KUWAIT CITY, Nov 17: The Ministry of Commerce and Industry is considering issuing a ministerial decision to broaden the prohibition of cash transactions in specific high-value sectors to combat money laundering and enhance economic transparency.

Sources revealed that the proposed regulation prohibits cash payments in the trade of jewelry, gold, watches, and other precious metals. Payments for these goods would be restricted to bank card withdrawals and electronic transactions, eliminating cash dealings for buying, selling, or mediating in these markets.

While it remains unclear whether a minimum threshold for cash transactions will be introduced, the anticipated decision is expected to apply universally across all transactions, regardless of value, in alignment with previous regulatory efforts.

This initiative aligns with the ministry's broader strategy, which involves collaborating with the Central Bank of Kuwait to reduce reliance on cash and transition financial transactions into the formal banking system. The focus is particularly on activities vulnerable to money laundering risks.

The proposed cash ban is also consistent with recommendations from the Financial Action Task Force (FATF), emphasizing the importance of focusing on beneficial ownership and implementing robust measures to combat money laundering and terrorist financing.

According to sources, expanding cash transaction restrictions will formalize economic activities and improve authorities' ability to track money flows from origin to destination. The move is further supported by a recommendation from the Kuwait Gold and Jewelry Traders Union, citing the high value of trades in these markets, which requires enhanced regulatory oversight.

The FATF’s latest report on Kuwait identified sectors such as exchange companies, real estate, gold and precious metals, gemstones, and virtual assets as medium- to high-risk areas. This underscores the need to limit their transactions to the banking system to mitigate financial crimes.

Activities currently subject to cash transaction bans:

Temporary trade fairs

Car brokerage (auctions)

New and used car sales (wholesale and retail)Domestic labor offices

Pharmacy purchases exceeding KD 10