. He added there are multiple electronic payment methods and procedures, so there is no problem at all in selling gold through these procedures. He called for close monitoring of gold sales through social media -- Facebook, Twitter, Instagram and others; where used gold items are displayed for sale without workmanship or workmanship is sold for a quarter of KD1 per gram He said the profit margin for gold traders is only through workmanship; as the global price of gold requires placing question marks on anyone who sells gold without workmanship, because this matter may be one of the gateways to money laundering. Moreover, Kuwaiti Society for Consumer Protection Chairman Mishaal Al- Manead believes that expanding electronic payment methods is an important step to contain money laundering operations; praising at the same time the steps taken by the government in this regard.

Cash sales
He explained that preventing cash sales in the gold market is also a pioneering step in light of the multiple procedures for electronic payment, but there should be a margin for dealing in cash in gold trade. He called for an agreement with gold traders to determine the value of buying and selling gold through cash payment, as it happened with pharmacies, where cash payment is allowed for up to KD10 when purchasing medicines; whereas if the value is higher, payment must be made by K-Net or through bank link. He affirmed that preventing cash in general in buying and selling operations leads to the stability of the economy and prevents illegal purchases, considering money launderers have left no stone unturned in cleaning their money.

“Selling through electronic payment in gold operations will prevent fraud and forgery, and the consumer has the right to demand his rights in the event of any commercial fraud in gold transaction,” he clarified. A lawyer specializing in money laundering cases, Ali Al-Attar, believes that gold jewelry can be exploited in money laundering operations. He affirmed support for all government procedures and decisions issued recently to curb money laundering. He pointed out this is important since FATF, which is concerned with combating money laundering and the financing of terrorism, recently warned about the serious shortcomings in Kuwait in terms of combating money laundering.

For this reason, FATF called for intensifying efforts of the financial sector supervisory authorities and others to confront the risks of money laundering, especially those including fraud, corruption and forgery, he disclosed. He said FATF only threatened to include Kuwait on the gray list due to the current government’s efforts to pursue money laundering in the new reform era, but he called for more oversight, especially since the money laundering mafia in Kuwait has creative ways through modern technology to breach the laws, in addition to exploiting legal loopholes where large sums can be divided into small sums to circumvent the laws, including tampering with import and export invoices for goods or commodities.

By Najeh Bilal Al-Seyassah/Arab Times Staff